A few careful stitches can easily repair your torn financial umbrella

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By: Good Nelly
on 20th Mar,2013

You must have heard that one should save money for a rainy day.
A few careful stitches can easily repair your torn financial umbrella

You must have heard that one should save money for a rainy day. However, what will you do when you're in the midst of a heavy rainfall, just at the time when your funds are nearly exhausted and the financial umbrella has torn?

Although the condition of the economy is looking brighter - auto sales, stock market, housing market are all improving, yet there are still lots of ominous signs. Unemployment rate is still refusing to go into a downward spiral and so is the credit card debt.

People born between the year 1980 and 1984 are more likely to have nearly $5500 more in credit card debt than their parents. Living on monthly paychecks will simply not do in this present economic condition. It does not provide any financial cushion. This is what an Albert Williams, assistant professor of economics has to say. According to him, family members, relatives and friends offer the much needed financial cushion to people.

In case your personal finances have gone into a downward slide, don't lose hope. If your financial umbrella has torn, then a few careful stitches can make it strong again.

Check out some steps to get a strong and firm grip on your finances.

1. Take care of your necessary bills first: It is difficult to differentiate between multiple bills. However, there will be some bills, which need to be paid first. Those bills should be on the top of your list. For instance: mortgage, food, medical bills, education loans, insurance, etc.

Mortgage should always get the first preference since you have to live at your house. You just can't afford to lose it. As far as food is concerned, you can somehow survive on budget-friendly vegetables, fruits and cereals.

Sometimes, it becomes really difficult to prioritize bills. In such cases, what you need to do is, follow a 10-10-10 rule. This means you've to think the consequences of making a financial decision in the next 10 minutes, 10 months, and 10 years. This will help you make a proper decision.

2. Be rational and practical: This is not the time to be emotional. This is the time to take quick action. Call your creditors and request them to give you some more time to pay bills. Just tell that you'll pay the bills in the next few weeks for sure.

If the scenario is really very bad - your creditors have filed a lawsuit against you, then may be it is high time you contact a financial adviser. There are many advisers who are ready to give counseling free of cost.

3. Have a discussion with your family: Tell your financial condition to your parents, wife and best friend. Discuss your financial problems with them. Sometimes, your stress level comes down just by having a frank discussion with your friends and family. They can give you good suggestions and tips.

4. Trim down your expenditures: Go through your bills and start looking for the areas where you can reduce your expenses. For instance: you can finally give up your Netflix subscription or change your existing cell phone plan. You can consider selling your car even to save on fuel cost and insurance premiums.

It is very easy to get worried when creditors and debt collectors call you time and again regarding payments. Don't get so much worried that you make major financial blunders. Think from your head rather than from your heart. A wise and smart financial decision can indeed help you alleviate the stress.

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