April 9, 2020 TVG Staff

The Value of Circulating A Dollar (Pound, Peso, Euro, Yen Or Other Currency) In A Crisis

The experts have been driving it into our heads for weeks now, STAY HOME! While some have been stocking up on hand sanitizer and toilet paper, many more are choosing not to spend what money they may have, in these uncertain times. Whether you are choosing to eat more at home because your hours have been cut or your company is pulling back on expenses with the unknown length of the pandemic ahead, experts also tell us we should resist the urge to cut spending altogether. They tell us that the value of circulating money during a crisis cannot be understated.

Let’s do the math! If you spend money on takeout at your favorite local restaurant, that money helps pay staff, rent, utilities and more. Your tip goes even further, helping offset an almost certain loss in take-home pay for many workers. Those owners and workers with the money you spent, can now buy more supplies from vendors, groceries for the family, medicines and more. It creates a domino effect. Something as simple as one dollar can be recirculated again and again to help keep people employed and our economy running.

From the business side of things, if companies cut back on vendors, the losses can be deep. Instead of cutting spending altogether as some have done, cut back on spending during the tough times, but keep the money flowing as much as you can, even if it’s far less than before. Your vendors rely on that money just like you do in their accounts receivable. They also need to recirculate money. This can help your company endure the crisis and emerge more quickly when the crisis is over, but it also keeps your vendors going when times are tough.

There is nothing easy about a crisis, particularly one that is changing by the week, hour and in some cases, by the minute. It would be easy to cut your spending, but keeping money circulating in your community raises the chance that restaurants and other businesses will be there when the crisis has ended.

We’re all in this together, and we will get past this. It will help if we can crunch the numbers and keep our favorite businesses afloat. TVG is navigating this crisis with you. We are here with strategic insights (even when we are working from home). Give us a call or drop us an email. Let us know what you think.


By Andy Likes, Senior Vice President at The Vandiver Group in St. Louis, Missouri


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