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Ten Steps To Consider In The Event Of A Financial Crunch Or Crisis

Step 3. Examine your expenses.

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  • Check your medical expenditures to see if they can be decreased or if there is money you are leaving on the table. For instance:
  • Check to see if you are leaving money on the table. For instance, see: Financial Assistance  Check to see if you qualify for government benefits at offsite link
  • Explore whether you can consolidate all or most of your debt into one loan, including switching credit card debt to a card with no or low interest. Consolidation can lower the amount of interest you pay on outstanding debt.  (How To Consolidate Your Debt)
  • Create a budget to help keep spending in line. 
    • The perspective you can gain just from creating a budget usually makes the process worthwhile. 
    • If you use it to help guide future spending, all the better.
    • To learn how to create a budget, see: Budget: Creating/Living With
  • Divide your expenses according to their importance:
    • Essential -- Core expenses
    • Discretionary expenses
    • Unnecessary
  • Starting with the most unnecessary expenses first, eliminate expenses you don't need in your life.
    • Start with your largest expenses, particularly those that happen all the time. For example, check your property and casualty insurance policies such as your Homeowners/Renters and Automobile policies. There may be some that you don't need, or that you can reduce the premium by doing such things as increasing the deductible.
    • If you need a medical procedure and will have to pay a substantial amount of money yourself, consider having it outside the U.S. in an accredited hospital. Going outside the U.S. for medical care is known as "Medical Tourism." (We have extensive information about "Medical Tourism").
    • As you have time, work your way down to your smaller expenses. A daily latte at $5.00, 5 days a week for 52 weeks adds up to $1,300 per year.
    • It's important to keep a few "luxuries" in your life that make you feel good. Just figure out how to do them less expensively. For example, instead of eating out three nights a week, eat out once -- or at a less expensive restaurant. 

Look at your taxes. Perhaps there are deductions or other means of reducing your taxes that you are missing. Reducing taxes by $1.00 is even better than earning $1.00. For information see: Taxes

If you are part of an economic unit, think in terms of the entire unitGet everyone together and discuss what everyone can do on their own to relieve your financial pressure.

  • Look independently at their expenses to see if you can come up with ideas of your own.
  • Create ground rules for your economic unit -- such as who spend how much on what. Agree not to question what the person spends so long as within their budgeted amount. If everyone knows their job, it will relieve tensions.
  • If you need someone to assist you for a while, instead of hiring expensive help, could a family member take advantage of an FMLA leave to care for you? The person may lose income, so do the math.


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