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Finding yourself in a financial pickle or, worse, in debt, can be pretty scary. Getting untangled isn’t always easy – but it can be done! Here’s what to do when trouble strikes.

1. Know what you’re dealing with

It’s perfectly natural to want to avoid pain – so when your finances get in a muddle, it’s tempting to just bin bank statements and carry on spending. Unfortunately, overestimating the threat (while underestimating your ability to cope) can turn a molehill into a meteor! If money’s stressing you, don’t let it slide – do the detective work first.

  • Are we talking an unexpected bill, several missed payments or mounting debt? How much are you short by?
  • How is it affecting you? That might be sleepless nights, extra costs from interest or penalty fees, or the impact on your usual bills and household costs.
  • Make a budget. The more detail the better, though in a pinch three things will do: how much money you bring in every month, how much you spend, and the difference between the two.

Taking stock may be enough to show you how to dig yourself out of temporary skintness, whereas you may need help with large debts or more complicated issues. Either way, try not to jump into quick fixes until you’ve scoped out all your options.

2. Fixing bumps in your cash flow

For minor holes in your cash flow, a bit of self-help may be enough to plug the gaps and get back on your feet faster.

First, check if your savings can plug the gap. Don’t have emergency savings? Consider this your wake-up call! Even putting away a fiver a week helps build a buffer – and a buffer means cash to fall back on without having to pay to borrow funds from a bank or commercial lender.

If the interest from savings doesn’t match what you’re paying lenders in fees and penalties, you may be better off by clearing your most expensive debts instead, but get advice if you need it.

Next up, check your budget and ask:

  • Can I pay less? Ditch, pause or cut back on unnecessary spending first – that’s anything you can live without! Then take a fine-tooth comb to your regular payments (mortgage or rent, utilities, even groceries) and see if you can switch providers for cheaper deals.
  • Can I earn more? Could you get extra shifts or ask for a pay rise? Are you eligible for charity grants or State benefits? Could you make extra cash on the side from your skills, time or hobbies?

Funnel savings or earned extras towards your cash crisis: if you can, get it paid off before it affects your ability to meet your other commitments.

3. Get the right help

If you’re worried about debt, it’s really important to get impartial advice from someone who know what they’re talking about – especially before borrowing more cash. Try StepChange, National Debtline or Citizens Advice.

You may also be able to get advice, support or friendly words from your school or university, your employer, or from a union or professional organisation you’re affiliated with.

If money worries are wrecking your mental health, diet, sleep or relationships, ask your health centre about counselling, support services or medical help. Don’t be shy about investing in yourself when you need to!

4. Talk about what’s going on

Talking to strangers about your money woes might sound as appealing as a Spice Girls reunion, but speaking up can take a load off. More importantly, it can stop associated costs from getting out of control.

  • Find out the process for getting support (and, if you need it, time off) if money worries are affecting your work or studies: approach your HR or student welfare contact.
  • Tell your bank. Yeah, it sounds masochistic, but they may be able to snooze penalty fees or extend your overdraft.
  • Have a good moan to friends and family – but take advice with a pinch of salt. If you’re after solutions, go to a professional!

5. Apps that can help in a cash crisis

Have a look in your app store to see what’s availble:

  • A budgeting app. If you’ve never made a money plan before, make it easy on yourself!
  • A money tracker. Whether you buy in cash or cash, get yourself an app (or a notebook) and log what and where the money goes.
  • Your bank’s app or, if your accounts are spread about, a money dashboard. Now’s the time to get super nosy about your balance, outgoing payments, and any potential issues on the horizon.
  • mySupermarket (also available online): an easy way to see if swapping your supermarket will save you cash.
  • Olio: if you’re in a real pinch, this app can help you find free food in your area, whether from neighbours who have over-stocked or local caffs getting rid.

Where do you go from here?

Hopefully there’s enough guidance on this page to push you in the right direction. That means finding out what shape your finances are really in, and what kind of support you need to get back on track. Asking for help isn’t a sign of weakness – if anything, it’s like asking a financial advisor how to make the most of your investments. There’s tons of good support out there: make sure you get it!

Keep control of your cash flow with Oval Money!