What a difference a week makes.  

I’m a small business owner and have loads of small business owners as clients. We’ve gone into virtual mode here and have contingency plans for continuing to help clients with their needs.  In an ideal world, we would all have 3 months of expenses in the bank. That isn’t always the case. I have a number of friends and clients who are completely shut down with no way to generate income and are at risk of or are already losing the income they had booked. If this sounds like you, read on…

Here are my thoughts and tips around managing your finances during this virus. We don’t know the time frame and we don’t know the impact – so this is my best thinking TODAY. With the ‘small print’ right up front – I’m not advising you to do this, just suggesting. You’ll need to decide which ones make sense for you.   

1. Meal Planning. When my husband and I decide we really want to conserve money, we go into budget lockdown; we’ve found the best way to save the most amount of money during a budget lockdown is to Meal Plan. And make big pot meals. We did an experiment once: We bought a $27 turkey and just over $20 of chicken breasts. The chicken breast provided maybe 6 servings.  The turkey, on the other hand, yielded over 20 servings and that was before we made soup from the leftovers! Chili and casseroles are some other ideas for yummy foods that allow you to spend less per serving. Yes, it can be more upfront work to make these dishes, but we find the savings can be immense.
2.  Review your credit card statements. Hopefully, you’re doing this on the regular anyway, but right now you can be extra picky about what services to put on hold so they’re not billing every month. I would argue you still need a streaming service — this isn’t about having no life at all, but maybe you don’t need 2 apple music subscriptions, etc. Find a way to suspend in-game purchases for your kids – now is not the time for expensive surprises.  
3. Go down to minimum payments.  If you’re really low on cash and don’t know when the next bit will arrive, you may want to hit pause on paying down debt.  (Yup, I said it!)
4. Contact your financial institution about payment deferral plans. Ask what they have in place, expect to put into place, or are willing to negotiate.   
5. Have an all-hands-on-deck family meeting. Be upfront. Tell your family how social distancing is affecting your business and how it will lead to some changes in the short term for everyone. Have a brainstorming session on how you can all cut down on costs, and what you can enjoy together for free.
6. Stop stressing about your investments. We’ve seen this before, and we will again. No one – and I mean NO ONE — knows how to time a disaster-time market, so chat with your advisor to make sure you’re positioned to take advantage of the upswing when it comes. Then let it go.   
7. Review your receivables. Send notes explaining the situation and that you would love to have payment asap. I just had photos done for a new employee and we received an email like that.   Instead of waiting until my next bill-paying day, we expedited.   
8. Review your payables. Are there any larger companies that may be better able to absorb a delayed payment? Call and talk to them and see what you can negotiate. (Keep an eye on your credit rating though.)
9. Pause contributions on your savings plans. This won’t go on forever, but we also don’t know how long we need to plan for. Right now, the priority is having the cash you need on hand for necessities. Especially is you’ve been squirreling money away for travel in the short term, you may want to consider deploying this cash into keeping the lights on.
10. Consider borrowing against the cash value of your whole life or universal life policy. Again – this is to ensure you have money for necessities. Understand any penalties, changes and credit rating implications first.

We’ve been here before….

I’m sure there are many more “hacks” that can be employed. I think the biggest one is to be kind to yourself and to the world. We are in uncharted territory; there is only so much you can do, and you need to prioritize the basics of living. Once we’re past this phase, you can work on getting back to your regular planning, saving and investing!