Financial Crisis can leave you in shambles, but it also teaches a lot of important lessons for life. Sometimes Financial Crisis can actually be good for you. Here’s why.
A Financial Crisis can make or break your future financial life and for all you know; it can be the best thing to have happened to you for the betterment of your life. Financial crisis is the best teacher on finance. No business school, investment advisor, financial expert, no one, and I mean no one can teach you about money the way a financial crisis will teach you.
Nobody wants to go through financial crisis in their lives. We all work like dogs to just make sure we don’t have to associate those words with ourselves. But often there comes a stage where we take our finances for granted. But what if all of a sudden the flow of money is disturbed, or there are certain emergencies that require additional cash flow. What if the company you work for makes heavy losses thanks to our economy and your salary is affected or job loss stares you in your face? Financial Crisis is about to raise its ugly head in your lives. But this can actually be good for you; Financial Crisis can be good for you. In fact we learn these 8 important things from a financial crisis:
1. Teaches you to plan ahead:
If you have been lax in planning or thinking about your future so far, a financial crisis will jolt you and ask WHY? Why did you not think or plan well for your future? Why did you not plan for emergencies? Why you didn’t foresee a money crisis? Why did you take your money for granted? You may have ignored these questions all your life but now in a financial crisis, you have no option but to face it and find answers to these questions. This can be an eye-opener and will make you a better judge for managing your money and teach you about money management without lecturing.
2. Checks your wasteful expenses:
If you thought you could never cut down your expenses when your financial life was sailing well and always assured yourself that all your expenses are justified and within means, then a financial crisis will show you a list of expenses that you can cut down among those ‘justified’ expenses. It could be those eating out habits of yours, that binge shopping, long telephone bills, electricity bills and more. You will on your own look for avenues to cut down the regular expenses and this can in turn be a lifelong lesson to spend only what is required. Even a big house will sometimes need to be traded for some cash and settled for a smaller house. Living within your means is not a bad thing after all.
3. Teaches you to truly value money:
The value of money is such a relative term. For someone like Ambani, Birla, or Tata it could mean different and for someone selling tea could be something else. However the value of money is actually the same. If a tea seller can buy a packet of bread for Rs. 20 even a Tata, Birla or Ambani can have it for the same price. Rs. 20 is 20 for you, me and all. This lesson is too difficult to learn in a regular smooth flowing financial life, but when in crisis, every penny of money is valuable. You will think twice before spending even that same Rs. 20 and ask yourself is it really necessary. It is a lesson all should be aware of but a lot of us often ignore. Financial Crisis teaches this lesson.
4. Opens up avenues that you thought never existed:
If you had that entrepreneurial germ in you that could never grow out of its cocoon because you could not take the risk of quitting your job and thinking outside the ‘jobosphere’; well this is the time. Typically people going through a money crisis, may think of getting a new job and apply frantically and get disappointed when interviews are delayed or there is no response. Disappointments and dejections are great time wasters. Instead approach it as an opportunity to explore new avenues. Even if job is your thing, look for associated faculties that you can get in to where your current skills can be used.
5. Clears your head to realize your mistakes:
The other good thing to emerge from a financial crisis is the ability to realize your mistakes; your financial and money management mistakes or career mistakes. Did you stick to a company that was going downhill for too long? Did you splurge too much to be left with very little today? I have known people going through financial crisis and still not needing to borrow a single penny from anywhere. This is because they have been smart about their money. They had other avenues as backups; good investments, some backup jobs, some hobbies that generated passive income etc. This is a good time to start afresh to wipe out these mistakes and learn some discipline the hard way.
6. Teaches you that nothing last forever:
The most important lesson learnt in case of a financial crisis is to learn that nothing lasts forever. Your ‘great financial life’ can face hiccups. The luxury of money is not forever and the saying that ‘paisa to haath ka mail hai’ (money is as temporary as the dirt in your hands) will suddenly appear true. Nothing lasts forever! Yes, it is this very lesson that will also get you out of this money crisis. Even your financial crisis won’t last forever. You will tide over it, but will have learnt to let go.
7. Tells you why debt is so dreaded:
The impact of a financial crisis will be the hardest if you have some debt. Financial crisis in normal circumstances is manageable at times as you can cut some expenses, sell some stuff, and tide over. However, if you have debts, like big credit card bills, mortgages, or money to be repaid to friends, family or others, then it will hit you the hardest. Debt can be dangerous and while you were happily swiping that credit card and taking loans and EMIs for all you wanted, it will come back to haunt you in your financial crisis. This is why it is said that, do not create unnecessary debt or do not let debts grow on you. If you ignored this so far, your ongoing financial crisis will teach you this already.
8. Teaches you to be a better and stronger person:
Whenever something goes off-plan or things get tough, I often remember a line from the movie, BATMAN BEGINS. It says “Why do we fall? …..so that we can learn to pick ourselves up”. It is true. Everything teaches you something; financial crisis even more so. Life goes on, don’t let it affect you. If you earned money before, you can do so even now. Remember, Money is a by-product of your life; your life is Not a by product of money. You created it before; you can and will create it again. For all you know it may be more than ever before as now you are a wise man. Take a financial crisis in your stride and think of it in this way, there is lull before a storm, and this lull in your financial life is a lull before financial storm showers money on you. It may sound too filmy or romantic, but it is true.
Financial crisis can be as bad as we let it get. We can be either weak or let it take over our life and overwhelm us or just be strong enough and get over it. Life is too precious and important to let it be affected by things that we can change on our own. Remember, we made money come to us by working towards it; money did not come on its own. So if it came then, it will come now. Be confident in your skills and more importantly in your own self. Even a non-functional watch shows the correct time twice a day. Nothing in life is useless.
Feel free to leave your thoughts on the topic or share your experiences in the comments section.