Money management crisis during the pandemic
Do you have sleepless nights due to money worries? Are you being harassed or pestered by creditors and banks because you owe money? If this is true, then do not worry too much as you are not alone. Many individuals nowadays are having trouble paying their bills or meeting their financial obligations when due.
An individual who is unable to pay his or her debts as they fall due for a variety of factors may be declared bankrupt either voluntarily or by the lenders or creditors.
You are in financial trouble if:
- You are living beyond your means or spending more than what you are making.
- If you are relying upon credit for your daily requirements.
- If you are having difficulty stretching your salary to cover regular monthly costs.
Financial problems should not make you lose hope about the future or that these issues cannot be resolved. There are many solutions to regain financial independence and peace of mind.
1. Careful budgeting in line with your income
2. Create a strategy of feasible expenses and prioritise your essentials and necessities.
3. Decrease or eliminate unnecessary spending such as vacations, over-priced entertainments as well as impulse purchasing. Apart from lowering the expenses, this is a possibility for the family to come together to discuss and rationalise the best way forward.
4. You may want think about the struggling days living as a university student (at least up until the crises is over). If you are single, you may consider moving back home to live with loved ones until the crisis or financial difficulties are over.
5. Try not to use your credit card as a ticket to endless spending and curtail spending to just the necessities. Remember that these purchases will have to be paid later on.
6. Sometimes when we feel bad or stress, we believe that spending may make things better, but that type of solution is only temporary. The main issues need to be tackle as they never go away.
7. It may be necessary to sell some items such as cars or other items of value may help. Some people have downgraded their properties or take on lodgers at time of high interest rates or when they have lost their jobs. You may have to take these drastic actions in the short term to stop money going out uncontrollably.
8. Seek professional help. There are people who specialise in helping people to manage their money better depending on countries and they have the tools to help and support you to get back on your feet. There are also organisations such as Citizens Advice Bureau who specialise in helping to resolve or liaise with creditors.
9. More creditors, banks and landlords understand of the current situation and most people are willing to be flexible at least in the short term, so speak to them and agree a plan of action based on what you know of your current situation.
The last and probably the most unpalatable choice may be to go for voluntary insolvency option. This is not an easy option and should only be taken as a last resort. But it better than worrying yourself silly, getting stressed and may be even being unwell.
Bankruptcy provides some respite, but it will damage your credit history and the possibility of getting credit in the medium term. It may even affect your job prospect, again depending on country.
The current pandemic (May 2020) will affect many people and for some, it may be the last straw that will bush individuals or small businesses into financial difficulty, but the most important thing is to get your finances under control first, then seek help.
The current pandemic has created a lot of difficult and unprecedented circumstances. Many governments and companies offer support for those who may be facing difficult times, so find out what help is available for you and members of your family.