Anybody can come up against a financial emergency from time to time. The key to dealing with it properly is knowing the right steps to take. Of course you can't help feeling stressed out at first, but it’s important not to react from that place or make decisions from it. If you attempt to get out of the situation you’re in from a place of stress or anxiety, you’ll likely only make irrational decisions that have more repercussions or make you more stressed in the long run. Here’s how you go about handling a financial emergency the right way:
Sensibly Evaluate The Situation
Calm down. Relax your body. Take some deep breaths. Don’t evaluate the situation while your heart is racing. When you're calm, you can look at the situation logically. What caused this emergency? Understanding the cause will help you to stop it from happening again. Maybe it was a loss of income, or a build up of expenses that you’re struggling to keep up with. Maybe it was something you couldn’t control at all, like a natural disaster or a personal injury that was somebody else’s fault. You can find places like gaskinsbennett.com to help you deal with situations that aren’t your fault, but you’ll want to read reviews and have a consultation first. Addressing whatever the root of the problem may be will help you to deal with issues more effectively in the long run.
Prioritize Your Expenses
Some bills need to be paid before others. You need both food and shelter. Prioritizing your expenses will help you to live more comfortably while you deal with your financial emergency. Once you know what’s truly important, you need to look for expenses that you can cut out of your budget. Maybe you can cut back on some things or eliminate them altogether. A personal injury could seriously harm your finances.
Negotiate With Lenders
If you’re having trouble with your mortgage, credit cards, or something else, you need to contact your lenders ASAP. They will want to help you make your payments. They’d rather that than not get them at all. Even if you’re not quite struggling yet but you feel like it’s going to happen soon, call them and discuss what’s going on. You may be able to get a lower interest rate, and even some time off making payments. You’ll feel like a weight has been lifted.
Look For Extra Cash
In an ideal world, we’d all have money set aside in an emergency fund. However, it doesn’t always work like that. Getting a loan or a credit card could potentially make the problem worse. So what can you do? If you can ask for help from a loved one, this may be a good way to borrow money without the high interest rates. You could also potentially sell things you don’t use anymore (not things that you really need/use or are irreplaceable).
Make sure you take advantage of any help available for you. Doing this alone and thinking you’re the only person to ever have a financial emergency will make things much worse!