Life Happens: Six Things to Do During an Unexpected Financial Crisis
At New Credit America, we always say “Life happens.” It’s an oversimplified statement, but when you think about it, it’s the absolute truth. If you’ve dealt with debt, you understand how true this statement is. Sometimes when life happens, it’s a wonderful and exciting new development like having a child or getting married. But sometimes life is expensive and unexpected. Losing your job, getting divorced, getting hit with a big medical bill or having an unplanned car or home repair can be an unforeseen financial burden. If you haven’t planned for life, the impact can be catastrophic. But, it’s important not to let life get the better of you. Having a plan to combat all the curve balls life can throw helps a great deal. Here are our top tips to help you handle an unexpected financial event
Assess your situation
First things first—don’t panic! That can be easier said than done but remaining calm is crucial. Stressing and panicking won’t accomplish anything or get you through your situation. Instead, calmly evaluate your situation. Identify the cause of your situation and what you need to remedy it. Identifying and having a clear vision of what you need will help you quickly take the necessary steps to get through the problem. The main thing to remember at this phase is not to procrastinate. That only makes your next steps more difficult.
Prioritize your spending
Whether your issue is a sudden decrease or loss of income or mounting expenses, your budget can’t remain the same. Because money is more limited, you must be more selective about when and what you spend your money on. Make decisions will keep your problem from spiraling into something you can no longer control. Some easy decisions include pairing down cable or streaming services, ditching expensive memberships, going to a cheaper phone plan and cutting down on frivolous purchases (i.e. the 3 p.m. latte or those new shoes).
If cutting these corners isn’t making much of a difference, you’ll need to make some tougher decisions. Your top priorities should always be food and shelter for you and your family. After that, determine which bills are necessities and which bills allow you some leeway. For example, medical bills can be renegotiated, and student loans can be deferred. However, your credit cards are less forgiving. Use all the money you’ve saved from these actions towards your emergency.
Use what you have
Now is the time to be as resourceful as you can. Make the money you have go as far as you can. When it comes to food, be creative. Use everything in your pantry rather than having high grocery bills. Make use of all those coupons laying around to save some extra money. Skip upgrading to a new phone or buying new clothes. Purchases like that can wait until you’re back on your feet. For now, make do with what you have.
Take advantage of opportunities to get extra money
We currently live in a gig economy, and there’s no better time to take advantage of the many opportunities out there than when a sudden financial hardship arises. Many people supplement their income with a side job like babysitting, pet sitting, driving for Lyft or Uber or selling handmade items online. If you have the time, this can be a great way to earn some money to help you through this tough life event.
If a side hustle isn’t for you, there are still ways to make extra money. Hold a garage sale or take advantage of the internet to sell items you no longer need or use. Here are 49 suggestions to help you make money off old household items.
Don’t be afraid to ask for help
This isn’t an easy time. Change and uncertainty can be scary. You don’t have to face life alone. Talk to someone you trust about what’s happening. Actively seek out additional help. For example, if you lost your job you may be eligible for unemployment benefits. There also may be assistance available to help you put food on your family’s table. Look for every available resource.
Additionally, if this situation has caused you to go into debt don’t let it snowball out of control. We can help. We have a variety of solutions to help your through this situation and on your way to financial freedom. To discuss our solutions, call our support team at (877) 373-2330.
Plan for next time
The thing to remember about life is that it keeps happening. Once you’ve made it through your financial crisis, think about what you will need in the event of another unexpected life event. Start an emergency savings account. Work on rebuilding your credit score, sticking to a budget and having a plan in place to act quickly in the event of another event.