Tackling A Financial Crisis Head On!

This Covid crisis is an unmitigated disaster. It has been handled poorly by every layer of society, from the Elites and Governments, down to the person next door. We are in a mess. I’m not talking about health. I have very strong views on that, but this is not the place to air those. Ask me, and I’ll tell you what I think, but seriously…..don’t ask!

I’m speaking about finances. We are in an incredible pickle. Well we would be if we could afford a pickle.

First there is the printing of money in America. And the silly spending Congress is doing. They are playing with numbers neither they, nor we, understand. We talking Trillions. 1 trillion dollars, is written like this $1,000,000,000,000. They are spending dozens of those. To us, it’s just a number we hear. But to our ability to spend, it is turning our salaries into spare change. Make no mistake, inflation is here to stay a while. Yes, I know, that production is in short supply, as are workers, but those are only part of the problem. The printing and spending of money is way bigger a problem.

People don’t have jobs. They don’t want jobs. They’re making too much money on welfare, or unemployment. They are being paid with monopoly money. It’s been printed with nothing behind it. That can’t go on forever.

In a related issue, the whole $15 an hour is a major player in industries that have acquiesced. Prices go up to help pay employees. And places like fast food restaurants, and Big Box stores are putting in more machines and self checkout. Machines don’t ask for sick pay, and don’t take maternity/paternity leave, and they don’t require health benefits. This is the 21st century. Machines can take many jobs.

I don’t know about the USA, but here in Scotland, truck drivers have been striking, and grocery store shelves are growing bare. It’s remarkable. They are talking about a shortage of beef, and even potatoes for the rest of the year, which will mean higher prices, and empty bellies.

In the States, landlords have not received payments in over a year. Yet they can’t foreclose and kick out people who won’t, or can’t pay. Most rental property owners are not Slumlords, they are hard working people who are now in financial trouble themselves.

The renters and some homeowners, lost their jobs as a result of Covid. Some of them have lost those jobs forever. They can’t find a decent paying job, and didn’t spend their welfare wisely, and when the ban is over, will lose their homes. The potential for major homelessness is sky high.

People use credit cards like mad. The bills and the debt are piling sky high. When the bubble bursts, the mess will be astronomical. Yikes.

What can any of us do? Good question. There is stuff we can do, but you’re not going to like it. First, find a job. It doesn’t have to be your career dream. This is temporary. This is getting money in the door. Find something.

Next, stop using credit cards. I’m serious. If you can’t pay them off at the end of the month, you start the next month playing from behind. Catch up is not a good strategy. If you want stuff. Write it down and prioritize it. What is the most important. What is second, etc. Then save for it. Make payments to yourself. Not to the credit card company. That way, if you lose your job, or get injured, or sick, you don’t have to worry about payments. I’ve done this for years. Yes, my car is old. But it’s paid for. I don’t worry about payments.

You need a budget. And you need to do it right. If you’re in debt, you’ve got to deal with that before investing and spending on wants, things you’d like. You need to start with God. Decide a number, or a % and set it aside and don’t even count it as part of your income. In my case, I use 10% as my base. I take 10% of my salary and put it in an envelope. It sits on a counter in the kitchen. The rest is for the budget. God gets the first of the best, and the best of the first. He will honor that.

Then, Food. Most people budget everything else before food. Our problem is, we buy groceries first. We need to turn that on it’s head fast. We have to eat. If you have children, they have to eat. That’s an absolute basic need. It’s not a right, but it is a need. Our groceries don’t have to be fancy. They might be hot dogs, mac and cheese followed by rice and beans. Those things are just as filling as fancy food. You may have to buy generic. I almost always do, unless there’s no other option. The price difference is incredible.

If possible, grow your own. It’s easier than you think. How many blogs, Facebook entries, and Instagram posts have I put online about the stuff I have grown? Even here in Scotland, where I have no yard, I’ve borrowed space to grow. There are tons of blogs and YouTube videos for the beginner.

After food, comes Shelter. You need to keep the power on. Heat and Air are mission critical. Especially heat in the winter. Then your rent or house payment. Followed by any insurance or taxes. You, your spouse, and your children need a roof over your heads. And you need heat. That is much more important than paying credit card debt.

Up next, is transportation. You need to be able to get to work, and to get groceries, etc. You need transportation. What you don’t need is a big car payment. I haven’t had one since 2006. I pay cash for cars. Now, in my case, I don’t like cars, so buying an old one is not a big deal. For some people it is. But you should never buy one new unless you’ve got loads of cash at your disposal. Your car will instantly lose thousands of dollars in value the moment you drive it off the lot. A three year old car will have depreciated to the point where it’s more of an even purchase.

I hear people say all the time, I need a reliable car to drive to work, or for my spouse to drive to work. Yes, you do, but reliable does not equal new. Those are not synonyms. For years, I drove in Atlanta traffic. Every day, it was like taking my life in my hands. And every day, I knew that if one of those road enraged lunatics crashed into me, my old car, was paid for. Before that, I drove the back roads of Northern Maine, in constant snow and ice, with Moose looking to leap out in front of me. Why would I want a car payment to tempt them even more. For example, one time, as I turned onto our road, three bull moose were standing in the middle of the snow covered road. I was forced to drive off into a farmers field. The moose followed me. It was a no win situation. I stopped. Got out and ran them off, then got back on the road. Fortunately I was driving an old Chevy truck with 4 wheel drive.

Get a used car, and keep it serviced. Services are much cheaper than payments.

Those are your 4 most important categories. Things like new clothes, new furniture, vacations, fancy haircuts, are all OPTIONAL. They are not necessities. The same is true of Netflix, and the internet. For two years, I used the public library every day as an office. They had free internet. We got rid of our landline at home, and had a basic service on our cell phones. I checked my mail with that. I waited until I was at the library to surf. Was it ideal? Heck no. But it was what worked in our budget.

For the record, I’ve had one breakfast at a fast food place in 5 years. That was because my car was in the shop and I needed to wait for it to be fixed. The fast food place was next door. We HAVE bought pizza. And we have eaten out, I’m just making the point that stopping for fast food as much as we all do, is wasting money.

I’ve said all this because tough times are knocking. You and I need to get ahead of the curve. The government will not save you. Neither will the lottery. Make a plan. Do it today. Be prepared. Thrive.