...All of us face unexpected money problems at one point or another. Whether it’s job loss, an injury or the illness of a loved one. These kind of setbacks can put a damper on even the strongest of financial plans...
But these types of money problems don’t have to last a lifetime.
In this article, we’ll discuss 5 things you can do to fix your money problems so that you can get back on track no matter what comes your way.
How big is your financial problem?
Estimate how much it will cost for you to recover. For example, if you had an injury what would it take to cover your medical costs, plus lost wages during the time it will take to recover. You may not be able to pinpoint the costs down to the cent but it is important to have a clear idea of what resources you need to get through your setback.
Temporarily reduce your expenses.
There’s no easy way to put it. You will likely be a little uncomfortable but the goal here is to reduce your monthly costs to help speed up your process of getting back on stable footing financially. Depending on the size of your money problem, that could be as simple as cutting back on dining out and switching from Cable to Netflix or it could be as drastic as staying with family or downsizing to reduce rental costs.
How can you cover the problem?
Where can you get the money to cover the cost of financial setback you are going through? Can you cover it with your savings? Do you need to borrow from friends and family? Or do you need to use credit to handle it? Each has a negative and positive aspect so be sure to decide which option will fit your circumstances best.
Map your road back.
Based on how you cover the financial difficulty, how can you get back on track? For example, if you got a loan from a friend will you pay them back first? Or will you pay down your debts first? If so which ones? You need to take the time to prioritize where you money should be going so that you don’t have any decisions to make when you get it. Keep in mind, these aren’t permanent decisions so you can shift your focus once you have paid off your first priority.
Rebuild Your Emergency Fund.
The money problems you face in life are guaranteed to hit eventually. It’s inevitable but if you try to stay prepared then you put yourself on the fast track to the road to recovery. Set a goal to dedicate a specific amount of your monthly income to a savings account that is only for emergencies. Then, focus on saving three to six months of your living expenses in that account. This will help you in the event of any future financial setbacks you may face.