Citizen Information

Basic Guide to Surviving the Economic Crisis
From the Chesapeake Budget Office

1. Reduce Your Personal Debt

Reducing your debt in tough economic times is critical. If you have more debt than you can afford, you are not in control. Take immediate steps to reduce your debt.

If you have a big mortgage payment, car payment, or credit card payment each month, and you lose your job, you will quickly fall behind, and risk losing your house and car.

If you have no debt and lose your job, your only worry will be finding another job. You won't have to worry about making payments and losing your home and car. With no debt, you can weather this financial crisis.

2. Learn to Live Without Credit

This is a hard one. If you are 40 years old or younger, you have probably used credit cards your entire adult life. You have probably never paid cash for a car, and you may just assume that it's normal to only have a 5% down payment on a new house.

Here's a challenge for you: talk to your parents or grandparents and ask them if, when they were young, they had a credit card. They will probably tell you that no, they paid cash for everything, including cars and houses. That meant they didn't buy a new car every three years, and they lived in a small house, but they also didn't have any debt payments.

Living without credit means making a budget and planning what you want to buy, and then saving money to do it. It's a drastic change for those of us who are used to buying now and paying later, but the savings in interest payments are worth it in the long run.

3. Start Working on Plan B

It's possible that your world hasn't changed yet, but the world around you has changed, and eventually your world will change too.

What will you do if you get down-sized at work, or if your hours are reduced? What will you do if you can't lease another car when your current lease expires? What would you do if you couldn't sell your house for more than the amount owing on the mortgage? What if the economy does collapse?

While these are not pleasant things to think about, start thinking about them: start making a "Plan B". You need a plan for the following:

If you lost your job, where would you work? Always have an up-to-date resume ready, and always keep your ears open for other opportunities.

Consider starting a home-based business in your non-working hours. If you have a hobby that could become a business, consider making that a second source of income.

If hours are reduced at work, consider getting a part-time job. That way, if you do lose your primary job, at least you will still have some income.

Chesapeake Public Library is a great free resource! They offer on-line computer training in  Website Design and Production; Software Design and Production; and most Microsoft Office  software applications. Visit a Chesapeake Public Library to polish your existing skills or learn a new skill.

Discover your talents and build on them. Consider obtaining certifications for employable career changes that do not require long term debt.

• Electrician
• Mediation
• Firefighter
• Home Care Companion
• Consulting
• Driver Improvement Education

4. Simplify Your Life

Every month dozens of people go through financial challenges that have forced them to cut their living expenses to survive.

Don't wait until you are forced to do so, cut your expenses now. Use the extra cash to pay down debt, or to build up some savings.

Think about this: If you earn $2,000 per month and it costs you $2,000 per month to live, you have no margin for error. If you can reduce your expenses to $1,800 per month, you have some "wiggle room"; missing a day of work won't destroy your monthly budget.

Start saving now!

If you save $100 per month for 10 years you will save $12,000 + interest earned.                                                      

Here are some easy strategies for cutting expenses:

1. Call the Chesapeake Department of Agriculture at (757) 382-6348 for information on  how to develop a family budget. Start by making a list of everything you spend money on each month. Include your regular monthly expenses, like rent, but don't forget to include irregular items, like Christmas and birthday presents, car repairs, and other one time items.

2. Determine what is most important.

3. Cut back to only basic services.

4. Cut the non-essentials on your home and /or cellular phone service.

5. Most importantly, stick to your budget plan.

5. Reduce Your Expenses

1. Combine your car trips; do all of your errands at once to save on gas.

2. Consider big lifestyle changes, like moving closer to work so you can walk or take public transit.
   

3. Pay your bills on time and avoid unnecessary expenses (traffic tickets, late fees, high interest rates).

4. Use coupons, they are free.

6. Prepare for the Long Term

1. Contact the Chesapeake Department of Agriculture to get tips on balancing your family budget and cooking on a budget.
   

2. Where affordable, stock up on non-perishable food items (dry beans, dry potatoes, canned tuna, etc.).
   

3. Plan ahead. Begin saving now for expenses that are due in 6-12 months (real estate tax payments, personal property taxes, etc.).

4. Find partnerships that work (Carpool, Bulk Food Purchases, etc.) for your lifestyle.
   

5. Exercise! It's good for the mind and the body!

7. Reach Out for Assistance Early

How do I apply for assistance?
If you are a current customer of Social Services, you may contact your case worker for referral information. New customers may call Social Services at (757) 382-2000, or walk-in between the hours of 8:00 AM and 3:00 PM services.

• National Suicide Prevention Lifeline: 800-273-TALK (8255)

• CHESAPEAKE COMMUNITY SERVICES BOARD EMERGENCY SERVICES or CRISIS INTERVENTION:
  MENTAL HEALTH; SUBSTANCE ABUSE; INTELLECTUAL DISABILITIES
  Call (757) 548-7000 (24 hours a day)
  Call (757) 819-6327 (TDD)

• Department of Agriculture: (757) 382-6348

• Chesapeake Public Library: (757) 410-7147

8. Research Alternatives

1. Have you considered all of the alternatives?
   Perhaps, you are considering your options within your present scope. Consider the alternatives and research other cities, states, and/or countries. 

2. Is relocation an option?
   Do your homework and be sure of the stability of the offer before you relocate.

3. What’s holding you back?
   It may just be the change you need! Plan financially to make it happen.