Ways To Cope with Financial Hardship
Date: August 22, 2022
With inflation at a 40-year high, the current economic environment is presenting added challenges for many Americans, especially those already experiencing financial hardships. Research shows that 26% of Americans believe their financial situation will get worse in 20221. Another 43% of Americans expect that their debt will increase 2 this year.
When you are in the thick of financial struggles, it can seem difficult to even imagine a way out, taking both an emotional, mental and financial toll. Experts with Affinity Federal Credit Union have specific steps that you can take to alleviate some of the stresses and challenges that come with this hardship and improve overall financial wellbeing.
- Prioritize your essentials: Ensuring your everyday essentials are covered is the first step to relieving financial stress. Determine your non-negotiable expenses like food, utilities, rent or mortgage, and medicine. These are the line items to tackle first each month.
- Ask for hardship concessions: Contact your creditors for support. Affinity offers free resources and free counseling services3 to help set up payment and budgeting plans. These plans may include lower interest rates, fees or penalties for an extended period of time. Also check with your services providers, like your utility or water provider. Many of these companies will also offer assistance programs that may allow deferred payments.
- When you can, make moves toward lessening overall debt: Work to pay down your overall debt, whether it's credit cards, mortgage payments, or student loans. Our team can work with you to find a payment strategy that works. We suggest finding one payment strategy and seeing it through. Whether that means paying off each credit card a little at a time or tackling one account at a time, make sure to stick with the plan.
- Manage your money with a budget: By tracking all of your spending, you will be able to pinpoint the areas in which you engage in unnecessary spending. With this visibility, you can make an accurate budget and adhere to it, managing your cash flow wisely and lessening the need to take on additional debt. Also, knowing that you are sticking to the budgeting plan you made will alleviate some of the day-to-day stress as you continue working towards your financial goals.
Our goal is to prioritize your financial wellbeing. There are services available to help you navigate through times of crisis. Making sure that you follow the above steps can help mitigate the emotional stressors of a difficult financial situation.
Visit our website4 or stop into one of our branches5 to learn more about how we can support you in meeting your financial goals.
This information is for informational purposes only and is intended to provide general guidance and does not constitute legal, tax, or financial advice. Each person’s circumstances are different and may not apply to the specific information provided. You should seek the advice of a financial professional, tax consultant, and/or legal counsel to discuss your specific needs before making any financial or other commitments regarding the matters related to your condition.
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