Financial hardship can lead to much stress that drags your life behind. The hardship may result from being in debt, not having enough money to pay for your expenses, health issue among others. No person would want to be in a financial difficulty but unfortunately, it happens. Sometimes, financial hardship may push somebody to a point of becoming stressful. Mostly, people in their first stage of financial wellness journey are likely to experience hardship as they try to make their way to financial success.
If you are suffering from any financial hardship, this article will be of help to you. The article helps you understand the warnings signs of financial hardships and provide a guide on how to deal with those difficulties in order to attain financial freedom.
What Are the Warning Signs of Financial Hardship?
If you’re feeling uneasy about your finances, is often one of the first early warning signs of financial trouble. It may be hard to identify the cause of the worry you’re experiencing but the fact that it is on your mind is enough of a reason to look into it.
To help you figure out if you’re vulnerable, here are a few telling signs that can reveal the early stages of financial problems:
- You freely use your debit card presuming money is available but you’re not always correct
- You regularly use your credit card in place of your debit card or cash for normal expenses
- You are not able to meet your minimum payment requirement from your income.
- You do not have a budget to keep your expenses in line
- You sometimes find yourself spending more than you earn
- You barely have any savings available to handle seasonal or annual expenses or emergencies
- You find yourself counting on your overdraft or line of credit to handle your expenses for the month
How to Overcome Financial Hardship
While you may feel a little apprehensive at first, the best way to make progress and deal with your finances is by focusing on each aspect of it one step at a time. Below are tips on how you can overcome financial hardship.
1. Determine What You Can Change
If you are in financial hardship, you may have an income issue, a spending issue, or a combination of the two. If you know that you do not make enough money to keep up with your current bills, decide what you can do to change the situation. It may include options such as going back to school to qualify for a higher paying job.
If you think you have a spending problem and it’s a compulsive behaviour, you may want to attend a specialized group or get professional help dealing with the issues you are facing. Once you have a plan that will help you change your situation permanently, you should be able to reduce your stress.
2. Work on your budget to get through financial hardship
It is no crime when you review and adjust your budget to accommodate things that can lead to financial freedom. For example, if your income has reduced, you can adjust your budget to be able to maximize the income available. Likewise, if your income increases, your budget should accommodate the increased income otherwise you end up spending your money on impulse. Once you make some adjustment, ensure you stick to your budget.
3. Make your service providers aware that you are facing financial hardship
You can’t drag yourself to depression just because you can’t communicate! Don’t wait until your service provider cut your service access due to your inability to pay for them. Imagine losing access of things likes electricity and water? To avoid such, ensure you communicate to your service provider so they can understand your inability to pay.
Since most of the service provider are able to understand your situation, you can come up with an agreement on how you will pay for the services. This may be in instalments based on your income. At this point, you already have saved yourself stresses that may come as a result of conflict and shame with the service providers.
4. Find a side hustle to earn extra income
A side hustle is what you do to earn extra income beside your pay. Extra cash you get from a side hustle can help during severe financial hardship.
There is a lot that you can do to get extra cash. You can be a freelancer, teach your job skills during your extra time, become a blogger the list is long. You can also read on side hustles you can start to make real money.
5. Avoid salary in advance
When in financial difficulty, you may be tempted to spend your salary before the payday. You may encourage yourself that the money will still be yours even when received earlier and so you can as well spend it now. It is good to note that when we take this money earlier than the pay days, they attract high interest rate. Such loans may spiral further to other months leading you to debt crisis.
6. Negotiate bills in collections
So numerous people with bills in collections are scarified of having to deal with them. Some people, on the other hand, suppose that debt in collections isn’t commodity they can do anything about.
To set the record straight, there is nothing and no bone to be hysterical of when it comes to dealing with your bills in collections. The worst thing that can be is that you get a “no” when you essay to negotiate. In addition, not dealing with bills in collections can have a negative long- term impact on your credit.
It’s still worth trying to negotiate bills that are in collections. However, they may indeed remove the negative reflections on your credit report, If you come to a payment agreement. And in some cases, they may forgive part of the balance or indeed dismiss it.
Just make sure you ask questions so you understand the specifics of any agreement, including any reporting that will be transferred to the credit divisions.
7. Never surrender even when you are facing severe financial hardship
Failure is the first step to financial success. Being in debt does not mean you will remain in that situation forever. So don’t give up. It may be a difficult moment to go through and sometimes can lead to financial stress. Keep in mind you will one day get through it. Avoid personal judgement and blame, learn from the mistakes and move forward.
8. Know the financial hardship programs offered by your lenders
If you have a debt to pay, your lender might have some financial programs that can relieve you part of the financial burden. These programs might include interest waivers, reduced payments, or payment deferrals. You, however, want to make sure you fully understand the details of any program you commit to.
It’s good to know that there is always light at the end of the tunnel. If you use the above steps, it is likely to navigate through your financial hardship.