Navigating a Financial Crisis

Financial emergencies are an inevitable part of life, and they usually ambush you when you are least prepared. Perhaps you had to make a large purchase that you didn’t expect or you had a gap in your employment. Regardless of the reason, you may now find yourself in financial hot water, and you need formulate a strategy to escape. While you can’t prevent financial crises, you can certainly control how you prepare for and manage them. Paycheck advances are one tool you can use to navigate your way through a financial firestorm, but you also have other options. In this post, we’ll give you five key strategies to help you handle a personal financial crisis.

Five Keys to Staying Afloat

Here are five tools you can use to stay afloat amidst a financial crisis:

1. Have a safety net. You may think you have job security, but when the economy hits a rough patch, you cannot foresee how your employer will react to it. Layoffs are sadly often the first means companies look to in order to trim costs in times of financial tribulation. The best way to prepare for this is to have money in the bank—three or more months’ worth of living expenses would be ideal.
2. Tap into your equity. Homeowners have a built-in safety net, of sorts, because of home equity. If you are struggling but a major expense is looming large, think about taking out a home equity loan or line of credit. For non-homeowners, think about borrowing from your retirement account at work. However, if you do, make sure that you repay yourself with interest.
3. For natural disasters, don’t forget about home insurance. If your financial troubles are the result of a natural disaster, take advantage of your home insurance policy. Similarly, government aid may be available to victims of natural disasters.
4. Get professional help. Your financial woes may see overwhelming to you, but a financial professional likely helps people in your very situation everyday. Think about seeking out a credit counselor for assistance in paying off debt and getting back on track. Most credit counseling services are available for little to no charge.
5. Don’t shy away from more drastic measures. Some financial crises require more drastic interventions than a paycheck advance or other small cash loan. For more serious situations, consider moving to a cheaper place to reduce your living expenses or selling some of your assets (e.g., a vehicle, jewelry, etc.).