Red Lobster’s new 35-year-old CEO explains what went wrong with ‘endless shrimp’ — calls the chain ‘one of the most important companies’ in American history. Here’s what you can learn

Focus on costs

It’s no surprise that Adamolekun’s first step towards salvaging the company is to cut its biggest expenses by downsizing the menu. Rising costs in recent years have pushed many businesses and families to the edge of a financial cliff.

In the first nine months of 2024 alone, individual bankruptcies filed under Chapter 13 and Chapter 7 were up 9% and 19%, respectively, over the same period last year, according to Epiq. It could take several years for consumers and families to financially recover from such a filing.

To bolster recovery, Experian encourages defaulters to take the time to re-examine the patterns of spending and borrowing that led to the bankruptcy and to avoid similar patterns in the future.

Personal finance celebrity Dave Ramsey, who famously filed for bankruptcy in 1988, believes careful budgeting was one of the key reasons for his own recovery.

"We just took inventory. We said, 'OK, what about us personally and what about our behaviors and our habits and our decisions and our values was wrong that brought us to this moment?'” he explained on his investing podcast, The Ramsey Show.

Now, he encourages his fans to focus on their budget “first and foremost” after bankruptcy.

While cost-cutting and stringent budgeting may help stabilize your finances, in order to truly get out of debt you’ll need to focus on growth as well.

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Invest for growth

Despite Red Lobster’s financial struggles, Adamolekun said he’s already looking to make key investments to expand the franchise.

“We intend to be done [with] closing restaurants and we intend to grow from here,” he told CNN. “There’s going to be investments in the product that will take time, infrastructure investment takes time, technology investment takes time… but the impact should be felt right away.”

Individuals and families can also make investments to expand income. For example, apprenticeship programs led to an average boost in long-term earnings of 59% after one year, according to a study by the Urban Institute and Abt Associates.

Going to trade school or acquiring a new skill by investing in a certification course could help you boost income — which makes saving, budgeting, and paying off debt a lot easier.

“You just got to start dialing this stuff in and go, ‘What can I do to get my income up in the short-term? What can I do to boost income in the long-term? And let’s manage the money that we have super, super tight,’” Ramsey said.

“What you gotta do is ask yourself, ‘What can I do to get above-average income for above-average financial results?'”