Making smart financial choices is always beneficial.
But, it really is crucial in situations like the current shutdown because of the coronavirus (COVID-19).
For example, says Tim Scales, it can be very hard to pay monthly bills when you have been furloughed. But, it’s important to try.
“This is not a time to get behind as it will be too difficult to catch up later. Pay what you can even if it is a part payment. It will make a difference later,” says Scales, who is a senior lecturer of finance for the School of Business and Economics, director of the Center for Entrepreneurship and director of the Center for Economic Education.
It could be worth it to contact a credit card company, a mortgage lender or an Internet or satellite-television provider to see if they allow changes in usual payment schedules.
Some services, such as DISH Network and DirecTV, allow consumers to suspend services for minimal or no cost. This vacation mode can be picked back up when needed.
That move in some cases still allows consumers to watch a few non-pay channels or the material that has been taped on a DVR.
“During difficult times, places like the utility companies are willing to work with you by not turning off utilities and waiving late fees,” Scales says.
That’s the case now with Richmond Power & Light and some utilities in eastern Indiana and western Ohio.
It’s important to realize this crisis will end and there will be some everlasting changes. Scales suggests observing what’s happening.
“This is an amazing time to witness and understand,” Scales says. “The shift from face-to-face shopping to an online environment is exciting to watch. Experiencing the purchase of a car online, unseen, and having it delivered to my home is incredible. Teaching students around the globe through online education is rewarding and progressive.”
IU East School of Business and Economics faculty recently discussed the impact the coronavirus is having on businesses in the region. Scales, Litao (Lee Zhong), associate professor of economics, and Oi Lin (Irene) Cheung, associate professor of finance and director of the Center for Business and Economic Research, provided their insight on how businesses are being affected and how they could survive through the crisis.
It always holds true, he says, that individuals and families must “make smart choices” and live within their means. That includes:
- Knowing what funds are coming in.
- Making sure you understand where your money is being spent. Many of us spend without paying attention to the cost and/or the benefit it brings.
- Getting as much as you can for your money and making your expenditures based on needs over wants.
- Cutting costs. Some of that is a natural byproduct of the shutdown for families: They can’t travel, buy cars or make other big-ticket purchases if they have to stay in place.
Following are more of Scales’ thoughts on surviving financially in this crisis, including being part of the solution and learning from it.
Turn ideas into solutions: I would love to do a TedTalk and let individuals know, “We need you.” We need individuals to do what only an individual can do. People can think and … come up with
great ideas. We can train people to test the ideas, challenge and prove the ideas and turn the ideas into solutions. Too often we look at individuals in high positions as the leaders when leadership is within each of us. Don’t wait, be the leader you are and lead with what you have from where you are.
Learn from the experience: We all have a variety of talents and we need to concentrate on our strengths. During these weeks, I am keeping a journal of different things as they happen to assure I have an opportunity to teach and simulate the experience. We do not have the answers yet, however, we do have the future to share.
Change brings opportunities: Change is good as it gives each of us an opportunity to have our own experiences. Some experiences will be better than others, however, each experience becomes our own. Change allows us the opportunity to become leaders and it offers us an opportunity to share with others.
Listen, learn and be responsible: I would suggest people try to understand the difference between fear and facts. Try to make good decisions based on facts. Realize this is a major issue we are dealing with and not take it lightly. Each individual needs to do their part in trying to understand the issues, and focus on doing what they can to remain positive, productive and healthy. Be responsible by staying home or, at minimum taking a walk, but keeping a distance from others.
Many businesses have to change: I see this as an opportunity for business to expand in many new and different ways. Many traditional businesses will need to make major shifts. Things such as online ordering and pick-up, curbside pick-up, home delivery – these are the future and the future just became now. It has always been important for a business solution to solve a problem and there are many new problems to solve.