I have been working my a$$ off in transitioning my side-hustle into a full-time hustle in the past couple of years. I was just starting to see the fruits of my labor when the pandemic hits and of course, just like any other small business, my online store got affected so much. As I’m contemplating what my next move will be, I’m intending to stay broke until I stabilize my finances in the next few months.
What Do I Mean by ‘Stay Broke’
Calm down. I’m not gonna live on the streets. LOL! My intention is to be able to cut down unnecessary expenses and to just get by with a small living budget in order to save as much money as I could.
This money will go to paying debts that I incurred during the lockdown period and also to be able to build a more hefty emergency fund.
This is one of the lessons that I learned the hard way. I was a bit late when it comes to learning stuff about personal finance. That means, I don’t have much savings and I don’t have a sufficient emergency fund.
Since I was pushing for my business to grow, I continuously reinvest most of my earnings into the business by buying as many inventories as possible.
As soon as the lockdown is lifted, I’m anticipating that the sales will resume and the earnings might return to what it was in the next 3 to 6 months.
Stay Broke in Order to Build Additional Sources of Income
This will not be a difficult action plan to achieve since I have been practicing frugal living for quite some time.
However, even if I have been living frugally, I still have some once in a blue moon splurges that I’m planning to cut-off from my budget in the next few months.
I have been tracking my expenses and I know that It’s not really my spending habits that got me into this conundrum but rather, my wrong financial strategy. Having said that, I still believe that money saved is money earned.
So, I’m still going to cut back on my spending and I hope it helps me save some money.
My strategy in the past couple of years has always been to reinvest all of my earnings into my hustle to help it grow and the remaining money will go to my living expense and payment to my rental apartment.
Now, I’m aware that it’s not the best strategy to go for since I got into debt because of a lack of sufficient funds during the quarantine period.
No one knew that this pandemic will cause a prolonged lockdown period and I’m not beating myself for not being able to prepare for this. Heck, even gigantic businesses and almost all countries are struggling financially in the past few weeks.
However, the biggest lesson is, if only I have diversified my sources of income, then I wouldn’t be so dependent on one source. I would have avoided going into debt.
What will I Build in 2020
Spin-offs of my Existing Online Store
I have been taking care of this during the lockdown period aside from this blog. It’s a strategy that I noticed from other online sellers as well. I used to have only one shop.
However, as my inventory grows, I noticed that a lot of my items belong to various market segments.
For example, most of my eBay followers are women but I have inventory for men. A huge part of my inventory is for budget-conscious customers however, I have a handful of preloved designer pieces. So my plan is to identify segments of my captured markets and create a different store for them and transfer the relevant inventories from the original shop to the new one.
This is the main priority for 2020. A few months of an emergency fund is not enough. I’m planning to save at least 9 – 12 months’ worth of the emergency fund. This will go to my CIMB Philippines Upsave Account which has a higher interest rate compared to my other savings account.
Other Sources of Income
I’m a big fan of low-cost startup ideas with high-profit potential. And blogging is one of those. Financially, you just have to pay for a domain name and a hosting service and that’s it.
The biggest capital will be my time which I have a lot of. I don’t have a lot of money but I do have a lot of time. And I think blogging can help convert my time into money.
I know that in every blog that earns money, there are hundreds or thousands more who do not. However, it’s the same in any other businesses and investments.
There’s always a risk involved. The beauty in blogging is that the outright financial risk (for one year) is approximately less than $150 (domain + hosting). Heck, I spent way more than that in my other side-hustles that failed.
I do not know yet if this would be the blog that I will monetize or not. But what I know is this blog will definitely my guinea pig for this experiment. Whatever I learn from this blog can easily help me build another one (hopefully a more profitable one).
One of the main reasons why I created this blog is to be able to engage myself with other PF/FI bloggers. And I have been learning a lot from them regarding dividend investing. This will be one of my priorities in the next few years starting in 2020.
I will allocate a portion of my income for dividend investing. I’m also planning to invest in index funds and other related investments in my country. I’m really excited about this since this is new to me.
What Can You Learn from My Mistake
Save, Save, Save
Save as much as you can and build a more hefty emergency fund. We do not know what the future holds. No one anticipated an event like this that has this kind of worldwide effect on the economies and well-being of people.
If your income is not sufficient enough. Then find ways on how to increase your income. You can either move to a better-paying job or take a second job or do some side-hustles (my fave way of earning money).
Diversify your Income Streams
Diversify your sources of income as early as you can. Once you have built your emergency fund, look for other ways where you can put your money to grow. It can either be on financial investment vehicles or it can be on side-hustles like online selling or blogging.
We’re lucky to be living in this time. Making money has never been easier. Heck, who would’ve thought that you can earn money by just writing your thoughts (blog)?
If you can’t invest money on anything because you don’t have that much money at the moment, invest your time.Don't put all your eggs in one basket. - English Proverb 1600s Click To Tweet
Keep the Balance
Luckily, all the things that I’ve been doing and all the new things that I’m planning to do are things that I really do enjoy and I’m excited about. It does not feel like work to me because I really enjoy hustling. I love the contradictory nature of it – unstructured yet structured. I can work anytime I want but at the same time, I need to ensure that I finish all my deliverables in a certain time frame.
It may not be the case for you, so choose wisely. Earning money is cool but it should not be at the expense of forgetting how to live in the now.Stay Broke - My Plan Until I Stabilize my Finances Click To Tweet
If you’re reading this now, I hope that you’re in a better financial position than I am. If you have been in a similar situation in the past, feel free to share your tips and suggestions in the comment section below.