How to Survive Financial Crisis, Recession Debt and Liquidation

How to Survive Financial Crisis, Recession, Debt and Liquidation

Are you in debt? Are you in a recent financial crisis? Is your country’s economy in a recession? How do you survive financial crisis, recession, debt and liquidation? Does it look like you don’t know the next step?

Well, in this post, we have put up strategies and decisions that will help you to survive a heavy debt, financial crisis or even when your country is in a biting recession.

We don’t need to define financial crisis and debt for you. However, we’ll define liquidation and recession as they are grossly misunderstood or not even understood at all. The important fact is that they all have to do with hardship humans encounter once in a while; they come and go, but may be there for a longer time if they aren’t well handled.

Recession is the GDP of a country contracting two yearly quarters in a row instead of improving or remaining where it is. While Liquidation is the situation where a company or a person can no longer make sales enough or provide the funds to continuously fund the growth of his business or family. They are ugly cases, and should be avoided by humans at all cost.

The BIG question is, if you get into these ugly situations, how do you survive the financial crisis, recession, debt and liquidation?

The Methods and How to Survive Financial Crisis, Recession, Debt and Liquidation

Surviving financial crisis, recession, debt and liquidation is often a bold step one must take. It is important. It is necessary. If this step is not taken, a lot of pain and anguish may befall you that getting yourself out of this ugly situation will be very difficult. The faster you come to terms with these methods, apply and practise them, the faster it is for you to scale through this difficult phase of life. These methods are listed below below,

1. Minimize Expenses

Once you notice that your country is into recession or that you’re suffering a personal financial crisis, the fastest and most important thing you should do is minimizing expenses. If your expenses was like $5,000 a monthly, cut it down by 50% or more, to like $2,500. Ugly cases demand austere measures and it’s not rocket science to cut off most of your expenses to increase your savings or improve your business.

If there is an economic crisis, it is definite that the income you are generating will reduce by at least 20%, and due to this, it is wise to cut down your expenses. To make it easier, begin with cutting off those expenses you can do without. If you cut your expenses, the remainder you can plough it in to make more money for you or you keep it safe until it’s save to bring it out for investment.

2. Make More Income

As soon as financial crisis comes, the question you should be asking yourself is how do I make more income? Aside the question of how to survive financial crisis, recession, debt and liquidation, the make more income question is important as well.

It is definite that your income will be cut by 20% when a financial crisis hits you, and so, it goes down to how do you make more income? Think of avenues where you can make more income to complement the income loss that befalls you. This making of more income can be to shore up the losses you have incurred. It must not be to put more money in your account, it can be for provision of the money you need to use in making those expenses that are life savers.

In this financial crisis and mess you are in, it is pertinent you look towards making more income. Look at opportunities that will add at least 20% to the income you already have.

3. Get Multiple Sources of Income

Let’s say you are into the business of tailoring and you’re about to enter into financial crisis or to go bankrupt, you’ll need to act fast in diversifying your income. As a business man, once you notice, at least, 20% reduction in your monthly income, consider taking out some of your money from that business to invest in another more profitable business.

It is not even bad to get as large as 5 multiple sources of income during or towards a financial crisis as far as those sources of income will be bringing in money for you. These multiple sources of income is to enable you avoid debt, liquidation and bankruptcy.

Once, your income begins a steady fall, it will come to your attention that your business is about to run off course or get into bankruptcy, and it is best to diversify. In the times of recession, though the financial crisis isn’t your doing, it is also best to diversify your sources of income to enable you survive the economic crunch and bounce back faster than your compatriots and competitors.

4. Avoid Risky Investments and Deals

You see all these get rich quick businesses, stay far away from them. Any business that promises more than 4% monthly interest of your investment, stay far far away from them. This is a very important method on this our how to survive financial crisis, recession, debt and liquidation.

At the times of financial crisis, many investments will be coming up, making promises of quick returns and profit. Run away from them! Run as fast as your legs can carry you.

Fine, there are genuine investments offering as high as 20% monthly interest, but don’t take this risk in this time of financial crisis. Most scammers build up fake businesses during financial crisis. Just do little investment you can trust, and do it with reliable and trusted financial institutions.

5. Be Healthy and Keep Fit

In a financial crisis, it is best to avoid any unnecessary and unplanned expenses. Your health and well-being is important to you and your family. You don’t want a situation where you’d get a serious health issue in the middle of a hard financial crisis.

So, do your best to keep fit. You have to exercise. You have to drink a lot of water. You have to eat well. Then, if you have a recurring health issue, treat it even before you fall sick. For instance, if you suffer from constant bouts of malaria, don’t be surprised, instead take anti-malaria drugs every three months to prevent it from pulling you down.

6. Get Insured

This should even be done before any financial crisis. Fine, it may be as risky as any business deal you may have gone into, but it’s safer to insure your businesses to have hope in case things go bad. This is important in our how to survive financial crisis, recession, debt and liquidation.

Insuring your business is very important, so that when it comes crashing, you won’t be left with nothing. One important aspect of insurance is that your hope of bouncing back is not entirely lost.

7. Save as Much as You Can

The time of financial crisis is the most important time to save. While reducing your expenses by 50%, you either reinvest them or you save. If you are the kind of man who is not into business and investment or don’t know much about investments, it is a wise thing to save up most of your income at this point in time.

Apart from preventing the financial crisis from biting you hard in case the unexpected occurs, it is also to enable you come out of the financial crisis unhurt and faster than your peers. Even while saving, there are various places where you can get a monthly interest of 1%, so it is a win-win for you.

8. Discard Recurrent Expenditure

The government has what is called recurrent and capital expenditure. The more capital expenditure the country has, the more development it will witness. The more recurrent expenditure the country has, the less developed it will be.

Recurrent expenditure are those expenses that don’t add to your investments or are capable of producing income. These expenses even go to the extent of reducing the amount that’s supposed to be in your savings. Examples of these kinds of expenses are cars, personal house, and some gadgets.

Let’s take a car, for instance, it helps solve the problem of movement. However, it needs fuel, maintenance, and you pay tax on it. It becomes safer and cheaper to use public transport and the subway to cut a lot of needless expenses.

Make more of capital expenditure at this point in time. Expenses that can grow your income and make improvement on your standard of living. Shun flashing, shining, lifestyle.

9. Maximize Your Assets

It is wise that you acquire assets at every point in time in your life as a business man and a working class individual. Acquire assets, acquire more assets, acquire more and more assets!

Assets help out with income and improve your income. During any financial crisis, some negatively affected businesses would want to let go of some of their assets, try and acquire them. However, be careful of expenses-laden assets and stay off from them. Once the assets is made up of little expenses and more of income, acquire it and more of it as you can.

10. Make and Stick to a Budget

The most important time to be making budgets is during any financial crisis. This is a good part of our how to survive financial crisis, recession, debt and liquidation. Budgets are very important during financial crisis to checkmate needless expenses.

If you don’t make budgets before, consider making budgets during financial crisis, and stick to it. On your budgets, put capital expenditure and assets acquisition as 50% of that budget. When you make a budget, stick to it 100%.

These methods will enable you survive financial crisis a lot. You can follow all these methods to the core and be assured of good results after implementing them. Surviving financial crisis isn’t a hard job to do, and it really pays to follow this method for a successful comeback from a financial crisis.

Thus, these are good ways on how to survive financial crisis, recession, debt and liquidation.

Thank you for reading!

Leave a Comment