Financial disasters come in all shapes and sizes; perhaps you’ve lost your job or a large long-term investment went awry. Especially heartbreaking is when financial disasters wreak havoc in the lives of young families. Whatever brings about financial distress, here are 5 ways to weather a disaster without declaring bankruptcy:
1. Downsize
When a financial disaster happens to a young family, making mortgage or rent payments can be a major struggle. One way to alleviate this financial stress is to downsize. If you can’t afford your current housing costs, sell your place or move out. For example, if you currently have a 3-bedroom home but could squeeze into a 2-bedroom apartment, do it. If you choose to downsize on space, thus cost, you will also need to downsize your belongings. Maybe you could sell your coffee table and the fancy China you never use. Take the opportunity to minimize clutter to create a clean slate for your young family.
2. Eliminate Unnecessary Services
One of the first expenses that should go include TV and cable services, although some companies require the contract be up before the service is cancelled. Other services that you can be rid of include paying for more than one phone, whether it be a home phone and cell phone or you and your spouse each having a cell phone.
3. Create a Budget
During a financial disaster, every dollar counts. With your entire family, write out where you will spend the money you do have. Necessary expense categories may include groceries, transportation, housing and utilities. To help everyone stick to the budget, agree to use cash to avoid racking up credit card bills or swiping the account dry with your debit card.
4. Use Your Untapped Skills
Chances are you have valuable skills that you haven’t used in some time but could use to make extra money. For example, if you achieved excellent grades in math during high school, you could advertise to be a math tutor to struggling students. Be creative, and market the hidden talents you possess.
5. Enjoy Free Recreational Activities
Although weathering a financial storm often seems like all work and no play, your young family needs to unwind, relax and regain hope. Try spending periods of time together that are cost-free. Rather than going to see an expensive movie, rent a family favorite from the public library, and watch it at home.
Although a very real struggle, financial disasters do not have to end in bankruptcy. With some creativity and downsizing, your family can weather this storm in life.
References
Economic Cycle Research Institute
Storage Units in North Miami Beach
EveryDollar.com