There are no two ways about it we are in uncertain and, quiet honestly, scary times at the moment both financially and economically. Things are very uncertain for a lot of people and then the best thing to do now for your personal finances is to go into ‘Storm Mode’
What is Storm Mode
Storm Mode is what you put into action when the *bleep* hits the fan basically – be that a due to job loss, family relationship breakdown, bereavement or in the current situation the global Coronavirus pandemic. We are going to go back to bare bones and start stockpiling all the money we can to beef up our emergency funds. At times of crisis like this, it is the best way to ‘ride out the storm’ and protect your finances for further disruption and make sure that you and your family are taken care of as best possible.
Lets break it down
1. Hit pause
First things first, we pause whatever Baby Step we are on (not sure what the Baby Steps are? Don’t worry for now, we can come back to that once the dust has settled, for now just bookmark this page and have a read when you get a chance) and go back to focusing solely on building our Emergency Fund.
2. Build that cash pile
If the storm clouds are coming then we need to be doing whatever you can to find money to add to our stockpile,
- Sell stuff – eBay is still fairly active with sales at the moment, if we go into a stricter lockdown it may not be possible to post items out though so keep this in mind.
- See if you can switch banks for a cash switching bonus
- Check to see if you have money pending on cashback sites or survey apps that you can cash out
- Take on a part-time job/extra work – things are so uncertain at the moment, people are getting made redundant or furloughed BUT places like the major supermarkets are screaming out for extra staff. This obviously isn’t an option for everyone and is very much a personal choice as it would mean making yourselves a Key Worker and putting you in direct contact with the public.
Basically do whatever you can to find some extra money fast, be it pennies or pounds it’ll all add up
3. Budget (for first time budgeters/newbies)
If you are brand new to budgeting then it can be a bit daunting but at times like these it is an absolute must. In its most basic form, a budget needs to show you what’s coming in and what’s going out.
A budget is never perfect on the first try, it takes a while to get it really working for you, but for the time being (and if you’ve never really looked at a budget before) then this is a good place to start.
If your income and earnings have been affected due to the Coronavirus and you are unsure of how to manage your finances at this time there is a list of support resources here on the Money Advice Service website
4. Sorry, did I say Budget I meant BUDGET (for Baby Steppers)
We’re taking it back to bare bones, scorched earth, Beans and Rice Baby!
If you’re already following Dave Ramseys Baby Steps then you’ll likely have a good budget in place already which is great but we’re not looking for just good enough here, we’re heading for a storm, we’re going to need to set fire to that budget and go back to Scorched Earth. That means covering our four walls, making the minimum payments on any debts and putting the rest into the Emergency Fund.
We need to cut all unnecessary spending – no restaurants/takeaways (‘We have food at home’), no extracurricular classes, no new clothes (It’s not like you’re currently walking around naked ‘YOU HAVE CLOTHES AT HOME’) no phone/tech upgrades. If you don’t need it to survive and you can make do with what you already have then don’t spend money on it.
It isn’t going to be fun I’m afraid but neither is running headlong into a storm. Grit your teeth, put up your umbrella and repeat to yourself ‘storms never last, it’s just for now’
5. Storms Don’t Last Forever
The good thing about storm mode is that although it is hard it is also temporary, you are protecting yourself for the storm to pass in the hopes that once it does you won’t have gotten into big of a mess financially and your stockpile of money will be there to help get you back on your feet.
Financelle made a really good point in her post here (see point 4) that now is also a time to be looking after you and not just your finances – Your mental health is so important during a storm – make sure you are looking after you!