When it comes to money, we all know that there are good times and bad times. Unfortunately, the bad times seem to be happening more often than the good times as of late. If you’re one of the many people who have been affected by a financial crisis, don’t worry – you’re not alone. And more importantly, you’re not without options. In this article, we’ll explore some ways that individuals have survived a financial crisis and how they made their way out!
Cut back on expenses
Since your expenses are likely what got you into this mess in the first place, it’s more than smart to start with them. Find out where your money is going each month and try to eliminate some unnecessary items on that list. For example, if you aren’t eating lunch at home or packing a lunch for work or school, maybe it’s time to cut back on some food expenses.
When you reduce your expenses, you’re not only freeing up more money to save or pay off debt, but you’re also teaching yourself a valuable lesson. You’re learning that you don’t need to spend as much money as you thought you did to be happy and satisfied. You might even find that you’re happier when you’re not spending as much!
Figure out where your money is going
Go over each purchase that you make with a fine-tooth comb. Each item should be categorized into one of three piles: “need,” “want,” and “silly.” The needs are items that are essential to keeping your life running smoothly, such as food and water. The wants are items that make life a bit more enjoyable, such as cable or internet service and music downloads. Finally, the silly items aren’t really necessary, but they’re still fun and can add to your happiness (e.g., candy bars and video games).
Take an inventory of the “need” pile and figure out what you can do without. If there are any wants or sillies that you can live without, take them off your list as well.
Renegotiate debt terms with your creditors
If you’re really in a bad financial situation, you likely have some type of debt that you need to pay off. Renegotiating with your creditors can help ease the burden on your back and allow you to get back on track.
Before calling them, make sure you know what debts you owe so that when you speak with them, you have a list of your balances, interest rates, and monthly payments. Think about what you can offer as a “settlement,” such as paying a percentage of the total balance in full or reducing your interest rate. Having everything written down will also help when going over the details with the customer service representative on the phone.
You also have the option of filing a chapter 13 bankruptcy. Filing for bankruptcy is a good option if your home is on the line. You can save it from foreclosure and allow you to keep it. But you have to work with an experienced professional to know if this is the best option for you.
Create or revise a budget
One thing that got you into this mess in the first place was overspending. To avoid making the same mistake again, you need to create a spending plan for yourself and stick with it. A common budgeting strategy is to make monthly expenses and break them down by week or month so that your money isn’t just sitting around doing nothing. If you aren’t sure how to create a budget, there are many free resources available that can help.
Make it work for you
A financial crisis is often viewed as an unneeded burden and something that should be avoided at all costs. While this may seem true on the surface, the reality is that a financial crisis can be turned into a blessing in disguise. All the stress from being in debt and not being able to keep up with your bills can be a powerful motivator for you to get your life back on track.
If you’ve learned some hard lessons, so have your creditors. They’re more likely to work with you if they see that you mean business about getting back on your feet. If you think your creditors are being unfair or acting illegally, don’t hesitate to consult with a lawyer.
As long as you’re willing to do whatever it takes, there’s hope for getting through any financial situation. So don’t lose hope! There are many options available to help ease the burden on your back and allow you to get back on track financially.
It’s not easy dealing with a financial crisis, but there are many ways you can get back on your feet. You’ll need to think outside of the box, but it will be worth it in the end from all the stress relief you’ll get from knowing that your finances are finally in order.