Tips and strategies to get through COVID-19 | Lisa Newton
It’s probably safe to say that when 2020 began, no-one could have foreseen the events that have since unfolded before our eyes.
One minute, I was looking forward to a friend’s 50th party in April (something he’d been planning for months) – next thing, everything had been paused, postponed or just cancelled altogether (he held a small zoom party instead).
Some people have seen their livelihoods go to zero – literally overnight. Not gradually, like the sun setting on the horizon, but very abruptly, like the power going out. The party is over. The music has stopped. There have been several high profile business collapses already with many more expected to follow. The high street is about to have a dramatic facelift. Airline staff have been laid off, major sporting events cancelled, hotel workers told to go home, retail staff – furloughed. I had never even heard of the word ‘furlough’ until now!
The sheer scale at which these unprecedented global events (“unprecedented” being the word of the moment) have hit virtually everyone has been (even for me, a bookkeeper by trade) – truly extraordinary.
Take Primark for example. One day they were making sales of £650 million a month, next day – NIL. Zero. Nada. Zilch. Why? Because they don’t have an online presence! How does any business or individual cope with an overnight shutdown?
The whispers of a virus in China were in the background in January, moving to the foreground in February and by March – that was it! It was in your face, everywhere. You couldn’t find hand sanitizer for love nor money! I don’t think anyone in the West took Corona seriously at first. It was something ‘over there’ happening to someone else. But I knew it was serious when the pubs shut and the pasta and loo roll at Tesco ran out. So, what I’d like to do here is to share some tips and strategies for getting through what is likely to be a highly unpredictable period.
I don’t have a crystal ball, so I can’t tell you if we are in for a ‘Great Depression’ as some beleive is due. I can’t predict house prices or the jobs market or interest rates – but there are some timeless words of wisdom when it comes to managing your finances that I shall impart. If things are particularly bad for you at the moment, always remember the saying that “this too shall pass” so just hang on in there. Take a deep breath and if it’s any comfort – you are certainly not alone. Many people are in the same boat. So if you are going down… you’ll be in good company.
Before we go into what to do, let’s just start with what NOT to do.
- Bury your head in the sand
- Waste time
- Worry or have sleepless nights (it’s a waste of energy)
Start looking at this as a great opportunity to get into the driving seat and take back control of your life. You are responsible for you. And when we start thinking in this way, everything going on around us takes secondary place, as we start ‘thinking’ and ‘planning’ and we stop ‘reacting’ and ‘panicking’. Let’s bring a sense of calm and order to our situation.
Now, for some practical DO’s. These can be applied to your business and to your personal finances.
Cancel subscriptions and all the unnecessary spending habits that you’ve picked up over the years
I must admit, I’m guilty of this myself. As someone who is more than aware that ‘it’s the pennies that make the pounds’ I had a £199 monthly software subscription for my business and I’d not been utilising it to its fullest extent. When Covid19 struck, this was the first direct debit that got cancelled. They tried to talk me into half price for three months and then catching up with the outstanding balance after lockdown, but I stayed strong and said ‘no’. I cancelled it altogether.
Reducing fixed costs like these, instantly keeps the cash in your bank account and that’s the aim of the game right now. Go through your bank statements for the last 3 months, look at each expense and cancel what you just don’t need. Be brutal. These are covid times. And no-one knows how long it’s going to last.
Revise your budget
Take a moment to list all income that you can expect in this month and list all expenses. If you’ve cancelled all unnecessary spending, then this will improve your budget.
Your goal should be (at a minimum) to ensure that you have more coming in, than going out. The problem that many people are facing today is that they’re overspending each month and falling further into the red. Some people were already overspending before covid19. This situation has forced many people to stop and take a careful look at everything. Don’t be scared. Just do it. With clarity of the situation and a number to work with, we can then start to take back control.
Set goals for yourself
You are the CEO of your life, you decide where you want to steer your ship. Don’t watch what Mr and Mrs Jones are doing next door – you don’t know what they’ve got going on. If they’re always in a new car every year and in the latest designer clothes and having an extension built – good for them. You don’t know if they’re in debt up to their eyeballs or indeed if they just make a lot of money. But that’s them. You don’t have to keep up with anyone but yourself. If you do have a habit of comparing yourself to others – stop it. It just leads to envy and unhappiness. Stay on your own path, focus on the road ahead and decide where it is that you want to go and plan from there.
If, you have just lost ‘20%’ of your income – then you may want to set the goal of how to make that figure back, or (quicker still) slash your costs by that figure. It’s a start. A goal gives you purpose and direction and this is what we need at a time like this. When it is ‘clear’ what the target is, then we can start to focus our energy on getting there.
Learn a new skill
Now is an absolutely fantastic time to learn a new skill. I don’t think there’s ever been a better time. And I really mean this. If, so far, in lockdown you’ve been spending lots of time on social media, getting wrapped up in the fear of death or the economy crashing or in conspiracy theories, then turn off the news and pick up a book to read instead. Switch off Netflix and get onto YouTube and watch an educational / instructional video. Watch a TedX talk. Listen to an inspiring podcast. Brush up on what is going on in your industry and ‘sharpen the saw’ as they say.
As I’m in the accounting industry, ever since the government announced their ‘package of measures’ I’ve been on the www.gov.uk website reading up on who can claim what, the rules for furlough and what grants and government help is available.
If you are short of money, make sure you check to see if you are entitled to any help. Universal Credit is a payment to help with living costs. I’ve been on zoom calls (both to listen and learn from industry leaders as well as to share my knowledge with others). Some employers are providing training – to keep up with what is going on. In our bookkeeping business staff have all been given access to accounting software training, excel spreadsheets and payroll management training.
There are many sites out there that teach you online. (udemy.com, simpliv.com, codecademy.com, udacity.com, coursera.org) to name just a few. Some courses come with CPD points which are handy, some are certified and some are free.
Open University (open.edu) are offering free courses that come with CPD points and are certified. Harvard University have some free online courses. So, if there’s something that you’ve always wanted to learn – do it. There are websites giving guitar lessons, language lessons (for free or at a heavily reduced price). Investing in you and in your education is an investment. Do be aware that some skills really are in demand. Learn them!
Sell your skills
Make a list of everything that you are good at. Don’t be shy or modest. What are your passions? What do others praise you for? Think about the tasks you complete at work? What have you ever been paid for? And can any of these skills be monetized? In particular – skills in demand online are: coding, website development, SEO, Facebook ads, social media marketing, Excel, copywriting, project management – to name a few.
Even if you don’t have ‘advanced’ knowledge, if you have ‘intermediate’ knowledge, this is more than a complete beginner and you have something of value to offer.
Register on these same platforms (as listed above) and become a trainer and sell your skills. In addition, you can offer 1-2-1 services and ‘freelance’ on platforms such as fiverr.com, upwork.com, truelancer.com, peopleperhour.com.
Take a look at these sites and see what others are offering. Do you already have a skill that you can sell now? If so, join the gig economy and add your ‘gig’. Designers, writers, bloggers, content writers, ghost writers, editors, proof readers – are always in demand!
Start a New Side Hustle
This is slightly different to ‘sell your skills’ – the ‘side hustle’ is the makings of a great business. So for example, I have a course on ‘how to make a podcast’ (this is selling a skill) but I actually run a podcast called ‘The Authors Podcast’ – this is a side hustle. It has the potential to be an entire business in and of itself. Note that any ‘skill’ can not only be taught to others, but also turned into a full blown side hustle. Focus on the most ‘in demand’ skills and think about how can you turn it into a business?
For example – one skill that is doing particularly well on Fiverr.com is: video marketing. Why? Because people want video for their social media channel: YouTube, Facebook, WhatsApp, TikTok, Instagram TV, Pinterest, for the website, to tweet and for their Linkedin pages. Videos are very engaging. What if you could make ‘videos’ like a professional? Today, it’s easier that you think.
You could invest in some editing suite software, or use a great site like invideo.io (which has everything you need) and you can make extremely professional looking videos on behalf of others who don’t have the time / energy to make it themselves. Imagine it takes you 2-4 hours, and you only sell one video per week at ‘£100’ – would this extra cash help you out right now? All from the comfort of your own home.
Be grateful – Mind-set Meditation
Make a list of everything you’ve got to be grateful for and stay in that mind-set of gratitude. Yes, we may be in lockdown and you can’t move about as freely as before, but are you safe? Do you have a roof over your head? Is there food in the cupboard? Do you have access to safe, clean drinking water? Can you use WhatsApp video or Zoom or the House Party app to call people for free and stay connected? Do you have good health? Are you living in a country free from war? Can you go for a walk around the block without fear of being kidnapped? Can you play some music and dance? It’s the little things that we have to be grateful for.
If you’ve just lost your job, can you use this time to retrain? If you’re furloughed, do you now have the time to write that book that you’ve always wanted to? Can you finally get round to doing those things that life has held you back from doing due to being ‘too busy’? Can you slow down, breathe, take time to stop and smell the roses?
If you are struggling with any of this and it’s all just too ‘happy go lucky’ for you, then I’d highly recommend checking out the BrahmaKumaris who are a charitable organisation who do daily meditations and online talks. I believe that the message they share is one that everyone should hear because you will need the mental resilience to help you through these covid19 times!
How you think will affect everything. If you see opportunity in this situation then you’ll find opportunities and you’ll thrive. If you see problems, then you’ll just be finding faults and negativity. Although your finances are important, your mental happiness is too. And although they say ‘money doesn’t buy you happiness’ – if your finances are OK during covid19, I’m sure you’ll be better placed to ‘cope’ than someone who is in financial trouble.
Focus on your cashflow
Simply put, your cashflow is like a bathtub. You have money coming in through the taps, and money going down the drain (literally). This is the best analogy I can give you. In these covid19 times (and in all times) we should always be managing our cashflow. We need multiple streams of income coming in, and few expenses going out. The water level in the bathtub represents the cash that you have in the bank. And you have to keep your eye on that level. Always seek to reduce your expenses first, and then go into increasing the income streams. Turning on the taps full blast is a lot of energy if there are ‘leaks’ in the bathtub!
Sometimes there are one-off unexpected expenses e.g. flat tyre – and you have to ‘dip in’ to your savings to pay for things. But sometimes you can add ‘one off’ cash INTO your bank. Try selling spare stuff on ebay.com or on GumTree or PreLoved.co.uk. Sites such as MusicMagpie make it easy to sell Mobile Phones, CDs, DVDs, Games, Books and Tech. Other sites that will buy your used books and gadgets include Zapper.co.uk and Ziffit.com. Have a good old clear out and get rid of things taking up space in your life. There are one-off surveys that you can participate in online and receive payment in the form of cash or vouchers e.g. for Asda or Tesco – that can then pay your food shopping bill for the next month! Focus on making sure more comes in, than goes out. Never underestimate the power of positive cashflow. Every little helps!
Save Money – Save Up Your Bad Habits
What has been remarkable following the lockdown was how many people immediately were in a problem because they had no savings to fall back on. If there’s one thing that should come out of Covid19, it’s that one should always have a ‘rainy day fund’. The easiest way to start building this up is to create a savings account with your bank online and set up a standing order from your main bank account to this ‘rainy day’ fund on the ‘1st’ of every month. Ideally, you should aim for 10% of your income, but whatever you can afford, just set it aside and forget about it.
Even if you feel that you’re not in a position to be able to do this at the moment, just do it anyway. You can start small. Put £1 per week aside into your savings account and when this lockdown situation has passed – increase it. If the amount is small, it’ll feel inconsequential so you won’t miss it. And post-lockdown KEEP IT GOING! So if you’ve managed to cut back on all the “unnecessary” items e.g. bottled water, coffees, lottery tickets, paid phone apps, cigarettes, alcohol, gambling, unnecessary Ubers… put this to your savings account and promise yourself that you won’t fall back into bad habits.
It just starts with one pound. It’s a step in the right direction.
Invest Money (advanced stuff)
Once you’ve mastered your command of money you’ll start to have savings. With this ‘pot’ of money you now have options. Don’t go and rush out and blow it at the first chance. Put it to one side and let it grow. If you are someone who lacks the discipline, then have two savings accounts. One to save up and spend on a treat for yourself, and keep one to save and invest with. This is your nest egg and you must guard it from all temptation. Tell no-one about this nest egg, as they may want to convince you to let them spend it. No, this egg is for you. But don’t worry, if you drop it and it breaks – you now have the tools and the skills to create another golden egg. Now this is where it can get very exciting.
Do seek expert advice. And by ‘expert’ I mean, before you follow anyone – ask to see their credentials. Don’t be swayed by ‘get rich quick’ schemes. There are many who would convince you that ‘gold’ or ‘silver’ or ‘bitcoin’ is the ‘next big thing’, but make sure you do your own research and that you don’t put all your eggs in one basket. But you do have to put them somewhere, as the banks these days are not paying a great interest rate and with inflation, the value is barely keeping up. You won’t always get it right, and you may lose some money, but you will (hopefully) learn from each mistake and not repeat it.
The trick is to not lose your life savings all in one go. Spread your risk.
Money can be invested into property that produces a passive income, or stocks & shares or unit or investment trusts that can produce a portfolio income, or into a business which can produce residual income. Selling your skills can provide an instant income which is very welcome in these covid19 times, but there are only 24 hours in a day and earned income can only get you so far. By investing your money into something which can provide a passive / portfolio income, you are then making money whilst you sleep, which is how real wealth is created.
Once a portfolio of investments are built up over time, these assets (if income producing) can then replace the earned income, and if you’ve followed the other steps of keeping your expenses low then effectively, you’ll be “financially free”, as more money will come in from passive income sources than from the job.
With freedom comes choices. Covid19 has shaken up a lot of people and made it impossible for many to go out to work to ‘earn’ income. Even those who were making a side hustle out of Airbnb have found that bookings have nose-dived. So if there’s ONE THING to take away from this corona crisis – it is that we all need multiple streams of passive /portfolio income. So if one thing turns bad, we can ‘pivot’ (the second most used word of the moment) and the show keeps on going.
A word about businesses
There are lots of different types of businesses. Investigate the options that are out there and choose the one that suits you. Some products / services are virtually ‘recession proof’ hence financial services such as accountants and tax advisors are set to do well. If you are looking for inspiration – there are some ideas that tend to do well in any downturn. Look into cosmetics and chocolate (as people seek to cheer themselves up). Any business to do with repairs and maintenance should do well as people are unlikely to have the budget to replace items, so they’ll seek to repair them instead (machines, cars, houses).
Food never goes out of fashion – so cafes, fast food (cheap eats) can do well. In this environment with airports virtually closed, it’s unlikely that international travel is going to be at the level it was last year, so this could represent an opportunity for internal holiday destinations, days out, budget travel – 1 & 2 star bed and breakfasts, campsites etc.,
And let’s not forget the obvious. There’s expected to be a surge in the divorce rate, (so people will need a lawyer, marriage counselling services and a spare room to rent). In tandem, a baby boom is expected (so daycare, anything child related) could be a great business to get into. Follow that group throughout their life-cycle and have products / services ready for them.
If you are a marketer, (and you’re good at what you do), then now is a fantastic time to position yourself to help businesses because after the lockdown they will need some customers! If you can get paid on results then you could clean up. Think of how well Groupon and Wowcher did post the 2008 recession. People still wanted to spend, but they also wanted a bargain. They bought customers to businesses and took a percentage cut for themselves.
Some business models (such as network marketing / Multi Level Marketing) work on a similar principle accept they have products/services already. Your only role is to market them, and in return you get a commission. The main benefit of this type of business model is that the support, infrastructure and delivery system is already in place. Health products are particularly crucial now as your immune system is your last line of defence against any virus. Supplements on subscription can provide a steady residual income and boost your own physical health if you take them too.
Think about the services that are invaluable i.e. ‘corona proof’. Will you be giving up your internet or mobile phone anytime soon? What if you could earn a residual income from basic essential services that every household has (like energy or telephony)? There are business models out there that can give you this. I’ve been a customer and a distributor for many years. And new people are very welcome to join the discount club.
Hopefully this has given you some ideas to explore. It’s important to point out that not everyone is ‘suffering’ in these times. But for me, there have been a few surprises. Initially, I assumed that cleaning businesses would do well in this environment… but then when the lockdown was ordered, (depending on who your clients were) – with many places closed, there was no work to do. So let us not ‘assume’ that a person’s situation is good or bad. You just don’t really know.
Finally, if you have mortgages or loan repayments to make – be it credit card, car loan, hire purchase (HP) etc., if you will struggle to meet the payment, do contact the loan company as they are being more lenient than usual. Many are allowing payment holidays, meaning that you can miss the payment for 1-3 months without penalty,
BUT remember that the amount WILL STILL BE DUE at some point in the future. Don’t just stop making payments but make an arrangement with them. Then use the breathing space given, to allow yourself time to implement what we’ve discussed above. Hopefully, by the time your payment holiday is over, you’ll have the cash in the bank. Stay positive and look for the opportunities.
To learn more about Constant Cashflow streams for the individual, the online course is available: