Financial hardship can happen to anyone. You can lose your job, or your business could fail—which is what happened to millions of people during the pandemic. Someone in the family got sick, and your savings went to hospital bills. Death, divorce, and disability can also change circumstances overnight.
So, if you’re going through financial hardship, know that you’re not alone and that you can overcome this and get back on your feet. Meanwhile, these tips can help you get through the tough times.
In this economy, running a tight budget is a good idea even if you’re not going through financial hardship—a penny saved is a penny earned! But when times are tough, every expense has to be brought under scrutiny.
You can’t do much about fixed costs like rent or insurance premiums. However, zoom in on variable costs.
Variable expenses can fluctuate over a month or even a year. These include:
Look for ways to save on each area—especially household expenses. This category alone can eat up 50% of your income, but it’s the most flexible. You can buy cheaper ingredients, generic brands, or go to a supermarket that’s known for its lower prices.
Get the whole family involved in the budget planning process. Set a goal: “We need to lower food costs by half. What can we do?”
Variable expenses are more flexible, but you can’t completely do without them. Discretionary expenses, on the other hand, are the first thing you should give up. You’d be surprised how much you’d save just by canceling subscriptions or Friday nights out.
But that doesn’t mean you have to completely deprive yourself of all sources of satisfaction—you need stress relief, especially now! Just find cheaper (or even free) ways to reward yourself: listening to music, picnics in the park, evening walks with the family.
There are some expenses that only happen once or twice a year, but they are huge. This can include tuition payments, annual premiums, or even the spike in spending during the holidays.
Divide the cost into 12 and plug it into your regular budget, so you gradually save for them instead of overloading your budget on that particular month.
If you really can’t afford them with your current financial situation, be proactive and think of ways to either reduce the cost or even prevent it. For example, if you’re concerned about school fees, can you apply for a scholarship or student subsidy? Or should you take the year off and submit an application for leave of absence?
Your budget may look great on paper, but it’s easy to lose track of your daily spending and realize that you’re short before the next payday. To avoid this problem, write down every expense in a notebook or money app.
Apps are convenient because they can automatically add up your costs and warn you when you’re overspending. You can also see plug-in due dates for bills or rent to get payment reminders. That will help you avoid late or disconnection fees.
If you’re not a tech person, a notebook is better than nothing. Ask your partner or children to do the same, since it also gives you a big picture of the total household expenses.
IF you are paying off a mortgage, credit card, or student loan, contact them to inform them of your situation and ask for financial hardship concessions.
Many banks are willing to restructure your loan, and credit unions can give out loan assistance. Either way, it’s better to grab the bull by the horns and face the problem rather than let the interest pile up.
Loan assistance may come in the form of reduced or deferred payments, or waiving part of the interest. Just make sure you understand their new loan package clearly. Ask about fees, the schedule of payments, and if you’re expected to give a lump sum at any point during or at the end of your loan term.
Most creditors will ask for a letter that explains your situation (sometimes called a hardship letter) and supporting documents. So, prepare this before you go to the office to inquire about their programs to minimize delays.
Are you struggling to pay for energy bills? The first step is to contact your provider. Many companies are extending energy bill assistance in response to the COVID-19 economic crisis. They may defer your payments, or even reduce them.
If you’ve lost your job, you may qualify for the LIHEAP (Low Income Energy Assistance Program). It can help you with heating or cooling expenses and provide emergency assistance if your electricity has been cut off.
Check your state’s energy assistance programs. Some of them offer Weatherization Assistance: they’ll install insulation and other renovations to help lower heating or cooling costs. Others—including Colorado, Connecticut, Maine, Michigan, and more—can give money to pay for bills or refer you to community partners who can help.
When many people got laid off, they not only lost their income but medical insurance, too. If you’re going through financial hardship, there are ways to get healthcare at a lower cost, or even for free.
You can apply for the government’s Medicaid program, which can cover hospitalization, doctor’s fees, lab work, and some kinds of prescription medicine. Your kids are also eligible for the CHIP program, which subsidizes pediatrician visits and vaccines.
IF you need to see a doctor, check the NAFC (National Association of Free and Charitable Clinics) and the Aunt Bertha websites. They have a directory of clinics that are willing to provide free treatment and pharmacies that can fill your prescription for free or at a lower cost.
For chronic or life-threatening diseases that require long-term hospitalization, therapy, and medicines, you can approach the Healthwell Foundation and PAN (Patient Access Network). You can also ask your doctor or hospital’s Patient Advocacy department if they can either lower your bills or refer you to an organization that can help.
The US government has released federal rental assistance funds to help people going through financial hardship.
You need to contact your state office to find out what’s available, the application process, and their requirements. You can also do a quick search on the Consumer Financial Protection Bureau website. Just type your state or territory and it will give a list of some of the rental assistance programs in your area.
If you do not qualify for rent assistance, or you are waiting for approval or have been put on a waiting list, try to talk to your landlord.
Ask if you can lower or defer your rent while you’re looking for a better job, or if you can get a roommate to help share the rent costs. If you’re good with tools, you can offer to do repairs and renovation and “work off” some of the money you owe. It’s worth a try!
They can use their network to help you find a job or a local charity. They may even be able to give money or organize a fundraiser.
Aside from financial help, they can also provide emotional support—which anyone going through the stress of financial hardship really needs!
A part-time or freelancing job can help you pay the bills until you find a more permanent job. The good news is that you can find many openings online. Here are some sites to get you started:
Aside from online job sites, you can check Craigslist for local work. While most people use to buy and sell items, you can also find leads for part-time jobs or projects.
It may be painful to part with some of your valuables, but the money can help you get through financial hardship.
The key to getting the best price for your items is to know where to sell them. Electronics like computers, phones, gaming consoles, and televisions sell well anywhere. But you can find more buyers on Amazon and eBay or sites that specialize in selling gadgets like Nextworth, Swappa, and Gazelle.
For more specialized equipment such as professional cameras or fishing gear, it’s best to go to a community forum where you’ll find hobbyists and pros who can recognize its value. The same goes for collectibles like comic books, action figures, paintings, first-edition or rare books, antique silverware, etc.
Designer clothes and accessories sell well on Poshmark and Le Prix, which have established a reputation among fashionistas as the place to get “pre-loved” quality items. Of course, the items have to be in good condition, and you’ll have to think about how to ship them without damage.
You can also sell books on Amazon, Cash4Books, CKY books, and Sell Back Your Book. You won’t get a very big amount of money, but every cent counts—and you’ll be able to free up space and share the book with someone who needs it.
You can also get faster responses from buyers by clearly listing the product features, taking good photos, and bundling products (ex: cameras with lenses).
When it rains, it pours. You’re already experiencing financial hardship, then something comes up: your car breaks down, your house is damaged by a storm, or the laptop you use for work conks out and you have to buy a new one.
Personal loans can help you quickly raise money for these emergencies. The most important thing is that it really is an emergency—loans should never be taken lightly because you will have to factor in payments in your monthly budget.
Here are some questions to ask before taking a loan:
Once it’s clear that you really need an emergency loan, go to a lender you can trust. Simple Fast Loans has a variety of loan packages that are ideal for people who are going through financial hardship.
Simple Fast Loans can help you through a rough spot. Just contact us for a personal consultation and find out how you can get emergency cash as soon as possible.