Financial Crisis – We’ve all been there, right? One moment everything is going according to plan—bills are getting paid, savings are growing, life is relatively calm. And then bam—a financial crisis hits. It could be anything: a sudden job loss, an unexpected medical emergency, a major market crash. Whatever it is, it feels like the rug has been pulled out from under you. I’ve personally faced a couple of financial setbacks in my life, and trust me, it’s not a fun place to be. But after some trial and error, I’ve learned a few valuable lessons that I wish I’d known sooner. So, if you’re facing a financial storm right now, or just want to be prepared in case one hits, these four steps will help you stay afloat.
How to Survive a Financial Crisis: 4 Key Steps You Must Take
Step 1: Assess the Situation—Don’t Panic
I get it—when the financial sky starts falling, it’s easy to freak out. When I first faced a big financial crisis, I had that sinking feeling in my stomach, thinking, “What now?” There’s this urge to do something fast, but one of the biggest mistakes I made early on was rushing into decisions without fully understanding the situation.
First things first: you need to take a breath. Sit down, grab a cup of coffee (or tea, whatever works), and really assess where you stand financially. List all your income sources, debts, monthly expenses, and any assets you have. Seeing it on paper (or on a spreadsheet) can be eye-opening.
For me, doing this exercise was a total game-changer. I realized that, while things weren’t ideal, they weren’t disastrous either. There were a few things I could cut back on, and I wasn’t in as much debt as I’d thought. That clarity helped me breathe easier. The goal here is to get the facts so you can make smart decisions, not emotional ones.
Step 2: Cut Back on Non-Essential Spending
Alright, this one is tough, but it’s also one of the most important. If you’re going through a financial crisis, your priority needs to be conserving as much cash as possible. I know it feels like a punishment, but cutting out non-essential spending will free up funds to pay down debt, keep the lights on, or put food on the table.
I’ll be the first to admit that I used to treat little luxuries like going out for dinner or buying new clothes as “essentials.” But when things got tight, those little habits were the first to go. Suddenly, Netflix subscriptions, dining out every weekend, and random impulse buys at Target were off the table. The key here is to focus on the basics: food, shelter, transportation, and health.
One tip that really helped me was looking through my bank statements for recurring payments. You’d be shocked at how many small subscriptions you forget about—streaming services, gym memberships, magazine subscriptions. If it wasn’t necessary for survival or productivity, it got the axe.
Step 3: Prioritize Your Debt and Build a Safety Net
One of the most stressful things during a financial crisis is feeling like you’re drowning in debt. Credit card bills piling up, loans that seem impossible to pay off—it’s overwhelming. When I hit my rough patch, I had to get real about my debt. I started prioritizing what needed to be paid first: high-interest credit cards or payday loans, for instance. Debt that can really compound quickly should be tackled right away.
The key to surviving a financial crisis is creating a buffer for yourself. You don’t want to end up in a situation where you can’t even cover a small emergency because you’re drowning in bills. Start by paying off high-interest debts first (I recommend tackling one at a time—snowball or avalanche method, whichever works for you). Once you’ve knocked out the more urgent debts, you can focus on building a small emergency fund.
I can’t tell you how much relief I felt once I had a small cushion, even if it was just a couple hundred bucks. It felt like I had more control over the situation, and I wasn’t panicking every time an unexpected expense came up. If you can, try to set aside a few months of living expenses to avoid adding extra stress down the road.
Step 4: Look for Ways to Increase Your Income
Now, I’m not going to sugarcoat it: making more money during a financial crisis is hard. It feels like there’s just no time between working your regular job and managing everything else. But honestly, finding a way to bring in extra cash is one of the best ways to weather a financial storm.
It might not be easy or glamorous, but there are tons of side gigs out there—whether it’s freelancing, tutoring, or delivering groceries for apps like DoorDash. When I was going through a rough patch, I started picking up freelance writing gigs in the evenings after my day job. It wasn’t a ton of money, but it helped ease the financial pressure.
The key to this step is not to fall into the trap of feeling like you have to go big or go home. Sometimes it’s about consistency. Even just picking up an extra $100 or $200 per month can make a huge difference in your ability to stay afloat.
You can also look into passive income ideas, like renting out a spare room, or selling unused items. Whatever works for you. The more streams of income you can create—even small ones—the better.
Final Thoughts: Stay Calm, Stay Focused
Surviving a financial crisis is like running a marathon, not a sprint. The biggest mistake I see people make (and I’ve made this mistake too) is acting impulsively and then making the situation worse. Take a step back, think things through, and take it one step at a time.
These four steps—assessing the situation, cutting back on spending, prioritizing debt, and looking for ways to increase income—are your game plan. And, as hard as it might be, staying calm and patient is key. Things might not turn around overnight, but with a bit of strategy and perseverance, you’ll make it through.
Remember: you’re not alone in this. Financial crises hit everyone at some point, and while it might feel like you’re drowning, the storm does pass. Take it one day at a time, and trust that with the right steps, you’ll come out stronger on the other side.
