Life is unexpected. This means that you may have to deal with a personal financial crisis. It’s no fun if you get into a financial emergency. When you are placed in this position, it is important that you manage your personal financial crisis as well as possible. Here are some tips to help you manage your financial crisis:
#1 Stay calm
The best thing you can do is stay calm. It’s hard in this situation, but panic doesn’t help anyone – nor does it help your finances. Take a few calming breaths and get ready to continue.
#2 Count your assets
It wasn’t a big financial crisis, but when our basement was flooded, we immediately began how much money we had. These included easily accessible money in savings and checking accounts, as well as hard-to-access assets such as investment accounts. In an emergency, you can even consider your retirement accounts.
#3 What can you sell?
You also know what saleable assets you have. Maybe a second or third car is being sold, or you have some other items that could generate some money by selling quickly on eBay, Craigslist or by using a flea market. Plan to sell these items if necessary.
#4 What are your obligations?
Next, you need to know your commitments. Get a list of debts and other obligations (invoices, etc.) and note the monthly payments. Prioritise your invoices to get the most important things done. If you want to keep your home, it is important that you pay your mortgage. You can skip credit card payments during a financial crisis – but be careful what you do.
#5 Try to take precautions
You should inform your creditors what is happening and let them know that you want to make payment arrangements. The only thing that made me happy during my basement debacle was that the cleaning and restoration company allowed us to make payments over three months without interest.
#6 Look for ways to cut costs
Naturally, you should look for ways to cut costs during a personal financial crisis. Reduce subscriptions and unneeded services. Eat less, search for sales. Be rigorous about how you can save energy and water and lower your bills. Avoid spending money on unnecessary items. If you have an emergency fund, this will help you stretch it a little.
#7 Think about how you can earn extra money
In a personal financial crisis, you probably need to make more money. A part-time job can help. You can also do odd jobs, donate blood plasma, or find any number of ways to earn more money.
#8 Ask for help
You can ask friends and family for help. Good, good, good. This doesn’t always mean they give you money. But they can do it . You can help by watching your children look for other jobs, or they can help you with shopping or in other ways. Having a support system can be important if you are going through a personal financial crisis.
#9 Set yourself a daily spending limit
A simple way to limit daily spending is to set a daily spending limit. It’s best to take an hour or two at the beginning of each month and see how much money you have to spend next month. Basically, you should always try to settle debts and bills first. This will prevent you from getting into a financial emergency situation.
#10 Plan your purchases
Before you go shopping, make yourself a shopping list. This will prevent you from buying things you don’t need or spending money you don’t have. If you ever want to go shopping, set a budget in advance that you can use freely.
Multiple account model
This way requires a little more effort, but is very effective in keeping track of personal finances. Instead of opening one account, you open several accounts and assign a specific purpose to each one. For example, you could open three accounts for the beginning.
Use the first one as a normal checking account. Here, for example, you receive your salary and pay the fixed monthly expenses. You use the second account for annual bills. In this way, you can guarantee that these will be paid on time. You can use the third account as a leisure account. There you pay in a certain amount each month, which you only use for extras.
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