Is it possible to keep paying your debts even while you’re in the midst of a personal financial crisis?
Yes, it is!
In fact, reports reveal that people are showing better financial habits while going through the coronavirus pandemic. Research specifically revealed that 45% of Americans started setting aside money – more than the usual that they save. Not only that 26% admitted that they started paying off their debts at a faster rate than before.
This is specific proof that you can still pay off your debt while in the midst of a financial crisis – whether it’s personal or on a national scale. You just have to be committed to doing it. If you can set your mind to it, you’ll find opportunities and ideas that will make it possible for you to keep paying off what you owe – no matter what.
It’ll be hard. There’s no doubt about that. But there are strategies that you can use to make sure that you can do it.
4 ways you can pay debts despite a personal financial crisis
To be specific, there are 4 strategies that you can use to make debt payments easier to meet despite going through a personal financial crisis.
If you follow these tips, there’s a higher chance that you’ll achieve complete debt freedom. And do you know what’s great about these tips? These are still applicable even if you are in abundance or going through another tough time. If you keep following these, you’ll strengthen and improve your financial position over time.
So what are these tips that will help you pay off your debts no matter what?
Adjust your monthly budget
If you realize that something significant changed in your situation, you have to consult your budget immediately. Make sure that you are using a working budget. What does that mean? It simply means that the budget is something that you can use in your current lifestyle. It’s aligned with whatever is going on in your life.
You may have a budget plan that you are currently using. But there’s a high chance that a lot has changed in your life since you created that budget plan. So make sure that you revisit your budget plan always. If something changed in your income or your expenses, look at your budget so you can make the necessary adjustments.
So if you haven’t looked at your budget plan yet, take the time to see if it still aligns with whatever is going on in your life right now. If you’re going through a personal financial crisis, change your budget plan immediately. Take note of the changes in your income so you can alter your expenses as well. The goal is to ensure that you have enough funds to pay the priorities – like your debt payments.
That’s how you can be sure that you can continue to pay your debts.
Another thing that you can do is to minimize your bills. If you have limited resources, it’s wise to keep your expenses down. It’s actually something that you should do automatically. Like when the coronavirus pandemic hit, a survey revealed that 49% of respondents said that they cut back on their spending. It was their way of making sure that their finances will last.
This is a smart way to react if you’re going through a personal financial crisis. You have no idea how long the crisis will last. So you have to make sure you can stretch your finances for as long as possible. Otherwise, you won’t just have problems paying off your debts. You might even be forced to add to it.
To keep that from happening, make sure you minimize your bills. Don’t make things worse by living like you’re not going through a financial crisis.
Earn extra income
This is the proactive way for you to continue paying off your debts despite the personal financial crisis. Find a way to increase your income. You can talk to your employer and negotiate a raise. Or you can use your hobby or something you are good at doing and capitalize on it. For instance, if you’re good at cooking or baking, that can be a side gig for you. Cook packed lunches for your colleagues at work. Or baked goodies you can sell during the weekend market.
You can also go and look for a 2nd job that will help increase your monthly income. It doesn’t have to be a physical job that you’ll go to every day. It can be an online job that you can do while you’re at home. You can get online projects that you can work on after you come home from your 9-5 job.
Anything extra that you earn can be used to pay off your debts.
Finally, you can keep paying your debts if you increase your knowledge of it. This is something that people underestimate. By knowing more about your problem, you can find the best way to pay it all off. You can figure out the best option that will allow you to, not just pay off your debts, but make sure that once the crisis is over, you’ll have a stronger financial position. This is possible even if you have just gone through a crisis.
So what’s the best way for you to learn about your predicament?
You can start by paying attention to the news. Figure out what is wrong. Listen to what the experts are saying about the economy. It’ll give you an idea about the opportunities you can use to improve your situation.
Then you should do your research. Whatever you’re going through right now, someone else went through it before. Find these people and read about what they went through – specifically how they overcame their struggles.
You can probably talk to your creditors and ask them about options you can use so your monthly dues are more affordable. They usually have programs to help consumers pay off their debts despite going through a tough financial situation.
Why it’s important to keep paying your debts
You may be wondering, why is it important for you to keep paying your debts? Wouldn’t the creditors and lenders understand that you’re going through tough times?
Yes, they do understand. But that doesn’t remove the responsibility of paying off your debts.
Besides, paying off your dues will help you accomplish these two.
To keep your financial problems from getting worse
First, it will keep your current situation from going from bad to worse. When you are in the midst of a personal financial crisis, you have to make sure that you’re managing your debts properly. Otherwise, it might get worse. So make sure that you’re up-to-date with all your debt payments. That way, you won’t be compromising any effort that you’re making to try and survive the crisis you’re dealing with.
To take care of your credit score
Another benefit of continuing to pay your debts involves your credit score. Whether you’re in a crisis or not, your inability to keep up with your payments will negatively affect your score. It’s just one of the things that will get worse if you skip any of your monthly payments. Don’t let this happen. You can’t fix this overnight so it’s best to just maintain a good credit score, to begin with.