One of the most disruptive things to happen in your life is a financial hardship. These can come in many different forms, like losing your job, poor investments, natural catastrophes and illness. It is important, if you should find yourself in any of these situations, to remain invested in identifying your next steps and making an effort to successfully recover. Here are some practices to follow in the event of a difficult financial situation.

Measure Your Current Situation

Before jumping to decisions, take note of where you are at the moment. Making too many quick decisions can potentially place you in an even more difficult situation, creating further stress along the way. There will be many things occupying your mind during this time, so remaining composed is the best thing you can do for yourself during the initial stages of a financial emergency.

Create a Game Plan

Now that you are calm and composed, the next step is to determine the root cause of the emergency. Did you lose your job?  Did you get ill?  What has caused your financial situation to get so bad?  From there, you need to develop a plan to get yourself back on track.  Write the plan down.  Plot out a week by week list of tasks that need to be accomplished to get moving in a positive direction.  Give yourself a list of things to do every day will make you feel more positive, focused and increase your chances of success.

Track Your Spending

During any financial recovery, one of the elements to focus on is your daily or monthly expenses. These can include important utility bills, food, and other necessities. Create a list that highlights the most important and least important items. For example, a mortgage bill is likely going to be a bigger priority than a cable bill. Monitor your expenses, categorize each of them, and invest in a consistent plan to ensure the most important bills are paid.

You may also have to learn to cope with not having luxuries that you are accustom to. Do you really need everything that you are presently spending your money on?  Always ask yourself if your next purchase is a need or a want.  If it is a need, then you should buy it.  If it is a want, then you should delay the purchase.  Always remind yourself of your ultimate goal. You want to place yourself in a great position to dig yourself out of your financial hardship, which will involve cutting out the luxury items.

Engage with Lenders

Difficulties with credit cards, bills, and other spending demands can place a toll on your financial condition. Another step to take is to contact and engage with lenders. These individuals are ultimately looking to help you make your payments, as their interests are tied up with your financial success. With consistent communication, they can be open to lowering interest rates or extending the terms of a loan. Your credit card company may also be willing to lower your interest rate if you make a good case. You might also want to consider contacting a debt consolidation firm that can help your negotiate terms with the people you owe money to.  Finally, reach out to your mortgage company as well to see if there is a chance your largest loan can be restructured.

Find Additional Sources of Revenue                                             

A financial recovery plan would not be complete without a search for additional ways to make money. Simple things like renting out the extra bedroom or getting a part time job can go a long way to getting you back on track.  Some people will enter into small entrepreneurial adventures that not only help in the short term but turn into bigger full time ventures.  Are your eligible for funding and grants from the various levels of government.  Do you qualify for EI?  Even having a garage sale will help.  There are always ways to make extra money out there; it is all about finding those opportunities and taking advantage of them.

By recognizing these opportunities, understanding your situation, and making plans to expedite your recovery, you can get back to a healthy financial footing. Consider these practices if a financial emergency has shown up unexpectedly. Your decisions and responses can be the difference between a successful recovery and prolonged hardship.


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