Facing Financial Crisis? Here are 4 Things You Can Do to Prevent the Worst

Facing Financial Crisis? Here are 4 Things You Can Do to Prevent the Worst
  • Opening Intro -

    It's not uncommon to experience an unexpected financial crisis at some point.

    We all need to have a contingency plan for when the budget goes off track due to problematic circumstances.

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However, there are many things you can do to prepare for the worst. If a financial disaster hits, here are some things you can do to head off major monetary losses.

Start an Emergency Savings Account

If you don’t already have savings set aside for emergencies, set up an account just for this purpose. Even if the money problem has already hit, you can often set payment plans to cover the cost of a loss, a medical bill, or a repayment plan if you have to take out a loan.

Have a monthly deposit withdrawn automatically from your paycheck and put into your emergency savings, so you will always have funds available when needed.

It can be difficult to get in the habit of bolstering your savings, but once you do, you will likely not see a difference in your quality of life, while helping your future self.

Reduce Regular Budget Items

Lower the thermostat a degree or two to reduce your heating bill or raise the thermostat when you are running the air conditioner.

Turn off the lights and electric appliances when leaving a room for the night. Make sure there are no plumbing leaks in your home’s water system.

Switch from soft drinks and coffee shop lattes to homemade beverages or ice water. Ask your home insurance agent if you are eligible for premium discounts. Stop carrying your credit card that lets you make unplanned purchases.

All these small steps can add up to big savings that will free up more of your income to use toward a financial crisis. Tracking the budget can be a great help for you to see how you are saving money and properly allocate it.

Eliminate Unnecessary Expenses

Get rid of payments that you don’t need, such as entertainment and leisure expenditures. If you have a major expense that you aren’t likely to use soon, now is the time to cancel it.

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For example, a timeshare contract cancellation could net you a refund of your deposit or advance payments that could be applied to a financial emergency. Consider cancelling your gym membership if you can exercise at home or stroll around your neighborhood.

You could also cancel an online gaming subscription or other services that you are not using that much. Cook new dishes at home to avoid eating out. This all might seem like not much, but it can add up to a significant amount of money.

Get a Second Job

Whether on a temporary or part-time basis or for ongoing added income, get another job to supplement your regular income. Find work that won’t compete with your main job.

You might be able to do seasonal lawn work, routine child care, or delivery services on a flexible schedule. Friends and family can help you find effective ways to get a supplementary income.

Don’t despair if you hit a financial brick wall. There are several options to explore that can possibly help you quickly save money to handle a monetary crisis.

Look at the methods above, and consult financial experts to find the best solution(s) for you. With luck and a good plan you will make it through.

other related articles of interest:

Image Credit: facing financial crisis by twenty20.com

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Consumer Tips reference:

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