We all try to take a proactive and smart approach to our personal finances, but every now and then life pulls the rug from under us, and we can find ourselves in the middle of a major financial emergency. If you’ve been blindsided by a sudden problem in your finances, whether it’s a job loss, medical issue, or anything else, you need to know how to recover effectively. Here are some of our best tips for digging yourself out of any financial emergency.
Evaluate your Situation
When you find yourself in a situation that constitutes a “financial emergency”, the first thing you need to do is take some time to carefully evaluate it. Obviously, you’re going to have a lot of things running through your head, but staying calm and collected is essential if you want to come out on top. Before you go stampeding towards a quick fix, you need to take some time to really understand the root of the problem. Sometimes this is obvious, like with the case of an injury. Other times, it has a lot of different factors and layers to it which you’ll need to dissect. Knowing the root of your problem is essential for a good plan of attack.
Prioritise your Expenses
Once you’ve examined your problem and come up with a way out of it, your next step should be prioritising your expenses in order to solve your financial emergency as quickly and efficiently as possible. No matter the situation, there are going to be certain expenses that need to be put before others. Food and shelter should always take the top spots, even above expenses which are directly related to your emergency, like legal fees for personal injury lawyers. Most importantly of all, you should think about the luxuries and negotiable expenses that you need to cut back on in order to solve your financial emergency. After all, it’s not worth risking a foreclosure just so you can keep up with your favourite series on Netflix! It’s never fun to cut down on the luxuries that you’re used to. However, if you want to keep yourself from slipping any deeper into your financial troubles, you’re going to need to sacrifice some of those comforts.
Take the Help You’re Given
If you’re fortunate enough to live in a developed nation, there’s probably some kind of assistance available to help you with your financial emergency. For example, if you’ve unexpectedly lost your job, you could be entitled to unemployment benefit. If you were injured at work, you may be entitled to compensation from your employer. Depending on the situation, you may also qualify for various other state benefits assisting with medical costs like, disability benefits and similar initiatives. As a taxpayer, you probably fund a lot of these programs whether directly or indirectly, so be sure to look into them and apply for anything you’re entitled to. You may feel a little embarrassed to go looking for handouts, but if there’s any time to swallow your pride, it’s in the midst of a financial crisis!