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Nov 26

4 Strategies for Handling a Financial Hardship

Reading Time: 3 mins

Even the healthiest people catch an occasional cold, and even the most fiscally savvy people run into money troubles now and again. If you’re looking at a financially lean year, don’t fret. With a few effective strategies at your fingertips, you’ll recover from your money misfortunes just as easily as you recover from a case of the sniffles.

Read on to learn four sure-fire strategies for handling financial hardship.

 

#1 Forgive but Don’t Forget

The first thing you need to do is cut yourself some slack—dwelling over the past isn’t going to get you anywhere. Forgiving yourself and choosing to move forward will. As important as forgiveness is, it’s equally important to reflect on what went wrong. This way, you can make it right in the future.

As you get ready to turn over a new leaf, ask yourself:

  • How can I prevent this situation going forward?
  • Were the factors that got me here within my control?
  • How can I focus on building a financial safety net?
  • Did stress or other issues factor into my financial decisions?

 

#2 Make a Game Plan

Once you’ve done some soul searching, step two is taking action. To get started, put a pencil to how much debt you owe, what your assets are, and which issues are the most pressing.

If you need some inspiration for planning your course of action, consider:

  • Reducing expenses – If you’re having trouble with money, you already know you need to spend less. However, thinking about cutting down on expenses and actually doing it are vastly different things. If you want to cut back without feeling deprived, try:
  • Canceling subscription services
  • Choosing home workouts instead of your expensive gym membership
  • Switching to generic brand groceries (we promise they taste just as good)

 

  • Checking your credit score – You might not like what you see, but knowledge is power. Many services allow you to check your credit score for free. This will give you a realistic idea of how much you need to work on your credit.

4 Strategies for Handling a Financial Hardship

  • Canceling credit cards – You can kill two birds with one stone by canceling a credit card or two. Having fewer cards means you won’t be as tempted to overspend, and it may also boost your credit score. We recommend cutting out retailer credit cards—they’re designed to make you spend money.

 

#3 Avoid Unnecessary Consequences

The best way to prevent hardship from turning into a catastrophe is by determining which elements of your financial predicament could have long-lasting consequences. For most people, the most consequential issue is taxes.

Not being able to afford all of life’s luxuries may be a mild annoyance, we promise incurring tax debt is worse. Making taxes a priority will ensure your next problem isn’t how to file for IRS uncollectible status. This means you need to file your taxes on time, pay off any outstanding tax debt, and make your annual tax payment a priority.

 

#4 Build a Financial Support System

As with most things in life, recovering from financial hardship is easier when you have a support system. Asking for help doesn’t have to mean asking for money. In fact, seeking out friends, family, and experts to provide financial advice can be more beneficial in the long-run than asking for funds. Give a man a fish, as they say…

 

Hardships Don’t Last Forever

Even though it might not feel like it now, we promise this storm will pass. Take comfort in knowing you’re being proactive, and rest assured knowing better days are ahead. The best thing you can do is follow the advice above and use this rough patch as a learning opportunity.

One day, you’ll look back and admire your resilience (and how much money you’ve managed to save!).

 

 

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