Taxes and death are said to be the only certain things in life, but you can add unexpected financial difficulties to that list.
No, seriously. How many times have you, or someone you know, been in a financial emergency? At any given time, about 50 percent of Americans are struggling with financial hardship.
Maybe your car broke down when you were dead broke. Or you were laid off from work and a few months without a paycheck left you struggling to pay your bills.
Although financial hurdles are very much part of life, knowing how to deal with them makes a big difference. This article offers a couple of tips you can use to cope with financial distress.
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1. Don’t Worsen the Situation
When in a hole, stop digging, so goes an old adage.
Many people have a tendency to worsen their financial situation when they’re faced with an emergency. If your car breaks down and the first thing you do is rush to a payday lender, there’s a strong chance you’re getting yourself into more trouble.
Payday loans have astronomical interest rates and must be repaid in a month or sooner. It’s no wonder so many payday borrowers end up in a vicious circle of debt.
It’s understandable that some emergencies can make it difficult for you to process your thoughts, but try to catch your breath and think through it. More often than not, you’ll find a solution that won’t leave you worse off than you already are.
2. Use Credit Diligently
For many people, getting a loan is far easier than asking for help from a friend or relative. So, we can’t run away from the fact that loans are a useful resource in times of financial difficulty.
You already know payday loans are a no-go, but that doesn’t mean you jump on the next available credit facility. Take a moment to go through the terms and conditions of a loan before signing up. Look out for hidden charges.
Ideally, you should go for an installment loan. This spreads your payments over a longer period of time, which helps ease the burden. It helps to know where to get installment loans so that you don’t fall victim to shady lenders.
3. Cut Down Your Expenses
Your living expenses won’t go away because you’re facing money problems. Utility service providers will send in bills without fail, and if you’re renting, your landlord will keep demanding their dues.
How quickly you take steps to reduce your expenses after experiencing financial difficulty goes a long way in ensuring your situation doesn’t go from bad to worse. If you lost your job, don’t sit still hoping you’ll find a new job soon. It could be several months before a new gig comes along, by which time your bills might have piled up.
Be proactive. If you’re a renter, move to a cheaper house or move in with a roommate. Don’t hesitate to move back to your parent’s house if that option is available. Cancel unnecessary subscriptions, such as streaming services.
You catch the drift. The goal is to keep your cost of living as low as possible as you work to regain your financial footing.
Prepare for Unexpected Financial Difficulties
Financial difficulties can leave you stressed, anxious, or even depressed. You’re not going to dig yourself out of this situation overnight. It’s crucial that you learn how to cope as you find a way out.
Make the most of these tips, and keep tabs on our blog for more helpful bits of advice.