As far as being frugal goes, nothing stings quite like a major loss. Whether home foreclosure, vehicle repossession, stock market losses, business flop or bankruptcy, financial trauma in the form of a monumental investment loss or debt surrender can obliterate your frugal efforts going back decades or more. While the final hour is certainly not the time to act in order to prevent financial catastrophe, if indeed you’ve waited that long to make your move, the following may come in handy. With that said, nothing can be for certain in a hectic personal finance scenario.
When on the verge of losing your home: It’s critical to see whether or not you qualify for a mortgage payment reduction. Your mortgage payment shouldn’t exceed 31% of your gross monthly earnings. If it does, you may be entitled to a reduced monthly payment.
When on the verge of losing your car: Contact your lender immediately. According to the Better Business Bureau the average cost of a vehicle repossession is about $8000, so unless your car is worth significantly more than that, your lender will be willing to work something out either through deferment or refinancing.
When on the verge of losing stock portfolio strength: Seek the assistance of a financial consultant or analyst company such as Cavalry Portfolio Services. While dumping smelly stocks may mean less taxes owed, a quick fix through the eyes of an outsider can salvage seemingly hopeless investments.
When on the verge of losing your business: Get creative. Now is not the time to shrink up and give up. If business is slow, devise an inexpensive marketing strategy courtesy of social media. If funds are running out, visit as many financial institutions as it takes to secure another business loan. With that said, you should do the former before attempting the latter, as banks want to see potential before giving you the money to stay afloat.
When on the verge of filing for bankruptcy: Think long and hard about what you’re setting yourself up for. Essentially the next decade of your life will be credit free. While comforting to some, ten years is a long time to be denied the ability to borrow. Seek help from friends and relatives if you must, but make bankruptcy the absolute last thing you pull out of your bag of tricks.
The eleventh hour is the worst possible time to be making moves to prevent major money loss. But if that’s the time crunch you find yourself in, it’s either now or never. While the aforementioned possibilities to prevent a personal finance meltdown aren’t bulletproof, they’re about as good as it’s going to get in such a short amount of time.