In light of the recent pandemic, you may have lost your business, or your primary source of income. Here is some lost income advice for the woman in business who is facing uncertain financial times. If you are one of these people, rest assured, it does get better. This is intended to be a practical list for immediate relief and can apply to both your personal and business finances and is intended for business owners and professional women alike.
Lost Income Advice for the Woman in Business – 10 Steps to get on solid ground
Step #1. Face the facts, know the numbers and accept where you are.
The first thing to do is accept you are where you are. So, pull out all the bills, all the bank account balances. All the creditor notices, if there are some, all the payment notices. All of them, and face them. You can’t slay a demon you won’t face. Accepting how bad things are, is the first step to acknowledging you can get past this.
Step #2. Make a list of the expenses you have to make in order to live.
Create a budget based on things you cannot live without in order to truly function. Prioritize your spending and get real with what you must afford, not what you want to afford, or wrongly assume you can.
List all the expenses that you have to meet, in order to not be homeless, to be fed and to stay safe (this includes health care, etc). To be clear, this is not your daily Starbucks, your Hello Fresh order or your nail treatment, or barber shop visit. This isn’t your gym, this isn’t your Amazon prime service, this is not the Bark Box for your favorite friend. This is:
Your housing…If that’s too expensive, start thinking about how to reduce that amount, if you can. Should you consider a roommate, do you want to downsize, should you rent and move into something smaller, or should you sell?
Your health insurance. Does your present situation place you in a position for subsidies, or depending where you live, Medicaid? Horrified at the thought, what’s horrific is getting sick and not being able to have access to care, get over it. Prescription discount plans can also be a godsend. One option I like to refer people to is GoodRx.com. You’d be amazed what you can save, with a little research.
Your food. What do you need to be able to cook healthy meals for yourself and not be starving? You’d be amazed that you can do it, tidily, depending on where you grocery shop, just don’t be thinking you are going to be able to do this at “whole paycheck” or some other fancy permutation, enough said. I like Aldi myself. Find your favorite place, make a game out of it, be creative. If you have kids, enlist them to help. Cook a healthy dinner as a family. Check out this great article on 15 meals to make for under $5. There’s variety, there’s healthy nutrition, and better yet, if there’s only you, or two of you, most recipes double up – so the cost per meal goes from $5 to $2.50 or less.
Your utilities. Phone, electricity, water, if you pay it. First. The rest…is all extra. Cell phone plans can be downgraded, and utilities (depending on where you live) can also be put on a budgeted plan to ensure the lights stay on, and the heat as well. If you live in the greater Maryland area, chances are you’re working with BGE, if that’s your provider click here for some information that may prove of assistance.
Step #3. Determine your cash (money in the bank, not your credit limits) on hand.
Compare this amount with the amount you have just come up with. Are you short? Are you ok for the next 4 weeks/month ahead?
If you’re not, what next? Well, it looks like you do indeed, really have a problem. It’s ok, it’s fixable, but it won’t just go away. Now is not the time to be prideful, it’s the time to get creative…What areas have the biggest gaps, where can you cut to make it better, and how can you fix them?
If you are a business owner, this situation will be the test of what kind of banking relationship you have. A time of crisis can be a time of opportunity to find a better service provider. The reason we published lost income advice for the woman in business is for entrepreneurs to have hope and feel empowered, even if finances are not where you want them to be.
Get to know your banker. If you don’t know who they are, make a visit to your branch to meet one.
Step #4 Make and decide to stick to a budget
A budget is a plan for how to spend your money. It’s essentially a listing of planned expenses and income/revenue. It’s going to be your bible, and become your best friend. Trust me on this. The Balance has a great guide on how to make a budget in 6 easy steps.
Step #5 Work to make the necessities happen first
What does this mean? I studied Psychology in college before deciding to focus on Management. Maslow’s hierarchy of needs is a visual representation of where your focus needs to be at the moment. Get back to the basics and focus on necessities, secure them and then you can progress up the pyramid once out of the woods. Get clear on your physical needs of food, water, housing, and safety. What needs to happen to ensure these are handled, whatever you need to do, get on it. Double time if you have kids or dependents.
Step #6 Itemize all your liabilities, debts, things owed to creditors, prepare to deal with it
List them by amount, interest, terms and contact information. Look at what you owe, own it. See if anything you owe can be returned to settle the amount owed, or find out what kind of payment plans you can establish.
Creditors know people get into trouble for a variety of reasons, often will be open to working with you, if you are honest, forthcoming and reasonable in your interactions with them. Before you contact your creditors, find your credit score. Credit Karma and the major credit bureaus provide it for free. Know where you stand before you call them. You may be in a position to negotiate more than you realize, especially if you have a good rating. Get your credit score for free here.
See what you can consolidate, if you have good credit, use balance transfers or home equity lines to get your payments to a lower, more manageable amount. More info on debt consolidation can be found here.
Step #7 Find extra money – It’s there, just be prepared to have to get creative
Convert things you don’t need to cash
Analyze and take inventory of everything that you have someone else might want to buy. This includes designer clothes, electronics (in good working order), collectibles, furniture, household appliances & gadgets… What is in pristine or good enough condition to sell. Sell it. Use Facebook marketplace, Let Go, consignment services, or Ebay. Sell, as much as you can. Unless it’s something like jewelry (which is rarely purchased at a reasonable percentage of it’s true value and often holds high sentimentality, more than actual value), get rid of it.
Even if all you get is $100, it’s $100 you didn’t have before…It’s $100 of food, or money for things you need, or $100 towards clearing debt.
Don’t have a job but have a car that’s clean and in good working order?
Consider driving part-time for Lyft or Uber. If all it does is pay your car payment, and keep gas in your car, it is the right thing to do. Besides, driving keeps you out, and about, active and useful.
Consider other options given you have spare time, that might provide temporary income. Housecleaning, house sitting, pet sitting, small chores and handyman work, or errand running can all prove to be sources of much-needed cash income, and myriad online apps and services exist to help you access these “gig economy” ways to make money, fast. Also, consider volunteering one day a week for a worthy cause you believe in. Many a job has been found through the path of volunteering, be it in on site networking, new contacts and connections, or just plain good karma. Don’t believe me? Try it.
Step #8 – Consider working with a Financial Planner
Sometimes when we hit rock bottom, or close to it, it’s because we don’t understand how we got there. You’re where you are for a reason, there’s always a message in the mess. Now may be the perfect time to decide to work with a financial professional so you can rebuild a healthier financial outlook, learning from the mistake that got you here.
Step #9 BREATHE – It will get better
Step #10 If you aren’t already become your own boss (if you can handle it)
Have you always wanted to be your own boss? Do you have a skill, or talent, or gift that people would pay money for? This may be the time to consider entrepreneurship. If you’re already a business owner, it’s a good time to reevaluate your commitment level. Hopefully this lost income advice for the woman in business article has helped you and given you hope whatever your situation.
In full disclosure, entrepreneurship is not for everyone, and it also comes with it’s own risks. This being said, sometimes losing a job or consistent source of income is the impetus we need to take a chance on our own brilliance. Many of us have a highly valued skill or ability, or talent but for whatever reason, refuse to take a chance on it. If this is you…why not consider this a possibility. After all, there are two sisters in Maryland who used the government shutdown as a great excuse to finally live their dream of launching their own cheesecake business. As a result, “The Furlough Cake” is an internet sensation.
Whatever caused your situation, baring health challenges, maybe this is the time to give in to your passion and see what might be a hidden opportunity in this unfortunate situation. Not everyone has what it takes to be their own boss, but if you do…no time like the present.
Sometimes when you leap, the bridge appears. To learn the 4 biggest mistakes about money you can make click here.