Everyone has had to face financial trouble at some point in their lives. Even famous multibillionaires have had to file bankruptcy in their early years before they made their fortune. Many people struggle not always because they are not compensated well at work or they do not know how to handle their money problems. A lot of people struggle with their finances simply because they don’t know how to respond to money troubles when they’re faced with them.
Although there isn’t a one-size-fits-all solution to financial troubles, the basis of every answer to your money problems is to live within your means. Everything else falls second to that “solution.” Of course, that doesn’t mean everyone has the resources to live within one’s means as this is impossible in many cities with the high cost of living. But that’s also why there are specific suggestions for these types of situations.
Unemployment or Low Income
The pandemic showed how vulnerable employment can be. That’s why many people have decided to do freelancing and self-employment when they lost their jobs because of the pandemic. The problem with a reduced income is if you try to solve it by using your credit card or getting into debts you cannot pay.
Identify first your current financial needs. Your most basic and pressing needs would be to pay your mortgage and utility bills, buy food, and have enough money to get by until you find a new job. Talk to your trusted mortgage lender and see if you can refinance your loan. Ask for a moratorium on payments if that is possible. Then, you can use your unemployment insurance (if you have one) or live on food stamps for a while until you get your bearing.
You don’t need a full-time job immediately to address your financial needs, though that’s the perfect solution. If a full-time job opening is impossible right now, you can accept a part-time job. If your full-time job does not pay you enough, look for a second job.
Unexpected Medical Condition or Accidents
Perhaps, there is nothing more mind-blowing in terms of one’s financial struggle than to deal with a medical condition. You might even lose your job or work reduced hours because of your appointments with the doctors. The way through this is to make sure you are maximizing insurance and government benefits. Check with the federal government and state laws about the aid that you are entitled to as a taxpayer.
Simplify your lifestyle. If you need to pay for medical expenses, you need to cut excessive spending. Also, you can look into fundraising campaigns online or ask for help from your friends (though be careful about asking for personal loans).
A divorce is always a shock to the system. Not to mention, on one’s finances, too. Between paying divorce lawyers and splitting everything in half, you may find yourself unable to afford the upkeep of the house even though you won that from your partner. The only way out of this problem is to sell the house. After all, plenty of people don’t want to live in a house shared with a previous partner.
Downsize to a home that you can afford. Yes, even with children in tow. It’s more important to afford your cost of living than go into debt. You can also consider generating revenue from the house by renting out the basement or attic or turning it into an Airbnb.
Whether it is substance abuse or shopping addiction, it is important to seek counseling when you can no longer control yourself. Any kind of addiction is a form of abuse to your physical, emotional, and mental state. When you are ruled by your “addiction,” you can no longer function well enough to earn the money you need for even your necessities. Get help because if you don’t, you will never overcome your financial problems.
Starting a Family
Suddenly, a baby is on the way. If you didn’t prepare for the additional person you have to take care of now, you’re going to be in big trouble. You have nine months until the baby arrives. During that time, cut down your expenses and look for a side job if you are medically allowed to hold a job. Adjust your budget and lifestyle, making sure that you have enough savings in the bank for the increased expenses.
Overcoming financial troubles is never easy. You need to start by setting priorities and clear boundaries. Once you have set a plan, work on implementing it and try not to stray away from your financial goals.