The pandemic and its economic fallout have continued to affect so many of us over the last several months. In looking ahead to brighter days, it’s imperative that you build and follow your own road map for financial recovery. While there is no one-size-fits-all answer, there are actionable steps you can take now to step out of current financial holes and set a course toward financial wellness for the future.
Budgeting Basics: To know where you’re headed, you’ve got to know where you’re starting from today. Kick off the process by developing a budget sheet. Ask questions: What do you need for your business to survive? What are your expenses and operating costs? Is there room for adjustments? From those answers, you’ll be better positioned to evaluate what’s needed to move forward, prioritizing expenses as needed and taking stock of where you can cut back.
Research Your Options: Investigate whether loans or government assistance are available to you through the CARES Act. Contact a financial professional to help evaluate which options might best suit your situation. If you missed deadlines or are ineligible for a specific offering, explore a short-term solution such as a low-interest loan, which could allow you to continue to pay overhead costs, including rent or utilities, to keep your business afloat.
Be Creative: After you have your basic balance sheet in order, take a moment to creatively evaluate what’s working and what’s not. Consider what you can shift in order to increase your cash flow now, such as offering gift cards for services, selling inventory, repurposing real estate or renting equipment. Tapping into this creativity can also provide a new touch point at the community level.
Plan for the Future: Fall and winter could see a resurgence of the pandemic and further tough times, so try to focus on your emergency reserves now. Utilize the budget you created to make any adjustments that will allow you to build up your reserves in advance. It’s recommended that you have at least six months of expenses set aside to provide the cushion you need to have ample savings in place.
Empower Your Employees: If you are able, explore options to support your employees’ financial wellness during this confusing period. Consider courses or training that can help prepare your employees to set budgets, establish emergency funds, and manage their retirement plans. This will encourage them to take control of their financials and plan in advance, preparing for possible shifts in income such as reduced hours or furlough.
Once you’ve accepted that there is a limit to what you can control, it’s up to you to make the changes necessary for a positive financial outcome out of this pandemic. Be strategic, be creative, and most of all, be determined.
About the Author
Brandon Goldstein offers financial planning and investment advisory services through Pruco Securities, LLC (Pruco), under the marketing name Prudential Financial Planning Services (PFPS), pursuant to separate client agreement. Offering insurance and securities products and services as a registered representative of Pruco, and an agent of issuing insurance companies.Related Articles: