How To Survive A Recession Financially - a Guide To COVID-19
Updated: Oct 15, 2020
It may not feel like it, but there is a lot you can do
Almost overnight, financial education and preparedness became way more important.
In a matter of weeks, the effects of the COVID-19 virus have landed on more than just our hospitals. Our local businesses, startups, restaurants and bars are all feeling the pinch, which ripples into our pockets as consumers, individuals, families and communities too.
Hours are being cut, doors are being closed, and many are scrambling.
So how can we all be a little more calm?
Right now, that calm is Financial Intelligence - knowing what to do in a time that’s incredibly emotion-driven. Financial Intelligence is all about healthy money habits. One silver lining of this shutdown is that it can really help you set good new habits!
5 Tips on How to Survive a Recession Financially
Below are 5 important strategies to managing your money in a very uncertain time. We invite you to review this guide and share this with anyone else that’s feeling challenged financially right at this moment. Here's what it covers:
1. Spending & Essentialism
2. Strategies for Bills During Hardship
3. Use of Credit & Loans
4. Making Extra Income
5. Online Services for Support
Money is so emotional.
When there is so much information bombarding us at all times, it is very easy to lose control of good spending habits. We humans don’t make the best choices when we panic, so take a breath and let’s make a plan.
Part 1: Spending & Essentialism
For most of us, this time is going to be about understanding what is a ‘want’ versus what is a ‘need.’ Those lines might be confusing right now. For some, they may seem really different compared to mid-February.
The first thing we recommend is to make a list of all your current financial obligations, and break them into Essential vs. Non-Essential.
Here are some examples:
Essentials - Housing, Car, Health Care, Debt repayment, Utilities, Groceries etc…
Non-Essentials* - Restaurants, Bars, Vacations, Clothes, Shoes, Tech, etc…
With the exception of food, health, and safety spending, most essentials are just our recurring bills. We’ll cover the bills later in this post, but let’s start with a list of recommendations and resources to help cut back the non-essential spending:
1. Learn to cook bulk meals - Buy ingredients and cook bulk meals like stews, casseroles, soups, stir fry etc… Here are two great resources for ideas of cheap bulk cooking to save money and eat healthier than carry out.
2. Pick up a new hobby - There are many hobbies that are free or very low cost -- think hiking, cooking, gardening, playing an instrument, writing a blog, board games, exercise, vlogging, meditation etc… Some of these can even turn into side income, but regardless, doing things you enjoy makes you feel better, and therefore less likely to spend.
3. Watch out for online shopping sales - Everything is on sale right now. AND it’s easy to feel lonely and down on yourself right now, but if you are really concerned about your income & financial situation, then don’t buy things you don’t need! If there’s ever a time to cut back, NOW is that time.
Here’s some help - Our 1 hour mini-course Prime Spending: How to Control Your Spending Online is free and only takes 1 hour. It’s all about how to control the emotional urges to shop online.
4. Be Practical - What has value, use and utility has priority right now. Things that do not provide or get used do not. Be mindful of your spending and if you need help with an individual purchase decision, call a friend.