With the reaction to the Coronavirus causing business shutdowns, stock market turmoil, anxiety, and stress – what are we to do?
The answer: Be A Leader!
The first thing a leader does in the face of difficulty is to stay calm and think. Each of us is a leader in some capacity at work, home, church, community group, or somewhere. And if you don’t think you have a leadership position then you can at least lead your peers by example.
Leadership is hard. It means going first when times are tough. Taking the pay cut first. Doing without first. A good leader is not the victim of circumstance. A leader takes control of what’s within their sphere of influence and makes the best of it. In the area of finances one thing would be controlling expenses and making the decision to do without certain expenses for the short-term. Give some things up for a few months knowing you can come back to them later. If you have an emergency fund, this may be the time to use it. Start making some plans just in case the difficulty lasts longer than the emergency fund.
Another difficult decision concerns taking on debt. I am not a fan of debt. It’s a burden. This kind of situation is a perfect example of why having debt is financially unhealthy. When you aren’t burdened with debt you have more options when times get tough. If you are considering taking on debt I would strongly encourage you to do most anything besides adding on more debt. Sell something, preserve cash, stop all unnecessary expenses, stop what you think are some necessary expenses (for the short-term), and severely downsize everything else. I believe this is the quickest way to healing your finances later.
If you are feeling the pain of the financial crisis then let the pain drive you to do things differently – to think differently. I’m encouraging you to do whatever is needed, legally, to avoid taking on debt. An old proverb says, “The borrower is the slave to the lender.” We have a belief in our society that didn’t use to exist and that belief is that borrowing money is the answer to my financial troubles. It is not. In fact, debt causes much of our financial distress.
The Coronavirus shutdown is a real economic threat, but we can get through it. We’ve got to focus on good principals of financial stewardship and think long-term. We each need to find that person we can talk with about ways to get through this crisis financially - a spouse, family member, friend, or financial advisor. It boils down to making a plan, sacrificing some things in the short term, and sticking with it. I’m happy to speak with you and help develop a plan.
We can do this! There is hope when you’ve set a reasonable course of action and start working it.
This is meant for educational purposes only. It should not be considered investment advice, nor does it constitute a recommendation to take a particular course of action. Please consult with a financial professional regarding your personal situation prior to making any financial related decisions. (05/20)