In an ideal world, this would never happen, or even if it would, you would have hefty savings account to fall back on and just get on with your life. Unfortunately, that is usually not the case. Most adults are actually living on a very tight budget. Paychecks cover your expenses right up until the next one comes in and that just keeps going in circles. Well, that is a viable way to live if you never encounter a crisis, but, you most certainly will. Everyone does. You never know when you might have a medical emergency that will set you back a couple of thousands of dollars, your car might break down or you could get in an accident. Even a natural catastrophe such as a flood or a hurricane could strike your home and leave you with great expenses to cover. Today, we will be naming a few ways which might be of help if you’re ever faced with a financial crisis.
1. Don’t panic
This might sound like the oldest, lamest and cliché-est line in the history of mankind, but stay with us a little bit. Sure, you would get irritated if someone were to say this to you during a tough time, but try to see beyond just these words. What this essentially means is, try not to make any rash decisions based on how you’re feeling right now. There is no better way to make any situation worse than acting out of irrational state – and that’s what panic is. Try your hardest to calm down, settle your thoughts and proceed to the next step.
2. Assess the situation
Once you’ve calmed down and are able to think clearly, it’s time to rationally evaluate the situation you’re in. The first thing that comes to mind will probably be to find the easiest solution, which is fine. However, in order to better solve a problem and possibly prevent it from happening again in the future, try to think about and possibly understand how you ended up in a crisis in the first place. Of course, if the reason is an accident or a natural disaster, your hands are pretty much tied as far as prevention goes, but if that’s not the case, think long and hard. Learning and evolving once life gets us down is how we’ve come so far.
3. Evaluate your monthly expenses and prioritize spending
This is a very good way to get out of a small to medium financial slump. How come? Well, we tend to spend money on stuff that is not necessarily essential. Ask yourself, which is more important, paying rent and electricity bills or going out to a bar every weekend and having a $8 coffee from your local hip coffee place every single morning? Let’s just say we all agree that you could survive without the latter. Sit down, pull out a pen and piece of paper and try to write down all of your usual expenses. Chances are you won’t be pleased with the results as far as cutbacks go, but hey, you get to pay your rent. One thing to keep in mind is that you can get easily deluded by this. For example, if you cut out your daily $8 coffee, you’re not really saving up $240 because you will probably have coffee at home, so make sure you calculate that in.
4. Take out a cash loan
Sometimes, you just can’t wait a whole month to save up because you’ve stopped drinking almond lattes. Sometimes, you just need money right away. And since you probably don’t have a savings account or not money enough in it, you could opt out for a cash loan. The way this works is fairly simple, you apply for a loan, you agree on a certain rate of interest and you get the money. If you feel like this option would be the best option, you can click here for more info and find out more about it.
5. Ask your friends or family for a loan
This might seem like the last resort for a lot of people, but it shouldn’t be. If you know that your parents, relatives or your friends could help you out, without jeopardizing their financial situation, you should approach them. You could probably work out a beneficial deal for both parties. Sometimes, you could even receive money interest-free, you never know.
6. Renegotiate your monthly payments
This could really come in handy if you’re struggling with paying off your mortgage or credit card bills. It might be hard to believe it, but it’s possible to renegotiate your terms or postpone them for the time being. The basic premise is, lenders will accept any amount of money over none, so in most cases, they just approve a slight delay or even lower your interest rates for a certain period. All you have to do is just ask, it cannot hurt.
7. Try and find another way to make money
This might seem like a ‘Just get another job’ advice, but it’s not necessarily. We are aware how hard it can be to find a job, even a single one. We’re talking about certain ‘side-hustles’ as they’re often called. Try and use your free time to master a craft or try and monetize your hobby. In the era we live in, it’s virtually possible to sell anything and you might just do.
8. Take out an equity loan
While taking out an equity loan, or essentially a second mortgage, is not a good idea for everyone, at certain situations it can be the only solution. Let’s say you’ve had an unexpected medical emergency and you’re left with a hefty bill, taking out an equity loan could be the only way you can get a large sum of cash. These kinds of loans are a good option to cover some large expenses and really shouldn’t be considered for some day to day troubles. Keep in mind that your house is at stake if you are unable to meet your payment.
9. Learn and prepare for future
This could very well be the most important advice on this list. Not so much of advice as it’s a reminder to always learn and adapt. If your roof was blown off during the storm, take out insurance for the new. And of course, try and some money on a monthly basis, so if the times get rough, you have something to lean on.