Getting Through a Financial Emergency
Very rarely there are financial emergencies as serious as the one our nation saw in 2020 with the economic downturn influenced by the Covid 19 virus. But in Oklahoma, financial emergencies are not unusual. The volatility of our two main industries, agriculture and oil, cause periodic downturns and job losses. Our Oklahoma weather also wreaks havoc for many people each year with the effects of tornados, ice storms, floods and other natural disasters. If you have a financial emergency due to lost wages or weather disasters there are a few ways to lessen its effects.
First, prioritize your budget to provide the essentials for your family. Shelter, food and transportation are the first bills that should be paid. Secondly, keep health, car and homeowners or renters insurance up to date. A sickness, fire or car accident without proper insurance would be devastating to an already strained budget. But you can call your insurance provider to see if there are ways you might save some money on premiums by raising your deductible or eliminating add-ons you may be able to live without.
Eliminate (if you need to) any non-essential. Cable or satellite TV, streaming services, subscriptions to gyms or the local coffee shop can be eliminated. Stay out of stores as much as possible, as the temptation to make unnecessary purchases is hard to resist. If you must go in for essentials, take a list and stick to it. Eat at home rather than eating out, it is easier on your budget. Carry your lunch to work.
Find out if there is a food bank in your area if you feel food-insecure. Don’t be embarrassed to use a service being provided for just this very reason—an emergency. Some utility companies have plans to help out those who are in an emergency situation. Check to see if your particular utility provider is one of these and if necessary you might delay an electric or gas or water bill. (Those amounts will be due at a later time, however.)
If you can’t pay ANY bill remember that good communication is key! Call the creditor and explain your situation. They may be able to help by letting you skip a payment or two (adding those payments on to the balance) or by letting you make a partial payment. Be sure to get those agreements in writing so you can refer back to them in the future if needed.
Avoid putting extra charges on your credit card if possible. And if it is really necessary, be very careful about what you charge. Remind yourself of your credit limit and do not exceed it. Be aware also, of your interest rate.
If you still have some income, you might adjust or temporarily stop payroll deductions to savings or retirement but don’t be tempted to cash in your retirement account. You will be hit with penalties and taxes which could take away a big part of your account.
If you have an emergency account, this is the time to use it. A job loss is a genuine emergency. But remember, this is a temporary situation. Be strong and know that you are capable of cutting back on spending for a time until you get another job or your employer calls you back.