It is difficult to anticipate how financial fortunes will unfold. There are so many influences shaping personal financial matters, even the most conscientious money managers have a hard time covering all the bases. And just when the elusive promise of financial stability seems like a real possibility, unforeseen challenges of great magnitude can change your entire financial outlook.
The financial strain of disability, divorce, layoffs, job loss, medical emergencies, and other events can disrupt financial order, particularly for families without substantial reserves. When extraordinary demands set-in, time is of the essence, calling for imaginative cost-cutting measures, capable of producing fast returns. For the best results responding to financial crises, look for short-term, stopgap solutions first, before moving-on to long-range planning.
Find Money in Your Budget
Successful personal finance boils down to balanced cash flow. As long as you spend less than you earn, your budget stays balanced and household money concerns remain stable. During a rough financial period, your traditional budget may become unsustainable, calling for a new approach. What’s more, depending upon the root cause of your financial issues, extraordinary expenses may further fuel the fire, making it even harder to keep up with monetary demands. You may be able to ease the pressure, however, finding inventive ways to save money and extract the resources you need. Trim these spending areas for savings:
Communication – With so many alternatives available for staying connected, it is easy for communications costs to rise beyond affordable levels. When financial challenges arise, look closely at your communications spending for phone and internet connections. Do you maintain a redundant land line, despite family members’ mobile capabilities? Are you paying for seldom-used high speed connections, when most of your online needs are covered at school and work? Can a group discount or family plan lower your communications costs? Answers to these and other important questions can help you save money and overcome financial distress.
Entertainment – This broad spending category encompasses concerts, shows, and other special events, but it also includes money you spend bringing entertainment into your home. Reviewing the cost of cable television subscriptions and satellite services can lead to savings for families needing to cut back. And since providers operate in a highly competitive environment, changing vendors can lead to aggressive promotional savings.
Food Costs – Feeding your family can be an expensive proposition. When unforeseen financial challenges strain household cash flow, trimming food costs can help you make ends meet in other spending areas. To save on food, reduce restaurant meals to a minimum and send family members to work or school with bag lunches. By planning a weekly menu, you can minimize food spoilage and tighten-up your grocery budget.
Lean on Available Resources
Depending upon the nature and scope of your financial problem, help may be available from organizations committed to your cause. Short-term disability payments, for example, help reinforce your cash flow while you’re out of work, covering basic costs of living until you are able to resume earning. And various legal aid programs assist distressed families, furnishing financial resources to offset the cost of divorce, bankruptcy, and other unfortunate events. Unemployment compensation is also available, providing short-term relief for able individuals actively seeking employment. If you are fully employed, on the other hand, but need a financial boost, short-term loans furnish fast access to cash, using your paycheck to guarantee repayment.
Take Proactive Measures to Protect Your Finances
When unexpected financial demands set-in, you are left to react and make the best of difficult times. In times of crisis, a problem-solving mentality is your best asset, finding financial solutions under duress. Although a positive, can-do attitude may help during hard times; a proactive approach can help you start protecting your assets today.
Financial emergencies leave you vulnerable, so preparing in advance can help ease the impact of unforeseen events. Ideally, your household budget allows for an emergency fund, representing cash you can draw from to get back on track. If you haven’t yet made much headway establishing a contingency fund, do what you can to prioritize emergency savings. For the best results, use automated withdrawals and keep your rainy day fund separate from other accounts, reducing temptation to direct the money to other financial obligations.
Unexpected financial demands can be catastrophic, testing your financial resolve. By trimming savings from your budget and using whatever emergency resources are available; it is often possible to avert further damage and get your finances back on track. As financial challenges resolve, prioritize contributions to your household emergency fund, preparing you for future trials.