Never let a good crisis go to waste
There’s a saying to never let a good crisis go to waste. It is in the most challenging times where we learn the most about ourselves. We learn how we respond in a time of instantaneous change. We learn how prepared we are or how we’ve underestimated the power of being prepared for unexpected times.
There are two sides to the coin that you can be right now.
It has been a month of staying inside and you may be experiencing financial hardship from what economists would site as early stages of a recession. A recession was predicted, but no could’ve predicted the cause being a global pandemic. Anxiety may be heightened around the security of your job, education for your children, or adjusting your lifestyle to a new normal. You may be asking yourself, how can I keep from falling?
On the other side of the coin, you may be a person who is a financial position to benefit from a low market. Your income has not changed, 6-months of living expenses are stacked, and you have been wanting for the opportunity to do more. Interest rates for homes and loans are at an all-time low. You may be interested in the buzz around investing or trading stock. You may be asking yourself, how can I benefit from the current market?
No matter what side of the coin you’re on, you will experience a level of change. Don’t let this crisis go to waste. Take a deep dive into your financial portfolio to see where you are and develop a plan to get to where you want to be.
Here is a thoughtful guide for such a time like this:
Win over your mind
During this time of uncertainty, it is natural to experience a range of emotions. The best thing that you can do is to feel them. However, don't stay there too long. Evaluate whether it is a fact or simply a feeling. Don't make major life decisions based on temporary emotions. Take a deep dive into your finances to prioritize responsibilities and lifestyle adjustments with a clear mind. Have a mindset of resilience and know that your finances will recover. Have a mindset of abundance and know that you can still win. This can still be your year. Win over your mind and control your narrative.
2. Be proactive
What are the things we know? We can’t go anywhere. Income may have changed, but bills are still flowing. Financial institutions and creditors are willing to make accommodations during a time of unexpected economic hardship. Call your creditors to request payment arrangements, waiver of fees, reduction of minimum payments, reduction of interest rates, or change due dates. Call your car insurance company to request a reduction of the payment amount during this time. These options are available, but do your best to stay on slack. During this time, essential bills are most important. The need to have readily available savings is important. I wouldn’t suggest spending all of your emergency on debt. Make arrangements. Your debt is not going to disappear. Bills piling up will make it harder to maintain in the future. Take the necessary steps to get ahead of financial hardship. Be proactive if you are experiencing or projecting a future financial hardship. Do what you need to absolutely do. Think of ways to replace income until things are back to “normal”.
3. Preserve your income
Do you know your numbers? How much are your monthly essential bills? How much would it be to maintain and cover 6-months of your essential bills? Separate expenses that are needs versus wants. Often, you can get in the habit of paying bills or just spending money. While being quarantined, you should have spent less money. You may have realized that you are throwing away money at things that you thought were essential. The money that you thought you couldn’t save, was spent getting your nails done. Eliminating unnecessary expenses will bring an excess of money that can be allocated to essential expenses, savings, investing or just things that are just more important to you. Will you eat at home more often? Will you ditch the unnecessary cable bill and opt for less expensive streaming subscriptions? Will you pay for education in a skill that could bring in more income?
4. The benefit of the market
When income and proper measures are secured to prepare for a recession, then you will be able to benefit from the current market. The right time to purchase a home may have just presented itself. Interest rates are low, making purchasing affordable.
The stock market has been buzz words for first-time investors. It is a good time to get in, but it is a better time to learn about the market and investments that you are interested in. Don’t throw around your money without giving yourself room to learn the game and the risks. Don’t rush because of the feeling that you will miss out. Trust me, you will have the opportunity to benefit from the current market. Here are four things to consider before investing. I also share a few beginner investing apps.
I want to stress the importance of having your savings in order. The status of one’s job may change in a day, given we still don’t know how this pandemic will fully impact the economy, you want to be prepared. Research to see what is happening in your industry. Will your industry be able to sustain during the duration of the quarantine and after the pandemic? Security is the question you have to ask yourself before making financial shifts and investments.
We are focused on the well being of our physical health, our financial health will follow. What you will benefit from the most is adjusting your mind to control the narrative of your finances. No matter the circumstance, you will come out on the other side of this pandemic.
“Never let a good crisis go to waste”