Navigating Personal Financial Crisis: A Comprehensive Guide
Sometimes all it takes is a job layoff, medical crisis, or divorce to cause a personal financial crisis. According to Pew Charitable Trusts, only 40% of Americans would rate their personal financial situation as good.
Though it may be hard to believe that recovery is possible, please know that there are plenty of resources to help you get back on your feet. This article lists eight government, community, and online resources that can help you cover your living costs, feed your family, and get a new financial start. Find out how to reach financial recovery after a crisis.
How to overcome a financial crisis
While you are in the midst of a financial crisis it can be difficult to think straight, but it is important to keep a clear head and know that you can fix it. Here are five ways you can help yourself.
1. Assess your situation and create a realistic budget: List all your income sources, expenses, debts, and assets. This will help you understand the full scope of your situation and prioritize what needs attention. Once you have done this you can create a ‘bare bones’ budget. List out all the essentials that you need to live such as bills and food costs and cut out any non-essentials to stretch your resources as far as possible.
2. Communicate with creditors: It is important to let your creditors know about your situation as they may be able to help by offering reduced payments, deferment, or restructuring of your debt.
3. Prioritize your debt: Focus on paying off high-interest debts first, but if you can’t, at least make the minimum payments to avoid further penalties.
4. Don’t hesitate to ask for help from family, friends, or community organizations. Sometimes, just having someone to talk to can ease the burden and provide new perspectives. It can be difficult to ask for help but approaching the conversation with honesty can help. Be straightforward about your situation. Explain why you need emergency help, how much you need, and how you plan to repay or show appreciation for their assistance.
5. Explore Assistance Programs: Look for government and community assistance programs that can provide financial aid, food, housing, or utility assistance.
Eight ways to get financial crisis help
1. Unemployment insurance (UI)
When you’re employed, money is deducted from your paychecks to pay for unemployment insurance. If you lose your job, you can tap this insurance policy. Each state has its own qualifications and benefits, but if you lost your job through no fault of your own or are unable to work, you’re likely to be eligible. To apply for UI, visit the unemployment benefits website for your state.
2. Temporary Assistance for Needy Families (TANF)
States use TANF, commonly referred to as welfare, to help families overcome financial obstacles to their well-being. Vulnerable families can apply to TANF for cash assistance, and may qualify for help with housing, food, job training, and child care—TANF ensures that American children get their most basic needs met, regardless of the economic status of their parents. Apply for TANF in your state here.
3. Supplemental Nutrition Assistance Program (SNAP)
SNAP offers nutrition assistance to millions of low-income individuals and families, including those who have fallen on temporary hard times due to job loss, medical crisis, or other setbacks. In most states, benefits are accessed through a scannable debit card and are funded by federal taxes. The program works with states, nutrition educators, neighborhoods, and faith-based organizations to make sure families have enough to eat. Find out if you’re eligible for SNAP here.
4. Women, Infants, and Children (WIC)
WIC is a short-term assistance program for families with young children. It supports low-income women who are pregnant, breastfeeding, or parents of young children with nutritious food, nutrition education, and breastfeeding support or baby formula. WIC clinics can also help with referrals to other support services. Find out if you qualify for WIC here.
5. Crowdfunding
For those facing an acute financial crisis, it can be a challenge to ask for and receive help. Creating a fundraiser is a simple way for people to ask friends and family for help getting back on their feet. Starting a fundraiser can also help secure funds faster than government programs—on GoFundMe, for example, you get access to your funds throughout your fundraising, not just at its conclusion. Be upfront and honest in your fundraising story about why you need help and be sure to thank your donors when they support you.
6. Society of Saint Vincent de Paul
Acting on its mission to end poverty, this nonprofit takes a person-to-person approach to help those in need of social services and financial assistance. They’re committed to helping people with housing, food, transportation, utilities, clothing, and medicine. Find out what services the Society offers in your area.
7. Net Wish
Since 2002, an anonymous businessman from Philadelphia has handed out aid to families finding themselves in a financial crisis. If you need short-term help with basic needs or bills, Net Wish can help. Instead of giving you cash directly, this nonprofit will send you a gift certificate or prepaid credit card up to $200.
8. Gradient Gives Back
The Gradient Gives Back Foundation was founded to prevent families who’ve fallen on hard times from losing their homes. It awards mortgage or lease payment assistance to families across the United States. With the stress of a monthly mortgage payment relieved, families can catch up on other expenses such as medical bills. You can apply for Gradient Gives Back here.
Further reading: Tips for Building a Healthy Emergency Fund and Finding Financial Help for Single Parents.
Get back on your feet after a personal financial crisis
You can get the support you need to overcome a financial crisis—and we want to help you. GoFundMe gives your friends and family members a simple way to rally around you when you need it most. Get started today. We are here to guide you every step of the way, showing you how it works and answering any questions you may have.