5 Tips To Help You Stay On Your Feet During A Financial Crisis

Are you in the throes of a financial crisis? Well here are some tips that could help you save.

  1. Revaluate Any Big Decisions

Unexpected financial binds are stressful. They make you financially anxious and this has different impacts on your life. However, taking a moment to think through the situation before making your next move can help you avoid making blunders.

Always remember that your today’s money-decisions have long-term consequences on your finances. Therefore, it would be best to talk to a qualified and reputable financial adviser before you act. The adviser will help determine your best move in the financial crisis, drawing up a strategic plan to get you back on your feet financially.

  1. Assess Your Expenses

You avoid losing money when trying to cover your standard expenses by knowing the much you spend and finding areas in which you can save. It is a strategy that can help you rise up to the occasion when unexpected expenses crop up.

Start with reviewing your spending over the past three months. It will give you an idea of where the money goes and what you spend. Consider noting down all the expenses, or use a  smartphone budgeting app or online budgeting to keep tabs on your spending.

The next thing to do to split your expenditure list into two categories. One for the essentials like food, clothing, housing, commuting costs and utilities. The other is of the extras like going out for dinner, takeout orders, and streaming services.

You then should find ways of slashing your expenses since you know where your money goes and where you can make some adjustments and save. No amount is too small to save because it will add up into something significant over time. You might discover later on that you have saved enough to add something to your budget when your income is not sufficient to cover everything.

  1. Contact Your Credit Card Company

The Consumer Financial Protection Bureau advises people to consider working with their lenders directly if they cannot pay their utility bills. Therefore, approach your credit card providers to discuss the options available. Reach out to Capital One if you are a customer to know more.

It is not uncommon for credit card companies to work with individuals that cannot pay their bills. The lenders might offer some financial relief like a payment extension or a favorable arrangement depending on your circumstances. As such, you will not have to worry about late payments that can stain your credit score.

Also, do not assume that a credit card is an alternative for emergency savings. It might help you settle some of the unexpected bills and cover essential expenses, but it is not a long-term solution. Therefore, use your credit card during emergencies responsibly to avoid digging yourself further into a financial pit. A better alternative is loans without guarantor to get you through a financial emergency.

  1. Find Out How Insurance Can Help

If you have insurance coverage, remember you make the monthly payments for it for a reason. Insurance coverage means you have something to cushion you during unexpected financial emergencies. Thus, find out what your policy can help, which is something that you should have done (reading through the contract and noting the fine print before signing). Below are some way that insurance coverage can help:

  • Health insurance: It is a chance to avoid out-of-pocket expenses when paying for your health care. You can explore other available options if you recently lost your health insurance.
  • Car insurance: A road accident can leave you with injuries and a car that need extensive repairs or written-off. The automobile insurance can cover the repair costs or may cover a rental while your vehicle is still with the mechanic.
  • Homeowners insurance: The policy can help you and your family get back on your feet after a storm, fire, or any other disaster. But you should know your coverage’s limitations. For instance, it may cover fires but exclude flooding.
  • Renters insurance: The covering is an ideal option if you are renting or subletting. It could cover things such as temporary living expenses when you are displaced or unexpected property damage.
  • Disability insurance: If your employment is terminated because of an illness or injury, your disability insurance coverage might provide some financial aid depending on if it was a long-term or short-term policy. Please note that disability insurance coverage is often provided through the employer.

Check with your insurer to know more about your coverage and if they have other beneficial policies that suit your financial situation.

  1. Explore Extra Income Streams and Other Relief

Finding extra income streams is wise when you are unemployed and the bills are pilling. You also can consider assistance programs such as unemployment benefits, which can be a viable option even when you are in-between gigs to make a living.

However, it might be some time before the benefits start trickling in; thus, start the process as soon as you can. Finding a side hustle to help you deal with your financial emergency can be challenging. Nevertheless, the much you make could help you be on your feet as you explore the industry searching for a job. It also can be an opportunity to acquire new skills worth adding to your professional portfolio and be a more attractive job candidate.

You might find some assistance from some emergency grants, depending on your circumstances. Also, it would be wise to consider food banks if you are not in a possible to get food.

Back to top button