At some point in life, we get broke and we have bills to pay. Becoming broke can be scary but it is not the end of the world. Going broke can help you plan your finances and do something meaningful. Life is full of ups and downs and somehow it makes life interesting. Going broke will help you appreciate the times when you have money. It helps you learn the essence of saving and using the money you have on important things.
When you go broke, there are things that you should do to help you become financially stable again. How you will handle the situation will help you get back strong again. The following are some of the things that you should do when you’re broke.
Reflect Through and Identify the Problem
When looking for a solution to something, you must first identify the problem. Determine why you broke. For instance, maybe it could be because you lost a job, overspending or your income is significantly small to cater to your needs.
Take action depending on the cause of your brokenness. For instance, if you are overspending, you can reduce your expenses. Look at the things that you do not need urgently and get rid of them. If you lost your job, try to not worry very much and start looking for one as soon as possible. Whatever the problem is, seek to find a situation. Don’t focus on negative thoughts but face the situation and see how to address it.
Have a Clear Picture and Plan Ahead
You need to have a clear focus on how you are going to navigate through brokenness. It is not the time for a blame game or start looking back and see what you would have done differently. Blaming yourself or others will only make you bitter and deter you from finding a solution.
Understanding that you are the author of your fate will help you have a clear focus and plan ahead. Get to know where you are financially and how to navigate through without many debts. Identify the people you owe, how much and the repayment terms.
Talk To Your Creditors
Once you go broke, it is good that you let your creditors know about your financial situation. Creditors expect you to pay off your debts and since they are not aware that you are broke, they may slap you with repayment penalties. Talking to creditors can help you to avoid late repayment penalties and prevent you from getting into more debts.
There are many banks that allow loan restructuring and it can help you transition smoothly. Some creditors will understand your situation and provide you with ideas that can help you raise money while some may not care. Stay positive and focused and know that it is just for some time.
Get Rid of Unnecessary Expenses
When there is no more income, it is good that you get rid of unnecessary expenses. Spend on necessities only. For instance, at such a time, you may not need new clothes, Netflix, or the internet. All you need to reflect through and see what you can do without. Look at your priorities and even how you can spend the least money on them.
Until you are back on your feet, you need to develop a culture of spending only when it is very necessary. You may also need to beat addiction when you are broke. For instance, if you are addicted to alcohol or wine, then you need to learn to live without it. You are doing all this to ensure that whatever you have is used only on essentials and t can last longer.
Every time you spend time pitying yourself that you are broke because you lost a job or whatever reason it is, you are fueling your mind with negative energy. It is normal to get worried and feel pity for yourself, but it should not deter you from making progress. As such, you need to find something you can do regardless of how much money it can bring it. This way, you will get rid of negative thoughts.
For instance, you can volunteer to work in a store. Alternatively, you can turn your hobby into a job. Essentially, you are looking for a way to survive and stay busy to avoid negative thoughts. If you can’t get something to do, you can learn new skills which can help you get a job. For instance, you can learn a new language or some freelance skills and start generating an income.
Monitor and Adjust
The other thing that you need to do is to adjust and continuously monitor your spending. You need to adjust to spending on essentials only. Get used to living without the things that you previously had. From time to time, monitor how much you are left with and how long it can take you. Make the necessary adjustments from time to time if you realize there are changes you can make to your expenditure.
Get Appropriate Help
Sometimes the situation may get out of hand and life must continue. For instance, if you are too broke ad you do not have money for essentials like food, and then you need to consider getting help. You can talk to your family or friends and see how they can help you. They may not be in a position to give you money as such, but they can cater to your needs. For instance, you can take dinner at your friend’s place. There are also other social programs where you can get help. The point is, see what works for you and get helped.
Start Investing and Look for Alternative Sources of Income
If you only have one source of income, then you are a step away from poverty. It is good that you start investing once you start making an income. This will serve as a backup in the time when you go broke. Take one step at a time, start small and continue growing your investments with time. They may not be generating a lot at the moment, but they will help you in the future in case you go broke.
Going broke is part of life and it is not a permanent situation. Becoming broke can help you come out better if you are taking proactive steps and remain positive. The thing that you need to do is to find a solution to your situation. There is no harm in becoming broke, but how you handle the whole situation will determine your fate.