Tips on Tackling Short-Term Financial Hurdles

Many of us will be faced with an unprecedented expense at some point in our lives, and unfortunately, you never know when this is going to happen. This can have an impact on your income, and you may be left wondering how you’re going to pay for it.

This is where an emergency loan lender can help if you have nowhere else to turn – but there are other ways of dealing with a short-term financial hurdle, from cutting non-essential expenses to utilising your emergency fund. Read on as we take a closer look at this. 

Assess the situation 

Before you can tackle a short-term financial issue, take the time to assess the situation thoroughly. To do this, gather all relevant information, such as the nature of the expense, the amount you need, and just how urgent this expense is. Understanding the situation will allow you to formulate a more precise and targeted plan of action and allow you to proceed responsibly and helpfully. 

Create a short-term budget 

Once you’ve assessed the situation, you can begin to tackle the financial hurdle in question. One of the best places to start is to create a short-term budget that focuses on essential expenses only. Look at your income and deduct your rent or mortgage payments, utilities, groceries, and transportation. These are classed as non-negotiable costs.

For the short-term, cut other costs that aren’t essential, like eating out and entertainment to free up funds for your immediate needs. Creating a budget will help you stretch your limited cash to cover what really matters. 

Prioritise expenses 

Not all expenses are created equal, especially when tackling short-term financial hurdles. Prioritise your payments based on both urgency and importance. Your primary essentials are payments like rent, mortgage, utility, and grocery costs.

Make sure you focus your cash on these expenses. Your secondary expenses – and therefore things you can do without – can be postponed or reduced in the short term whilst you get your finances back on track. 

Explore alternative income streams

When facing a short-term financial hurdle, diversifying your income stream can be helpful. This means finding ways in which you can boost your income alongside your full-time job. This could be anything from freelance writing, selling your art or photography, or even taking on part-time work if possible to supplement your income. Having additional income streams can help you bridge the gap if you have a short-term expense to cover. 

Utilise emergency fund 

Whilst an emergency fund can take a little while to build up, having access to your own savings to deal with a short-term financial hurdle is incredibly helpful. Everyone should be saving for an emergency fund, which should typically cover around 3 to 6 months of your income.

Your emergency fund can be used if you’re faced with an emergency expense that your monthly income would struggle to cover. You should resist dipping into your emergency fund when it’s not necessary, as you never know when you might need it! An emergency fund can help with both financial stability and peace of mind. 

Cut non-essentials 

In the short term, cutting non-essentials is crucial. Look at your outgoings and determine where you spend when you don’t need to. For example, if you have subscriptions that you don’t use – whether that’s to the gym, or streaming – be sure to cancel your membership.

If you buy your lunch at work every day, this can all add up, so determine what you could cut back on, and use the money to tackle your expense. 

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