Every now and again our finances take a nosedive and we are left worrying how we are going to get by. It may be a business failure, a job loss, an unexpected expenditure, an accident or ill health that triggered the financial crisis. There are ways of riding the storm and surviving on a fraction of the income that you are used to. Here are the three steps that you must follow to survive.
1) Identify all your outgoings
Make a list of everything that you pay out for each month. Start with the major outgoings such as the mortgage or rent, car loan and utility bills. Work down to the food bills and the children’s activities.
Try to work out where savings can be made. If you currently have two vehicles, do everything that you can to reduce this to one. Not only will you get some money when you sell one, you will also save on the monthly costs of insurance, road tax, maintenance, and fuel.
Turning down the heating will also help a lot. A large proportion of all household expenditure relates to heating. You will be surprised by how much you can save by turning the thermostat down by just one degree. It’s easy to keep warm by popping on an extra layer of clothing and snuggling under some blankets when you are watching TV.
Eating and drinking out is expensive and is a luxury that you can do without when you are trying to save money. Takeout food is cheaper but making your own is the best. You do not have to cut down on healthy food because fresh vegetables do not cost much. You can also make tasty casseroles and soups that will feed the whole family.
2) Adopt emergency financial measures
You may not be able to afford all of the monthly expenditure and may have already fallen behind with some payments. Don’t just ignore the letters demanding money. Contact the person or company that you owe money to and try to arrange a repayment plan that you can afford. This is true for mortgages, car loans and personal loans.
You still need the essentials, such as a mobile phone, but deals may be hard to find in your situation. When you are hunting for contract phones, no credit check is what you need. If you are really struggling you may be able to obtain an unsecured payday loan but make sure that you understand exactly what you are agreeing to.
3) Increase your income
Is it possible for you or your partner to take on some extra hours at work or to take on an additional part-time job for a few months? Could you do some babysitting in the evenings or sell some things to raise some cash?
Also, check that you are receiving all the benefits that you are entitled to. If you have a spare room, consider taking in a lodger to help towards the cost of the mortgage and household expenses.