We are living in times of uncertainty not seen in recent memory due to a virus pandemic and the associated government-enforced economic shutdown.
Many are faced with the prospect of seeing incomes dramatically reduced, if not eliminated.
If you find yourself in this situation, the following are a few simple, but not easy things you must do.
Keep your composure. Even amid frightening circumstances, it is very important that you keep a cool head. Many difficult situations are made far worse by decisions rooted in fear.
If you don’t already know, get a very good handle on how you’ve spent your money over the past three months. Review your bank statements, credit and debit card transactions thoroughly and categorize every expenditure into broad categories such as eating out, clothes, entertainment, utilities, subscriptions, housing (mortgage/rent, electric, gas, water, sewer, etc). You get the idea. Everything must go into a category…by the way, miscellaneous is not a category! This exercise, if you’ve not it done it before, will be very revealing and help you see, on paper, just how much you can live without.
Prioritize your spending. Basic survival is your number one priority; think of what it would have taken for your ancestors of the 19th century to survive, and this becomes your starting point. These become your priority expenses and everything else is on the table as a non-necessity. Examples of priority expenses; mortgage/rent, food, utilities, and necessary medications.
Next, prioritize your non-priority expenses. The importance of this cannot be understated as you will create your guide as to what/who gets paid as you are able. You may need to make some difficult phone calls to let lenders know that you will repay what you owe, but that you cannot do it at this time due to a loss in income.
Finally, review point #1. You will get through this and will most likely be a stronger/wiser person as a result of having endured this.