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People love to shop. Businesses love to expand. Businesses and people spend what they earn…

The one thing they do not have enough of is what?


The pandemic created a global liquidity shock. Customer A owes your business money. They lost 95% of their sales. They cannot pay you.

You, then, cannot pay your suppliers. And so on, and so on, and so on…

It is global. It is a shock. And, it means you have no cash coming in.

What to do?

Downsize, for one. Scale back. Get lean.

The pandemic has showed a lot of people what they did not do. Save money.

Most people and businesses spend what they earn. They feel this pressure to “look the part”.

When you make more, you want to drive a better car. Live in a bigger house. Wear fancier clothes.

The same is true for businesses.

And, here is the raw truth faced by everyone:

Did you save enough money to last 6 months?

I mean, enough to pay all your expenses with not a shilling coming in.

Spending Can Be an Addiction

We buy stuff for many reasons. It can be because we need something.

It may be because there is a hole inside that you are trying to fill up. And, as in all addictions, spending will not, cannot, fill that hole.

Consider it may be a desire to “look good”. You look around, your neighbours, friends, and family drive better cars. You feel “less than”. So, you spend to “keep up with the Joneses”.

Here is a rule of thumb:

Save first
Put money into a vault. Spend what is remaining. I am not suggesting becoming a miser. I am saying – save first, not last.

When you save last, there is usually nothing left. It is all spent.

Here are some focus points to think about before you spend*:

Do not shop.
Live within your means.
Take care of what you have.
Wear it out.
Do it yourself.
Anticipate your needs.
Research value, quality, durability, and multiple use.
Get it for less.
Buy used (especially cars).
*Courtesy of Joe Dominguez, Your Money or Your Life

The Most Impactful Graph, Ever

The following “fulfillment chart” is the most impactful graph, ever. I saw it years ago and it changed me.

What it shows is that fulfillment does indeed go up with each dollar spent.

In the beginning! When you have NO food, clothes, or shelter.

Money spent creates great fulfillment when buying these basics. Remember that first old beater you had when 16 or 17? I do. Loved it. How about your first little studio apartment. The one that was all yours. Fulfilling just to remember, isn’t it?

As you move up the left side of the graph (fulfillment) you reach a crossover point. That point is called “enough”. That is the point where each dollar you spend brings less and less fulfillment.

In fact, it starts going down! Yup. #truth. It goes down…

How does that work?

The effort required to “get more stuff” means more work, less savings, and higher stress.

Let me illustrate with an exaggerated example. Someone you know has a nice house, good job, wife, and 3 kids.

They want more. They buy a bigger house. House comes with fatter mortgage. But that is ok, because the husband just got promoted and has more income to cover it.

But the promotion comes with higher expectations. This means longer hours at the office. Less time with the family.

The husband – to relieve stress – has a brilliant idea! Buy a motorhome so the family can spend more time together on holidays!

The wife takes a part-time job to pay for the motorhome payments.

The family is spending less time together now. The stress has the husband drinking more and eating poorly. And then a pandemic hits. Unexpectedly.

What to Do Now (If You Did Not save)?

Cut back every discretionary expense you can. Grow your own food in a backyard garden. Start saving now. It is not too late. Get creative. A crisis forces creativity!

Remember principal number one – save first.

And, as we start to come out of this pandemic, please, do not go back to old spending habits. I repeat do not.

Thanks for reading…