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While most of us are lucky enough to get through life with everything going more or less according to plan, every now and then chance can throw you a fast one, and you may find yourself buckling under the strain of a full-blown financial emergency. If this has happened to you, things may look pretty bleak. However, it’s important to be proactive, and make the most of a bad situation. Here’s a brief guide to bouncing back after a financial emergency…
Evaluate your Situation
Take a little time to relax and carefully evaluate the situation you’ve found yourself in. Letting yourself get into a panic will only exacerbate things, and lead to more stress later on. It can be hard to keep a cool head during anything that qualifies as a financial emergency, but careful evaluation is an essential base for good decision making. To start with, you need to pin down what it is that caused this emergency in the first place. Have you suddenly been put out of work? Is there some mounting personal expense that you’re finding it hard to keep up with? Has some freak accident occurred? Once you’ve understood your situation thoroughly, you can move onto the next step…
Prioritize Your Expenses
Not all expenses are equally important, and when you’re in the midst of a financial emergency, there are going to be certain ones that need to take priority over others. You may need to budget for a financial advisor to help dig you out of failing investments, a work injury lawyer to mount a case against your employer, or something physical like a completely new car, boiler etc. Whatever the nature of your emergency, just make sure that you’re going to have a roof over your head and food on the table no matter what happens. It isn’t worth risking a foreclosure on your home because you’ve been slapped with a massive phone bill! Set some time aside to list all your outstanding expenses, and establish which ones are most important. This, in turn, will allow you to choose specific expenses which you’ll be safe to cut out of your budget. Trimming back on life’s luxuries is never fun, but it may be necessary to solve your financial issues.
Negotiate with Lenders
If the root of your financial emergency is your credit card, mortgage, or other things like medical bills, then don’t be afraid to call your lender. You may not think it, but it’s in these companies’ best interest to help you keep on top of payments. Yes, even if that means extending your term or trimming down the interest rate. Just remember that the less you sink into debt, the more likely they’ll be to help you out. Calling your credit company and briefly explaining the difficulty of your situation can often result in a lower interest rate and in some cases even a temporary delay in having to make payments. Doing the same thing with your mortgage company can help to restructure your loan.
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