7 Tips to Handle Financial Emergencies and Obstacles

At some stage in your life, you will face emergencies or obstacles and might not know how to navigate them.

Whether it is job loss, illness, natural dsaster or a relationship breakdown, there are things that can help.

Here are tips to help you overcome financial obstacles and handle emergencies.

This post may contain affiliate links for products and services we personally use. You can read the full disclosure.

1. Have an Emergency Fund

Looking back, we can all see ways we could have done better, should have saved more etc.

Instead of dwelling on it, learn from it and start building an emergency fund now, whether you think you’ll need it or not.

Dave Ramsey always said $1,000 then pay off debt then build 3 to 6 months. Scott Pape (The Barefoot Investor) said $2,000 to begin with.

Considering the rising cost of living, $2,000 is a better minimum.

To get your emergency fund together and have extra cash, do a financial review to see where your finances are at and cut back where you can e.g 24 ways to easily save money.

Then look at all the things you can do to make more money e.g these 80+ side hustles.

Set up a separate bank account for your emergency fund so you aren’t tempted to dip into it all the time.

ING often have a $100 bonus offer (but do your research to see which bank is best for you).

What if you Don’t Have an Emergency Fund?

Maybe you didn’t have time to create an emergency fund before you needed it.

Or it ran out fast and now you are left wondering what to do.

Depending on your emergency, there might be resources available to you and you will need to look at how you can make more money.

Check Resources

Review your circumstances with Services Australia (Centrelink) by answering questions here and it will show you what you might be eligible for.

Choose payment finder or whichever option you are checking then go through the steps.

Next, see if you are eligible for any free money or vouchers. Each state has different assistance programs and options available.

Use AskIzzy to see what help is available in your area.

If it is job loss you are facing, use the tips in this article.

How to Make More Money

Go through your house, garage, everywhere and see if you have anything you can sell that you don’t need.

Check out tips for buying things to resell to help you get the best prices and faster sales.

Cash in all points with reward programs and from all online surveys or join them to get some side cash.

Look for lost money and see if you are eligible for any free money or vouchers (state by state info here).

Return any items you don’t need but purchased recently if you can.

Sign up for freebies and do everything you can to get that cash together.

For more ideas on how to make extra money read 43 ways for single mums to make money. How I made $33,277 on the side in 12 months and 31 ways to make and save $200 or more.

How to Save More Money

Go over every area of your budget and see where you can make some changes. Annually, my finances are reviewed, sometimes saving me over $4,000.

Read about how I do my annual financial review. Also, read how to make and save money on everything.

Note: If you like freebies and discounts, check out how to get a $100 cash bonus from ING,$14 from Up Bank or have a look at the full list of freebies, offers and discounts for every state.

What if you can’t Make or Save More for Your Emergency?

Most of the time when we are in dire straits, we probably aren’t in the position to borrow money.

This means you’ll end up borrowing from payday lenders or those short-term loans which cost a fortune in interest.

If you choose to borrow, read the fine print, and know the conditions and the interest charges.

Try to get legitimate lending first but if you can’t get a loan from a bank or similar, research your options and work to clear it asap.

Read 6 tips to easily reduce your debt which includes tips on dealing with debt collectors.

Remember, any debt you take on will add to the stress because you still have to pay it off.

2. Get Real About Your Emergency

Is it really an emergency or is it just a tight spot? Bushfires, cyclones, health issues, and leaving an abusive relationship, are emergencies.

Overspending then not having enough for a specific bill is not an emergency and there are probably things you can do to get around it.

Sit down, work out your budget, and look at your expenses and what your emergency is.

Are there other ways it can be managed? Is government help available?

Check charities if you are in a position where that would be relevant or if you are a member of a church, ask your pastor/bishop/minister for help.

If it is something such as not enough money to pay the bill, ask for an extension from the company and set up a payment plan.

Then stick to it! Charities can assist in paying bills, as can most churches for their members.

Check out how to survive on Centrelink to see all the things you might be entitled to that could help.

3. Get Emotional/Mental Support

Financial emergencies and obstacles can put a huge strain on your mental health which causes more issues.

If you need counselling or psychology to get through, do it. There are helplines set up for different circumstances so at a minimum, use that.

If the people in your life (family and friends) can be trusted and are supportive, let them know what is going on.

Accept any help that is available and genuine.

Don’t be too proud because it will cost you more in the long run.

4. Have an Attitude of Gratitude

You don’t need to be totally happy all the time but learning to have an attitude of gratitude can change a situation.

By changing how you view a situation, your brain can look for solutions.

3 Questions to Ask Yourself to Cultivate an Attitude of Gratitude

Having an attitude of gratitude is easier said than done for some. Use these questions to help reframe whatever is happening:

1. What lesson can I learn from this?
2. How can I be grateful that this happened?
3. What opportunity can come from this?

5. Know What You Want

Have a clear direction on what you need as an end result.

Knowing what you need will enable you to seek out the right help and put a plan of action in place to sort out your situation.

If you don’t know the specifics, try to get as clear as you can.

Asking for help or accessing some resources requires you to know exactly what is happening and what can help.

6. Negotiate

Whatever the financial emergency is, you might have room to negotiate and get it reduced or get an extension.

Ask for discounts, extensions and if there is any assistance available for everything you have to deal with.

Be calm, polite and try to know your facts as much as possible so you know what options are available.

They want their money so more often than not, they will work to find a solution.

Sometimes it is deferring payments for a few months but the interest still accrues, other times you might be able to get out of ongoing contracts e.g. gym memberships.

7. Learn To Let Go

Some things are outside our control. Whenever we face emergencies or obstacles, we need to assess and do what we can while letting go of whatever we can’t control.

This can be difficult when you are in survival mode, trying to make ends meet and make it all work.

How Can You Let Go?

Learning to let go can be difficult.

It is not about letting someone get away with something but rather recognising what is within your control.

Counselling can help with this as can some books such as Man’s Search for Meaning, Radical Acceptance and The Happiness Trap.

What Else Can You Do?

Financial emergencies don’t need to ruin you completely. Bouncing back from these obstacles might not be easy but it is worth it to try.

If you feel it is too much, please call a helpline and don’t try to do it all on your own.

Preparations For An Emergency

Once it is over or close to over and money stress has eased a little, look at what you can do to prepare better for emergencies.

Firstly, a strong emergency fund helps. This money should not be invested in shares or stored in a way where it would be difficult to get if needed.

Next, look at having some food storage and storing other items you need or use on a regular basis.

First aid, toiletries, basic foods, cleaning products if you use them and some supplies can go a long way to save money when facing an emergency.

Evaluate your life, home, car, everything and work out what potential emergencies you may face so you can plan accordingly.

Mostly, save as much as you can. Pay down debt and plan for the future so that when the next emergency hits you, you are better prepared and can bounce back more easily.

A few things that can make a big difference:

• Emergency fund of at least $2,000
• A go pack with a change of clothes, food etc.
• Having an emergency plan so if you need to evacuate or bunker down, everyone knows what to do.
• Some food storage and water, a small first aid kit etc.
• A first aid kit for your car
• Insurance! If you cannot afford to replace it, you cannot afford to skip insurance.

What tips would you add? How have you dealt with an emergency?

For more ways to make and save money follow us on social media:

The Thrifty Issue Facebook Page
The Thrifty Issue Facebook Group
The Thrifty Issue Instagram