By Katherine Zobre
Alabama Small Business Development Center Network
Katherine.zobre@ua.edu | 201-503-5927 

Managing finances at the best of times can be stressful. During a crisis, things get even more complicated. We are all feeling the crunch of COVID-19 – at home and business. However, crises are opportunities for us to take a hard look at our finances. Take a breath and prepare to face some hard truths.  

Step 1: Perform an asset analysis.

During this crisis, take a broad view of your personal and professional assets: your skills, attitudes, habits, education, credit, social and professional network, home, car, inventory, cash on hand, and retirement savings, etc. Now you know what you can rely on and potentially turn into cash. The key to weathering crises is to conserve your cash on hand and take advantage of opportunities. You can only take advantage of opportunities if you’re prepared to see them as opportunities.  

Step 2: Categorize expenses.

Start with your February bank and credit card statements. Review and categorize each expense item into one of the following categories: Essential (E), Non-Essential (NE), Reduce (R). Your Essentials (E) should include things like your mortgage payments, loan payments, insurance, etc. Non-Essential items should include unnecessary expenses such as a Netflix subscription. Items that fall into the Reduce (R) category are items like grocery and utilities – essential items that you have some control over.  

Once you’ve gone through February, go through the 12 months. Take note of when annual payments are due and seasonal spending habits. Going through your monthly and annual statements will allow you to see your ‘cash cycle’ of your home or business.