A financial crisis can happen to anyone, anytime. A medical emergency, an accident or unexpected home repair can derail your finances. But, the crisis does not have to control you. You can take control of the crisis, manage it and make it through to the other side.
Managing the crisis requires a concrete, three-step process designed to help you.Quickly assess the situation, consider your options and take action to protect yourself and get through the financial storm.
Assess the Situation
The first step in any crisis is to assess the situation at hand. It’s easy to panic in a crisis, but descending into panic will lead you to make rash and disastrous decisions. Taking time to look at your situation and the details of your crisis can help you figure out how to move forward.
Start by asking yourself some key questions:
- How much money do you owe and to whom?
- Have you talked to your creditors, made them aware of your crisis and asked about options?
- What will happen if you don’t pay your creditors, and can you live with that consequence?
- When will your crisis end and what will life look like when it’s over?
Consider Your Options
Next, consider your options based on the information you assembled during your assessment. You likely have several options including:
- Working out a payment plan
- Taking out a payday loan
- Take out a personal loan
- Tap into your savings or using credit cards
Each option has both advantages and disadvantages and you will want to consider each choice carefully. Make sure the option you choose fits your situation and can get you through to the other side of the crisis.
Now, put your plan into action and stick to your plan. Taking action sooner than later means you will gain control of the crisis early, rather than letting the crisis take control of your life. By working through a financial crisis, you can weather the crisis and come out stronger on the other side.