Did you lose a significant amount of money in an unsuccessful business venture? Are you stuck with paying bills for a medical emergency? An unexpected situation or a series of poor financial decisions can accumulate to a financial disaster.
Once you’re on the edge of a financial crisis, the progression is quick and will inevitably happen, unless you do something about it. Furthermore, recovering from a financial crisis is far more complicated than avoiding one. Whichever boat you’re in, we can help you navigate this rough financial patch.
Take a look at various steps you can implement to improve your financial standing.
- Stop Ignoring
Are you struggling to pay your bills on time? Are you living paycheque to paycheque? Are you living on your savings? All these are red flags pointing towards an impending crisis.
Instead of sweeping things under the rug, recognise these red flags and work on a plan to better your situation. The more you procrastinate, the worse it’s going to get.
- Immediately Analyse Your Situation
You need to analyse your current financial situation to identify areas for improvement. Compare your spendings and due bills with your income to determine the gravity of your financial crisis.
- Stop Using Credit Cards
The convenience of using credit cards encourages consumer spendings. If you’re facing money problems, avoid using your credit card. Remember, in addition to repaying the amount you spent, you are also liable for paying the accrued interest.
- Start an Emergency Fund
At some point, everyone faces a financial emergency. Whether you lost your job or were involved in an accident, an emergency fund will serve as your safety net. Ideally, an emergency fund should have three to six months of living expenses. If you don’t have one, there is no time better than now to start saving up!
- Pay Bills on Time
Even when money is tight, you cannot miss out on monthly bill payments. Not only will you be stuck with paying late fines, but it will also impact your credit score. For the sake of your future ability to borrow, it’s crucial to maintain a good credit score.
If you’re unable to pay your bills, take a small loan from Finance27.
- Reform Your Lifestyle
It’s important to understand what kind of lifestyle you can afford. If you’re spending all your money on going out or buying extravagant things, it’s bad news for your finances.
To deal with a financial crisis, strip down your lifestyle to the basics. Switch to cheaper brands of everyday products and start cooking at home. These small changes make a big difference.
- Keep Your Partner in Loop
It’s important to share your financial concerns with your partner. Financial troubles can be emotionally taxing and you don’t have to go through it alone. Try to work with your partner and come to a solution together.
- Get Another Job
It might be tough to save when you’re barely able to stretch your income to last a month. In case you’re living paycheque to paycheque, it would be best to get another job. Introducing an additional source of income will provide you with much-needed financial relief. Juggling multiple jobs is not easy, but remember it’s only temporary.
- Look After Regular Maintenance
From your car to your health, make sure your financial troubles are not overshadowing minor issues. Overlooking these minor issues can lead to major expenses in the future. So get your car fixed and look after your health.
- Talk to Family & Friends
Talk to your family and friends about your money problems. Even if they can’t help you financially, they can at least offer emotional support through these tough times.
More people than ever face a financial disaster, once in their life. By recognising the signs of financial distress and taking timely action, you can effectively avoid an unfavourable situation.