Financial struggles can make for extremely trying times. There are plenty of reasons why someone might end up in such a position, including job loss or medical issues. Whatever the reason, it can become difficult to get by when there isn’t much money coming in. You may even need to rely on savings or unemployment benefits to survive. It is possible to wake up from most financial nightmares with a few, fairly basic, strategies.
Cut Spending
Your first step should be to cut back how much you spend each month. Remember, if you’re living on a budget, it will be based on your monthly income. If that has been affected for whatever reason, you must recalculate. You should start thinking about getting rid of luxuries that you don’t need. Any monthly subscriptions that are not essential should be cancelled. You should use the situation as the justification for finally cancelling your cable and gym memberships.
You need to cut back in other areas as well, such as grocery shopping. Even with a large family, shopping around for good deals and menu planning can help you decrease your monthly grocery bills. Don’t forget to look around for coupons and use up what’s already in your pantry.
Energy bills can be a big portion of your monthly budget. The cost of paying for energy is probably a lot higher than you even realize. Try to reduce energy costs by wearing layers rather than turning up the thermostat when it gets cold. We will be saving a lot of money on energy costs with our wood stove this winter. Try to put a limit on how much water you use each day. Pay attention to your electronics. Don’t keep things plugged into the wall when not being used, because they continue to suck energy. And, turn off your lights already!
Make More Money
If you’re trying to improve your finances, then you need to start some kind of side hustle. Extra money can help you during hard times, whether you need it to get by or to pay off debt. There are plenty of options to consider. I suggest you start by selling products that you don’t want or don’t need. Have a garage sale, or post things from your attic or basement on Craigslist or eBay.
There are seeming limitless possibilities for making money online. Use extra time during the day for taking online surveys or even playing games for gift cards. It’s a much better use of your time than mindlessly scrolling through Facebook again or capturing imaginary creatures.
I would also suggest trying to find some freelance work online. It has been one of the most lucrative side hustles for me this year. Sites like Upwork post all sorts of opportunities, from transcription and editing, to drafting blog posts for websites.
Use Your Assets
In addition to selling things you no longer need, you may have possessions and assets that you can use to make money when times are hard. You can rent out different types of assets for income. You can always rent out a room in your home. Websites like Airbnb have made it extremely easy to do short-term rentals of property. If you don’t feel comfortable having strangers living in your house (maybe you have children), there are ways to rent out your car for others to use. Or, you can use your car to make money driving others around with Uber or Lyft.
If you’re in a really desperate situation, you can get loans on the equity in your property. There are home equity loans or title pawn. A title pawn is where you use something you own like your car as capital to get a short term loan. You can then use this money to keep your electricity running while your hustle your way back to bringing in money. When taking out a short-term loan, be extremely careful. You need to make sure that the interest is at a level where you can pay it back – and do it as soon as possible. Taking on more interest-accruing debt could ultimately do more harm than good.
Plan For The Long Haul
It’s important to assess your situation and how it may effect your long-term plans, especially if it may take some time to fix things. If you have lost your job it could be months before you find another one. You need to think about financial commitments that you may not be able to afford. For example, if you are renting property and you can’t fit this into your new budget, it may be time to end your lease and find somewhere else to live. Moving back in with family or staying with friends for a while may help you get back on track financially.
Unexpected issues like job loss or medical problems are the reason why you should have an emergency fund. Whether it’s $1,000 or a couple of months of living expenses, that fund can be huge relief when you’re stressed about other things. If you don’t have such a fund or it’s already spent, the time will come when you consider cashing out savings or investments. While you may have had other plans for that money, there may be no other choice. If your other options are to take on additional debt or not be able to purchase food to eat, it’s probably time to cash out your accounts. Just make sure to continue working hard to replenish them in the future, by continuing to save money and increasing your income with side hustles.
Our family has gone through some pretty tough financial times. There was one month when Mr. Smith and I rolled coins in order to pay for our rent. Fortunately, we’ve been able to improve our finances over time and are headed in the right direction. Whatever the cause of your financial nightmare, try not to lose hope. It’s best to take your time assessing the situation and your options, and then put in some extra effort to right the ship. Make smart financial decisions so that you and your family can ride out this storm together.
