How to Survive and Thrive During a Recession and Beyond
We have so much to think about in our daily lives that it can be overwhelming. Tensions are high right now just trying to figure out how to juggle basic bills, let alone saving anything for retirement. It’s hard to see past our basic needs to plan for our future. But it is possible.
Take a deep breath. You can get through this period. It’s happened before in history and will happen again. My parents were kids in the depression of the 1930s. I grew up hearing their stories and how they conserved or how they went without. I know it was very hard on my grandparents to support their families. My dad’s parents had six children. But they got through it and thrived. My parents learned from those struggles and, thankfully, passed down their wisdom of those experiences to their children.
Change your mindset. So many of us when we’re overwhelmed with debt or other financial obligations feel like we’re helpless and hopeless. I urge you to change that way of thinking. YOU are in control not your money. If you feel like you’re drowning, it’s time to look at where your money is going. Are you eating out too much? Are you going on one too many Target shopping trips? Are you just swiping your debit or credit card hoping the transaction isn’t declined? If this sounds familiar, you need to get on a written budget and take control of your money.
Get on a written budget. You must have a written budget that gives your money a purpose. Even if you’re struggling to pay what Dave Ramsey calls your “four walls” which is basic rent, utilities, food, and transportation. The priority is to allocate your pay to those four items first, even if that means foregoing paying your credit card bills. That isn’t ideal, however it’s priority number one. Even if you’re not struggling to pay the “four walls”, you absolutely should be telling your money where to go each month. Get on a written budget. Begin by going through your bank statement from the previous month and figure out where your money is going. I strongly suggest if you’re having issues with this use the envelope system. Budget a certain amount for groceries each month and put that cash aside in an envelope. There are a lot of ideas out there on this subject including percentages of your income to allocate to each budget category. I urge you to check the Dave Ramsey website for help. www.daveramsey.com
Conquer your debt. Before you can even begin to invest the recommended 15% into your retirement accounts, you have to get out from underneath the burden of debt. Imagine what you could do with the money that just goes to debt payments each month. Think of the wealth you could build. The best way to get out of debt is to list your debts smallest to largest, regardless of interest rate, and attack, attack, attack. You might be asking how you do this while you’re struggling to just pay basic bills. Once you’re on a written budget, you’ll be surprised how much money is going out the window that could be allocated to this debt. Once you reel in your budget, you’ll be shocked at how much you have left over each month. Like Dave says, you’ll feel like you got a raise.
Increase your income. Another way to attack debt or build wealth is by getting a second job or a side hustle. This changed our lives when my husband and I decided to do this. In short, we hustled. We were working in our full-time careers and Door Dashing, Instacarting, and Ubering every single day. Yes, people thought we were crazy for working so much, but it was what helped us turn the corner with our finances. If you’re sick and tired of being sick and tired, you’ll do whatever it takes.
Are you sick and tired? The cycle of debt or even poverty can be broken. Some of you may have grown up with limited resources and have completely changed your family tree. That’s one thing we love about our clients. They come from all backgrounds and situations. If you started your life with nothing, you aren’t relegated to that situation the rest of your life. I know many of you can probably speak to that. Your resolve and your positive mindset is something that will carry you through the worst of times. This is what helped my grandparents. My maternal grandfather was in sales during the Depression. Imagine selling anything when you know people have nothing. He built a successful business despite this. He saved and paid cash for his house in 1941 just before WW2 broke out. That means he was saving even during the worst financial crisis in our country’s history. Thankfully, my grandfather did not believe in debt. Unfortunately, we have grown up with conspicuous consumption and keeping up with the Jones’. As a young adult in the 80s, boy was this true. I had to learn the hard way, even with my family’s history. We are often too influenced by society’s norms. And, we didn’t even have social media back then. Imagine our youth today. They are bombarded with messages that you need “more” or the “most expensive” this or that. I urge you to share your money saving tips with the next generation as the twenty-something’s are facing similar events that my grandparents did. Stay positive and move forward. We can overcome.