You’re coasting along, and everything seems right with the world. Then, it happens. You’re hit with a financial emergency. What do you do? If you don’t have a financial emergency plan, it’s probably too late. So, prepare now before it really is too late.
Reorganise Your Budget
Reorganising your budget is probably the simplest thing you can do. It’s also the second-most effective. Reorganising your budget means redefining how you organise financial expenses and income. If you don’t have a budget, now is the time to start one. If you have one, it might be time to consolidate debts, raise insurance/assurance deductibles, and cut back on unnecessary expenses.
When you start seeing the debt burden drop, you’re in good territory. Basically, the goal with this strategy is to spend less than you make. When that happens, you end up with instant savings.
Reorganise Your Priorities
If you can’t consolidate expenses, and you’re having a hard time trying to figure out how to organise or reorganise things, it might be time to admit defeat (in your old way of doing things) and reprioritise your life. What’s really important!
Don’t think of this as “giving up” things. Rather, think of it as focusing harder on what your top values in life are. Honestly, this is very hard for most people to do. They have never been asked to do anything like this before, and focusing on your top 5 values necessarily means you’re going to cut a lot out of your life.
So, pick what you know to be most valuable to you. Not what you think should be valuable, or what you think others think should be your top priorities, but what you think are your top priorities and values in life.
It might take you a few days or a few weeks to hash this out. But, when you’re done, you’ll have a brand new shiny budget you can live with and that will allow you to save money for emergencies. Realise that this will largely be a “purge” of a lot of expenses you have now.
If you’re drowning in debt, admittedly, it might not be much of a purge if you aren’t able or willing to file for bankruptcy. While you should always try to repay your debts, if you can’t, and you’re constantly spending more than you’re making, it might be time to clean the slate and start over – “nuke and pave.”
Get a Short-Term Loan
Companies, like Ferratum, can help you with short-term cash needs if you need some money right this second. Sometimes, you face a temporary shortfall. This isn’t necessarily indicative of a long-term financial problem. Maybe you’re constantly behind because of your paycheque schedule. If you’re able or willing to pay interest on a short-term loan, it could give you just enough breathing room to establish a savings and repay the loan over a couple of months.
Work Hard On Paying Of Credit Card Debt
Credit card debt is probably one of the major reasons people don’t have an emergency savings. When you’re in deep, do everything you can to get out. It’s the only way you’ll be able to establish a savings.