Last week we explored some of the financial challenges being faced by many consumers in this tough economy. It seems that everyone, regardless of financial status, is reeling from the effects of the spiraling cost of living and the shrinking value of money.

There are really only two things to do when there isn’t enough money to meet your needs – cut back on spending or earn more money. Let’s take a look at some practical things you can do right now to ease the pressure of these challenging financial times:

Reduce non-essential spending

With this global financial crisis, it’s definitely not the right time to get involved in extravagant spending sprees. It’s smart to be prudent with your money at this time, so don’t spend too much money on non-essential expenses such as entertainment or clothing.

Become more price-conscious

In the past, shoppers could just pick up their favourite brand name items without concern for price; now you must scrutinize prices to ensure you’re getting the best deals. Recently, I noticed that my regular brand of corned beef cost nearly J$70 more than a perfectly good alternative. What’s worse, the cheaper brand found in this supermarket was over J$20 less at another location!

Buy only what you need

In these times when your next electricity bill could be unpredictable, you have to watch your cash flow. Normally it’s smart to buy foodstuff in bulk to benefit from wholesale prices, but it might be wiser to keep your cash to meet unexpected expenses. Also, if you examine some of the wholesale discounts, you’ll realise that you really aren’t saving that much per item to warrant tying up your money on things you might not need right away.

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Plan your spending

The importance of planning for spending needs is even more crucial now. You have to know beforehand if you’re going to run out of cash to meet your expenses, and if so, the amount of your projected shortfall. Go to www.financiallysmartonline.com to download a personal budget and a cash flow calculator, and follow the directions to record your monthly expenses and income.

If your calculations reveal that your expenses outweigh your income, you have to find solutions to create more incoming cash. The shortfall figure gives you a target amount to balance your budget. Remember that you may have less sources to turn to for a ‘borrows’, as many friends and family members overseas are currently facing serious challenges, some even losing cars, houses and jobs.

What can you do to make more money when everyone is cutting back on spending? There are two things to note: 1. People will still pay money for things they consider basic necessities; 2. Not everyone in the world is broke.

Provide essential items cheaper

There are two things that Jamaicans can’t seem to do without – food and phone credit. In fact sometimes it seems that our love of talking makes phone credit more precious than food! If you can supply these items at a cheaper cost, then you will find ready customers. Let’s say your budget shortfall is J$15,000 per month. If you break that amount down into a daily figure, you would need to earn J$500 per day. If you can sell something and make J$50 profit from 10 customers or J$25 from 20 customers, then you’re in the money.

What can you do to make this profit? People need to eat, so try to provide a healthier and cheaper option. How about preparing sandwiches or salads that you can retail for less than J$100? People need to talk, so how about joining a programme that allows you to sell credit right from your phone? Depending on your selling price, you can make up to J$20 profit on a J$100 phone card. See www.coolbizja.com for more details.

Look far and wide for extra income

If most of the persons around you are broke, you may need to look afar to earn more. Why not make use the millions of Internet users to create extra income? Here are some of the possibilities:

1.   Social Networks e.g. www.mylot.com, www.xomba.com, www.earnmoneyspace.com. The free-to-join sites will pay you for simply starting discussions on your topics of interest and responding to other members’ comments.

2.   Affiliate Programmes e.g. www.amazon.com, www.paydot.com. You need a website or blog to promote the goods and services available on these sites. You get paid when you re-direct your visitors to the affiliate marketer’s website and they make purchases.

3.   Content Writing e.g. www.constant-content.com, www.groundreport.com, www.demandstudios.com, www.academia-research.com. There are millions of internet sites, and many of them need fresh content to keep current. If you have a creative flair, you can get paid for submitting articles, photographs, or videos.

4.   Tech Support e.g. www.mturk.com, www.odesk.com. Freelance workers can register at these bureaus to be hired in areas such as web development, multimedia design, administrative support, and writing.

Note: You should always carefully research all internet money-making sites to ensure that they are not scams.

Copyright © 2008 Cherryl Hanson Simpson. No reproduction without written consent.

Originally published in The Daily Observer, October 23, 2008

Cherryl is a financial columnist, consultant and coach. See more of her work at www.financiallyfreenetwork.com and www.financiallysmartonline.com. Contact Cherryl