Helpful Hints for Avoiding a Financial Emergency

DSC_0150In Emergency Survival Kit: Tips for Dealing with Financial Emergencies, we identified the two emergency assistance programs that are available at Helping Hands Hawaii. Over the years, the Emergency Assistance Program (EAP) and Pūnāwai Program have assisted thousands of families in need. They have allowed families to stay in their current units without becoming homeless. They have helped households avoid utility shut off. And, they have empowered families to transition out of homelessness and into new homes.

But, what can people do to avoid such stressful situations in the first place? Here are some simple tips to help you prepare for and avoid falling into a crisis situation.

Tip 1: Prepare, Prepare, Prepare!
Set aside money in an emergency savings fund, even if you can only put away a little each month. Your savings will grow over time through compounding interest.

Tip 2: Plan a Budget!
Create and stay within a spending plan or budget. Being aware of incoming and outgoing funds will help you to manage your money better.

Tip 3: Want it or Need it?
Cut down on unnecessary expenses. Only buy what you need. Save up for things that you want. When you’ve reached your savings goal, take a temperature check. Do you really still want the item?

Tip 4: Eliminate Unnecessary Expenses
Are you using all the features on your cell phone? If not, downgrade to a model with less functions or refrain from upgrading to the latest model. Think about other expenses that you have and can do without. Cut the cable, cancel unneeded monthly subscriptions and limit other recurring bills.

Tip 5: Be Open and Honest
Let your landlord or utility provider know what is going on and talk to them about working out a payment plan within your means. Don’t wait until the last minute. Approach them as soon as you know that you may have financial challenges.

Tip 6: Notify Financial Institutions
Speak to any creditors or lenders about reducing or deferring payments until you get back on your feet. Again, provide them with as much notice when possible.

Tip 7: Research your Options
Seek out assistance from organizations in the community. Call multiple organizations to determine if you are eligible for emergency assistance. Ask your landlord, utility provider, creditor or lender if they specifically work with any organizations that may be able to help.

Tip 8: Increase your Income
Apply for additional benefits (such as SNAP or SSI) or for employment to increase your monthly income.

Tip 9: Stay Away from Pay Day Loans or Money Mart
It’s a quick fix, but the interest can build if you aren’t able to pay them back on time. This can cause you to be in even greater debt and increase your financial distress.

Tip 10: Ask
Talk to your family or friends. Work out a payment plan with them that is within your budget to pay them back over time.

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