Showing posts with label Consumer Debt. Show all posts
Showing posts with label Consumer Debt. Show all posts

Sunday, March 7, 2021

Financial Recovery Tips for People and Businesses Hit by the COVID Economy

Over the past year, tons of lives have been disrupted. Despite the hard times, sometimes it is all you can do to pick up the pieces and keep moving forward. Otherwise, how else would things go back to normal? 

Thankfully, with the right approach, you can return to full steam. Plus, if you got a little bit of luck, you'll be even better off than you were before. If you’re looking to improve your circumstances after personal loss (whether financial, personal, or health), here are some ideas to consider about steps you can take to reset and try again. 

These tips are equally applicable to households as well as businesses, so let’s get started.

Evaluating Your Present Circumstances

To begin, you've got to take a good hard look at where you and your business are. Getting an outside perspective can also help you see things from another angle. Having a clear picture of where you are versus where you want to be can help you think about what you need to do to get to the place you want to be. 

Look at your circumstances, get your bearings, and then you can choose the path forward. Financially speaking, make sure you are familiar with your bills and how they are paid. 

Often, one person in the family or business manages the budget, but if more people are aware and at least know where their money is and who it goes to, it can take a lot of the insecurity that comes from not knowing.

Write Your Budget Down on Paper

Start by listing all your monthly expenses on paper. Following that, add up all your income as well. Now, try to make both sides of the equation balance. If you have less income than your expenses, you've got to make some major changes.

If your business is a brick and mortar company or a restaurant that relied on foot traffic or a dine-in experience, a pandemic and shutdown would certainly explain a loss of revenue. Is there a way that you can pivot and bring your product to your customers instead? 

Seeing your budget in front of you would help tell you what you can or can’t try to do and how much time you have to try new ideas.

Of course, if someone in the home has lost a job, that would explain a deficit. Still, until they are employed, you'll have to figure out how to balance the budget. 

You’ll never know when you or another member of your household will get hired again, so while looking for jobs, it is wise to try to cut bills or spending on non-essential purchases as much as possible.

Are There Areas Where You Can Reduce Your Expenses?

Often, we have tons of unnecessary expenses that come out of our bank accounts each month. Most of the time, these charges occur without anyone realizing it. 

Since they automatically debit the account, it could be from a subscription service you haven't used in years. Maybe you only use it rarely, or it’s a subscription to a magazine or video game service.

Often, businesses must cut discretionary spending as a way of saving money. This can mean temporarily reducing or eliminating spending on company parties, team lunches, company benefits, or anniversary gifts. 

After all, the little (or not so little) things are cut. If there’s no way to keep going, sometimes it means laying off employees. This can be a difficult process, and for small businesses who don’t have a large staff, it can be impossible to do, but it must be considered since nobody will have a job if the company shuts down.

Would Increasing Your Income Be Possible?

Adapting and diversifying your income streams in business can be essential in times of change. Saying that on paper is easy, but executing it is often more challenging. Companies with a narrow niche are more likely to fail if they can’t adapt to a changing market. 

For this reason, you should consider how you can add to your products or services in a way useful to people. If you run a food truck, what if you could do catering? Can your department store begin shipping to customers who purchase things online? Can you make use of freelance delivery drivers to bring products to people in your neighborhood?

At home, perhaps, you are already on a shoestring budget. If that happens to be the case, then you might consider trying to supplement your income. Have you thought about ways to make money on the side? Also, if anyone in the home could pick up a job, they could start working a few hours each week. That way, they can help to contribute until the ship is upright.

Have You Considered Refinancing Some of Your Debt?

Finally, thanks to recent rate reductions, refinancing can be a great way to improve your cash flow. By reducing the interest accumulating on the money you owe, your monthly payments will shrink in size. Thus, if you qualify, refinancing the debt could save you money over time.

Rethinking Your Perspective on Debt

How much credit do you have on your credit profile? If you believe that you are overburdened, consolidating your debt could be a source of relief. In some circumstances, companies purchase debt from consumers. 

They will purchase all the consumer's debt while also giving them a lower monthly payment. Either by reducing the interest rate or extending the payment timeframe, you'll receive a more affordable payment. 

There are also forgivable loan options (PPP loans) that companies might be eligible for depending on your area ad type of business. Resources like these are crucial to investigate but vary from region to region.

Credit Repair Strategies

If your credit is bad because you have been behind on payments, finding lending options through traditional lending sources can be a daunting proposition. However, if you are a business in, say, Melbourne, Australia, with a delivery vehicle that just breathed its last gassy breath and you need to replace it, or your business will die too, or have to have a vehicle to commute to the job that is keeping your housing bill paid, sometimes getting a car loan from an alternative lender could be the right answer, even if temporarily. 

Making your payments on time is good for your credit in the long term, even on a less than ideal loan, and you can always refinance to a better rate when things improve. Just watch out for lending scams and predatory lenders who would take advantage of you in a rough spot.

Making Tomorrow a Better Day

As long as you follow this advice, things should start to get better soon. That way, simply making ends meet no longer runs you ragged. Otherwise, you'd have to work yourself to the bone just to make the minimum payments. If you had to ask us, that's no way to live.

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