5 Ways to Make it through a Financial Crisis

Surviving a Financial Crisis: 5 Tips to Get You Through Tough Times

Do It Yourself
Cut Expenses
Consider Loans
Determine Essential Bills
Turn to the Gig Economy

Making it through a financial crisis may seem impossible. It’s not. With the right attitude and the right advice, you can handle an unexpected lay-off, health crisis, or emergency bill.

1. Do It Yourself

Spending $80 on a haircut or $20 for the neighborhood kid to mow your lawn is not an option in the middle of an economic recession. When you need every penny you can get, you can’t afford to pay someone else for personal or household maintenance. Start cooking at home instead of eating out or ordering take-out, learn to cut your own hair (or at least find a more affordable salon) and fire the housecleaning service.

2. Cut Expenses

You’ve read a million articles telling you that one of the best ways to get through a financial emergency is to cut expenses. That’s because this advice works. Slashing your expenses helps you put more money towards essential bills and gives you the psychological boost of knowing you’re taking the right steps. Start renting movies from the library instead of paying for Netflix, make your own coffee instead of visiting a shop and start shopping with a grocery budget. You might even find yourself keeping these frugal habits around after the financial emergency ends, which will help you pay off overdue bills, build up your emergency fund and avoid another financial disaster.

3. Consider Loans

According to abcNEWS.com, around one-third of American could not pay a surprise bill of $400. If your emergency fund isn’t as high as you‘d like and you find yourself needing a quick influx of cash, consider taking a loan. Banks and credit unions may offer a personal credit line, especially if you’ve been with at the financial institution for years. You can also take out a cash advance from a credit card or turn to your 401(k) for a loan in certain circumstances. While private businesses like title loan shops and payday lenders can lend cash, these loans come at a steep interest rate, so turn to them only as a last resort.

4. Determine Essential Bills

If you don’t pay your credit card bill, you’ll be hit with late fees. If you don’t pay the electric bill, your lights and appliances will be cut off. In a dire financial situation, you may have to deliberately skip paying certain bills and save your cash for your most important debts. You should also reach out to every company that’s asking you for money and try to work out a payment plan. You may be able to delay payment or send in a smaller amount for a few months.

5. Turn to the Gig Economy

Sometimes you just need a little extra income to make it through a difficult time According to CNN.com, working in the gig economy comes with drawbacks. As a contract employee, you won’t have benefits like paid time off or health insurance, and you may not have access to work when you need it most. However, the gig economy allows you to control your income; the more hours you put in, the more money you’ll earn. When the crisis is over, you can return to more traditional employment.

Whether the struggle is from a downturning economy or a personal situation, hard financial times can impact everyone. You will need to make sacrifices and hard decisions, but don’t despair. You can outlast a financial crisis.