Four Financial Pitfalls to Avoid During Tough Times
When you lose a job or lose income and your finances are suffering, it’s time to evaluate your spending and saving habits.
While your unique financial needs will shape the way you prepare for and adapt to financial difficulties, in general, you will want to avoid the following:
Do Not Spend Blindly: Even if you feel like you are currently on healthy financial footing, it never hurts to be cautious. Retool your budget keeping your necessities in mind. Set responsible spending limits. Mindful spending habits will help reduce the chance that you push yourself into a tight spot at a bad time.
Avoid Certain Types of Borrowing: If you come under financial strain, resist the temptation to take out a payday or quick-fix loan. These types of loans come with high interest rates and often predatory lending practices. If you were considering a large purchase, such as a car, it may be better to wait until you have a stronger financial foundation.
Do Not Turn to Credit Cards: If your income flow has been interrupted, you may be tempted to start using your credit cards to pay for necessary expenses. Resist this urge! Especially if you’re already carrying an interest-bearing balance every month. If you can only make minimum payments or might miss payments in the future, your credit score will probably suffer.
If you are reaching a point where you cannot afford to cover your bills, do not be afraid to seek assistance. Consider applying for temporary government aid. A helping hand can help you keep your lights on, without worrying about future interest payments. These programs help people get back on their feet after tough times. Consider your credit card as your last financial resort.
Don’t Be Afraid to Earn Extra Income: Flexibility is your friend. If you have ever dreamed of building your own business, now may be the perfect time to fill a niche and provide a needed service to others.
Learn more ways to stay financially, professionally, and personally strong at the Syncis Money Blog.