FINANCIAL PANDEMIC: The Approaching Storm

The financial pandemic has been brewing for months. Now, it’s approaching and coming into sight. The dam that many have been patching and plugging since the spring is beginning to show signs of wear and has begun to spring leaks.

The difference in this economic situation and others is that it has affected every economy, every nation, every people simultaneously. Just like its predecessor, the coronavirus pandemic, the impending financial pandemic is global. No one was prepared, no one had time to prop up their faltering economies, and no one could have predicted the future uncertainties.

But the key for you and me is to create good out of the bad and to be prepared. It was Walt Disney who said in a previous economic downturn: “I’ve heard there’s going to be a recession. I’ve decided not to participate.” Heed the signs and plan accordingly. You can survive.

Just as a hurricane or snowstorm leaves devastation in its wake, so too will the arriving financial pandemic. Many experts believe the cleanup and rebuild will take years, if not decades. Review the chart below that indicates many industries will not recover until 2024 or 2025.

The signs are developing before our eyes and those signs are bubbling to the top in dramatic fashion.

  • American Airlines will lay off 19,000 employees by October.
  • United Airlines plans to lay off 36,000. That’s half of its U.S. staff.
  • Oil companies are suffering, laying off and furloughing thousands.
  • Media companies like NBCUniversal, AT&T and Warner Media are cutting employees, including executives.
  • Already struggling companies like Macy’s, JC Penney, PHV Corp (Calvin KIein, Tommy Hilfiger) are shuttering more stores and cutting staff.
  • Big banks like WellsFargo and HSBC are cutting services and employees.
  • Uber, Lyft and TripAdvisor aren’t exempt either. They are restructuring.
  • Obviously, hotels and entertainment industries are stumbling.
  • Experts predict the housing market is — at the very least — due a significant correction. At worst, many realtors and industry officials believe real estate prices may take 10 years to recover.

What’s the message? As I’ve written previously in The Brewing Storm and The Coming Storm, the times call for us to be sensible and prudent — but action is the operative word.

While we’re busy trying to pick up the pieces of the medical pandemic, keeping our heads above water, getting back to work and searching for a sense of normalcy, the ground is shaking beneath us, and warning signs abound. This is not a time to be lulled to sleep, it’s a time to pay attention and take action. Just as you would prepare for a hurricane or significant snowstorm, so too is this a time to circle the wagons, evaluate circumstances and priorities, check supplies and make plans.

So what does all of that mean for you and me?

Plan while you can, prepare before it arrives and stay vigilant and alert. Noah’s friends thought he was crazy too, so you may be mocked if you’re not following the crowd. Remember, Noah was building an ark to prepare for a flood that many in his generation had never seen.

Here are some simple things you can do with your money, health and well-being.

  • Eat at home.
  • Travel less: Vacations can be put on hold.
  • Be circumspect and reasoned about big purchases.
  • Combine trips to the grocery store, doctor, piano/soccer practice etc.
  • Start planning for Christmas. What can you make, create or build for gifts?
  • Exercise. This will diminish stress and help keep you in physical shape.
  • Stay up to date on the times. No, not on those crazy media outlets, but sources that provide solid information (BBC, Reuters, WSJ, AP).

In other words, the arriving financial pandemic is perfect for Dave Ramsey’s world. You know what that means:

  • If you don’t already have it, create an emergency fund. Your initial fund should be $1,000.
  • Pay off debt. Especially if you have grace with lower or no interest rates right now.
  • Live on a cash basis and within your means. Eliminate or minimize credit card usage.
  • Start a budget. Yeah, this is a hard one, but you’ll find you can save tons of money.
  • Track your expenses. You’ll be shocked at where your money is going.

Think like you’ve just been told a major storm is approaching. What would you do? How would you plan? What precautions would you take?

Prepare. Even if the storm isn’t as torrential as many predict, you’ll be in a better position.


Have questions about your finances? Chip Bailey is a Master Financial Coach and a Dave Ramsey Preferred Coach who helps people live stress-free and debt-free. Email us with your question, or schedule a free 30-minute consultation.

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