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How To Cope With A Cash Crisis? Try Exploring 101 Ways

If you are hit with a serious money crisis and you find yourself scrambling around for emergency money, here is how to assess your situation and get back on your feet.

All of a sudden and without warning, your roof begins to leak! Your hot water heater shuts down and your computer goes up in smoke, the clutch needs to be replaced in your car and you have been told that you might be made redundant!

As you sit, stunned and you ponder an exit strategy you receive a friendly letter from the Tax man explaining that they miscalculated your taxes in 2009 and you are going to have to pay back more take the following year!

This kind of money emergency requires your immediate attention.

What Do You Do?

The above scenario looks like a money emergency of biblical proportions. You are afraid to open your front door for fear of finding a swarm of bailiffs!

Thank goodness, there are things you can still do to restore your financial life and equilibrium—and perhaps even fend off future misfortune—without having to declare bankruptcy.

Wherever there are money woes, you can be sure to find crippling emotional setback.

Avoid it all you try, you might just as well begin to prepare for the devastating fiscal and the emotional fallout that is sure to come. You will need to explore coping techniques if you hope to make a solid financial comeback.

Whenever a money emergency hits, it will be your ability to deal with the individual pitfalls that will hold you in good stead.

It is when a series of financial hits come your way that the stress will tend to accumulate and make your life much more difficult to cope.

You will not be so overwhelmed when you can calmly and rationally look at each individual problem as it arises. If you sit, back wringing your hands with worry and allow all of your emergencies to pile into one; you will find yourself down for the count.

Keep Calm, Stay Focused and Plan for Success

Calm must take center stage. You must NEVER allow yourself the luxury of panic.

There is no one there for you to just take over. You are all you have.

The more you panic, the less effective you will be. You need to keep a very clear head to be able to sit down and come up with an appropriate plan.

Be aware of your own tendency to sabotage your plans further. It is only when you are at your most calm that you will be prepared to get to where you need to be and then overcome.

Being Calm is the First Key to Managing a Money Emergency

At even the first hint of a money emergency, it is important not to act right away. If you do, you will inevitably make a mistake!

First, before you can manage your finances again, you have to first manage your emotions. You absolutely must regain your balance before you can even begin to make a plan.

If your money emergency demands that, you act quickly, think first about seeking the advice of a debt counselor, money coach or financial planner.

Whenever possible think about seeking out the aid of a financially perceptive friend or family member who can help you to come to a clearer perspective.

Remember the old adage that “two heads are always better than just one!” You will not need to make major cash investment if you are strapped. Look for a planner who will give you a one-hour consultation for £150. Often times this will be all you will need to securely turn the corner.

Time to Crunch Some Numbers

The first step toward establishing financial stability is to step back, take a deep breath and assess the damage.

Possibly one of the bigger mistakes people make when they are in a financial crisis is not being prepared to make a clear assessment of where they are.

You can easily become overwhelmed. However, totaling up the damage serves two important purposes.

  1. You need to know exactly how much you owe how much money you have in hand and what it will take to cover the distance between the two.

  2. You will want to avoid any other mishaps, such as penalties, further repairs, missed deadlines, etc.

If you are not properly prepared, you must become prepared on the spot. Any type of money crisis will catch you unaware and you will feel cornered.

Wouldn’t it be ideal to be ready and waiting for the crisis? How likely is this to happen to you, though?

Most people will be at least somewhat prepared. If the crisis is not too dire, they will be able to handle it ok. Some will be sunk from the get go. The idea is to not be overwhelmed and to have a good plan of action, no matter how little or how a lot. You need to be entirely prepared to deal with any sized setback.

Ideally, those unexpected expenses could be covered by the funds in the Irregular Expenses account in any good budget.

Unfortunately, though, there is always a common problem. You might well have an emergency stash—but its most often depleted. This same problem affects the majority of us so take heart.

At about this time many people make the mistake of turning to plastic for relief. Resist this one.

You will only be transferring your problems from one pocket to the other. On the other hand, if you are sure you can handle using credit cards to deal with a cash emergency, you had better be sure you could pay them off when the time comes. Otherwise, why add yet another debt and another problem. Eventually, it will all catch up with you.

If you are truly running while on your last leg, consider taking out a home equity line of credit. This will work for some. The interest is tax deductible, but those are not fixed rates. Be smart about this remedy, though.

Unless you plan to pay back the amount you borrowed promptly, it can end up costing you more than you thought—especially if you’ve already depleted your own equity.

The Idea is to Make a Smart Decision and Not a Rash One

Think well before borrowing from any insurance or saving plans you may already have set in place for the future.

There are loopholes that allow you to do so, but there are also hidden costs—never mind potential taxes, penalties and other consequences.

Keep in mind that if you were to lose your job, you would have to repay the loan immediately, or be taxed as though it was a withdrawal. This remedy could be very costly in the long run.

Saving money is a calm state of mind. Before you can even begin, you have to say NO to all of the spending—and stop thinking that you actually need all the stuff you’re spending all of your hard-earned money on. Just don’t spend.

That is simple enough!

Say NO to all of the excuses and reasons for why you feel you MUST spend. Tell yourself, NO MORE EXCUSES, PERIOD! The very next time you want to buy something, take the £50 or £100 out of your wallet, instead and stash it away somewhere. Do you see the logic? That’s why you call saving. You don’t end up with stuff; you end up with the hard-earned MONEY.

Another new way of thinking will be to think of frugality as your savior. Become a confirmed cheapskate and do as your most frugal friends do.

Pay special note to the fact that frugal friends fix the shower curtain instead of buying a new one. Sit down with Depression-era relatives and ask about how they made ends meet despite even desperate times. You want to learn to economise.

The next step in rethinking is to become inspired. Spend all of your spare time online and search out those frugal websites.

Look at “living cheaply,” “frugal living” and “voluntary simplicity.”

You’ll find a ton of good websites devoted to living on less, such as:, and

Learn to turn shopping time into activity time. Go for a bike ride, walk down memory lane, take the kids to the park; do anything and everything that you can to take your mind off shopping and spending. It works!

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