10 Ways to Deal with an Unexpected Financial Disaster

Financial disaster making woman cry

You can prep and plan all you want for the unexpected, but it will still occur. In fact, that’s why it’s so gallantly referred to as the unexpected. No matter how much planning and thought you put into the circumstances that go along with life, you can never predict precisely what will happen, how you will deal with it and how to avoid it.

Perhaps the most disastrous unplanned occurrences in life have to do with your health and your finances. Both can be a blow difficult to come back from, and both can cause you serious pain and worry. That’s why you have to prepare as much as you can ahead of time so that potential financial disasters do not cripple you and your family.

It’s not easy, but it is something you need to do. Unexpected financial disasters are unavoidable, but there are a few things you can do so that you can deal with them when they do occur. Some things can be done ahead of time – before you even know what potential disaster is on the horizon – and some in the moment.

M&T Bank storefront

Plan an Emergency Account

The most important thing you can do for yourself and your finances is have an emergency account. This is a bank account that contains a minimum of $1000 to be used when emergencies occur. Perhaps your idea of a financial emergency is a bit more than this paltry amount, but it does help to have it there.

You just never know when you have to meet an insurance deductible or plumbing emergency, and this account will allow you to do that without breaking the bank and outdoing your budget.

Man looking at financial documents

Have a Savings Account

Savings is different than retirement. Many people are not aware of just how so. They say their savings is their retirement, but it’s not the same. Sure, you can save for whatever you want to save for, but you should have a savings account that helps you out when things get tough. You have no idea when you might lose a job or need extra funds to pay for something, so this account is going to come in handy more than you know.

Woman panicking looking at financial paperwork

Stay Calm

When financial disaster strikes, the most important thing you can do for yourself and your family is stay calm. Do not panic. Be calm and be cautious. Do not overreact or panic. You need to sit back and make a rational decision to keep from panicking. Then you can sit down and really think about how it is you want to handle this situation.

Woman handing over credit card

Do Not Make Rash Decisions

Do not make any rash decisions. Go ahead and think logically and carefully about what it is you want to do when financial disaster strikes. The faster you make decisions, the worse the situation can become. You have to sit back and stay calm when it comes to making decisions of this nature because they are the ones that are going to have the most impact on the future of your finances.

Person on computer

Make a List of Priorities

Now that you’re calm and thinking logically, it’s time to make a list of your priorities. What do we mean? We mean, make a list of all your financial obligations in order from most important to least. This tangible list is going to help you decide whether or not there is any wiggle room, what you can pare down and how you will proceed.

Person writing check

Talk to Your Lenders

Do you have a need to pare down expenses for a while? Call your lenders. Did you know they are more willing to work with you to get through financial hardships if you talk to them about it? For example, many car note lenders are willing to let you forgo a few payments in an emergency and make them up at the end of your loan. It never hurts to call and ask what someone can do to help you.

Putting money into piggy bank

Get a Second Job

If you need to get another job, get one. If you have to do something to make more money, do it. There is no reason you cannot make more money. It might not be fun or enjoyable, you might hate it and it might make you miserable, but sometimes that’s what you have to do to make ends meet when a financial crisis occurs.

Money with tool on top

See if there is any Assistance Available

There are always programs that offer temporary assistance to those who are going through financial difficulties. For example, if you lose your job, your state might be able to offer you assistance purchasing groceries until you are back on your feet.

Your electric company might be able to offer you assistance in paying your bills for a while. You just have to understand that this is not an answer to your problems to be taken advantage of; it’s a temporary assistance program to help you out while you get back on your feet.

Exchanging money and shaking hands

Budget Even Harder

This is the most important thing you’re going to do during a financial emergency. You are going to budget even more than ever, and you are going to like it. You are going to pare down every possible expense you have.

You are going to save everything you can possibly save in every single aspect of your financial life. You need to cut as many things out of the budget as possible and stick to this until your finances are back in order.

Pile of money

Replenish Your Emergency Fund

This is very important. It might not be easy at first, but even if you can only offer $5 a week to this fund, do it. You need this fund. The more you have saved for emergencies, the less likely you are to find yourself in a financial bind again in the future. It’s something that you should consider doing before, during and after financial crisis to ensure that the monetary portion of your life in intact at all times.


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