Experiencing financial difficulty can be terrifying. When you are struggling to generate enough income, have crippling overheads to pay off or are being dragged down by inconsistent cash flow, you can feel helpless.
This is especially commonplace now due to a volatile economy, skyrocketing inflation and rising energy prices, which are causing many people to reassess their financial health.
If you are used to having a certain income, consistent overheads and reliable cash flow, suddenly being left with less (or nothing at all) can be a huge shock to the system. Given the immediacy in which payments need to be made, this leaves you little time to take stock and assess your next move.
Often people make panicked decisions in situations like this because they are understandably emotional, and feel the need to make a snap judgement. What’s more, few people are financially savvy, which makes any decision relating to money a bit more stressful.
To help, this is what to do if you are experiencing financial difficulty:
Take stock of how much income you have, and how much your overheads are
The first step you need to take if you are experiencing financial trouble is to ascertain how bad the problem really is. You can only create a solid recovery plan if you know what you are dealing with, so crack out the bank returns, assess what the situation is and, if possible, trace it back to the source of the issue.
No one likes studying the sorry state of their financial affairs during hard times, but it is important to be honest with yourself. When it comes to serious matters surrounding finance – such as taxes and loans – you cannot afford to procrastinate or hide the truth down the back of the sofa.
If you feel that your income could be at risk for any reason, looking at insurance products such as Critical Illness could be worth looking into. This type of insurance means you can mitigate some of the financial pressure if you lose your job. There are lots of companies that can help you find the right policy, Future Proof are an award-winning insurance broker and have a number of good articles on their website on the topic.
Reach out to close friends and family for help
Enduring financial difficulty can be a lonely experience, and you can easily feel helpless. This is why it is vital that you contact your close friends and family for help or advice, with key ways how to do so stated on Psychology Today.
It may be that they can help point you in the right direction, listen to your concerns or help you sort the issue out, or they might even lend you some money to keep you afloat.
Again, it is important to be honest with your friends and family, because there is no shame in experiencing financial difficulties – especially during tough financial times.
Find new ways of generating income
Lastly, try your utmost to treat this as an opportunity as difficult as that might be.
While you are on your back foot, you will be forced to think of new ways to generate an income, which could be a benefit in the long term.
Perhaps there is a business idea that could transform your finances, or a career change that you have been forced to take but could end up making you far happier and far wealthier. Whatever the case, finding imaginative ways to earn additional income is crucial during a difficult financial period.
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