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How to Deal With a Personal Financial Crisis

If you’re going through a financial crisis right now, you’re not the only one. The world is going through a pandemic, which has caused a global financial crisis on a bigger scale and unemployment on the individual one. A lot of people are losing their jobs and their savings due to layoffs, medical bills, and day-to-day expenses. If you’re facing problems with money, you need to think about the next step thoroughly. 

There’s always a way to fix a bad financial situation and get back on track. Below, we’ve listed possible solutions to help you deal with your financial crisis. 

Face the Facts

The first step in solving a personal problem is to admit that you have it; running away from the fact that you’re going through a financial issue won’t make it go away. You can ignore it and continue to have the same spending habits, but that will only make it worse. Instead, start acknowledging the problem so you can find a solution; procrastinating won’t help as it will take some time to sort your finances out. 

Track Down Your Spendings

Identifying the problem is your next step. If you lost your job, had to shut down your business, or have no source of income for any reason, you need to start tracking where the money is going simply because there’s no money coming in to make up for it, for the time being. If your money problems are a result of overspending, then you need to know what you’ve been spending your money on and eliminate anything expendable. 

Create A Budget and Prioritize

Even if you don’t have a problem with money, it’s always a good idea to make a budget for the upcoming week or month. Make a list of things you plan to spend money on and compare it with how much money you have. Take a look at the list and ask yourself, is everything on it necessary? Surely, eating out once a week or, buying a new pair of shoes isn’t a priority in comparison to paying rent and buying food. If you stick to a carefully planned budget, you will be saving yourself from being in a tight spot. 

Get A Loan

If you are already in a tight spot, you can get a loan. If you live in Singapore, a quick online search will lead you to a website where you can learn about your loan options and apply for one. Regardless of where you live, it pays to compare loans from different lenders to find one with the lowest interest rate. The best time to get a loan is if you see a solution to your money problems on the horizon. If you’re bankrupt but you’re waiting on a new job’s salary or profit from your business, you can take out a loan since you know you can pay it back on time. 

Stop Using a Credit Card

A credit card means more easy spendings and possibly more debt. Make sure to set your credit card aside and save it for a very rainy day, this won’t solve the problem, but it’s a way to prevent more problems from arising. 

Keep Track of Your Progress

After you make a budget plan, cut down unnecessary spending, and stop using your credit card, you need to keep track of your budget. Know where every cent is going and make sure everything is going according to plan. Think well before making any purchase and ask yourself if what money you have left can get you through the month. Remember that it’s better to end up with extra money at the end of the month than to run out of money halfway through the month.

Get a Side Job

You can get a side job whether you already have a job or if you’re unemployed. It can be something that you do from home or something that you never thought you would have as a job. It doesn’t have to pay much; the extra money will surely come in handy. Remember that this is not a normal situation, so you may have to go out of your way to get out of it. 

Being aware that you are having money problems should be an incentive for you to take action, not a source of anxiety. Seek emotional support from your friends or family if your money problems are affecting your mental health. Don’t despair, there’s always a way to overcome a personal financial crisis. You just have to know where your money went and be careful about where it goes next. You’ll be surprised at how much you can save if you stick to your budget plan.