One of the most fundamental skills that anyone can possess is the ability to use the resources they have available to them in the best possible way. During times of affluence, you may not give resource management a second thought because there is enough to go around. During financial downturns, though, the money available is stretched thin. This is when we need to revisit old skills, or learn new ones, if we have never had to “tighten the belt” before.
Here are 10 ideas to help you manage your resources:
1) Practice discipline. We know this is not what anyone wants to hear, but the reality is that discipline is the key ingredient to living within your means. Deciding to manage your resources more effectively means nothing if you don’t stick to it.
2) Watch your daily decisions. The little decisions you make each day have a huge impact on the bottom line. If you are in the practice of hitting the drive-thru every day because you “deserve” that latte, you may be leaking a lot of money that could be put to better use.
3) Always plan ahead. Make menus. Make grocery lists. Plan when and where you will buy your necessities, looking for the best prices. You may even consider clipping coupons. (Just be careful not to buy something you normally wouldn’t just because you have a coupon).
4) Work from a budget. Or call it a spending plan. Remember that B-U-D-G-E-T is not a 4-letter word. D-E-B-T is a 4-letter word and should be avoided as much as possible.
5) Create an emergency fund. This might be particularly hard during financial downturns, but even small amounts can help. In general, the minimum should be six months of basic expenses, but everyone can start somewhere. Your first step toward establishing a larger fund begins with a minimum of $1,000. That way, when your car breaks down and you have an $800 repair, you can cover it without going further into debt.
6) Take care of your basic needs first. Always pay for housing, food, clothing and transportation before any other bills. You cannot pay off anyone else if you have no home and no way to feed your family. If you need assistance with getting payments deferred, call your creditor. Most lenders have policies already in place to assist borrowers during difficult times.
7) Avoid buying on credit. If it is absolutely necessary, be sure that what you are a buying is truly a need and not just something frivolous.
8) Before you buy, stop and think. Ask yourself 4 questions: Do I need it? Can I buy it cheaper in another brand or somewhere else? Can I make it cheaper? What are my other options for acquiring this item, such as borrowing it from a friend or getting it from a food pantry?
9) Get Creative! What resources, other than money, do you have to work with? Do you have a skill that you can use to barter with? Do you have extra of something that you can sell? Are you creative in other ways? Could you start up a side gig to earn a little extra cash?
10) Waste nothing. This virtue comes from the Depression era but still rings true today. What are you throwing away that can be re-purposed and help you avoid extra purchases? It’s trendy to reduce-reuse-recycle and go green. Now is a great time to research ways that you can do this and cut costs.
The best advice is this: Do not confuse frugality with depriving yourself. Take it as a challenge. Things will improve, but in the meantime our attitude is half the battle. And above all, remember to reach out to others for help…
Scott Credit Union is here to help its members through this difficult time. Call us to see what options you have.