When you are experiencing a financial crisis or setback, it can feel overwhelming. What do I do first? What’s the best path forward? How do I stay afloat financially? These are all questions that you may have.
Managing a financial crisis requires an action plan. This isn’t the time to wing it and hope for the best. A great place to start is to build an emergency budget and set some new spending priorities based on that emergency budget.
You don’t have to spend hours creating your budget or spending priorities, but you do need a plan to ensure that your urgent financial needs are met. We’ve created a helpful infographic to assist you in setting spending priorities when you are experiencing a financial crisis.
Setting Spending Priorities Infographic
Download the full PDF Version of our Infographic Here.
Examine Your Income and Expenses
The first step to establishing healthy spending priorities in a financial crisis is to evaluate all of your sources of income and all of your household expenses. This will allow you to have an accurate picture of your needs and what is available to meet those needs.
Focus on Urgent Financial Needs
The most important financial needs take priority in your spending plan:
- Housing/Mortgage/Rent
- Utilities (water, electricity, heat)
- Food
- Transportation for work
Make sure the items you need to live and work are covered first, and use what’s left to pay towards your other obligations.
Communicate With Creditors
If there isn’t enough income left over to pay all of your expense, it’s important to communicate your financial situation quickly to your creditors. They may have hardship programs that you aren’t aware of or solutions you haven’t considered. This isn’t a time to go silent and avoid their calls – honest communication is the key to success here.
Look for Opportunities to Eliminate Expenses
It’s tough, but it’s also possible. You may have to make some hard choices until your financial situation changes. In almost any budget, there is room to cut corners or eliminate expenses if you look closely. With an emergency budget, your goal is to get your expense down to the minimum level to help you stay on track as long as possible. Keep in mind, this isn’t forever, it’s temporary.
Ask For Help
There’s no shame in asking for help when you need it. A financial crisis isn’t your fault, and there are resources available to help.
Consider contacting local resources such as 211.org for a list of options for assistance in your state.
If you’re experiencing a financial crisis as a result of the COVID-19 pandemic, we’ve developed a list of resources for consumers facing financial difficulty during this difficult time.
If you are experiencing financial difficulty and are looking for a solution, CESI is here to help. Our counselors are available to assist if you are experiencing job loss, temporary loss of income or financial hardship during this time. Contact us today for a free financial assessment with one of our certified credit counselors.
