As children we don't think much about money - that's something for adults to worry about. Somehow we think that reaching adulthood means money will automatically start rolling in, but that's far from reality. In actuality, bills pile up draining your bank account before you have time to save money.
Because kids aren't taught financial literacy in school, many people don't realize how slippery a slope debt is. When you live paycheck to paycheck, pretty soon the budget is stretched thin and all it takes is one unforeseen expense for the debt train to start rolling down the tracks. If it's not managed correctly then your credit score suffers and the real problems begin.
No one wants to live in their parent's basement forever or owe a credit card company money for the rest of their life. The actions you take for financial independence now will determine your near future. But even if you're trying hard today, unexpected events can derail your progress.
When you're faced with a tough situation during financial recovery you've got to play it smart and find solutions that work around bad credit.
Avoid Traditional Payday Loans
A lot of restrictions were put on payday loans in recent years because they were rather predatory. For many cash-strapped individuals with poor credit scores payday loans seemed like the only viable way to get quick money in an emergency. But that financial tool is nothing more than a band-aid that will hurt like hell when you try to get rid of it. High-interest rates and fees tend to create a revolving door of debt that's hard to pay off if you're already financially strained.
Using a payday loan alternative from a company like Blue Trust Loans is a much more brilliant financial move if you need cash on hand quickly. Small personal loans can be issued in a day as long as you aren't in bankruptcy and can meet the other minimal requirements. The repayment terms are much more favorable, which makes it easier to actually pay back the loan rather than racking up more debt.
Remember, you should only take out a loan - even a small one - for an absolute necessity. When you're credit score is bad the loan terms are going to be strict and can be costly.
Trade Labor for a Personal Loan
Asking family and friends for money is probably the most embarrassing thing I can think of outside of getting pantsed in public. It goes against all the tenants of financial independence. Of course, family and friends want to help you, but it doesn't make asking for help any easier.
What can soften the blow and help keep some of your dignity intact is coming up with an agreement to trade labor for a personal loan. Does a friend need a fence built? Offer to help them out in exchange for extra cash. Does your sibling need a babysitter once a week for the next few months? Grab your board games and be the short-term nanny.
Long story short, if you need cash and can't get a loan on your own offering up your help or expertise makes the deal better all around. You won't feel like a total mooch and the loved one knows they're at least getting something for their money even if you can't pay them back immediately. Consider the labor as a substitute for the interest you would have otherwise paid.
Check Local Agencies That May Offer Assistance
It isn't a guarantee, but there may be local agencies and organizations that can provide financial assistance for people with poor credit. In most cases, they offer one-time assistance so it's not a solution that can be used repeatedly. Many local municipalities also have programs to help residents cover the cost of utilities and housing, which can free up money for other expenses.
Even if the agency doesn't provide the monetary relief they may be able to provide financial guidance, legal advice, or point you in the direction of another organization that can help. Keep in mind this solution may not be the quickest, so it's best to do your research before an emergency happens.
