While maintaining a balanced budget is difficult in the best of time, keeping a firm grip on finances during some sort of life crisis is especially challenging. The death of a loved one, the loss of a job, or going through a divorce all have the ability to derail a budget and plunge a household into a financial state that can take years to recover from.
Completely avoiding any type of damage during a life crisis is not a realistic goal. Fortunately, there are some ways to minimise the damage and make the recovery process a little easier to endure. Here are some general suggestions.
First, don’t go it alone. Many try to tough things out on their own, a situation that often leads to making the situation worse. Turn to those who can offer practical financial advice that you may not be able to recognise while in the heat of the crisis. Seeking emotional support from loved ones is also important, since that can often calm your fears and help you face the situation with more confidence than you thought possible.
During this period, take the time to look realistically at your expenses, as well as the assets on hand to carry you through the crisis. Trim your expenses down to necessities, making it possible to maximise the wise use of your assets. Avoid incurring a lot of credit card debt if at all possible, and see keeping up a car loan or a mortgage payment as a priority. While difficult, this in the long run will position you to emerge from the crisis sooner rather than later.
Tags: car loan, credit card, mortgage
You’ve pinpointed a classic danger: crisis spillover. When we face trouble in one area of our lives, it can create “fallout” elsewhere. Your examples are dead on — it’s during breakups (relationship or job) or death in a family that great pressure can be placed on our finances — and we’re often too distracted to correct them. That’s why we all need to lean on others during tough times — to help us find the right path and get through them.
Nice post.