Five key ways to survive during economic crisis
The high cost of living has plunged Nigeria into an economic crisis. However, the prospect of something expensive and beyond your control happening becomes less threatening if you’re properly prepared.
Here are the five steps for how to deal with an economic crisis:
1. Prepare to minimise your monthly bills
You might not have to do it now but be ready to start cutting out anything that is not a necessity. If you can get your recurring monthly expenses as low as they can be, you’ll have less difficulty paying your bills when money is tight.
2. Make a budgetIf you don’t know exactly how much money you have coming in and going out each month, you won’t know how much money you need for your emergency fund. And if you aren’t keeping a budget, you also have no idea whether you’re currently living below your means or overextending yourself. A budget is not a parent—it can’t and won’t force you to change your behavior—but it is a useful tool that can help you decide if you’re happy with where your money is going and where you stand financially.
3. Look for ways to earn extra cash
Everyone has something they can do to earn extra money, whether it’s selling possessions you no longer use (either online or in a garage sale), babysitting, chasing credit card and bank account opening bonuses, freelancing, or getting a second job. The money you earn from these activities may seem insignificant compared to what you earn at your primary job, but even small amounts can add up to something meaningful over time. Besides, many of these activities have side benefits: You might end up with a less cluttered house or discover that you enjoy your side job enough to make it your career. Now’s the time to prepare for the worst and hope for the best.
4. Live within your means
If you make it a habit to live within your means each and every day during the good times, you are less likely to go into debt when gas or food prices go up and more likely to adjust your spending in other areas to compensate.
5. Invest for the long term
So what if a drop in the market brings your investments down 15%? If you don’t sell, you won’t lose anything. The market is cyclical, and in the long run, you’ll have plenty of opportunities to sell high. In fact, if you buy when the market’s down, you might thank yourself later.