Today's New Financial Reality: How to Get Through the Tough Times
Dear Readers: Today we often hear the phrase "extraordinary times call for extraordinary measures." And while it's usually used to refer to large-scale problems and solutions, I think it can apply much closer to home as more and more people are faced with a fast-changing financial reality. It's not just about the markets and investors. This new reality affects everyday decisions on how we spend, how we save, and how we protect ourselves and our families.
To cope with this new reality, we have to think in new ways, reprioritize and get creative so we make the most of the resources we have and potentially figure out how to make do with less.
But when it comes to money, being creative doesn't mean the old ways of managing are thrown out the window. On the contrary. To me, it means looking at tried-and-true methods and applying them creatively to your own situation now. Like so much in this precarious world we currently live in, getting a jump on the situation will help you survive better both in the short term and the long term.
Whether you are trying to conserve your finances, need to adapt to a loss of income or need some extra financial help, you have options.
If Your Income Is Stable, Rethink Your Budget to Maximize Your Resources
Don't think of budgeting as doing without; think of it as doing your best. With restaurants, gyms and movie theatres closing in many parts of the country -- at least for a while, you've probably been spending less. So if your income is stable, this is an opportunity to rethink your needs and wants, reprioritize your expenses and plan better for the future.
If the current situation doesn't bring home the importance of being prepared for the unexpected, nothing will. If you've had trouble saving in the past, this could be an opportunity in disguise. Put what you don't spend on today's extras toward the future -- whether that's your emergency fund, retirement or child's education.
And if those extras caused you to overspend and get into debt in the past, this is your chance to change those habits. Use this enforced saving to pay down your credit cards.
If Your Income Has Dropped, Try to Lower Fixed Costs to Make the Most of What You Have
When changes in income make it hard to cover essentials, it's not just a matter of rethinking your budget and eliminating extras but of figuring out how to lower fixed costs. Here are some tangible ways to do that: