There are few things more distressing than a financial crisis. Whether it’s a sudden job loss, an emergency or accident that causes a huge financial crater, or any other kind of imposition, a blow to your finances can make you seriously doubt whether you’ll be able to weather the storm this time. Despite these uncertainties, there are always things you can do to get yourself through a crisis, or at least to alleviate some of the worst consequences. Here are our tips on how to deal with a personal financial crisis in 2022.
Take stock of the situation
Before you begin trying to deal with a financial crisis, it’s important to get a good idea of exactly what’s going wrong. What is the nature of the emergency? How did it begin, and what are some of the potential ways it could end? Don’t prophesy doom, either; try to keep a level, calm head as you assess exactly what’s happening and how you should deal with it. By keeping the picture clear, you’re also doing all you can to ensure your own response is level-headed.
Get as much help as you can
No matter what situation you’re in, you’ll almost certainly be entitled to some kind of financial help. Try to research which benefits you’re entitled to or whether you can receive any kind of grant in your situation. Even if this isn’t possible, you’ll always find that there are loan lenders ready to help you; you’ll even find very bad credit loans direct lenders that can assist you if your credit rating has suffered. You should always make sure to look into what help you might be able to receive.
Ask friends and family for support
Even if friends and family can only provide emotional support, that might still be massively useful in your situation. However, you might also find that they’re capable of helping you out financially. If your friends and family are in a better position than you in terms of money, and if you’re on good terms with them, then you shouldn’t be ashamed to ask for help. If necessary, you can ask them to structure it like a lenient loan; offer to pay them back once you’re back on your feet.
Dip into savings
According to research, the average Brit had around £6,800 saved in 2020. In many cases, this could be enough to lift you out of your financial trouble, at least in the short-term so that you can find a more long-term solution. Even if it’s not, it could go some way towards denting the issue. Don’t be tempted to ignore your savings because the situation isn’t dire enough. After all, what is a “rainy day” if not a personal financial crisis? That’s what savings are there for.
Tell your employer
It might be a good idea, depending on the nature of your financial crisis, to inform your employer about what’s happening. They might be able to provide assistance (assuming the problem doesn’t stem from them, of course), or, at the very least, grant you special time off to resolve your issue. Even if they can’t provide any immediate support, just knowing that they’re aware of what you’re going through could be a big help psychologically and emotionally.
Pick up a side hustle
If your life allows for it emotionally and in terms of free time, then you could consider picking up a side hustle in addition to your main job. This could be something that you do when you’ve got some free time so that you can earn a little extra cash. Tutoring, guest blogging, or even menial work like cleaning can all be great ways to do this (assuming you’ve got the time and energy, of course; don’t burn yourself out in pursuit of an extra income source).
Consolidate debt
If your financial crisis is as a result of mounting debt, then consolidating that debt can be a good way to climb out of a hole. It depends entirely on your circumstances, of course; consolidating debt isn’t an instant way to get rid of it, nor will it mean you’re free of repayment obligations. It can, however, help you to keep track of payments, and in some instances you can find that consolidation loans have more favourable interest rates than the individual loans you’re currently paying off.
Create a concrete plan
As well as your budget, you should also create a plan that will help you figure out exactly how you’re going to get out of your current financial crisis. This could involve selling possessions you no longer use, for example, or talking to certain people about borrowing money. Whatever your plan consists of, making sure that you have one and that you stick to it fairly rigidly is a great way of improving your chances of making it out of the crisis with your money largely intact.
Stop using your credit cards
In many cases, credit cards can get you into worse debt than they can ever lift you out of. If you stop using your credit cards, then you can be sure that you won’t be plunging yourself into more debt than you started with. If it helps, physically cut up your cards so that you won’t be tempted to make more payments on them (if, of course, you’re allowed to do so). This won’t stop you from needing to make repayments, but it will stop you from using the credit cards to make things worse.
