3 Things You Can Do to Ease Financial Stress In a Tight Economy

by Bill on February 24, 2012

Headlines I’m finding in the news today.

American Airlines bankrupt
Sears closing 120 stores
P&G cuts 5700 jobs
Post Office possibly cutting 35,000 jobs
(all CNN Money)

I was scanning the news feeds this morning and realized in one day a whole lot of people were about to be out of work. This got me thinking. Even if you aren’t one of those threatened with the immanent loss of a job, this year may be an eye-opener still. For that reason I tell people learn to reduce your debt, make a product you can sell and learn to be self-sufficient.

Now everyone loves to think they can be self-sufficient, or self-reliant or whatever you call it; but if you have a job, with a boss and paycheck, and pay on monthly installment for anything you are not self-reliant – because any of that can be pulled out from under you in a heartbeat. The job could be cut, or eliminated. The credit may vanish if you or the creditor has trouble. Nothing is guaranteed if you are dependent on someone else for your sole income or resources.

How do you get out of that trap? Make yourself dependent on yourself and create multiple resources of income. Have something you can supply to many people. You don’t have to be a full-fledged business, but you still can make yourself a supplier of something many people want. The first thing you need to do is figure that out. What can you do, that you already do, that can make money? What can you make that wouldn’t take lots of time and money to put a quality piece together? Everybody has some talent. No one grew up thinking they were gonna be a Wal-mart cashier.


Now, figure out what extra spending you can reduce – today, I mean all the extra crap. Yes, even the extra trips to the dollar store. Cut yourself down to basic “don’t spend it unless it has to deal with shelter, food or heat”. Obviously don’t cut the gas to get to work, but do cut the coffee you drink while getting there. Stop the Netflix, stop the Amazon account and the online whatever. Don’t spend another dime on fast food for a month; eat sandwiches if you have to – its that important. The reason I say this is because that extra money will now fund your initial product and/or marketing; albeit small but it will be the initial startup capital.

If you are making something, make one item. Sell it. Use ebay, or Craigslist or flyers or whatever. Sell it. Now, take ALL of that money and reinvest it into making more product. Do that for a month. No you won’t be rich, but you will have the beginnings of a tiny little side income. Somewhere in there determine the cost to produce one item from beginning to end, including a set hourly wage for yourself – use the national minimum wage for now ($7.35 as of 2012) as a standard. That becomes the minimum amount you need for inventory multiplied by the number of pieces you want, or need, to make. You can start keeping the extra money as time goes on. BUT, you not only have enough for the production, you also made a little part-time money for yourself!

How does this help you become self-sufficient? Remember that amount you figured out earlier for basic needs without all the extras and debt? That is now your target amount to achieve with your little side production job. Once you match that number, you can do one of two things – use it as a debt paycheck where it goes towards paying down credit cards or loans; or building up an emergency fund in case you do loose the job.

And if you do get your debts paid down, and the savings built up, the income from this becomes extra money for things you couldn’t afford before! Or, if you want, go off on your own and be your own boss. If you can learn to reduce your debt, make a product and become self-sufficient you can handle economic downturns much better.

Questions? Comments? Opinions? All are welcome. And please feel free to pass this on if you know someone who could use it.

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{ 3 comments }

Squirrelers February 25, 2012 at 11:56 pm

Totally agree that things can be pulled away in a heartbeat. Things like this happen to people all the time, and with what seems to be regularity these days. People buy a home or take on debt based on cash flow they think is “secure”, when the reality is that much of the security is in their minds only. Best to be smart about this, and not follow conventional assumptions on steady income all the time.

Crystal @ Custom Memorial Quilts March 3, 2012 at 4:26 pm

Came over from Ken’s Freelancer Today. You’ve hit several nails on the head here, Bill. I’ve been completely debt free for about a decade now and earn from home creating custom memorial quilts and proofreading (paid to read and sew – it doesn’t get any better than that!). Getting to this point took time and work and sacrifice. But it is so worth it to scale back and forgo all extras (and then some) to have the freedom and peace of mind that comes with being self-sufficient. Great post and great blog!
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Bill March 3, 2012 at 10:14 pm

Thanks for the comment Crystal! Hope you find more useful words in future posts. And yes I do believe, as you will see, that people who take the time to make their life will always see better times ahead.

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