Tag: Rusty Tweed

You may be wondering what you need to do in order to keep your finances intact during the COVID-19 crisis. Here are some principles to live by so that you can live financially to see another day.

Know the Different Scenarios

One of the first things that you should do is to model various different financial scenarios based on certain impacts that the economic crisis could have on you It is vital to be prepared for the worst-case scenario financially so that you are able to plan for the worst. Make sure that you consider the worst of what can happen and are not overly rosy in forecasting the various situations that you may change. In other words, you will want to have a plan to deal with the worst so you can know how to adjust your expenses accordingly.

Stay Defensive

You will also want to adopt a defensive posture so long as the crisis is continuing and things seem chaotic. While there will be the urge to try to take advantage of opportunities that arise during this time, the best thing that you can possibly do during an economic crisis is to survive. There will be plenty of chances to scoop up assets on the cheap once it is apparent that the crisis is over and you will emerge from it.

While the COVID-19 outbreak is ongoing, you must be cautious in terms of investments and new opportunities. Remember to not use all of your available cash and to always keep more than enough liquid assets than you need to make it through to the point where business begins to increase again. As Rusty Tweed would tell you, sometimes the biggest win is just sticking around when other businesses are forced to close.

If you are an individual as opposed to a business, you should still try to stay as liquid as you can during the crisis. However, you can slowly scale into new financial opportunities as they arise, making sure to do so a little at a time.

Use All Available Government Programs

Moreover, you should take advantage of each and every single government program that is available to you. If you are a business, there are government loan programs that are designed to keep your business going until the crisis has passed. Some of these loans can even be forgiven so long as you keep your business operating during the COVID-19 outbreak. To the extent that there is a government program or other relief that allows you to take advantage of forbearance to pay certain bills, wait to pay the bills until you have to so you can continue to conserve cash resources.

Not every government program is well-publicized during this time. Some may be first-come-first-served while others may have time deadlines to apply. Do an exhaustive search for all possible programs that can give you grants or loans during this difficult time.

As an individual, do not hesitate to file for unemployment. There are federal government programs that supplement state unemployment benefits, giving you a living wage while you are out of work due to the coronavirus crisis. However, you will need to be persistent in filing for unemployment benefits because many people have been reporting difficulties getting through to the agency on the phone or even being able to file over the website.

Cut Expenses

As a business or individual, Rusty Tweed would advise that you get aggressive in cutting your expenses while there is no visibility about whether and when the economy will recover. In order to maintain your financial empire, you literally need to assume that the worst projections will happen and then plan from there.

This means cutting out any type of spending that is not essential. Provided that you survive this crisis financially, there will be plenty of opportunities to spend in the future. However, you must make it to the future. You can never be cautious enough when it comes to slashing the amount of money that is going out when it seems like the economic world is ending.

Keep Your Head

Finally, the most important thing that you can do as a business or an individual in order to keep your financial empire from falling is to keep calm and take a deep breath. Many people will panic during times like these and make illogical decisions. This is the beginning of the end for them as one bad decision literally begets another.

By thinking clearly and making sound decisions, you can do what needs to be done financially during these times. While these are occurrences that nobody could have fully planned for, you can still exercise the principle of strong decisionmaking to make it through. If you make decisions based on rationality and evidence, chances are that you will make it through this economic catastrophe

For some, the question is, why is personal finance not taught in school? It is not clear whether people are not educated, or simply they don’t want to learn anything. Before I look into the crux of the issue, let me review a twitter feed that I engage in about finance. A good number of people believe that they were never taught personal finance. Those that were taught think that it was a waste of time; in fact, some are enrolling for private finance consultations instead of reviewing their school-learned lessons.

Before 1998, only 21 states had implemented personal finance in their educational curricula. Eighteen years later just 24 more states have done so to bring the total to 25. Today, only 22 states, out of 54, require students to pass a personal finance course before graduating. Considering that 73% of the US population is above 21 years, it not hard to see why they feel that they never received this critical information.

So, from reliable extrapolation, we can argue that majority don’t have the power over their finances. Once you get your money, ‘finance’ becomes an academic word. If the person is not taught in school, then, personal finance is just that, personal! If you cannot take the initiative, then the cruel hand of your creation will initiate you.

Research shows that majority of people rely on information from parents, mostly negative, about finance. If your parents are struggling with finances, you are likely to learn from experience. If they don’t, then, that lesson may never hit you until when it does. With finance, there is more than affording a mortgage, paying for college, medical insurance or even a holiday. It is about having a balanced lifestyle from youth to old age.

It is more about how you can transition from one stage of life to the next and managing it well. For example, the transition from youth to parenthood is not always backed with increases in income, yet the expenditure tends to increase significantly. So, personal finance is engaging in a thought-provoking decision plan. For example, individual finance should inform you on when to start a family and how to do that.

On average, to retire peacefully, you need $1.5 million. Assuming you have worked for 40 years to retire at 65, you need to save $37, 500. Unfortunately, the real median personal income for the country is $31,099. That sad reality can explain why the average American debt grows over 20 times faster than the US GDP, which is another worrying statistic. Firms such as Tweed Financial Services must worry about the trend.

A quick review of some of the personal finance courses available in schools shows that the classes are laden with financial jargon and little applicable knowledge. Tweed Financial Services is concerned that one does not need to know how to fill IFRS compliant forms to be perceptive about his finances. All the person needs is information enough to plan and execute a budget that includes what to earn, what to spend, what to save, how to save, and how to grow the savings.

My opinion is that personal finance knowledge should be a comprehensive learning process that should start in school and continue into adulthood. At the high school level, children should learn bookkeeping, budgeting, and a saving culture. As they progress in life, they must learn how to manage debt and earn. Once they have savings, they should learn ways and means to increase or multiply those savings. Later in life, they should focus on maintaining affordable lifestyles without breaking their lifelong commitment to a successful personal finance.