Imagine you have lost your job. Perhaps, you have children to feed or you have sick parents to take care of. Little money has been saved and debt is starting to slowly pile up. This is financial crisis creeping up on you. It’s not an easy feat but here are some actions that can help lighten the situation and prevent it from getting worse.
Determine how much money you currently have. Check your bank accounts, your retirement plan and your other sources of income. You might also want to estimate the values of your properties – cars and houses. Then, total your debts from credit cards, mortgages and student loans.
Call your creditors.
Let your creditors know your financial situation. Negotiate so they can grant you lower monthly payments just until you get your finances sorted out. If they initially refuse, speak to a supervisor or a manager. Creditors are often more forgiving when they see you attempt to pay even a little.
Change your spending habits.
Cancel all your unnecessary memberships and subscriptions. Avoid pricey restaurants, shops and boutiques. If you are used to shopping at upscale markets, this is the time you have to explore discount markets. You might also need to switch to more affordable product brands.
Split the rent.
Rent usually takes the most of every renter’s salary. So, to free up some money, find a roommate you can split your rent with. This will cut your housing cost by 20-50 percent.
If things get more out of hand, you might want to consider selling that expensive new car and instead buy an older but equally reliable car. During these times, it’s more important to weigh your needs over your wants.
Let your family know.
Lastly, be honest about your situation with your family. You might need to cut off on extra-curricular activities such as music lessons or summer camps. And if your kids are old enough to get part-time jobs, encourage them to do so. No family can’t beat financial crisis if they work towards addressing the situation together.