Life is full of surprises: some good, some bad and some financially ugly. Life events like a job loss or an illness can wreak havoc on your finances, making difficult times even more difficult to bear. If you find yourself in a situation that places you in a tough financial spot, take comfort in knowing that there is a way out. Agencies like Wescot can help. Connect with the company through social media to learn more about its services. By following these steps, you are then armed with your best defence against financial trouble in unfortunate circumstances.
Establish a Budget
Your best bet for combatting the stress of a job loss is to map out a budget that is clear and concise. If married, speak with your spouse about how to best manage this difficult financial time. Once you’ve got a clear idea of the amount you’ve got coming in and your expenses, you’ll be prepared to put together a budget that best suits the needs of you and your family.
Just because you’re on a budget doesn’t mean you must give up life’s small pleasures. Make room in your budget for things like the occasional cup of coffee at a café to ensure you are still treating yourself, albeit minimally.
When establishing a budget, don’t go drastic all at once. Start small, by decreasing your spending on things like entertainment and take-out, in order to see a significant impact that doesn’t affect your necessities. Don’t be afraid to adjust your budget as time goes by. You may find that saving money wisely will make allowances for great things in the future. Make room for rewards when you reach milestones like a job promotion, a special birthday or an anniversary.
Save
Don’t allow circumstances like a job loss to put you in a bind. By following a budget from the start, you will have more control over your savings account – a necessity when preparing for the worst. Many people use credit cards to aid them during difficult times, which consequently only results in more debt. Begin a savings account and set money aside in it each month so you are one step ahead of financial disaster. Doing so will arm you with a bit of cushion in case you do find yourself in financial trouble.
Tackle Debt
Prepare a detailed list of all of your debts, including your remaining balances and how much you currently pay each month. This will give you a clear idea to begin your plan of action in instances of job loss and other unforeseen circumstances. Also make note of irregular payments that might surprise you. Car insurance, property taxes and income taxes can all wreak havoc on your savings account if you aren’t careful.
Prioritise Your Payments
While all debt should be taken seriously, some bills matter more than others. Your mortgage and rent take precedence over all other bills, as do other household bills such as water and electricity – make these your priority. Credit card companies will often contact you soon in the event of a missed payment, but you should never take risks when it comes to your home.
Seek Help
Many card companies and banks offer insurance and payment protection plans for severe circumstances, which may include job loss, death in the family or perhaps a pregnancy. Mortgage protection insurance (MPPI) may help with living expenses while short-term income protection (STIP) may prove particularly beneficial in the event of a job loss. Review your current accounts and determine if you previously signed up for any of these. If so, make a claim.
Life events like a job loss or family illness can bring upon feelings of helplessness. Don’t become victim to these negative feelings. Instead, commit to doing everything in your power to lessen the harmful effects of mounting debt. Whilst there are credit repairing companies that can aid in consolidating debts or lowering interest rates for you, do away with the middleman and contact your creditors yourself. Doing so will show true effort on your part, making your creditor more likely to help you during a difficult time.
Contact your credit card company and speak to a manager about your financial troubles. They may have the authority to forgive some of your debt or at the very least lower your interest rate or minimum payments to a level in which you feel comfortable. Your bank may also have a hardships team designated to handle these issues. Once you submit a hardship notice, your bank may take extra steps to ensure your payments are manageable. Small steps like this can make all the difference in how your family handles unforeseen circumstances.
No matter what life throws at you, it’s important to come prepared. Start your path to financial freedom now before it’s too late. With the proper budget, savings account and payment schedule all in order, you may find yourself financially unfettered by any unfortunate circumstances hurled your way.