We all face financial uncertainty from time to time. From a vehicle break down to a surprisingly high bill, it’s easier than you might expect for your budget to thrown off track. No matter how meticulously you’ve planned your finances, it’s likely that the coronavirus pandemic has seen your spending habits change or perhaps even an unfortunate drop in your household income. The fact is that money issues are a regular part of life and can happen to anyone. What really matters is how you move forward and knowing the options available to you is the first step towards making an informed decision.
Whilst job security and financial stability should be amongst your top concerns when trying to keep your finances in check, it’s also important to develop money management coping strategies and to know where you can get help if you need it. Outside of seeking qualified financial advice, here are five top tips that could help you to cope with a financial emergency.
Get your priorities right
If you’re faced with a bill or are struggling with debt, anything you owe can seem like the most important thing in the world. In reality, though, some debts trump others and if you are facing a financial emergency it’s often important to know what to tackle first.
Priority debts are those that are the most important to deal with, simply because the consequences of not paying can be very severe. What counts as a priority for you will depend on your circumstances, but common examples of priority debts include payments towards rent or a mortgage, tax bills and utility bills. Effectively, these are the debt payments that keep a roof over your head and your family clothed and fed. Even when times are tough, the basics are often the most important things to manage as without the security they offer you won’t be in a position to keep on chipping away at your other issues.
Make informed spending decisions
Just as savers and other frugally minded members of the public might find ways to spend less money, those facing a financial emergency may find life just that little bit easier if they limit their spending on non-essentials and cutback on costly outgoings.
Tightening the purse strings is all well and good, but whilst it’s easy to cut down on entertainment spending or the costs of eating out, some things simply need to be paid for. Car insurance, travel to and from work or school, food and utilities are all unavoidable costs for most people and so getting a good deal on these essentials could leave you with more room for movement when other emergency costs emerge.
From using comparison websites to shopping at a cheaper supermarket, making savings is easier than many people think. In most cases it simply involves shopping around for the best deal, a habit that could see you saving money even after you’ve overcome your financial difficulties.
Consider getting a short term loan
When faced with an unexpected bill or a large one-off cost, many people will consider borrowing money either from the bank, on a credit card, or from family and friends. Despite these all being perfectly valid means of getting your hands on some cash in a pinch, it’s also worth considering whether a short term loan could be the answer that you’re looking for.
Providing a flexible finance solution which could see you able to pay back what you owe over several months or even years, many of these short term loans don’t feature the same longwinded application process as getting a bank loan and in some circumstances can even be granted to those with a bad credit history or poor credit score.
Just as we mentioned that those looking for insurance may wish to save money by opting to use a comparison website, so too can you often get a better deal on a short term loan by applying via a broker. As a specialist online credit broker, Little Loans is one such specialist site that could see borrowers matched with the direct lender that is most likely to approve their application. An easy to apply emergency loan could be the ideal solution for cash strapped members of the UK public, and by using a reputable online credit broker to access a flexible loan you could see money hit your account in just hours – perfect for dealing with an emergency.
Set short term goals
There’s no better time to focus on your financial future than when you’re dealing with money problems. For one thing, your focus will be on making the best of your situation and so it’s a good opportunity to get to grips with your financial circumstances and make the changes that will help you to cope with similar emergencies in the future.
Planning to get out of debt, working out a realistic budget or simply deciding that you need to cut your spend on rent and bills could see you starting to get a handle on your finances whilst freeing up the funds you need to pay out for an emergency. Just remember that making changes takes time and so your short term goals should reflect not only your current money troubles but also the wider circumstances that affect your bank balance day in, day out.
Don’t struggle on alone
Above all else, it’s vital to know that no matter what financial issue you’re facing, you aren’t the first and you certainly won’t be the last. Despite the curated lifestyle snapshots, we all see on social media, many people are struggling more than you might expect and scratching beneath the surface will often show a different story to the public-facing one.
If you are finding it tough to cope with financial hardship or simply don’t know where to turn when faced with an unexpected cost, there is help available. From the many free advice services operated by charities through to paid-for expert guidance, there’s no need to suffer in silence and getting help from those in the know could leave you equipped to solve future financial problems.