How To Respond To A Financial Emergency
You may feel good with your emergency fund, but there is nothing like actually being in the middle of a financial emergency. You can feel an immense amount of stress and feel like you’re drowning in debt. And if you haven’t previously planned for emergencies, it can feel 10 times worse. But there are things you can do to help navigate through whatever emergency you are faced with – whether you’ve previously planned for it or not. So, here are some ways on how to respond to a financial emergency. Maybe some of these steps can help you get through this emergency and start planning for future emergencies as well.
Remain Calm And Evaluate
While any emergency that hits you financially is stressful and chaotic, it’s important to not go crazy. If you are going through a stressful situation and you start to lose your cool, there is no way you’ll be able to get through it. Instead, do your best to take a moment and breathe. Taking the time to sit down, calm your nerves, and really start thinking clearly is the only way you’ll get through the financial emergency. Start thinking about what exactly is causing the financial struggle. Once you get to the bottom of what is hurting you the most, you’ll be able to think of solutions to recover from financial ruin.
Look For Assistance
There are many programs you may qualify for when you are dealing with a financial emergency. If you find yourself unemployed, you are eligible to collect unemployment and you may qualify for COBRA insurance if your insurance through your job is terminated. If you experience an accident at work and get hurt, you should immediately contact your employer's HR department about worker’s compensation. And if you are disabled either through work or any other accident, you may qualify for Social Security disability and Medicaid. These programs are funded by your taxes, so why wouldn’t you take advantage of them when you really need financial help?
Restructure Your Budget
When a financial emergency hits, it may be time to restructure your budget. Of course, you’ve budgeted for your weekly or monthly expenses like groceries, gas, bills, and your rent or mortgage. But when you become tight for cash, you have to sit down and figure out where you can pull back on your spending. Maybe you start looking for cheaper food or you start taking the bus instead of always driving. Wherever you can cut back on spending will only benefit you and your financial struggle. It may take some adjusting and discipline, but when you are tight for cash, you have to be willing to make the changes necessary.
Look For Extra Money Wherever You Can
If you really look hard enough, you can find many ways to make some extra cash. You can sell the things you haven’t used in a while but is still in great condition. What is useless to you can be very valuable to someone else. You can also take on odd jobs on the side when you have free time. Jobs like Uber and Lyft are easy to start doing and can allow you to bring in a lot of money depending on how much time you can put into it. You can also start a side business from any hobby or talent you have. Whether it's painting, home repairs, dog sitting, babysitting – whatever you are good at can make you some much-needed money.
Talk To Lenders
Although it is hard to believe, lenders actually are very willing to help you. If you are dealing with an emergency that is eating up your money and you fall behind, talk to your lenders. Whether it’s your mortgage, bills, or your credit cards, your lenders will take the time to come up with a workable solution for you. Even online title loan companies are flexible. You just have to speak up. If you wait till you are getting final notice letters without having previously told them about your money troubles, you will never receive the help you need. All it takes is a simple phone call before it gets even worse.
Note: The content provided in this article is only for informational purposes, and you should contact your financial advisor about your specific financial situation.