If your income were to dramatically drop tomorrow, would you survive? Would you spiral into a financial crisis or would you be able to keep your head above water? Many financial experts say that American’s who live paycheck to paycheck, could be 3 months from homelessness. We’re going to give you 5 ways to survive a personal financial crisis.
How are you doing Financially?
If you were to ask ten different people in your town, “How are you doing financially compared to last year,” you’d probably get several different answers. And if you asked ten different people across the country the same question, the variety would be even greater. It seems that no matter what the national economy is doing, there are always people who are experiencing plenty, lack, and doldrums when it comes to their financial situation. As a matter of fact, some are experiencing a true financial crisis.
The Certainty of Economic Booms and Busts
One thing is certain in life; personal economic booms and busts are inevitable. But what is not as certain is how you will weather the downturns, the economic valleys of life, and a possible financial crisis.
Some people seem to sail through job loss, repossessions and other financial speed bumps with a resolve and confidence that things will get better, while others will feel like life has come to an end and want to cash it all in.
Here are 5 things we’ve done personally to survive job loss, medical emergencies and starting a business – all without having to borrow any money.
We’re not saying that if you do these things that life will be easy, but we will say that you’ll be able to sail through rough seas without going under. And with each storm that you make it through, your financial muscles and confidence will grow stronger, and the waves will grow smaller. Here’s how we’ve survived our economic downturns in life and you can too!
1) Be a Manager – and Manage Your Money
Save in advance of expenses by using a budget described in our book, America’s Cheapest Family Gets You Right On The Money and in our America’s Cheapest Family Budgeting System. Or try Mvelopes.com, it’s one of the only computer-based/app-based budget systems that works like our system. We’ve used a simple money management system since day one of our marriage. It’s helped us weather many financial storms. We are totally convinced that a budget is the most effective tool we’ve ever used, and it helped us pay off our house in 9 years, pay cash for all of our cars and keep our overhead manageable.
2) Be A Researcher
Philosopher Sir Francis Bacon said, “Knowledge is Power.” Whether you’re fighting a political battle, physical battle or a fiscal skirmish, the more you know the more you’ll get. Research is one of the secret gems of the frugal life. The more informed you are, the better you’ll be able to negotiate and the easier it will be for you to recognize a deal when you are looking at it. When you’re experiencing financial limits, or even a financial crisis, taking the time to research can produce some pretty hefty dividends.
a) Quote Your Insurance
We have saved $66 per month on auto insurance by using Insweb.com and $200 per month using eHealthInsurance. It will take more than 15 minutes to quote your insurance, but even if it takes you 5 hours and you save $2400 in a year’s time, that $480 per hour you just earned . . . Tax-free!
b) Ask For Discounts
Over time you’ll learn where it is appropriate to ask and when it is likely to produce a good return, but initially, just ask. You’ll probably embarrass your kids and your spouse, but you very likely will get a positive answer more often than not. We’ve asked for and received discounts when buying cars, houses, insurance, clothes, food, building supplies, tools, artwork, furniture and so much more. You’ll be amazed at what will happen when you ask.
Are you a veteran? Ask for a discount.
Are you a student? Ask for a discount.
Are you a senior? Ask for a discount.
Are you a mom of multiples, homeschooler, teacher, civil servant, airline employee, a hotel employee . . . the list goes on and on, ask for a discount. And one more . . . are you paying cash . . . ask for a discount! Be ready to be surprised.
c) Be Patient
Ben Franklin is credited with saying, “Haste makes waste.” It is so true that in a rush to spend, rarely is economy found. In the midst of an economic hard time, take the time to wait. We have seen so many miracles as we have held off on spending when we have a need. Either a friend has the thing we need, we find an unexpected discount or we discover a way to work around the need. When we wait, we give time for creativity to germinate and provide an unexpected solution. Because we live in a large city, we know that there is usually someone who already has the thing we want, and they don’t want it anymore. When we find that person, we’ve found our deal! We have found deals on CraigsList, eBay, OfferUp.com, Half.com, Amazon.com, or shopping at garage sales, church rummage sales, flea markets and business closings. Be patient — your bargains are just around the corner.
3) Be Resourceful
a) Grow your Own Fruit Trees
Plant fruit trees (bare root or from a cutting) so you can eat homegrown fruit. We have over 30 fruit trees on our property and it’s great to pick fresh fruit each year. This is especially easy if you live in a place where it rains a great deal and you have enough “chill hours” to grow many varieties of trees.
b) Grow Your Savings
Could you plant a garden outdoors or do container gardening on your patio or indoors? Start now. Growing your own organic produce can be huge savings and a great learning experience. Read Square Foot Gardening for more ideas.
c) Cook from scratch!
Buying prepared foods cost 300 to 400 percent more than cooking from scratch. Cooking from scratch isn’t that hard and gets much easier as you practice. Plus it’s usually much healthier than prepared or fast food. Many families spend more money eating at restaurants than they do at the grocery store each month.
d) Free firewood
If you have a fireplace or wood-burning stove, watch for downed trees or neighbors who are trimming their trees. We’ve collected several cords of wood this way and heat part of our home in the winter with free wood.
Caulking windows and doors, using expandable foam and adding ceiling insulation are relatively inexpensive ways to keep the heat and cold out of your house. If you’re a crafty sewer, making heavy window coverings can keep your home more comfortable too. Planting windbreaks with trees and shrubs can also reduce utilities.
4) Be Innovative to Avoid Financial Crisis
a) Have you been Laid off?
We survived 3 layoffs by using a budget, keeping our overhead low, and applying immediately for unemployment compensation. Involve your whole family in your financial conservations efforts. Be sure to find support groups where you can develop leads, and get help rewriting your resume, developing your LinkedIn profile and job hunting.
b) Educate Yourself
Don’t expect someone to bail you out, read books on job hunting, get additional certifications and job skills training. Check out LearningExpressLibrary.com they have realtor exams, civil service tests, GRE and lots of other resources available through your library at no charge to you. Check out the resources at your public library – you’ll be amazed at what they can offer. Read Books!
c) Take any job
We know this flies in the face of most common logic, but if you haven’t worked for several months, getting a low paying job and doing the best you can, with a good attitude, can make better things happen. You never know who you’ll meet when you’re working. A ship at anchor never goes anywhere, pull up the anchor and see where the wind takes you.
The same blessings from taking a job come your way when you volunteer. So often volunteer positions turn into paying jobs or you meet someone, who knows someone else and good things happen. At the very least, volunteer at a food bank—extra food is always a bonus.
e) Invent something
Necessity is the mother of invention. While you’re working out your financial situation, keep your eyes and mind open for innovative solutions to common problems you are encountering. Perhaps you might create a marketable solution. Annette’s Dad did this while he was retired working as a custodian at his church. He invented The OriginalDripCatcher.com.
f) Sell Things You Don’t Need
So many of us have so much unneeded stuff. We’ve made hundreds of dollars selling off old toys, clothes, games, and housewares. If you don’t need it, perhaps it could be sold to provide income for food, paying off debt or paying for utilities.
g) Rent out a room
Try AirBnB as a host or put up an ad at a local university. Renting a room out to a carefully screened renter may cause you to give up some privacy, but could provide much-needed income to help make it through your economic recovery.
5) Be Generous During What Might Be a Financial Crisis
a) Give Time
If you don’t have money, give your time to help others at food banks, churches, animal rescues, soup kitchens, hospitals, airports, homeless shelters, adoption agencies and food rescues.
b) Give Encouragement- Get to Know and Help Your Neighbors
If you end up with extra food from a food bank or food rescue, share it with an unemployed neighbor or family in need. Being generous, even in tough times will help you feel better and encourage others.
If you apply some of these 5 ideas you’ll get through your financial crisis with less stress and more fun and family times.
In this season of political change, when the economy is a focus of much debate and argument we need to remember that:
There is nothing WRONG in America that can’t be fixed with what’s RIGHT in America!
We, all the people, ARE America – not just the people who we’ve sent to Washington!
For more ideas to save money in several areas of household finances, visit our MoneySavingTips page of our website