We all try to expect the unexpected and plan for the worst. We all know that financial crises happen, but we rarely expect them to happen to us. Try as you might to prepare for them in advance, when they hit they tend to blindside you, leaving you wondering not only how they happened, but what you should do next. If you’ve been taken aback by a job loss, an emergency home repair or any other sudden, unpredictable shake up of your financial situation, it’s important to stay calm and keep a clear head. Remember that as stressful as the situation is, there is a clear way to go about getting back on your feet.
Take stock of the situation
The most important thing to do when you happen across an unexpected financial crisis is to stop and take stock of the situation. Panicking won’t get you anywhere, but evaluating your situation and seeing how you got into this mess is the first step towards getting out of it. It’s only with a cool head and an understanding of your new situation that you will be able to sort the situation out. Write up your budget, look at what you have coming in and what you have going out, because you have a little work to do.
Sort out your priorities
Not all debts are created equal, and “I’ve grown accustomed to a certain standard of living” is not an excuse your bank will care for if you default on a secured loan. The world we live in states that some debts and bills will always need to be addressed before others; if you find yourself unable to pay them all, you’re going to have to start prioritising your debts. Look at the budget you’ve drawn up and list your debts by priority. While you’re there, look for areas where you can start cutting back. If you can find 5 areas where you can to cut down £20, that frees up £100 to put towards a priority bill.
Once you’ve figured out what debts go where in the grand scheme of things, you can start telling your lenders what’s going on and trying to negotiate a lower interest rate, or possibly even freezing your interest for a few months. Believe it or not, this negotiation is not only in your best interest, it’s in the interest of your lenders too – if you’re making repayments, albeit at a lower rate, they’re getting back some of the money they’re owed. In their eyes this is far better than not getting any money back at all. If you’re honest, up front and quick about this, credit card companies and other lenders tend to be more cooperative than if they have to start sending out threatening letters and debt collectors.
Find an extra source of income
There’s always more than one way to make a buck. If you have any talents you can put to use, now would be the perfect time to break them out. There are plenty of sites out there like Udemy where you can put together an online course tutoring people through anything from playing guitar to how to edit photographs. Once up, these tutorials can earn you a passive income, helping tide you over until you’re back on your feet. Failing that, there’s always the option for garage sales and selling things on eBay.
Look for additional assistance
Nobody likes asking for help – especially when it comes to money. However, friends and family rarely charge interest when it comes to short term loans. Just remember that if they say no, it’s in no way a reflection on either of you – you never know what another person’s financial situation is until you see their accounts for yourself, you could however consider a unsecured loan from Peachy. There are other ways to get financial aid and assistance at times like these. If you’ve recently lost your job, there are unemployment benefits you can look into, online resources to help get your CV up to scratch and even networking opportunities to help you find short term work. A little help can go a long way in the middle of an unexpected financial crisis.