One of the most difficult things to deal with when it comes to your personal finances is the situation where you find yourself short on cash. Try as you may to avoid them, there are some events that you just can’t plan for.
In those cases, the worst thing to do is ignore the situation. The sooner you deal with your shortage, the less likely it is that things will spiral out of control. Here are three options to consider when you are looking to make a game plan for getting back on track.
1. Evaluate Your Credit Card Situation
If you are in the same situation as the average UK household, you might have somewhere around £2,688 (roughly $3000 U.S.) in unpaid credit card debt. While it’s nice to fit in, you might very well be experiencing a shortage of cash as a result of your credit card use. This is the first place to start in order to create a long-term solution.
Your goal should be to pay down your credit cards as quickly as possible, and also to reduce the number of cards that you have overall. This may not be a quick fix for your cash flow shortage, but it is the best way to prevent the situation from arising again.
2. Get a Short-Term Loan
Procuring a short-term loan shouldn’t be your go-to choice when it comes to solving your cash shortage. That being said, it is a viable option as long as you take several points into consideration.
Firstly, the nature of a short-term loan is that it should be paid back within a month or two. If you are not confident enough that you can do this, you shouldn’t go the way of the payday loan. Next, you should be sure that your credit score could take a slight hit as when a potential lender runs a check on your credit it can leave a record.
If you are comfortable with both those points, however, then your next step should be to compare lenders so as to make sure you are getting the best interest rate and terms possible. Websites like Cashlady are designed to help you do just that.
3. Reassess Your Monthly Expenses
Another wise step to take is to reassess your monthly expenses. What are the major things that are eating into your budget? Are these things essential or nonessential?
Start with a list of the things you spend money on each month, can you make any savings anywhere? Categorize your expenses based on importance, making sure to account for your basic cost-of-living items. Beyond those, you should make a concerted effort to discover what is dispensable, as shown on cnbc.com.
Make sure to be patient with yourself. Learning to live within your means doesn’t always come easily, but it is definitely possible with the right amount of determination. If you need a little help getting started, consider using a monthly budget template to help you prevent any future cash shortage situations.