A financial setback is something which can hit you at any time in life be it expected or unexpected, you need to handle it and get back on feet to keep going.
We all have faced it at some point of life which may have been caused due to job loss, accidents or injury, family crisis etc. Small or big ,these events can derail even the best planned budgets.
Here are some steps according to finance author Stefanie O’Connell, to help you get yourself in track as quickly as possible.
Step 1- Estimate the total amount drained from you .
As stated above ,if any of the reasons resulted into your financial setback make a total amount of how much money has drained and if you are handling a job loss, take into note how much time you need to get a new job and estimate the total living cost for that time span.
Yes it is true that you cannot estimate the costs to the penny ,you will atleast get an idea of what resouses you need to support you through the phase.
Step 2- Cut off the expenses .
If there are any possible ways and areas where you can reduce the expenses then do it as soon as possible. Though temporarily,this would help reduce the cost you need to get in track.
Some suggestions to this are –
- a) Stop going on outings for dinner or lunch
- b) If jobless, stay with family while searching for one which will help reduce rental costs.
- c) Use public transports instead of your personal vehicle.
These are a few suggestions as to how you can cut the expenses but before deciding,know the pros and cons and choose which you the best according to your needs and circumstances.
Step 3- Enlist the options you have .
Identify the sources where you will get back the money to cover the estimated cost.
Consider the financing options ,check if you have enough money in the savings to cover the projected costs,if you would need to rely on credit card or loan .
After following all these tips , as you start getting back on your feet ,dedicate a savings account specifically for these kinds of setbacks and build it up for any future distresses.