Hopefully, health is first and foremost on your mind, but quickly after that, I would assume that jobs, businesses, and money are occupying a fair amount of your thoughts these days.
Whatever your situation, it’s an opportune time to sit down with your money and organize, strategize and possibly move some puzzle pieces around, so they fit this strange time.
Collectively, we might be waiting – for stores, beaches, workplaces to open. And, to see where our nation’s companies, both large and small are going to redirect.
However, you as an individual shouldn’t wait. There is so much to address right now.
There are plenty of career development actions to take, whether employed or not, that will improve your professional life and future. Expanding your network and refining your LinkedIn profile always come to mind.
Perhaps you have wanted to bump up your social media game or start a blog, create a speaker sheet, or find networking groups. None of these cost a dime, and they will move the needle for you if you create and use the tools to build your vision.
These actions can put you in a better position to earn money either now or later.
What about the money you have or are currently earning? What can you do today to prepare financially for an uncertain future?
Here are some ideas to consider, and yes, a spreadsheet would really help:
- Assess your earnings as they are now. You may be on unemployment, working less or experiencing a downturn in your business. You want to be knowledgeable about exactly what you earn and from what sources. Are those sources stable? Can you depend on them for the next 6 months to a year?
Get very clear about what income sources you have, and the amounts, as well as the timing of the income. When income is earned and collected will impact cash flow and right now cash is queen.
2. Assess your expenses. They have surely changed, and if you aren’t very clear on those numbers, now is your golden opportunity. Normally an annual budget works just fine, but I would suggest a monthly one for now, that extends out for the year.
If you have deferred loan payments for a few months, see how that plays out now and 4 months from now, so you can be aware of all the changes that will be taking place in your spending requirements.
3. Know the Difference – You have your projected revenue from all sources, by month, and your anticipated expenses by month, now the difference will inform you. Do you have money after the expenses or are you in a deficit position?
You may have both across months, and you can deliberately find ways to use any extra to cover the difficult months coming up. So, where can you save, where can you cut, and where will you need help?
Write the answers down, and keep addressing these questions.
4. How is your liquidity? What access to cash do you have? If all your money is tied up in a house or investments and you have no savings to draw from, does that work with your current situation?
If not, then identify ways to create a savings account, either from those investments or if possible, conscientiously save now.
For now, you can take money out of retirement savings (such as a 401K) without the usual penalties (with certain restrictions) if you absolutely must. Make that decision carefully.
If you happen to be coming into money now, use greater caution with the proceeds and keep more than you might otherwise have.
5. Check your borrowing power – Set up your loans, of all types, on a spreadsheet, so you have the entire picture in front of you. What payments do you normally make? Do you need to make adjustments?
Now might be a time to pay the minimum (it normally is not recommended), if you are not in a good cash position. It might also be a time to pay off debt quickly if working. Available credit could be needed later, or the payments you were making could go to savings.
You may even consider obtaining a new credit card for security or an equity line, or doing a balance transfer if possible to eliminate interest for a period of time.
6. Find the opportunities – Down times have historically been money makers for many. We live in an age where opportunities exist to make extra income that never previously were possible.
From Etsy to UpWork to Kickstarter, there are ways to supplement or go full time online. There are industries that are hiring, as well as businesses that can be bought.
Yes, this is a challenging time, but what’s in it for you? I challenge you to get out of fear and in touch with your interests and imagination.
7. Have the Conversations – As we evolve, the financial community is working overtime to keep up with the changing landscape. New money coming in with new rules that are constantly being rewritten is complex.
Speak with every one of your financial advisors – your banker, insurance agent, investment advisor, tax accountant etc. If you have no specific questions, then just ask them what they are seeing and if they have advice for their clients.
The conversations will help you to gather information, see options, and feel supported.
That’s a great start toward managing your money in transitional times. Gaining control over your finances doesn’t depend on having money, it depends on having knowledge and systems.
That way, when the money does come in, you know what to do to create both a sense of security and your vision.