Money shortage – 10 steps to get you out of financial trouble

Does a money shortage make you feel paralysed? Seeing yourself in a deep financial trouble is quite a stressful experience–a cold shower which can freeze your willpower to get out of it.

By: Hitesh Khan/

But if you don’t take action when you are facing money shortage, you are just like a drowning man who does not try to save himself. Sooner or later you’ll reach the bottom.

When facing money shortage, don’t give up, but swim!

If you take immediate action, you will be able to get out of the trouble.

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Here are ten things you must do if you want to overcome your financial troubles:

1. Face the problem. People tend to deny situations they don’t like. But closing your eyes in front of the increasing debt figures will not make them disappear. The first step to solve the financial trouble is to recognize and admit there is a problem.

2. Create a plan. Create an action plan with numbers and terms outlining when and what to do. The next steps in this article will suggest you some of the targets in this plan. Print it out and stick it on the wall or on your fridge. Just having the plan will not solve your problem, but will get you much closer to taking action.

3. Cut the unimportant expenses. Once you have realised that you are in trouble, don’t be shy about it. Cut any expenses for dining out, going to expensive bars with friends, shopping, unnecessary home improvement, and all that. A harsh problem requires harsh actions. You will get back to doing your favorite things once you get out of the slough.

The harsher you act, the sooner you’ll emerge from your money shortage.

4. Stop using credit cards. The biggest mistake people in trouble do get further down on credit. This is a counterproductive approach and you are just adding fuel to the fire. You need radical solutions, and one of them is to stop using your credit. If need be, you should take a personal loan with lower interest to cancel out your credit card debts.

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5. Negotiate your loans. The debt you already have will not disappear. And since you are already in trouble, it’s probably hard to pay everything on time. Try negotiating for better terms.

6. Sell some stuff. How bad do you need to fix your financial situation? You may think selling of selling your home and moving into a smaller one is a disaster, but picture yourself broke. If you have made the wrong decision of buying too many, too big, or too expensive things, now you have the chance to fix them. Fortunately we live in a free market and everything can be sold. You can always buy items again when you are in better financial shape.

7. Work more. It is probably obvious, but earning more money may help you execute your plan faster. Remember, your struggle will be temporary, so give it everything you have. Picture yourself and your family happy and secure again, and you’ll have the motivation to take on some extra work. If your current job does not offer options for extra work, get additional job, do some work from home freelancing, or even get a second job.

8. Ask for raise. What’s the worst thing that can happen to you if you ask for raise? To be fired? If there is really a risk to be fired just for asking, you’d better leave that job anyway. The worst thing that can really happen is your request to be rejected. Then why don’t you try? If you are facing money shortage there is no better time to ask than now.

9. Ask friends and family for help. Doing this may be your last resort. If you have developed a habit of not relying on friends and family, you have probably not asked them for financial help so far. So, now is the time to do it. If loans from relatives are already part of your trouble, forget about asking for more.

10. Track your progress. If you keep track on your progress, you’ll be motivated to do better and better with your efforts. Keep notes about the savings you make, the debt reduction, and the additional income you earn. Talk about it and let others encourage you. Enjoy each small improvement to your financial situation and build upon it to tackle the next goal.

Money shortage happens to the best of people, and just a few innocent mistakes can quickly spiral out of control. The worst thing you can do is to deny the situation and make no effort to solve it. Pull yourself together and attack the problem with the sometimes drastic and radical measures required, and you’ll be in a better financial situation before you know it.

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