Potentash
  • Relationships
    • The Singlehood Series
    • Dating
    • Sex
    • Parenting
  • Lifestyle
    • Home
    • Food + Beverage
    • Fashion
    • Interviews
  • Stories
    • The Singlehood Series
    • Fiction
    • Poetry
  • Skin + Beauty
    • Skin
      • Skincare
    • Hair
      • Haircare
  • Wellness
    • Physical Health
    • Emotional Wellness
    • Mental Wellness
    • Social Wellness
    • Spiritual Wellness
  • Business
    • Business Finance
    • Personal Finance
    • Entrepreneurship
    • Investments
    • Personal Investments
  • Entertainment
    • Internet
    • Events
    • Music
    • Books
No Result
View All Result
  • Login
Potentash
  • Relationships
    • The Singlehood Series
    • Dating
    • Sex
    • Parenting
  • Lifestyle
    • Home
    • Food + Beverage
    • Fashion
    • Interviews
  • Stories
    • The Singlehood Series
    • Fiction
    • Poetry
  • Skin + Beauty
    • Skin
      • Skincare
    • Hair
      • Haircare
  • Wellness
    • Physical Health
    • Emotional Wellness
    • Mental Wellness
    • Social Wellness
    • Spiritual Wellness
  • Business
    • Business Finance
    • Personal Finance
    • Entrepreneurship
    • Investments
    • Personal Investments
  • Entertainment
    • Internet
    • Events
    • Music
    • Books
No Result
View All Result
  • Login
Potentash
No Result
View All Result
The Singlehood Series: When He Got Game But He Is Broke

Image ffrom https://www.freepik.com/

7 Financial Tips On What To Do During A Financial Crisis

Rayhab Gachango by Rayhab Gachango
12 February 2025
in Money, Personal Finance
Reading Time: 8 mins read
2 0
0
2
SHARES
11
VIEWS
FacebookTwitterWhatsApp

A financial crisis can strike anyone at any time, often due to unforeseen circumstances such as job loss, unexpected medical expenses, poor financial planning, or even a global economic downturn. In times of financial hardship, stress levels rise, bills pile up, and uncertainty about the future becomes overwhelming. However, by taking the right steps, you can regain control, minimize damage, and set yourself on a path to recovery.

Understanding the root cause of your financial crisis is crucial to finding the right solutions. If your crisis is due to job loss, the focus should be on budgeting and securing alternative income. If medical bills are draining your resources, negotiating payment plans and seeking assistance may be key. If you are struggling with debt, prioritizing repayments and avoiding new loans is essential. Regardless of the cause, financial discipline, smart decision-making, and strategic planning can help you weather the storm.

Here’s what you need to do, what you need to stop doing, and how to make the most of the money you have during a financial crisis.

What You Need to Do

1. Assess Your Financial Situation

Start by gaining a clear understanding of where you stand financially. List all sources of income, expenses, savings, and outstanding debts. Identify urgent expenses versus those that can be reduced or eliminated. This will give you a clearer picture of how much you need to survive and where you can cut costs.

2. Create a Bare-Bones Budget

During a financial crisis, you need to operate on the most minimal budget possible. Prioritize essential expenses such as rent or mortgage, utilities, food, transportation, and healthcare. Eliminate or significantly reduce discretionary spending like entertainment, dining out, and luxury purchases.

3. Look for Alternative Income Sources

If you have lost your job or your income has significantly decreased, explore new ways to make money. This could include freelancing, selling unused items, offering a service, or taking on temporary or part-time work. Consider using skills you already have to generate additional income.

4. Negotiate Bills and Payments

Many companies offer hardship programs that allow you to defer or lower payments during financial difficulties. Contact your mortgage lender, landlord, utility providers, and creditors to negotiate more manageable payment terms. Many service providers are willing to help if they are informed about your situation early.

5. Prioritize Debt Repayment Smartly

While paying off debt is important, not all debts should be treated equally in a financial crisis. Focus on covering high-interest debt like credit cards first while ensuring that you meet minimum payments on other obligations. If necessary, explore debt consolidation or refinancing options to reduce interest rates and make payments more manageable.

6. Seek Financial Assistance

Look into government aid, nonprofit organizations, or community support programs that offer financial relief, such as unemployment benefits, food assistance, or rent subsidies. Many people struggle in silence without realizing that help is available.

7. Focus on Needs, Not Wants

In times of crisis, it is essential to differentiate between what is necessary and what is a luxury. Stick to the essentials, and remind yourself that this is a temporary situation. Making sacrifices now will help you recover more quickly.

What You Need to Stop Doing

1. Stop Using Credit Cards Or Mobile loans Recklessly

While credit cards or mobile loans can be useful in emergencies, relying on them too much can make the crisis worse. High interest rates can lead to unmanageable debt, making it even harder to recover. Use credit only if absolutely necessary and ensure you have a repayment plan.

2. Stop Making Unnecessary Purchases

Cut out all non-essential spending. Cancel subscriptions, avoid impulsive online shopping, and rethink any purchases that do not contribute to basic survival or long-term financial stability.

3. Stop Ignoring the Problem

Denial can make things worse. Ignoring bills, avoiding financial discussions, or hoping things will improve on their own will only delay your recovery. Addressing the issue head-on will put you in a stronger position to overcome the crisis.

4. Stop Taking on More Debt Without a Plan

Borrowing money to cover existing debt or unnecessary expenses can lead to a cycle of financial dependence. If you must take a loan, ensure it is for essential purposes and that you have a clear repayment plan.

5. Stop Eating Out and Overspending on Food

Cooking at home and planning meals can significantly reduce grocery expenses. Buying in bulk, using discount coupons, and opting for affordable but nutritious meals can help stretch your food budget further.

How to Make the Most of the Money You Have

1. Track Every Dollar

Use budgeting apps or a simple spreadsheet to monitor your spending. Knowing exactly where your money is going will help you make better financial decisions and prevent unnecessary expenses.

2. Reduce Utility and Living Costs

Cut down on electricity and water bills by using energy-efficient appliances, turning off unused lights, and being mindful of water usage. Consider downsizing your living space or finding a roommate to share housing costs.

3. Use Community Resources

Many communities have free food banks, discounted healthcare services, and low-cost transportation options. Take advantage of these resources to lessen your financial burden.

4. Buy Second-Hand or Trade Items

Instead of purchasing new clothes, furniture, or electronics, consider buying second-hand from thrift stores or online marketplaces. Trading or borrowing items can also help cut costs.

5. Automate Savings, Even in Small Amounts

If possible, continue saving, even if it’s just a small amount each week. An emergency fund, no matter how small, can provide a financial cushion and prevent future crises.

6. Invest in Skills That Can Help You Earn More

Use this time to learn new skills that can open up better job opportunities or allow you to start a side business. Many free or low-cost online courses can help you gain new qualifications or improve your earning potential.

Financial Tips for Specific Causes of a Crisis

1. Job Loss

  • Apply for unemployment benefits immediately (if they are available).
  • Network and update your resume for job opportunities.
  • Consider freelance, gig work, or temporary employment.

2. Medical Expenses

  • Negotiate medical bills and ask for discounts or payment plans.
  • Look for medical assistance programs that help cover expenses.
  • Use generic medications and explore affordable healthcare options.

3. Business Failure

  • Reassess your business plan and cut unnecessary costs.
  • Sell off excess inventory or assets to recover funds.
  • Consider alternative business ideas or new income streams.

4. Overwhelming Debt

  • Contact creditors to negotiate lower payments or interest rates.
  • Avoid taking on more debt unless absolutely necessary.
  • Seek help from a financial counsellor for debt management strategies. Personal Finance: Practical Steps To Get Out Of Debt

5. Unexpected Emergencies (Natural Disasters, Family Issues, etc.)

  • Apply for emergency assistance programs.
  • Prioritize immediate needs and put major financial decisions on hold.

Conclusion

A financial crisis is undoubtedly stressful, but taking immediate action can prevent long-term damage. By reassessing your financial situation, creating a strict budget, cutting unnecessary expenses, and exploring alternative income sources, you can navigate the crisis more effectively. Avoid making impulsive decisions, stay proactive in finding solutions, and use available resources wisely. With patience, discipline, and smart financial planning, you can not only survive the crisis but also emerge from it stronger and more financially secure.

Check out

Financial Distress: Things To Consider When Downgrading Your Lifestyle Because Of An Economic Crisis Like Retrenchment Or A Recession

Understanding Financial Anxiety: Signs, Causes And Impacts

What You Need To Know About The Japanese Concept Of Happy Money And How You Can Gain More Financial EQ

Family Finances: Elsa Majimbo, Black Tax And The Children Who Don’t Want To Pay It

Share1Tweet1SendSharePin
Previous Post

10 Types Of Men You Should Never Marry Or Date

Next Post

When Life Throws You A Curveball, Insurance Should Have You Covered

Rayhab Gachango

Rayhab Gachango

Potentash Founder. A creative writer. The Managing Editor at Potentash. Passionate about telling African stories and stories about the inclusion of minorities. Find me at [email protected]. “We're all stories, in the end.” ― Steven Moffat

Next Post
When Life Throws You A Curveball, Insurance Should Have You Covered

When Life Throws You A Curveball, Insurance Should Have You Covered

Please login to join discussion

Recommended

How to change your wardrobe habits to combat climate change

Being Messy Can Be Good For You

20 March 2023
127
Organize Your Life: 5 Different Ways To Use A Planner

Organize Your Life: 5 Different Ways To Use A Planner

17 December 2018
90

Popular Stories

  • Book Review: Things I Will Tell My Daughter By Joan Thatiah

    650 shares
    Share 260 Tweet 163
  • Relationships And A Tolerable Level Of Permanent Unhappiness

    1558 shares
    Share 622 Tweet 389
  • Jewellery: 5 Reasons Why The Hilton Arcade Curio Shops Are A Great Alternative To Maasai Market

    890 shares
    Share 356 Tweet 223
  • Musician Crystal Asige Lost Her Sight In Her Early 20s But She Has Not Let That Stop Her From Pursuing Her Dreams

    2303 shares
    Share 921 Tweet 576
  • 6 Things You Shouldn’t Cook With Butter

    16 shares
    Share 6 Tweet 4

Potentash Blog

Potentash is an award-winning lifestyle blog. We publish lifestyle content that intersects with health, women, beauty, travel, business, relationships, finances and entertainment.

Explore

  • The Singlehood Series
  • From Stairs To Ramps
  • Man Around Nairobi
  • Pearls And Heels
  • Personal Finance
  • Food + Beverage
  • Editor’s Pick
  • Reviews

Get the Potentash Newsletter

  • Newsletter Archive
  • Subscribe
  • Frequently Asked Questions
  • Privacy Policy
  • Contact Us

Copyright © 2023. Potentash, In Partnership with Decima

Welcome Back!

Sign In with Linked In
OR

Login to your account below

Forgotten Password?

Retrieve your password

Please enter your username or email address to reset your password.

Log In
  • Login
No Result
View All Result
  • Relationships
    • The Singlehood Series
    • Dating
    • Sex
    • Parenting
  • Lifestyle
    • Home
    • Food + Beverage
    • Fashion
    • Interviews
  • Stories
    • The Singlehood Series
    • Fiction
    • Poetry
  • Skin + Beauty
    • Skin
      • Skincare
    • Hair
      • Haircare
  • Wellness
    • Physical Health
    • Emotional Wellness
    • Mental Wellness
    • Social Wellness
    • Spiritual Wellness
  • Business
    • Business Finance
    • Personal Finance
    • Entrepreneurship
    • Investments
    • Personal Investments
  • Entertainment
    • Internet
    • Events
    • Music
    • Books

Copyright © 2023. Potentash, In Partnership with Decima