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Dealing with Financial Struggles without Adding on Debt

How to Handle Financial Problems without Increasing Debt

When you’re dealing with financial troubles, one pitfall that you’ll want to try to avoid is going into debt. For example, if you lose your job, end up with reduced hours, or find yourself suddenly hit with a big expense, it’s very easy to wind up using your credit card for purchases and adding on extra debt. Credit card debt can be especially problematic, since cards often carry very high interest rates that makes them tough to pay down even at the best of times.

The good news is that there are ways to deal with financial struggles that don’t involve taking on additional debt.

Identify your Issues

One of the first steps to dealing with any problem is to take the time to fully understand the issue. What problem are you faced with? What’s your current situation? How much money do you need to deal with this problem? What timeframe are you dealing with? The more you understand about your issue and your situation, the better. This information will help you solve your problem.

Understand your Emotions and Triggers

If you’re dealing with a stressful financial situation, it’s easy to act emotionally. Unfortunately, emotions can cloud your judgment, causing to make rash or impulsive decisions. One way you can keep yourself in check is by pausing before you make a big decision. Write down how you’re feeling, think about the situation in depth and, if you’re not in the right emotional state to decide, commit to putting it aside and coming back later.

It’s also important to recognize your spending triggers. A lot of people spend more when they’re stressed, tired, or feeling down. If you know what situations cause you to make poor financial choices, it becomes easier to correct your behaviour and avoid doing things you may regret later.

Reduce your Spending

If you’re dealing with a financial problem (such as an unexpected expense, a job loss, or a medical bill, for instance) it’s important to cut your spending wherever you can so you can afford the new expense. Look at your budget and see where you can make changes. Any money that you can cut from your spending is money you won’t have to borrow.

Create a Realistic Plan

When you’re faced with financial difficulties, the best way to deal with them is to plan. Figure out how much money you need to deal with your issue, then create a plan that helps you meet this goal.

It’s important to be realistic. If your car breaks down, can’t be repaired, and you need to buy a new one, for example, it will likely take you a while to save up if you don’t have any savings. Deciding that your goal is to buy a new car this month likely won’t work for you and will just leave you feeling anxious. Instead, create a plan that is financially possible and come up with a short-term plan to deal with your transportation issues in the meantime.


When you’re dealing with finances, it’s important to make priorities. Very few people are in the position to afford everything they want. When you’re making spending decisions, you’ll need to determine what is most important to you and put your money towards what matters most. These priorities will be different for each person.

If you’re going through financial struggles, it becomes even more important to prioritize your spending. With less money available, it is crucial to spend every dollar wisely.

Talk to your Creditors

If you’re experiencing financial difficulties, talking to your creditors could be helpful. For instance, if you lost your job or if you have become ill and are unable to work, telling your creditors this information might be helpful. While creditors are under no obligation to help you out, if you have a good history with the creditor and a track record of paying your bills on time, they may be willing to modify the terms of your loan to make it easier for you to pay.

For instance, your creditors might be willing to reduce the amount of interest you are paying, which will save you money. They may also propose extending the timeframe of your loan, which could lower each monthly payment, making it more manageable.

If you do talk to your creditors, be honest and straightforward. It’s important to know what you can afford to pay so you’ll know if your creditors are making an offer that makes sense for you.

If your creditors agree to change the terms of your loan, make sure you get the new terms in writing.