Balancing Personal Finances During Financial Crisis
How a person goes about preparing for a financial crisis is important before, during, and afterwards. It is important to understand that everyone will experience a financial crisis during their lifetimes. It may not come down to a level of starvation and homelessness, but it will certainly be difficult.
The first thing to remember is that humility will allow both a person’s mental state and financial outlook to weather the crisis. Much of the difficulty a person has in a financial crisis is driven by pride. The wish to keep up appearances, avoid admitting failure, or avoid admitting being in a crisis exacerbate the problem.
Early detection of a financial crisis is as important as early detection of cancer. Remedies, while tough, are best taken early.
Regardless of where a person stands for the duration of their crisis, accepting it and embracing it is going to be the key to weathering it. That is where humility is essential. Zen Buddhists would call this living in the present and submit to life, not with cynicism, but with an eye to see things as they are and one’s own healthy role in that experience.
Once a person accepts their situation, begin to take stock of what is essential in life. Choices are going to need to be made which will be painful but must be done to restore financial balance, which is defined as living within one’s means. Cell phones are an important technology but plans may need to be reduced, data plans dropped, minutes reduced, and phone usage limited to those who will need it such as working adults or teens engaged in outside activities where contact is essential.
Cable television may need to be sacrificed to free up money. Clothing purchases can change from name brand stores to Goodwill or the Salvation Army. These decisions are not difficult except for a person’s pride. Which is why embracing the situation openly and honestly with family members is essential.
Vacations will need to be scaled down to visiting family or to what are known as “staycations”.
Please be forewarned that not all money to be saved will come at the expense of cancellation of subscriptions. There are things that are essential to keeping a household going during a financial crisis which cost hard earned money, but will limit or prevent other haemorrhaging of money. Those items are life insurance and health insurance.
One financial crisis can easily become two with a death in the family. Likewise, a sudden illness can make a crisis become a calamity. Think very carefully before dropping any essential coverage and have a plan in place if it must occur. Even purchasing an inexpensive 5-year term life policy is better than having no life insurance protection.
Look into health care memberships where a monthly subscription is paid for visits to a local clinic.
While not being a comprehensive healthcare plan, such plans, where offered, allow for unlimited doctor’s visits and outpatient treatment which can even include dental and oncology services. Adequate insurance will help protect the household’s financial well-being.
Remember, a crisis is like the coldness of winter, it will pass. Life will go on, and recovery will occur. How soon they occur will be a matter of how quickly a person adapts to their circumstances and restores balance.