10 Tips that can help you Through a Financial Crisis

Oct 20

At one point in our adult life, we have had our fair share of financial troubles. Some see this as a daunting point of our life. You would feel hopeless, helpless and depressed but the best thing about it is that you can easily get out of that situation with nothing but hard work, dedication and discipline. We do hope you are reading this article because you are curious about how to properly manage your finances, not because you are going through this turmoil in your financial life. Here are some tips that would help you in dire need:

  1. Be realistic. Being honest about your earnings and expenditures is the first step that you need to do. Have a more realistic budget to help you control your monthly expenses properly. Check to see if you are spending more than you earn. In that case, you might need to do a money makeover. You’ll need to take some time out of your busy schedule and record your expenditures. This can be the most critical part of the total money makeover steps. It might be possible to speed up the process if you have online statements. Then, you will need to cut down on unnecessary expenses, which with the addition of a few other practices, can gradually resolve your financial problems.
  2. Liquidate your assests. Selling off your assets can be an effective strategy to come out of a financial crisis. The investments you made in real estate playa del carmen (or elsewhere), stocks, bonds, and precious metals can be converted into cash through the process of liquidation. This can provide you with the funds needed to address immediate financial challenges and stabilize your situation.
  3. Avoid any large rent or house payments. If there is a need to refinance your home for a more flexible mortgage plan, then you need to do just that. Some experts would advise you to pay more every month to save on interest but if you can’t do it, there’s no reason to stretch your budget to accommodate huge house payments.
  4. Investing stable assets. One of the best ways to assure financial security is by investing in stable assets. These see the likes of gold and real estate, which tend to retain and grow in value, even during times of financial crisis. Gold is popularly known as “God’s Currency”, and has been known throughout the centuries as a store of value. It can be moulded into different forms, and is rather liquid, so you could sell it when needed. Now, if you have land, you could build a house with the help of a Home builder in Spring, TX, or wherever you are. Real estate, especially residential buildings, can generate rent, and provide you with a hedge against inflation due to its tendency to have high demand.
  5. Get medical insurance if you can. If you don’t have sufficient savings for rainy days, then you ought to have some or get yourself a medical insurance. Medical emergencies are something that you would really need to save up for and insurance can help you out on during these hard times.
  6. Purchase your items with “real time” money. This is probably a sin that most of us had committed at some point. Don’t count your chicks if they haven’t hatched. Don’t rely on your future income to budget your money because, there is still a huge chance that it won’t materialize and you’d end up with nothing at all.
  7. Avoid cosigning loans or guaranteeing someone for a loan. At this point, you would want to stay away from any extra expenses such as loans (only if you need it). There is no assurance that your acquaintance would actually pay as well.
  8. Avoid joint obligations from individuals with questionable spending habits or credit ratings. Even if he/she is your significant other or spouse. If they don’t pay, you would be responsible for the rest of what’s left of the debt or tax bill.
  9. Don’t make any rash investments. We know how tempting it can be to invest what’s left of your savings to stocks and real estate but as of the moment, avoid these rash investments. You are more vulnerable to these “upsells” so watch out.
  10. Find a way not to spend money. You would want to save your income as much as possible. For example, instead of taking your significant other or spouse on an expensive restaurant, you can have a picnic by the beach or a camping trip to a nearby spot.

Out of these tips, you would be left with a small amount of cash but don’t underestimate the power of time and discipline. Tabulate your monthly expenses, your improvements in controlling your expenditures and save any money you have left or at least 10% of your earnings for the next 6 or so months. You would have money for rainy days and you would realize how much you had earned.

Irina Webandyou is a finance writer for many popular websites. She contributes towards Instant Payday Loans website. She loves covering news about personal finance, debt, taxes, investing and many other business things.