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Three steps to survive economic difficulty

Updated on January 31, 2015

Three steps to survive economic difficulty

At some point in our lives, we experienced economic hardship. The demands of daily living puts a toil in us, sometimes we just seem to just give up and sulk. Other times we are feeling inadequate specially when we cant even provide for our basic wants, that’s the time we think of other solutions to the problems. It gets worst when we have a family to think about too. We cannot just sit down and worry, we need to do something. Worrying doesn’t help us at all, it just caused depression and insecurity.

What we need to do:

1. Check your finances/Analyze the situation

Analyze what is happening to your finances. Take a serious look at the situation. Don’t panic immediately because it will just add up to your worries and if you are worried you just tend to disregard the problem until they are piled up and you wake up one day with more debts and you are broke. Get your bank books, credit card, all the billings you can get (include the past billings) and analyze them.

Three steps to survive economic difficulty

Bank books - Savings

Check the withdrawals and the deposits. Are you short of cash? Is the cash inflow (the deposits) always negative comparing to the cash outflow (withdrawals). If this is the case , then look at the times when you have lots of withdrawals. That is why there is a need to keep all the receipts when you buy something, so that you can monitor your expenses well. The soonest time possible that you detect a negative cash outflow in your bank account, you need to find a solution.

Check on your debts and credit cards

Are you religiously paying your debts like car payments, house, insurance credit cards etc? Car, house, insurances are fixed payment except when there is an increase in the interest rate, that is why it is important that you read all the terms and conditions of all your contracts with the company you are indebted too because a rise in the interest rate makes you pay more. When you have a loan always think of the interest rates, whether they are fixed or not.

Utilities and basic consumption

Check your consumption on your utilities like electricity, water and food. After analyzing the trend of your bills pertaining to this, look at the necessary items that need to be eliminated or you just need to cut back a little on it.

2. Plan a budget: After checking your financial status and analyzing it, you need to plan a budget and stick to it. Consistency and determination is needed here, plus patience. Set a timetable and work on that plan. If you plan to eliminate debts in say twelve months, do it paying attention to the money which will be left for consumption. Even if you are paying debts it is advisable to also save. You might ask yourself, how can I save when I have many debts and I need to live also? That is why a careful planning is needed to accommodate these three things, savings, debt payments and consumption.

3. Ask the help of your family on the matter specially the spouse. Assign somebody to always check on the air-conditioning/heater unit. Live simply specially on foods, cut back on unhealthy foods like sweets/chocolates/ice cream. They are not nutritious anyway. Always enjoin every member of the family on the effort to save .

Yes it is possible living simply and still paying your debts. In the long run after overcoming your financial difficulty, you will smile and you are going to be proud of yourself. You will get there and in no time at all.


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    • PADDYBOY60 profile image

      PADDYBOY60 6 years ago from Centreville Michigan

      I agree with carolina muscle. Living simple is better living. We need to convey that to the young people of today. The days of the high roller are over. Things are getting tight for everyone. The sooner we all learn to cut corners the better. Thanks for putting this out there.

    • prettydarkhorse profile image

      prettydarkhorse 8 years ago from US

      thanks cool, Maita

    • Coolmon2009 profile image

      Coolmon2009 8 years ago from Texas, USA

      Good advice thanks for sharing

    • prettydarkhorse profile image

      prettydarkhorse 8 years ago from US

      thanks for dropping by Dohn, two is the maximum, but soemtimes one is just enough...

      by the way where is your black card? hmmmmmm

    • dohn121 profile image

      dohn121 8 years ago from Hudson Valley, New York

      I've eliminated all but one of my credit cards--my Capital One as I know the importance of having at least one credit card (2 is the max, I believe). It helps to have one whenever I travel, like for renting cars, booking hotels, flights, etc. I also find that it is absolutely essential if you want to purchase things online. Thanks for all of the tips, Pretty! I appreciate it!

    • prettydarkhorse profile image

      prettydarkhorse 8 years ago from US

      hi carolina muscle: yes, you're definitely right there, living simply is the best, and taking care of your finances too!

    • carolina muscle profile image

      carolina muscle 8 years ago from Charlotte, North Carolina

      Living simple is living better! Great hub!