Everyone experiences financial difficulties at some point or another. It might be that you were born into a relatively frugal household, and had to earn everything that came your way. It might be that you are relatively affluent, but an issue with gambling has rendered you near bankruptcy.
A current amount of wealth is never necessarily a guarantee that wealth would, should or could remain in your bank account.
That means everyone can use some excellent tips regarding how to manoeuvre when in financial difficulties. The very act of hitting this financial rock bottom can be enough for some people to tailor their considerations here. But sometimes even that might not be the case. Sometimes, a custom article on a helpful financial blog can do the trick. Seems like you’re in the right place!
1. Consider Your ‘Items Of Worth’
It’s always a good plan to consider what items you can live without, ideally items of value. Of course, then you might be able to find an appropriate place to sell them. While it might feel difficult letting go of prize items you have attained over a career or a lifetime, sometimes they can serve as the lifeline they need to be. This might be a much more valued use for them than simply sitting as an observation piece, or as part of a collection.
If you think of this now, you are likely to realise you have many items like this. You might not be into buying items of luxury, or even expensive items at all, but some might hold value over others. To use a small example, it might be less expensive using a temporary rail pass than driving your car around town. It might be worth selling an e-reader and transitioning back to books. No matter how you value your personal belongings, always consider if they might be able to help you out of your current situation. It might feel a shame to lose your jewellery collection for example, but this can be a much better outcome than turning to bankruptcy. It may even be that it would save your from having your items removed from you by force when the bailiffs legally enter your property.
2. Reach Out
Reaching out to friends and family can help you during this difficult time. It’s not always the most comfortable request to make, but sometimes a loan from favourable people in your life can help you stay afloat just that little bit longer. In a world where financial deadlines mean everything, sometimes having this flexible perspective with a parent can help reduce plenty of stress from your shoulders, or generally help you sustain yourself for a little longer. This lifeline could be critical, but it’s important to pay your loans back as agreed. You can enter into a contract with them, but if not remember that the only collateral you will be bringing to the table is the potential ruin of your relationship should you fail to pay. This is why many people even refuse the initial offer of a loan from their parents because the chance of things going wrong is much worse than facing the financial penalties of ill-handling. This is for you to decide, yet some people do not have that luxury.
Be sure to open lines of communication from the start, and the endeavour should at least be more clear for everyone involved.
Sometimes, you might be able to refinance a certain item. This can help if you have fallen behind on its payments or you simply need an extra loan using a form of collateral. For example, it might be that you use a refinance home loan option to gain further future wiggle room, taking a large cash loan in exchange for extending mortgage repayment durations. There are many assets you can refinance, from your home to your car to other items you are paying back with a significant valuation.
It’s only worth taking this option if you are absolutely sure you can repay those terms as you hope to. To do so as a final lifeline could be deadly because all this does is get you further into more debt. However, let’s say you have an amount of debt, but a regular income coming in that simply isn’t good enough to meet that demand. Refinancing can give you this cash loan to settle those debts. From there, you can use your standard income to repay the refinance. Either for a longer period of time than before or with a slightly higher repayment value. It’s likely to be both. With the willingness to do this you open your potential future options to a degree that might be worth considering.
4. Reduce Living Standard
Reducing your living standard is important if you hope to meet the financial deadlines more appropriately. For example, if in debt you might choose to sell certain items, reduce your luxury hobbies, cancel vacations or lessen your quality of purchased goods. It might be you purchase clothes less frequently or eat more frugally. There are a million methods of saving money and combined they can all add up into a big helper for your financial needs.
If in financial difficulties, this should be the first thing you do, bar none. No one with financial difficulties they have yet to meet should attempt to live a life as they have before, as they shouldn’t have the right to. Of course, when it comes to children you might desire to keep their standard of living as correct as possible, instead, neglecting your own luxuries. However, people looking at their own situation will find it the hardest to make cuts here. If getting into financial difficulties in the first place, that might be part of the problem. It takes debt repayment letters and final demands to wake people up to this fact. Changing from a ‘wants’ to ‘needs’ mindset will always be the most appropriate in helping you return to your own sense of personal frugality.
5. Rectify The Issue
Of course, getting into financial difficulties is never something you slip into accidentally. It’s always a consequence of bad financial behaviour – be that via neglect, an addiction, a difficult social situation or being penalised due to your previous behaviour. For example, getting into debt thanks to a stockpile of parking tickets will quickly make you aware of your need to rectify certain behaviour.
There are likely financial services to help you in your country. In the United Kingdom, charities such as StepChange Debt can help you dramatically, as can the business variant. These services can help you come up with a budget, and help you identify where you’re losing out on your main expenditures. In some cases, they can even contact your creditors and ask for more lenient terms, or help show you are taking steps to resolve your situation. These services can often work in synchronicity with rehab centres, medical clinics and many other public services if you simply see what’s on offer. There is guaranteed to be more help out there than you think with your financial difficulties.
No one enjoys having to come to terms with their flaws, but finances never lie. Without any money in your bank account or thousands in debt, it’s pretty clear you will be doing something wrong. Keeping the willingness to stay humble and reflect on your behaviour, and make an active change. These can help you climb out of this whole step by step and begin enacting the healthy disciplines of the future.
With these simple suggestions, we hope you find more utility rectifying your financial state for better, not for worse.