There comes a point in almost all of our lives when we will experience financial trouble. Whether we hit rock bottom and don’t have any money at all to our name, whether we go bankrupt, whether we experience debt, or whether we’re just running a little short on disposable income after the main bills and expenses have been paid out, it’s extremely important that we know how to deal with our financial lives in order to avoid further struggle or disruption to our lives. Of course, experiencing a lack of money is going to be hard. But it is important that we remain sensible and logical in order to get back on our feet as quickly as possible. So, if you’re currently experiencing financial difficulties, or if you’re just doing your research to be safe and prepared for the future, here are a few sage pieces of advice that could help you to pull things back together a lot more easily.
Here’s a guide on What to Do When Your Finances Run Low
Consider Taking Out a Loan of Sorts
If you are struggling for money and you need immediate access to cash, you should consider taking out some sort of loan. This will provide you with the funds that you need to get things back on track, and then you can pay the money back to the lender in installments or at a later date. There are all sorts of loans on the market. From standard loans, where you request a certain sum of money and sign a contract to make monthly payments of an agreed amount for an agreed period of time. Alternatively, you can have open loans like credit cards. These provide you with access to a given amount of money. You can then pay it back slowly, but reuse the amount that you’ve paid off again if needs be.
Understand Interest Rates
Lenders don’t lend money to you through sheer kindness, generosity, or good will. It is their profession. So, they’re going to have to make money out of the act of lending money to you somewhere along the process. This is where interest rates come into play. An Interest rate is the amount a lender will charge you for the service of providing you with money. You can generally work out how much interest you will pay by finding out a given loan’s APR. This is the “annual percentage rate”. If a loan has a high interest rate, you will be charged a larger overall sum for borrowing the money. If you are offered a low interest rate, you will be charged a smaller sum. So, you should seek out the loans and credit cards on the market that will offer the lowest interest rates possible.
Avoid Payday Loans
Payday loans are perhaps the most advertised forms of loans. They tend to have television and radio advertisements with catchy jingles, So, it’s not all too surprising that you may However, you should avoid them at all costs. While they give you access to quick cash and have extremely low standards when it comes to credit ratings, they have outrageous interest rates that people in extremely comfortable positions would seriously struggle to pay back, never mind individuals who are struggling for cash in the first place. Sure, payday loans can offer you cash. But you can easily find yourself in irrecoverable debt when taking one out, no matter how sensible you are with repayments.
Never Engage with Loan Sharks
If you have a low credit rating and don’t want to engage with payday loans, options can get pretty thin. You need a decent credit rating to take out a loan with any professional lender. A lot of people resort to taking out money from loan sharks as a result of rejection from professional lenders. Loan sharks are illegal lenders and, consequently, they aren’t regulated by authoritative bodies. This means that it’s extremely hard to regulate your engagements with them. They notoriously charge extremely high interest rates that are nigh on impossible to pay back. They can change the terms and agreements of your contract as and when they please. Perhaps the most dangerous part is that loan sharks can use all sorts of threats, violence, and other forms of intimidation in order to get the money that they are owed back. You should avoid these illegal lenders at all costs.
Sell Unnecessary Belongings
Seeing as we live in a consumer society, the majority of us have vast amounts of things that we really do not need and rarely make use of. When you find that you are low on cash, it’s always a good idea to consider selling some of your unnecessary belongings. You can then put the money that you make towards whatever it may be that you need cash for. For cheap items, you might want to consider doing a carboot sale. As the old saying goes, one person’s trash is another person’s treasure, and small purchases mount up. For other belongings, consider online auction sites like eBay, or sales apps such as Depop.
While finding yourself in a place of financial difficulty is never a desirable experience, there are things that you can do to work your way back into financial stability and to avoid further problems from developing down the line. You just need to be aware of what you should and shouldn’t do to get there. Hopefully, the above advice will help you to make the best steps on this journey!