3 Things to Focus on During a Financial Hardship

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When experiencing financial hardships such as illness, injury, job loss, death of a loved one, etc., it can be difficult to see the light at the end of the tunnel. People often make poor decisions when they feel sad, angry, or frustrated. If you are feeling like you would rather bury your head in the sand (or binge Netflix in your PJs while eating ice cream) instead of addressing your situation, then you can relate. It is common to feel helpless and overwhelmed during these times. Here are the three most important things you can do to empower yourself and work toward resolving the issue:


When people lose their assets and are unable to pay their debts, it is not because they didn’t work hard or care about paying their debt; it was usually because they had lost income or had an unexpected increase in expenses and were no longer able to meet all of their obligations. They thought that if they paid the bills they could afford (a few small credit cards, the cable bill, etc.) then they weren’t totally giving up. Although it may seem like a good idea to pay whatever you can, it is important to think about what is best for you in the long term. Let's prioritize. Sit down (include anyone who contributes to the household budget) and start writing a list of your expenses. The first item should be your biggest priority and the items should reduce in importance as you go down the list. Think about needs versus wants. Usually, having a place to live, food to eat, and basic utilities are at the top of the list, but each person has their own personal priorities. Once you have your list, pay each item in order until the funds are gone.

Ask for Help

Many people isolate themselves (or pretend that everything is fine to friends and family) when dealing with a financial crisis. Although it is important to be careful about taking advice from people who are not professionals in the field, it can be helpful to vent to a loved one, or even a counselor, to relieve some of the pressure you are feeling and help you to focus on finding solutions. Similarly, many people avoid opening mail or answering calls from creditors because they don’t know what to say or do; this can make things worse in the long term. The best way to begin is to call all of your creditors and tell them what is happening. Many lenders/creditors have hardship programs that can help. Ask your credit union for advice about which options could help you; they may refer you to a financial counselor to give you additional resources. Just remember to take things one step at a time and acknowledge yourself for remaining positive and proactive. You are doing a great job!

Think Outside of the Box

When in the midst of a financial crisis, it can be easy to tell yourself, “there is nothing I can do to fix this.” Just remember, it takes a lot of bricks to build a house and it takes a lot of small decisions and behaviors to create your budget and spending habits. The ultimate goal for most people is to reduce expenses and/or increase income to balance your budget and be able to save. Start thinking about what you can do that you have never tried before. Be creative! Everyone will have their own limits as to what they can do, but you won’t know if it works for you unless you try it. Here are some examples:

  • Get a roommate
  • Consider getting a second part-time job
  • Clip coupons or shop at other grocery stores to slim the monthly grocery bill
  • Explore other insurance options with lower premiums
  • Cancel your cable, Netflix, Hulu, etc. accounts
  • Explore budget-friendly family phone plans
  • Move into a home or apartment with lower rent, or apply for a refinance or modification on your mortgage
  • Track spending through apps like Intuit's Mint to reduce miscellaneous expenses

Now, give yourself a P.A.T. on the back for taking the first step; and, Prioritize, Ask for Help, and Think Outside of the Box. If you have any questions, contact our team here.


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