No Matter the Financial Crisis, Life Goes On. Are You Equipped Enough to Pull Through the Next One?
How long can you survive without an income? 1 week? a month? or the whole year? This pandemic has jolted many into an unexpected, stark reality of what a financial crisis is all about. So, how will you survive the next one?
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Reduce Your Debt
It sounds obvious, but with the allure of credit card and overdraft facilities, it’s so easy for us to just swipe a card, get instant gratification and then cry into our wine glass at the end of the month when we can’t pay it back.
A handful are great at swiping and paying back month end, but let’s be honest Aluxers, it’s not easy.
Even if you start right now by adding an extra 50 paying off your debt each month, not only does it reduce the payback cost, obviously, but the interest reduces too. Every dollar paid back, is one less you need to worry about in the future.
Learn to Differentiate Between Your Creditors
Aluxers, every month there are certain creditors that must be paid, regardless of anything. Things like the IRS, certain loan issuers, child support and alimony. That’s not saying you can’t get them discharged, but it’s a heck of a process to do so.
However, other creditors may be discharged if you’re bankrupt, while others may just be more lenient in your payback amount and period or just scrap the debt entirely.
Be sure to keep up to with the “super creditors” like paying your federal taxes. Not doing so can cast an incoming financial crisis.
When it comes to finance, we’ve got videos that will help you through any and every season you find yourself in. Be sure to subscribe to our channel for plenty of solid, helpful advice.
Know Which Assets Are Safe and Which Are Not
One of the scariest things about an economic crisis and not being able to pay your debt, is wondering what could be taken from you to cover that debt.
Find out which assets are exempt from collection by statute. If you declare bankruptcy, these assets will be protected.
Of course, this would differ depending on the laws of your own country, and even differs from state to state.
To paint it with a board brush troke, non-exempt assets would be a second home, supplementary vehicles or trucks, boats or recreational transport, valuable items and collections and any investment accounts.
Anything deemed essential for everyday living is not affected.
Maximise Your Liquid Savings
Aluxers, when the sh*t hits the fan, what do you need the most? Cash. As the saying goes, “cash is king.”
Things like savings, checking and money market accounts will tide you over a financial crisis, not like stocks or index funds where values change depending on market conditions. The beauty with cash is that unlike an investment cashed in early, you won’t lose money. Of course, you lose your savings, but that’s what it’s there for.
To survive tougher and leaner times, make sure you have enough saved to fulfil your major obligations. Things like tuition fees, medical aid, insurance, are all important to continue paying. As long as you can cover the essentials, you’ll be ok until things turn around, which they do.
As an old proverb says, “the art is not in making money, but keeping it.”
Learn Skills So You Don’t Need to Outsource
Before you start worrying that we’re implying cutting your own hair or grooming your own dog – stop. We’ve seen the images circulating the internet of dogs that are unrecognizable, and humans that look like their dogs cut their hair. We don’t mean that.
Look at what you pay other people to do. If it’s hanging pictures, learn to do it yourself. Changing the oil and water in your car, do it yourself. Doing hems and sewing on buttons, do it yourself.
All these extras add up, and if you can learn a skill and save money, double bonus!
Start Living More Frugally Now
Aluxers, there are so many motivational sayings about how the time is now, and that can be said for living frugally too. So, when things do get bad, you don’t have to make huge lifestyle changes, you’re already in a habit of living that way.
And even if a financial crisis doesn’t occur, you’ve saved money, learnt new skills and been less of a drain on society. Your water usage is lower, your electricity bill reduced, you don’t waste as much food anymore, you’re using products more sparingly which in turn reduces wastage.
Nothing bad can come from living more frugally. Like author Catherine Pulsifer’s words go, “Being frugal does not mean being cheap! It means being economical and avoiding waste.”
Re-Negotiate Any Insurances, Contracts, or Monthly Expenses
One of the things many of us have had during the pandemic, is truck loads of free time. And many people felt unmotivated to dive into fresh projects and bright ideas.
So, to save money without having to pretend to be Miss Sunshine with your sh*t together, simply pick up the phone and phone all monthly financial commitments and see if you can reduce your insurance fees, your mobile phone bill or whatever monthly expenses – just to give your pocket a break.
Shop around, so when you phone your own supplier, you have a good idea of what the competition offers, and your current provider can match or better that rate.
And we know it can be daunting chatting to random strangers on the phone, but when you see your savings each month, it will be worth the awkward conversations.
Have Multiple Income Streams
Someone who knows about a side hustle is Curtis “50 Cent” Jackson. His book, Hustle Harder, Hustle Smarter is a great listen on audible and will inspire you to look at the side hustle differently and to take on things you normally would not, for great reward. Check it out on audible using our free voucher at the link alux.com/freebook
As one satisfied reader put it, “50 did it again!!! Another hit (in print this time). Maintains the reader’s interest throughout. Recommended reading for sure inspiration.”
Basically, Aluxers, when one source of income is falling away, you’re not standing there with nothing.
If you are thinking about starting a side business but don’t know where to start or what to do, check out 15 Businesses You Can Start For Cheap (or even FREE).
Invest in Crypto Now
As we said in our video, 15 Reasons Why You Should Invest In Crypto, “Germany’s Deutsche Bank mentioned crypto in their ‘Imagine 2030’ report. They talk about how fragile the traditional money system is — that by 2030, over 200 million people will be using digital money — and by then, traditional money will already be on the way out.
And it’s not just Deutsche Bank. Twitter’s Jack Dorsey has said he believes Bitcoin will eventually become the world’s single currency. Elon Musk has stated that ‘crypto is a far better way to transfer value than a piece of paper.’ China State TV has called Blockchain — the technology that makes crypto possible — 10 times more valuable than the internet.
So, if you’re stuck and think you need a PhD to invest in it – you’re wrong. We’ve created the best and easiest course out there, to guide you step by step through everything we’ve learned about Bitcoin and Blockchain — from scratch.
It’s called Bitcoin Essentials. You’ll learn how the technology works, how to use it, how to buy bitcoin safely, and how to store it. Just to go alux.com/bitcoin. If you want to be part of this new revolution in technology and wealth, this is something you really don’t want to miss out on.
Don’t Neglect Routine Maintenance
Aluxers, even if it’s a push and you’re really going through a tough financial crisis, don’t let any required maintenance be put aside. So whether it’s fillings at the dentist, or a service for your car, if you neglect them, they end up costing a lot more, further down the line.
Fillings not done turn into gingivitis and gum disease. A small problem in a vehicle that could have been fixed relatively affordably, turns into a bigger, much costlier problem to fix.
Regular maintenance is the best preventative measure for bigger problems and financial outlay.
Start Growing Your Own Produce, Going Solar, Upcycling, Re-Using Your Water
Aluxers, there is nothing more satisfying then cutting the leaves off your first spinach harvest or picking the tomatoes off your plant and popping them straight into your mouth.
YouTube is jam-packed with how to grow your own fruits and veggies, even in the smallest of spaces. Not only does growing your own food feed you, but there is a massive sense of pride attached to it.
Where you can, go solar. Some countries reward you for putting less strain on the power grid.
Try upcycling If you spot a piece of rope on the beach, use it to make a swing instead of buying one for the kids. Use old tins to make a painted cutlery holder, or a unique lampshade from old chicken wire. So really… your imagination is all you need.
And lastly, reuse your water. Catch your shower water in buckets and use it to flush the toilets or install a simple grey water system to flow into your garden.
Boost Your Credit Score
This may sound counterproductive when speaking about a financial crisis, but often during these times, interest rates drop, people sell their businesses, cars, houses and valuables. You need to be ready to make a purchase quickly.
And even if that’s not your course of action, think about who a lender will want to lend money to during a crisis? Exactly, someone with a strong credit score.
Tell People About Your Situation
Hiding it doesn’t help, and you never know what other’s may be able to help you with. There is absolutely no shame or embarrassment to be going through a financial struggle. It happens to everyone. You are not unique, and you’ll be in awe at the generosity of people when you play open cards.
And on the other side of the coin…
Be Prepared to Share and Start Now
If you’re doing well now but someone is struggling – help them. It doesn’t have to be with actual money, but cook a meal, offer to babysit while they look for work, anything to ease their burden.
If you’re in a position to help someone else, do it. Don’t do it because you expect anything in return, do it because you genuinely care. And remember, kindness is a cycle. That person, when they’re on their feet will go and do the same for someone else, and so it continues.
And Aluxers, don’t wait to start making these changes. Do it now.
Acknowledge That Downturns Happen
The tide does turn.
Remember the Spanish flu? We’ve been seeing so many images of it and having our current situation compared to that deadly flu which started February 1918 to April 1920.
Remember what happened after the flu? The roaring twenties!
So, there is always a silver lining, Aluxers.
What advice can you give fellow Aluxers to get through a financial crisis? We appreciate and value your input.