One of the big issues interfering with the ability for the country to manage COVID-19 has been the disruption in the supply chain. Front-line workers did not have enough safety protection, there was not a suitable supply of ventilators, managing PPE was a free-for-all. Supply-chain problems also hit businesses, as just-in-time production was stymied by a lack of parts from sources that were shut down. When this pandemic inevitably ends, we will have learned how to manage our future supply chains.
But our personal supply chains have also been severely disrupted. When you think of the things that hold us together, they involve our work, our savings, our health, our spirit and social connections, our spending and our debt. When any of these areas becomes disrupted, it can send us into a tailspin. When many areas become stressed at once, it can be chaos. Right now, we should all be congratulating ourselves for just being able to put one foot in front of the other. But how do we get our supply chain back on track?
Many of us believed that we could count on our work. While some businesses are doing well in these times, they are the exception. Regardless of whether you are a professional or a day worker, you have been affected. I know many doctors who assumed they had stable jobs and were blindsided by the shutdown. This wake up call means that everyone needs to figure out how to keep their supply chain moving when disaster strikes.
Only three things can get you through work stoppages — government support, your ability to borrow, and your personal savings. Government help speaks for itself, so let’s focus on the other two.
I am a huge believer in having lots of debt available to me and hopefully never using it. The simple reason is that when we need to borrow the most is often the time when it is most difficult to do so. First, everyone should be working on improving their credit rating. My favorite app is Credit Karma which gives me a weekly update on my credit score, tracks all my outstanding debt, notifies me if any new credit cards have been applied for, and gives me tips on what credit cards are the best bang for the buck. The better your credit score, the more options you have. Virtually anyone can borrow, but the offers improve as your credit scores improve.
Appropriately build out your accessible debt portfolio. A home equity line of credit through a bank is often free to set up and avails you of some of the equity in your home as you need it. It is a credit line, so you only pay for it as you use it. Study what credit cards make sense for you based on their awards, annual costs, and amount of credit they will give you. Initially applying for credit may temporarily hurt your credit score, but eventually your usage and payment history are the larger influences. Loans from your retirement plans would be another option, but this is more of a last resort.
If you have accessible debt, you don’t need to have quite as much in savings. But if you don’t have much debt built up, then you need to start having money regularly set aside until you have at least three months of income. If you are currently working, you may get a nice jump start on this because there is not that much to spend money on.
While your work, savings and credit are key components of your supply chain, so is your spending. This is where you have the most control. The bad news for economic recovery is that many people may reduce their spending, even when things improve. But if everyone is spending less, it should be easier for you to do so, too. We live in a relative world: how we think we are doing is based on what we see others in similar circumstances doing. While consumerism won’t become extinct, it may become endangered. This will help all of our personal supply chains.
This is a time where our spirit and social connections come into play. We tend to hang out with people with similar belief systems. That’s our tribal nature. If we reflect on what we have experienced through this and our belief system evolves to appreciating what we have, an interest in helping others, a desire for community, and less of a need to compete and compare, we will have dramatically improved our supply chain management. Appreciation does not cost anything and is regenerative.
And this brings me to our final supply chain component — our health. One of the amazing things about this pandemic is how many people are spending time outside. We all know about getting exercise, sleeping and eating well, but this connection to nature may be the best method for creating resiliency in your supply chain.
Ross Levin is the chief executive & founder of Accredited Investors Wealth Management in Edina.