Maintaining and managing our money well is a goal that all of us share, but a goal that each of us has made different amounts of progress with. These past few months have seen many of us deal with difficult events which have undoubtedly affected or at least tested our personal finances. If you mismanage your money, you can quickly find yourself facing financial hardship and it may be hard to get yourself out of the situation. Sometimes these unfortunately events are our faults, and other times they are not, but regardless it’s important to have a plan and act on that plan to ensure we bounce back from whatever lemons life throws at us.

A Car Accident

Hopefully, you never find yourself in a car accident, but they are a relatively common occurrence and it’s important to know what to do if you do happen to be in one. Even with many of us driving way less due to this pandemic and being sheltered in place, accidents will still happen on the road. One wise thing to do before hand is periodically review your insurance coverage. You don’t want getting in an accident to be the time you learn your coverage probably isn’t the best!

Of course, there’s the logical health and safety advice to focus on first – stop your vehicle as soon as it’s safe to do so, call for emergency help if you need medical attention, if not, check everyone else involved and see if they need medical attention. But beyond this, you will have to focus on the financial repercussions of a crash. First, there’s the cost of damage to your vehicle. If you were not at fault, be sure to ensure you exchange insurance information to file a claim with their insurance. Likewise, they may need to make a claim against you if the incident was your fault.

Beyond that you may have injury claims to consider depending on the severity of the accident. If you’ve been hurt and it’s cost you a lot in medical bills or lost earning from taking time off work to recover, you may be entitled to compensation. There really are various types of auto crash accident claims, so do your research and find the best advice for your individual situation.

Debt

A lot of people have debt of some sort. Some debt is manageable and controlled – for example, taking out a mortgage you can afford, or a finance plan on a car that you can easily meet the payments for. But it’s when debt becomes unmanageable that issues can quickly begin to rise and your finances can spiral out of control. This situation can occur when you spend beyond your means on credit cards, or when you take out a loan with an excessively high interest rate.

It’s important to always be aware of what you’re spending. Have a budget laid out and never spend beyond what you can afford to repay. If you are already in debt, it’s a good idea to seek the services of a financial advisor or a wise friend or family member who will be able to help you to get back on track. You can also consolidate your debt to one, lower interest rate loan. Then, dedicate as much of your disposable income as possible to chipping away at your outstanding amount!

If you find yourself in debt over your limit, take drastic action to get back on track, and that likely involves cutting way back on expenses in your life until the debt is back under control.

Getting laid off

One scenario faced by may of us (40 million here in the US) is getting laid off. COVID-19 presented employers with a situation never seen before and many took government loans and even then still had to lay employees off. Although hopefully as things get moving again employees are being brought back on but that’s not going to always be the case!

Regardless of whether you lost your job or not, this was definitely a good reminder of the importance of an emergency fund. If you’re not convinced of the need for an emergency fund after a global pandemic like this, I’m not sure what will convince you! As you’re able to do so, work to build up an emergency fund of 3-6 months of expenses.

Secondly, ensure you are taking advantage of whatever support is available. If you were laid off, hopefully you got some sort of severance pay, whether that be a few weeks or a few months. Beyond that, work to file for unemployment benefits through your state. Many states have extended what they offer. Who knows how long you might be out of work so go ahead and ensure you’ve got a safety net.

Thirdly, you’ll likely be very frantically searching for new work and leveraging your network and job boards as best you can, but it’s wise to have a backup plan to earn income. There are lots of side hustles available whether it’s driving your car giving folks rides or delivering food or walking dogs, and even in the midst of a global pandemic people are still using these services! It’s not a bad idea to look into a temporary job or gig while you look for more full-time work!

Summary

Unfortunately life will throw us lemons, sometimes our own fault and sometimes not. Staying positive and focused throughout will help you recover and emerge without too much of a ding to your personal finances.

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