The following is a guest post from Rebecca. 

The possibility of an economic collapse looms all over the country like a dark cloud. But even before a wave of financial crisis hits the nation, millions of Americans are already facing their own economic catastrophe because of consumer debt, most of whom are barely coping and struggling to get out of it. According to a report by the Federal Reserve Board, 40% of Americans couldn’t even afford an unexpected $400 expense. This sad reality is one of the many reasons why there are thousands who are deep in debt.

So how do you wade through a financial trouble and mitigate its impact? Below are some helpful tips on how you can pull yourself through this difficult situation.

1. Acknowledge and accept your situation

Accepting that you are struggling financially is probably one of the hardest things to do. It hurts one’s pride and ego. Acceptance, however, is the first step towards solving your money problems. It helps you regain control of your situation and focus on seeking solutions rather than dwelling on the problem or worse, pretending that it doesn’t exist. And while you may feel embarrassed in discussing your money issues with other people, it would be extremely helpful to talk about it with your family and closest friends. Whether they are in the position to offer financial assistance or not, having someone to talk to and trust alleviates some of the stress away.

2. Come up with a game plan

One of the vital points in surviving any financial crisis that comes your way is to have a solid action plan that you can stick to and follow. This is the part where you sit down and figure things out. If you are married, then financial matters are best discussed with your spouse. Let’s break down what a solid action plan is all about:

Get a better understanding of your financial situation. First, determine your net worth by listing down your assets and liabilities. If you have assets under your name, you may choose to liquidate some of these to keep you afloat financially during a crisis.

The next step is to come up with an expense tracker to see if you are allocating your hard-earned money to your “needs”, If you see that your expenses are way higher than your income, then it is time to cut back on your expenses. Cancel or downgrade those subscriptions that you don’t really need. Limit your trips to your favorite fancy restaurant. You may also want to postpone that dream vacation you are planning for summer and use the funds allocated for that trip on more important matters, or better yet, save it. Keep in mind that this is only temporary. You may seem like you’re depriving yourself of life’s simple pleasures but you’ll thank yourself that you did once the crisis is over.

Don’t be afraid to ask for help. Dealing with a financial problem is frustrating and stressful, to say the least, and most of us couldn’t help but feel hopeless when we find ourselves in this kind of situation.

If dealing with your debts becomes too much of a burden, and you have no one else to help you out, then it is time consider debt relief. Debt relief or debt forgiveness is the reorganization of one’s debt to provide a person in debt with a measure of relief, either partially or entirely. Debt forgiveness programs give debtors a better alternative to solve their debt problem than filing for bankruptcy, since bankruptcy is the last thing that creditors want, they typically give in to lump sum settlements than receiving none at all.

When considering this option, it is best to seek the help of a debt counselor to see which program best suits your needs. Most debt relief companies offer a free consultation, which means you don’t have to spend a penny to get professional advice about your finances.

3. Execute your plan

For most people, taking action is ten times harder than accepting their current situation. Weathering a financial crisis entails discipline, commitment, and consistency. Without these three, you are doomed to fail. Yes, it may take time – recovering from any financial setback doesn’t happen overnight – but if you stick to your plan and keep your goals in mind, you will be able to bounce back sooner than you expected. Do not be afraid to take the first step. Bear in mind that your hardship is only temporary, as long as you act quickly to resolve it. But if just sit and do nothing, thinking that your money problem will go away if you ignore them, you may find yourself in a much worse situation than you are currently in.

Post-crisis action plan

Once you get back on your feet, make a conscious effort not to repeat the same mistakes that got you in that dreadful situation. This means making necessary lifestyle changes and being wiser in handling your finances. Keep your lifestyle and spending habits in check. Never get yourself in debt just to sustain a lifestyle that you can barely afford, and most of all, use your credit cards wisely. Your plastics are not to be used as your source of emergency funds nor it should be used to buy stuff that can’t afford to pay in full.

The crisis might be over but it doesn’t mean it won’t happen again in the future. So be money-wise and be ready to take on the next economic storm that comes your way.

Sources:

http://money.cnn.com/2018/05/22/pf/emergency-expenses-household-finances/index.html?iid=SF_LN

https://www.curadebt.com/debt-relief/

https://www.nerdwallet.com/blog/average-credit-card-debt-household-