I see people every day who are under serious distress due to the global recession. My offices in Brampton and Mississauga are “ground zero” for the downturn in good paying manufacturing jobs in Ontario. A lot of people are out of work and in many cases won’t be going back to the good paying positions they had. They had built a lifestyle on 2 good incomes and in many cases they are now down to one income and in some cases both breadwinners in the family are laid off. This recession took many people by surprise, few people had prepared. So, now they are in the position of building their financial “survival kit” after the crisis has already struck. It’s a worst case scenario.
The first and most important element in survival is realizing you are in trouble. Many people hold onto the hope that “they will find another job” or “things are turning around” and this may very well be true. However you don’t want to pin your survival on hope, you need to act. What should you do?
Taking the “survival” analogy further.
1. Do an inventory of what you have . What resources are at your disposal ? What is the income coming in , what assets are available to be liquidated. What help can you count on from others?
2. Conserve what you have. You have no idea how long you are going to need to survive, don’t waste anything. Slash your expenses, reduce spending to the bare minimum, cut all the “fat” from your budget. Inform everyone in your family what is happening and what you are doing about it. The members of your family particularly your children ( provided they are old enough to understand ) need to know about the situation and the measures being taken. Everyone is going to be impacted by your “survival plan” so they need to be involved in its shaping and implementation.
3. Get informed. Find out what kinds of services are available at your bank, maybe you can reduce payments, pay interest only or maybe it’s time to consolidate. Talk to your creditors.
4. Seek help, You may not be able to do this on your own. You may need the help of others to make it through. This could be as simple as credit counseling and budgeting sessions with a counselor. Maybe you need to consider formal remedies to debt such as a proposal to your creditors or even bankruptcy. Even if you don’t think it will come to that get informed so that you have an understanding of what you can do.
5. Don’t panic, “freaking out” will result in bad decisions and loss of resources. You need to be rational, you need to act in your own interests and in the interests of your family. This may mean that you need to consider things that you’d rather not. Survival could mean the reduction of the number of vehicles in the household, it could even mean moving to less expensive accomodations. Everything needs to be on the table, don’t reject any options just because they are not want you want. Remember survival is about doing what needs to be done, not what you want to do.
6. don’t give up, all of this is 100% survivable and you will rebuild and recover. Once you do, keep your “survival kit” stocked with savings so you can survive the next crisis with less scrambling.
If you think you need some help or would like information about your options call us, we can help you to make your Financial Survival Plan. Call 310-PLAN today
