Are you facing tough times? Are you finding it difficult to handle your finances during these times? If yes, you need to identify the specific challenges that you are facing. Only once you recognize these challenges, it will become easier for you to find a way out. Today, we will share with you four such problems that you might often face during trying times. We will also share with you a few tips which will help you find a way out.
Reduced savings rate
One of the main problems which you might face during such a time is the lack of saving. The saving percentage goes down drastically. Many people claim that they cannot save anything month on month. It is a common problem, but fortunately, it has an easy way out. There are steps that you can undertake in this regard.
Track your expenses
The first thing you need to do is to use financial tracking apps like:
These will help you track your credit card statements as well as bank account statements. They will scan your messages and emails for every expense. They show expenses an easy to understand form so that you can decide which ones you can curtail.
Set saving goals
Once you go through your statements, it is essential to set proper saving goals. It will motivate you to save and curtail the expenses. Even during difficult times, it will become possible for you to at least save 10% of your income with these two steps. Thus, if you are facing the problem of not being able to save enough money, these two steps will help you out.
Another problem that you might face is that your debt might seem insurmountable. It might seem like you would never be able to pay that back. However, this problem is solvable, as well. The steps which you need to undertake include:
- You have to stop taking more debt. Only once you do so, you can think about recovering from it. To make the money which you need, you can take up a second job or work as a freelancer in your part-time.
- You have to then think about paying off the high-interest loans by taking a consolidated low-interest one. It will ensure that your monthly outgo reduces significantly.
- You have to set proper reminders to ensure that you do not miss out on a payment date. It will ensure that you do not have to pay penalties as well as the excessive interest, which will again help you pay off your debt and save some money as well.
With the help of these three steps, it will become easier for you to bring down your debt burden. Sure enough, it will not happen overnight, but it will set you on the right track and help you manage your debt.
Another issue which you might face is unforeseen expenses. These can be medical bills, educational bills, urgent repair bills or rehab bills. Sure enough, during the tough times, it can be challenging to shell out money for these expenses. However, when such expenses arise, you have two ways to deal with them. These include:
Compute the exact costs
Instead of just thinking that the situation is dire, you have to compute the expenses. For example, what might seem like a considerable rehab bill might get reduced due to insurance. That is why; you have to find answers to questions like will insurance pay for treatment?? And the answer to this question will help you compute the exact expenses. You can enquire about the same from the rehab center or your insurance agent to calculate the expenses. Once you know the exact expenses, it will become easy for you to prepare for the expense.
If you have a good credit history or credit score, you might think of borrowing from a bank or a financial institution. If not, you can borrow from your retirement account. It is the last resort, but since you have an urgent expense which you cannot ignore or delay, you have no other solution. Thus, this problem is solvable as well when you’re facing trying times.
Many people face a severe time crunch during trying times. Amidst the time crunch, their investment capability takes a hit. They are neither able to monitor their investments nor make new ones.
That is why; their money does not work for them since they aren’t making the right investments. If you’re facing this challenge while handling your finances, there is a solution to that as well. There are some investment options which you can choose from. These include:
- You can invest in index funds, which are more secure than other avenues.
- You can split the money between safer assets like gold, bonds, and so on. These are easier to invest in and do not require frequent monitoring.
- You can consult Robo advisors who would send you alerts in the form of push notifications, emails, and texts regarding the changes which you need to make to your portfolio from time to time. Most of these advisors require you to make changes only once every six months.
These are the three options that you have when you’re short on time while handling your finances and investments.
So, if you’re facing trying times, there is nothing to worry about. You might be facing challenges, but all of them have a solution. We have covered 4 of the most common challenges above and how you can solve them. It is time to take control of the situation and move ahead rather than regretting it.