How to handle a financial crisis

Financial crisis blog


Tips to help get your cash under control, fast

 You might not see it coming, and it can hit you hard. A personal financial crisis can come from one of many angles – perhaps you lose your job, get divorced, have a sudden medical emergency, or are hit with a massive bill that you simply can’t pay. Whatever the cause, without warning your financial security can crumble beneath you. The consequences can include stress, confusion, a sense of helplessness and loss of control and confidence.

A financial crisis may be challenging and you might feel like there’s no way out. But rest assured, you can take control and get on top of things. Here’s 5 tips to help get control of your cash when financial disaster strikes.

  1. Stay positive

We know – this isn’t as easy as it sounds! But you have to keep a realistic perspective.

  • No matter how deep a financial hole you feel you’re in – you might be buried by a mountain of debt and facing bankruptcy – remember that you’re not the first. Thousands of people have experienced the same, and survived – and you will too.
  • Yes, the stress that a financial crisis brings is huge. But know that you can, and will, get through it, with positive thoughts and actions. Make a commitment to focus on the positive – this can help improve your mood, reduce stress, and get you on the path to a successful way through your situation.
  • Remind yourself of the good things that you do have – perhaps friends, family, health, and a home, and be grateful. While you may want to wallow in how unfair it seems, remember there are many people much worse off than you.
  1. Accept your situation, and make a plan

Life throws us unexpected surprises sometimes – and not always the kind of surprises we’d like.

  • The key to handling these nasty surprises is to be realistic. Don’t stick your head in the sand and hope that denial will make the problem go away. You need to face money troubles head on, before they get worse.
  • Stop wasting time panicking, and take positive action instead. Channel your anger, frustration and stress into fuel for finding a solution.
  • Acknowledge your situation by discussing it – let your loved ones know that you’re going through a financial crisis. Even if they’re not in a position to help you by loaning you some cash, confiding in trusted friends and family can provide valuable emotional support. They can share their own thoughts and experiences to help work out your worries and ease your anxiety.
  • Consult a financial counsellor, who can help you get on top of your thoughts and plan a successful solution.
  1. Survey the damage

So you’ve accepted and acknowledged that you’re in financial trouble – well done, that’s the hardest part over with. It’s now time to take stock of the damage.

  • Create a personal financial statement which measures all of your cash, savings and assets against your debts and liabilities to determine your net worth. This may be quite scary, but it’s important you determine how significant the issue is so you can make a plan.
  • Get a free copy of your credit report so you can be sure you’re capturing all of your outstanding debts.
  • If you haven’t already, you need to create a strict budget, and stick to it. Use a handy app like TrackMySpend to record every dollar you spend and hold yourself to your new budget. Every cent you save will get you a step closer to being out of debt.
  1. Contact your creditors

Time to face the music and negotiate with those you owe money to.

  • Trying to hide from your creditors is only going to make the problem worse. They’re unlikely to forget your debt, chances are it will just increase with interest, fees and charges.
  • Get in touch with your creditors ASAP, and be proactive and honest with them. Explain your circumstances and ask them for solutions, such as deferring repayments for a short while to get back on your feet, setting up a repayment plan, or refinancing your debt with them.
  • Your creditors might need information and evidence about your financial situation – which is why it’s important you’ve completed step 3 above, and have an accurate picture of your financial situation, and a budget in place.
  1. Set up an emergency fund

Now that you’ve experienced a financial crisis and are working on a successful way out – protect yourself from ever having to go through it again.

  • You’ve found out the hard way that while we don’t like to think that things will go wrong, they sometimes do. Create an emergency fund so you have some cash on hand next time you’re hit with one of life’s little surprises.
  • No matter how little money you have coming in, always try to set a small amount aside. Ideally, make this a small transfer to a separate account that you won’t be tempted to touch.
  • This way, the next time you’re unexpectedly hit with an unpleasant financial surprise, you’ll have some cash on hand to help pay the big bill. Every bit helps!

And remember – City Finance is here to help you cope with life’s little surprises!

We understand that life doesn’t always go as planned, and that sometimes you need a fast cash loan to see you through a tough spot. If you need access to a quick, easy loan, apply online today, or pop in and see the friendly staff at your nearest branch. We’re here to help!