Personal Finance Tips
Back in 2007 when I graduated from college our country was facing an economic depression. I was laid off form my first 3 jobs out of college. Government officials were denying it and bickering over whether it was real or not, but if you were one of the estimated 2.6 million individuals who lost their job it was very real to you.
It seems that our economy is on the rebound for the most part, but, what about personal financial disasters? Just because the country isn’t experiencing one doesn’t mean that your finances and household are safe. Divorce, job loss, natural disasters, and illness are events that can throw a wrench in even a solid financial situation.
Portions of this post originally appeared in Madame Noire.
Here are 3 Tips to Survive a Financial Disaster
1) Communicate: Many people do not realize how flexible and accommodating companies can be, especially if you have had great payment history. Reach out to your creditors, explain your situation, and find out if they have a hardship program that you would qualify for. During my job transition last year my credit card company waived the interest charges.
2) Downsize your life: Contact utility companies and find out if you can reduce your cost by taking advantage of promotions or downgrading your package. Do you really need the triple play package? Do you really need cable? Eliminate unnecessary bills and reduce your spending to needs not wants. Sorry to tell you but weekly manicures and dry cleaning services are not needs.
3) Assess your current fiscal responsibilities: Create a plan to manage your finances. Now that you have reduced your spending create a real plan that will sustain you during this disaster. Determine whether your going to pay down debt during this time or just pay on your debts. Determine if you can afford to put money aside for savings and investing.
No one likes to be caught off guard. Once you make it through a financial disaster try these things to prepare yourself for the next unexpected occurrence
3 Tips to Prepare for Financial Disaster
1) Financial Disaster Fund: Calculate how much you life costs you including all of your needs and save at least 3x’s amount. This account is for emergencies so once you reach the goal amount set up another savings account so that you don’t dip into this one.
2) Get on a Budget: Control your spending. You don’t have to live like you are experiencing a disaster, but be conscious of your spending and question each purchase. This will help you save more and will soften the lifestyle blow should a financial disaster occur. Do you have to have a “girls” night out twice a week or can you host a girls night in potluck? If you want to eat out try substituting expensive dinners for happy hour deals (one of my favorites in NYC is $2 taco Tuesdays)
3) Diversify Your Income Streams: Get resourceful and tap into your creative abilities. Create side hustles so that your survival does not depend on an employer. It could remain a side hustle or it could turn into a full-fledged business. You’d be surprised at the ways people are creatively funding their lives. Having difficulty figuring out your side hustles? Check out my girl over at Dear Debt Blog, I thinks she’s a master side hustler.