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How to Manage Your Finances When Your Life Is on the Fritz

When life is on an upswing, finances are easy to deal with. But what if things aren’t going according to plan? Here are some ways to manage your finances when your life is a little haywire.
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When life is on an upswing, finances are easy to deal with—you don’t have too much trouble paying your bills on time and saving for what you want. But what if things aren’t exactly going according to plan?

How can you deal with money matters when you’re not making as much as you need to get by, or aren’t able to work altogether? Or when those 911 situations arise which you have no control over? Here are some ways you can manage your finances when your life is on the fritz.

Avoid digging into a deeper debt hole

You’ll want to avoid money suckers, such as the evil overlords of credit and payday loans. When you’re in a bind, it can be super tempting to reach for the plastic or get immediate funds for a hefty fee at a payday center. While resorting to these things seems like an easy, immediate fix, it really is a temporary solution that will cause problems—and perhaps wreak even more havoc—down the line. While credit is definitely not a bad thing, and building good credit is essential as a consumer, it can also get you in trouble if you’re using it as a short-term panacea.

If you are in a place where you feel the need to resort to credit, while it’s not the ideal thing to do, set limits and make a pact with yourself. For instance, once you hit the limit you’ve created for yourself, come up with a concrete plan to pay it off. Instead of saying “I’ll pay it off one day,” give yourself a time frame, and do the math as to when and how you will pay down your credit.

One thing you’ll want to do is keep an eye on your credit utilization ratio, which is percentage of how much you spend in relation to the max limit on all your credit cards combined. It would be great if you could keep your credit utilization ratio at 30 percent. For instance, say you have two credit cards and your total limit on both cards is $5,000. To maintain decent credit, you’ll want to have no more than $1,500 on your balance on all your cards at any given time.

To help you keep a solid credit score, you’ll also want to make sure to pay the minimum balance, no matter what your circumstances. Being late on payments will ding your credit. If you find that tough going, if you’re a Simple customer, you can create a Goal to make sure that bill is taken care of no matter what.

Renegotiate your debts

If you have existing debt, such as credit card debt or student loans, reach out to the credit card company or loan servicer to let them know about your situation and see if there’s anything that can be done. It’s helpful to remember that nothing is necessarily set in stone, and a quick phone call couldn’t hurt. You never know, they might suggest some possibilities that didn’t even cross your mind.

And while it can stir up some unpleasant emotions, have all the needed info in front of you, and know what you’d like to ask for. As your interest rate, or APR, plays a big role in how much you owe with credit cards, check to see if there’s any way your interest rate can be lowered. You might have a good chance if you’ve been a longtime customer in good standing.

When it comes to student loans, a few things you can ask is a different repayment plan that might better fit your current needs, or ask for a deferment or forbearance, which can either postpone or lower your payments for the time being.

Play the save more, spend less game

You may have dig into your memory back to your college days when you had to scrounge for loose change or eat cheaply to save a buck. When it comes to cutting back, do what feels natural or easy to you. You don’t have to necessarily give up all the things you love, but perhaps practice moderation or sniff around for a sufficient replacement.

Look for bridge gig opportunities

While you know exactly what you need to get a handle on your finances, you might not be able to have all the pieces in place overnight. It’s frustrating, but the good ol’ saying “grow where you’re planted” applies here.

Instead of wishing for things you can’t have right now, look for stepping stones that could help you get to where you need to be. These bridge opportunities can be anything from taking on a side hustle such as selling crafty wares or homemade shaving soap at a local artisan market, to being a bike messenger, or taking a night class that could help you develop skills that could help you earn more down the line. Every little bit helps, especially if it deters you from tapping into money that you don’t have (read: credit cards).

Have an abundance money mindset

Even when things feel like they’re in the gutter, having an abundant approach to your finances helps. While some days it might just be easier to shrink off into a corner or experience temporary amnesia, remember that there are a great deal of opportunities to better your situation. It might be a way to rake in extra dough, or something that could help you save money or prevent you from resorting to using credit. It just takes a little bit of resourcefulness and maybe even looking for opportunities in little-known places.

While it can be a struggle to keep a handle on your finances when your life is on the fritz, having a game plan and doing what you can will help you steer through unsettling waters.

Disclaimer: Hey! Welcome to our disclaimer. Here’s what you need to know to safely consume this blog post: Any outbound links in this post will take you away from Simple.com, to external sites in the wilds of the internet; neither Simple nor The Bancorp Bank, our partner bank, endorses any linked-to websites; and we didn’t pay/barter with/bribe anyone to appear in this post. And as much as we wish we could control the cost of things, any prices in this article are just estimates. Actual prices are up to retailers, manufacturers, and other people who’ve been granted magical powers over digits and dollar signs.