How to Manage Your Finances in Difficult Times

Throughout life, many of us walk a tightrope between being able to manage and predict our cash flow and falling into debt. For most of us, debt is something we work extremely hard to avoid, but in the toughest moments, it’s something that can be inevitable – and in those cases, it’s important to know how and when to mitigate our financial issues with sound solutions.

In this short guide, you’ll learn the steps you should take to deal with financial difficulties as and when they arise across your life.

Taking Stock

Before you make any dramatic decisions, you should try to get fully abreast of your financial position. Your predicament may be worrying, scary or anxiety-ridden, but it’s essential that you look it directly in the face, rather than skirting around the issue. That’s because as soon as you drop into debt, you need to assume supreme financial responsibility, with the full knowledge of how you can deal with your issue, in order to map your way out.

Find information on:

• All of your important, obligatory payments – those you will have to continue making
• All the costs you don’t have to make – and how much you can cut them down
• Your expected earnings in the next weeks and months – and what they accrue to
• The value and interest rate on loans that you might be able to take out to help

With all of this financial information pooled and collated, you should be able to spot a route out of your difficult predicament. Be careful, check your calculations, and make sure you’re accounting for all your costs and income before you start to make a plan.

Loans and Overdrafts

There are many benefits to using loans or overdrafts to deal with immediate financial difficulties. They can keep you above water, helping you avoid having your electricity cut off, or your home requisitioned by a landlord or a mortgage company. At the same time, they’re mechanisms that, if you’re in a difficult financial position that’s set to get worse, can actually serve to hinder your financial recovery, rather than help.

Before taking out a loan or getting an overdraft, consider:

• How failing to meet repayments might affect your credit score over time
• What the interest rate is on the loan that you take off – and what repayment plan you can enact
• How your overdraft works, and what fees you will incur if you use it to escape debt
• How quickly you can move away from basing your finances on a loan or an overdraft

If you’re unable to answer these questions adequately, or you’re concerned that you may sink into greater debt as a result of using loans and overdrafts, then it might be time to cash in on your assets to find the cash you need to become stable.

Selling Assets

Some assets are easy to sell and would be a no-brainer to offload in a difficult financial position. For instance, if you hold stocks or shares in companies on the market, you should be able to cash them in within a day, allowing you to use your investment’s value to bolster your own finances. Meanwhile, you have many other assets – some that you don’t even recognize instantly as your ticket out of your predicament – to consider. Such assets might include:

• Your car – can you sell it and use a bicycle and public transport for the foreseeable future?
• Your home – can you remortgage it, or get an equity release on its value?
• Your computing devices – they’re worth a lot, can you do without them?
• Your collections – have they enough value to pay off your debts?

Nothing should be off-limits in your thinking about escaping debt. If you’re still going to be struggling after cashing in these assets, then it’s worth considering a new way in which you can find the cash to get yourself out of your debt scenario once and for all.

Lawyer’s Protection

Now you’re looking to protect yourself from a debt lawsuit – something that can cost you even more cash and leave you in a desperate financial position. What you need to look for here is quality defense – some quality help with a debt lawsuit that will help you out of your situation without taking you for a ride. When searching for the right representative, make sure that they have a great track record, to give yourself the best chance of success.

To fund a debt lawsuit, you might need to find cash from different sources. If you win the lawsuit, you’ll be able to claim back the cash that you spent – and you may well be able to claim some extra cash for loss of earnings and other such accrued costs that are related to your lawsuit’s continued progress.

Develop Better Habits

Whichever method you use to get out of debt, your next task is to find a way to develop better sharper habits, so that you don’t let this happen to you again. All of this also takes time, practice and patience, but after your difficult period in the red, you’ll have the impetus behind you to make some changes to your life. There are hundreds of things that you can do to boost your financial health, including:

• Keeping a sound financial record, and using it to budget with your income
• Not spending on items that you don’t require, and cutting down your consumption
• Setting up a savings account, and paying cash into it each and every month
• Using investment options – like stocks, shares or property – to gain value in your cash
• Make sure you are risk-averse in your spending, to protect your cash
• Insure your wealth and your assets, so you don’t experience sudden losses

All of these tips can be followed by you right now in order to help you recover and protect yourself, ensuring that you’re able to avert disaster in the future, and prepare yourself responsibly for the financial rollercoasters to come.

There you have it – several ideas to help you manage your finances in the most difficult periods of your economic health, directing you to the solutions you need to emerge from the red once again into the black.