Whether you’re facing unexpected medical expenses, a job loss, or car repairs, it can be easy to feel overwhelmed, especially when it comes to your finances. Whatever your situation may be, use these tips to rebuild your financial health.
1. Start with a financial review
The first step is knowing where you stand and what may need your attention. Create a financial inventory that includes:
- An up-to-date budget that includes your current income and expenses.
- Current savings totals versus your pre-crisis savings.
- The amount of debt you currently owe.
- A list of past due bills, if any.
2. Get current on bills
Falling behind on bills isn’t ideal, but it can happen in a crisis. If you have bills that are past due, you’ll need a plan for catching up.
Connect with lenders, utility accounts, credit cards, and your landlord or mortgage company about what options you have for bringing your account current. Often during a crisis, companies offer payment programs for people experiencing financial hardships.
3. Rethink debt repayment
Your crisis budget should tell you how you can put debt repayment. At the very least, you try to pay the minimums, but ideally, you can pay more than that.
Next, think about ways to make your debt less expensive and more manageable. You may consider:
- Consolidating federal student loans to streamline your payments.
- Transferring high-interest credit card debt to a card with a 0% annual percentage rate.
- Refinancing a home loan or car loan to get a lower rate and payment.
4. Make a savings plan
Once you’ve got your budget in order and debt repayment plan in place, rebuilding, or establishing savings is next on the list. If you’re not in a place financially where you’re ready to save, begin to plan for it. Look at what lifestyle changes you can continue post-crisis that would help to build your savings.
Once you have a fixed dollar amount you need to save, break that down and decide how much you’ll save each payday. Then automate your deposits to a savings account so your money can grow with as little hassle as possible.
Improving your financial health can take time
Recovering from a financial crisis isn’t something that happens overnight. It may take several months or even longer for your finances to start getting back to normal. During that time, patience and consistency can be your best friends as you work toward positive financial health.
Fulton Bank, N.A. Member FDIC
