Money Management in Times of Crisis

This is the shorthand from a lecture I gave last week for dealing with a personal financial crisis:

When we are facing an economic crisis, there are four issues that we must understand:
1) What the crisis is and entails
2) What are the assets we can use during the crisis
3) What changes we can make to reduce the impact or evade the crisis
4) How to avoid making the crisis worse by taking more debt

There are 8 steps required when dealing with a financial crisis. Three steps we need to take before the crisis, and five we will take during the crisis.

The three steps we take in preparation are:
1) Understand what is our net worth - we need to understand what our assets are and where our obligations stand
2) Understand our operating financial needs - Yes I am talking about a budget
3) Establish an emergency fund - 100% liquid asset

Once the crisis strikes, then we do the following 5 steps. Not really one at a time, but all together as much as possible. The steps are:
1) Keep calm - understand the emergency and develop a plan
2) Find alternative funds - either sell assets or develop an additional income stream
3) Renegotiate our debt - I am talking mortgage, car payments, personal loans and/or any other financial obligation
4) Reduce or eliminate operational and discretionary expending - reducing or eliminating cable, cell phone, internet, Starbucks addiction, etc.
5) Ask for help of friends and relatives - just not more debt. Ask grandparents for help with child care, friends for employee store discounts, etc. Avoid increasing the number of creditors.

The talk was a success.