Recessions. Natural disasters. Medical bills. Job loss.
These events are stressful. They wreak havoc and cause people to experience intense emotions; like fear, worry, and anxiety. These can lead to feelings of isolation, making them believe that they’re the only one that’s going through this experience.
In today’s society, social media can contribute to feelings of inadequacy and alienation, too. These apps can cause people to believe that everyone else has it all together, always looks perfect, and is forever on vacation. But, it’s simply not true.
In reality, everyone experiences challenges and setbacks in life. Some people will face financial hardships, too. Luckily, there are steps you can take to reduce your risk, ensuring you get through them, and that will help you thrive on the other side!
Often, they take you by complete surprise. It can be the result of something that’s outside of your control.
A financial hardship is usually triggered by an event that makes it difficult for someone to pay their bills and expenses. Their monthly outflow becomes larger than their income, making it difficult to make ends meet.
These individuals can feel hopeless and experience a reduction in their financial wellbeing. They may backtrack down the Hierarchy of Financial Needs and face financial uncertainty, too.
Financial hardships are often sudden and unexpected. But, in some instances they’re preventable.
Money problems don’t always stem from unforeseen events. Some people experience them as a result of their poor financial habits.
Many people don’t have an emergency fund and fail to budget. They’re excessive spenders which leads to debt and lifestyle creep. This handcuffs them to their job and makes it difficult for them to achieve their goals.
Money problems are nerve-racking. They keep you on edge and consume your mind. This mental anguish lowers your sense of financial wellbeing.
A financial hardship can have physical and emotional effects, too. They contribute to changes in your eating and sleeping habits, which can lead to other difficulties.
Money issues affect your overall health. This makes it important that you start combating them at the first sign of trouble.
Like any challenge in life, you have the power to choose your response. The sooner you decide to take action, the less likely your small problem will turn into a big one!
Here are 5 steps you need to take when facing a financial hardship.
These companies can’t help you if they don’t know there’s a problem. Call your creditors and let them know you’re experiencing a financial hardship.
Most of these companies will already have programs in place to assist you. They may be able to waive fees and penalties or lower your interest rate. Some may even put your debt in forbearance.
Don’t wait to contact them. Most will be more willing to work with you if you let them know of an issue upfront. Waiting until the payment is due or late makes them less likely or able to help you.
Changes in your financial situation should prompt a review of your financial goals and budget. A financial hardship means you’ll need to reduce your top expenses and cut back or eliminate the things you want.
Reducing your expenses will allow you to live on less. It frees up money, so you can ride out the financial storm or put the excess towards the issue at hand.
When you face a financial hardship, you’re not alone. Many organizations can assist you through it. A few resources that can help are:
Part of the wealth creation process includes building an emergency fund. Its purpose is to help you get out of a financial crisis. Use these monies first, then look for other options.
Consider some ways that you can get some fast cash. A few options include taking out a 0% APR credit card, a loan, or even withdrawing money from your nest egg.
A financial hardship brings tension and uncertainty. But, it’s only temporary. Stay positive and stick to your plan. Things will get better.
My first financial hardship occurred 8 months after I joined the workforce. I was laid off and became stressed about what was ahead. My concerns eased as I began making a new plan and budget. They allowed me to survive on my emergency fund for the next 6 months, while I searched for a new job and planned for the future.
This was a tense period in my life. Looking back on it, I now realize it was a challenge. This was an obstacle that I needed to overcome to grow. It helped to push me forward and allowed me to get clear on my goal of reaching early financial freedom!
Sometimes, bad things happen to good people. We face difficulties that first appear to be negative life experiences. But, in the end, these failures, setbacks, and hardships are all a part of the process that leads to success.
Take a look at some of the most influential people in history. They faced enormous challenges, were told they would fail, and yet they persevered!
Thomas Edison was fired from his job and failed 1,000 times before he created the lightbulb. Beethoven lost his hearing and still went on to become one of the greatest composers of all time. Colonel Harland Sanders was rejected 1,009 times before he went on to create KFC at 65.
There are countless examples of good overcoming bad and individuals succeeding, despite impossible odds. This is further proof that it’s possible and you can do it, too!
You will rise up to the challenge. You will recover. And you will bounce back, better than ever! Have faith.
What’s the most difficult financial hardship you’ve overcome? Comment below
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