7 Tips for Getting Through a Financial Emergency

There are many families across the country who live paycheck to paycheck. No matter how big your property is or the size of your family, keeping a household running in working order can put a strain on your finances. While some families will put money aside each month as an emergency backup, there are many others who don’t save for the unexpected.

Whether you’ve recently lost your job, or you need to take care of an emergency home repair, there are numerous financial emergencies that can increase stress levels. If you find yourself in a black hole, here are seven tips on how to get through a financial emergency.

Stay Positive

If you have found yourself in a financial emergency, the last thing you should do is panic. The fear of the unknown and solving the situation can cause many people to get stressed, anxious, and upset, however, this will only make matters worse and increase stress levels. With a family to provide for, it’s understandable that you won’t feel yourself, so it’s important that you take time to get in the right frame of mind and assess your situation to find the best solution. There are lots of health benefits that you can gain from positive thinking, helping to make your situation that little bit easier.

Assess the Situation

Once you have calmed down and got into the right headspace, your first step should be to establish the root cause of your financial emergency. While you will be able to brainstorm solutions at the end, you need to pinpoint what has caused you to be in this situation. Some of the most common reasons include losing income, natural disasters, and mounting expenses that you’re having difficulty keeping up with. Your plan of action needs to establish the root of the problem, otherwise, you will be putting a band aid on a wound that is bound to open again later down the line.

Prioritise Expenses

There are all sorts of expenses that you need to account for as a family. You will find that they aren’t all created equally, and some bills will need to take priority over others. If you’re unable to pay everything in one go, you need to learn how to prioritise. Understandably, the most important bills that should be put first are food and shelter. Rent and mortgage payments take priority, but if you’re struggling to keep on top, you should contact your provider who may be able to help. Also, review your insurance portfolio.  If owning a life insurance policy, you may have a cash value policy.  Whole life insurance plans allow you to borrow from the cash value if needed.  Or if you have a term life insurance policy, you may be able to lower the death benefit which will decrease your monthly premium.

Cut Your Spending

Once you have identified which bills are a priority, you can figure out ways on how to cut down on your spending. In a financial emergency, there is a slim chance that you will have extra money to use as you please. There are lots of ways to save money on household bills, such as where you shop for food, buying second-hand clothing, and creating a budget. You need to remember that although times may be tough at present, cutting down on expenses can be a big help and get you through your financial emergency quicker.

Consider a Loan

If you need money right away, you may want to consider taking out a short term loan. There are websites like New Horizons where you can get a quote for short term loans. The company processes thousands of applications each day, with 92% of them being approved. These short term solutions can put your mind at ease and reduce stress levels. So you can be confident you’ve made the right decision, it’s always important to do proper research and vetting.

Find Other Ways to Make Money

In an ideal scenario, you will want to have some cash set aside in an emergency fund, which can be used to cover unexpected expenses, however, for many families who have to count every penny, this isn’t always a realistic expectation. If you have the time and commitment, why not look at other ways to make extra money? A side hustle can be a fantastic way to earn extra income and create an emergency fund for when you need it most.

Reach Out to Friends and Family

There are many families up and down the country who are going through the same situation as you, so don’t hesitate to reach out to friends and family during a financial emergency. It’s important that you have a strong support network around you, who can be there when times are tough. You may find that someone in your close circle could help you financially, which will take a massive weight off your shoulders. There may also be a family member or friend who has been in your position, meaning they can give you useful advice on what to do to rectify your financial emergency.

If you have to deal with the occasional financial emergency, try not to let things get beyond your control. There are lots of tips that you can take on board, which can help you be proactive and get through the obstacle ahead.