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Facing Financial Hardship? Here’s 7 Essential Tips To Get You Through

Don’t you think it’s strange how money controls the world and yet we’ve never really taught how to manage it in school?

Instead we study things like…. Religion and algebra. 

Seriously? When was the last time you used an algebraic equation in everyday life?

So it’s hardly surprising that any normal person could, at some time in their lives, find themselves in a position of financial hardship. 

If you’re left wondering why the way you manage your money seems like such a struggle then I’m here to tell you you’re not alone. 

We jump from school or university straight into life, without so much as a one-to-one about the importance of personal finance, so it’s not surprising this can lead to financial difficulties.

In my case I went from University, where I had student loans to help me pay for things, straight into a working life in one of the most expensive cities in the world. And when you’re trying to settle into a new city, make friends and create your new life, paying your bills and setting money aside in a savings account is the last thing on your mind.

Paying rent, bills, loans and all whilst trying to find a job and keep my head above water meant that I quickly fell into financial hardship after university. I built up a large, semi-permanent overdraft, and got swallowed by my debt. 

swallowed by debt: financial hardship

I struggled to pay my rent and at one point I remember having nothing to eat except boiled rice with a little tinned salmon mixed in. It’s actually pretty filling! I won $100 on the lottery and it was like a gift from God, even though I’m not religious.  Even though I was dirt poor I managed to scrape through.   

You can read more about My Story With Managing Debt and how I got out of it here

It took me the next 10 years to realise I’d been lured into a bit of a debt-trap and to start figuring out how to make money on my own terms. 

But first I had to come to terms with my situation and recognise what financial hardship really was.

What is financial hardship?

Back in my 20s I was useless at managing my money and it got me into trouble. There wasn’t one single day where I realised I was facing serious financial hardship in my life. It sort of gradually creeped up over time and got progressively worse. 

But there were a few signals that I was heading that way. And they included:

  • Being unable to pay off my overdraft
  • Incurring regular monthly penalty charges 
  • Personal debt being sold onto collectors
  • Thinking that I could get away with it
  • Not understanding the significance of credit reports
  • Debt collectors turning up at my Mom’s house
  • Asking a friend for help with my rent
  • Struggling with feelings of anxiety, despair and hopelessness

Just writing this list out reminds me of the difficulties I faced when I didn’t know how to manage my money. 

Financial hardship is when a person cannot keep up with regular bills, payments or debt repayment. It can occur when your expenses exceed your income and it can happen due to poor money management or circumstances beyond your control.

Financial hardship can really damage your outlook on life and the feeling of being broke all the time and not managing your debt properly can be one of the hardest situations to find yourself in. 

A life-changing event can happen at any time in your life but if you’re prepared for the unexpected and financially resilient then you can create a strong and stable financial foundation to help you weather the storms ahead.  

And if you believe that financial hardship only happens to the poorest in society then check out some of the causes of financial hardship below. You might be surprised at how familiar some of these might be. 

Causes of financial hardship

It’s impossible to fix the problem of financial hardship without first identifying the underlying causes. 

That might seem obvious. But you might never really understand how much your shopping habit is costing you, for example, if you don’t take the time to audit what you’re spending money on in the first place. 

Let’s take a look at the main causes of financial hardship:

  • Zero knowledge or education in personal finance (I would say this applies to almost everyone who hasn’t picked up a book or read a blog about personal finance)
  • Personal issues such as relationship breakup
  • Job loss
  • Accident or illness
  • Unexpected medical bills
  • Separation or divorce
  • Shopping and maxing out credit cards
  • Victim of fraud
  • Gambling addiction
  • Alcohol or drug addiction
  • Poor investments
  • Retirement
  • High levels of debt

There’s very few people who have not experienced some aspects of the above points at some point in their lives. 

Financial hardship can affect anyone, regardless of your background. 

If you’re facing financial hardship the most important thing to remember is that you are not alone and that the solutions to your current circumstances are closer than you think. 

Your life’s not going to be transformed overnight, but once you begin to recognise what financial hardship looks like you can learn how to spot the signs in your own life so that you can begin to make the necessary changes and start your journey to a wealthier new lifestyle. 

11 Signs You Might be Facing Financial Problems

Sometimes it can still be difficult to know whether or not you’re in real financial difficulty or not.

signs you may be facing financial hardship

After all, it’s not as though there is an easy measuring device that can tell you exactly how ‘financially hard’ your life is. 

But if you can answer yes to any of the following statements then it might be time to reassess your finances and take a look at some of the solutions identified below.

  1. You don’t have a personal finance budget
  2. You have no savings
  3. You use credit cards to pay bills
  4. You fight about money often with your partner
  5. You never pay off your credit card in full and only make the minimum monthly payment
  6. You often pay bills late or miss them altogether
  7. You borrow money from friends and family
  8. You ‘forget’ to pay your taxes
  9. You live beyond your means
  10. You’re spending money to feel good
  11. Your approach to personal finance is summed up by the saying: “live each day like it’s your last”

If you nodded along with any of the statements above, and trust me I’ve done all of these things, then it might be worth paying more attention to your personal finance. 

In fact I really encourage it. The only way I managed to start controlling my finances, instead of allowing them to control me, was to really start treating money with the respect it deserves. 

I was too emotional about debt, and debt-collectors, but it was only when I took a long hard look in the mirror and began to recognise the bad money habits that I had allowed to spread through my life that I could swallow my pride and begin to look for help. 

So what did I do? I asked the internet of course!

And the internet replied. In fact I credit the personal finance books and blogs that I read with turning my life around. They taught me about the power of passive income as well as the importance of managing your money in a way that works for you.  

You can head over to the Financial Toolbox section of this site to discover all of the tools and resources that I use to help manage my money. 

Otherwise check out the solutions to financial hardship below which will help steer to a financial future in which you’ll never have to experience hardship again. 

7 Key Steps to Getting out of Financial Hardship

If you’re experiencing financial hardship it’s important to work through each of these suggestions so that you can arm yourself with all the knowledge, tools and tips you need to face the situation head on.

1. Face it head on: figure out what you owe

Figuring out what you owe isn’t as always as easy as it seems. If you haven’t been consistently budgeting, or tracking your debts that it’s not always clear what is owed to whom. 

become a backpacker guide: get paid to walk

The first step is to write it all down. Grab all your financial documents, paperwork, bank statements and whatever else you need. Clear a table, turn off your phone and block out a quiet afternoon to go through it all.

Write down your list including the name of the debtor, the amount and in order of priority. The priority should begin with the debt that has the highest interest rate, because that debt is accruing more debt at a faster rate than any of the others. 

For each debt write down:

  • Name of debt
  • Total amount owed
  • APR (this is the interest on the debt)
  • Minimum payment each month

It might be a difficult process to write down all your debts because when you see them all down in black and white you’ll really see how much you owe and that can be frightening. But the reality is the debt will continue to grow so we must do this in order to help tackle the problem.

Now we have a clearer idea of all the debts contributing to your financial hardship we can begin to tackle them one by one. 

Write down all your debts when facing financial hardship

Re-negotiate your debts

Next, you will contact each company on the list to explain that you’re actively addressing and managing your debt repayments going forward.

If you’re a bit of an introvert like me then you might find this step really difficult. 

It’s uncomfortable and talking about your financial situation with a stranger can seem like the worst, but remember the people you are talking to are professionals who are employed to secure debt repayment for their companies. 

They will appreciate the fact that you’re taking an active involvement because you are essentially making their jobs easier. Always keep that in mind. 

Now the tough part: you have to ask for a debt reduction to help you repay the debt. I know this is awkward because you don’t want to feel like you’re pleading your case; but remember you’re helping the company recoup its debt. 

Initially they will say no but persist by politely asking to speak to a Manager (as a general rule of thumb your regular contact centre agent will not have any authority to permit renegotiations, so you must inevitably speak to a Manager to get that agreement).

You’ll need to tell the Manager that you are potentially facing bankruptcy. Even if this is not looming over you it’s a good leverage tactic to employ because once you are bankrupt you cannot be pursued for debt. However this is not generally recommended as that information will stay on your credit file record for a very long time. 

Be honest, advise the manager that you’re experiencing financial hardship and unless you are able to reduce your debts, or look at managing debt currently in a more affordable way it’s very unlikely that you will be able to repay anything at all.  Remember this is a negotiation, not an argument. 9 times out of 10 they will be willing to negotiate if the alternative means nothing at all. 

Keep your negotiations realistic. If you can reduce debt of $10,000 by $3,000 or $4,000 then you’ve already made a significant saving. Make sure you get any agreements in writing along with a new, reduced payment plan that matches up to the figures you have agreed. 

Audit your spending and bill payments

Now that you’ve taken a good look at your debts we need to take a look at some of the spending habits or bills that potentially contributed to a situation of financial hardship. 

Utilities and bills

You can’t cancel your regular bills and utility providers like water, electricity, heating and internet providers. But you shop around for a better deal. 

According to the United States Government Energy Department Americans can save, on average, $723 to $1,182 per year just by making changes around the home to limit the amounts they spend on energy.

And when you take into account the potential savings that could be made by switching to a more competitive energy supplier the cost savings can run into the thousands. 

Other bills you can cancel or re-negotiate include:

  • Gym membership
  • Phone and broadband
  • Streaming services like Netflix, Apple, Amazon Prime


A common rule of thumb is to try to keep your rent or mortgage to no more than 30% of your overall income. I know that was impossible for me when I first moved to London and it can be particularly difficult to do if you live in a very expensive city. But you don’t have options. 

Essentially they are limited to earning more money, or moving to a cheaper location. 

In the long term it’s a good idea to have a strategy that includes creating some income-producing assets but if you are facing financial hardship is it really worth sacrificing everything you have just to live in one of the world’s most expensive cities?


The morning and evening commute is one of the worst aspects of working in an office. Crushed on the subway in intense summer heat is probably one of the worst parts of city living. And the fact they charge you an arm and a leg for it adds insult to injury!

So back in my office days I always tried to walk to work. And you’ll save a packet, considering that daily transportation is one of the most expensive bills we face.

Even now when I work out home, I make sure I get out every day for an 8km walk around the park. I guess old habits die hard!

If you live on the other side of town, get a bike. And if you live more than 10km from work ask yourself if it’s possible to move closer. 

Food and shopping

It’s so easy to fall into the habit of eating out 2, 3, 5 times a week. Especially when it’s so convenient and quick, and cheap!

But if you find yourself eating out, or ordering takeaway, then the sooner you cut it out the sooner your wallet, and your waistline, will thank you. 

Start a budget

Let’s be honest; society celebrates the spenders!

That’s probably why so many of us end up in debt in the first place. In fact teaching myself how to budget during my mid-twenties (and sticking to it) was single-handley the most important step I took with regards to my personal finance. 

But if you want to be in control of your money you need to learn how to budget. 

Learning how to budget and sticking to it is a bit like taking swimming lessons. Once you know how to swim, you know longer need to take the lessons.

And it’s the same with budgeting. Once I realised how much I was spending on certain categories (by keeping a budget) I slowly began to appreciate the value of things. 

Eventually you’ll be so good at budgeting that you’ll do it on autopilot and you won’t need to forensically track all of your expenses. 

However, when you’re facing financial hardship keeping a detailed budget is essential to get a comprehensive understanding of your financial life. 

That’s why I created a FREE Annual and Monthly Budget Tracker. Get your free copy by dropping your email into the sign up form below:

If you’re after a more detailed guide in how to set up your first budget check out my post: How to Budget Like a Boss in 7 Easy Steps

Get financial help

Sometimes when our problems are of our own making it can be difficult to ask for help. 

Get help when facing financial hardship

That’s usually because we see them as our problems to solve. Maybe it’s pride or ego or the fact that it’s almost considered taboo to talk about money but whatever it is, when it comes to financial hardship, it can be really difficult to ask for help.

It’s owning up to failure. But the truth is… you can only really win when you know what failure looks like. 

But when you’re in financial hardship there are brilliant people and organisations that want to help you. 

Asking for help is the only way anyone gets ahead. Even the world’s most powerful individuals, the entrepreneurs who set up our richest companies, only did it by asking for help.  

So what are the ways that you can get actual financial help?

  • Request payment holidays: mortgage, loan and credit card providers can provide time-limited payment holidays. Bear in mind this won’t clear your debt, but it may give you some breathing space. 
  • Find out about bursaries, scholarships and grants: If you’re a student most higher-education institutions have hardship-grants available for those experiencing financial hardship. The US Education Dept publishes its full list of available grants here
  • Get help with food bills: if your financial hardship means you are struggling to buy food then do not hesitate to take advantage of a food bank. You can find your nearest food bank in America on Feeding America whilst The Global Foodbanking Network will help source food banks from Botswana to Bulgaria.
  • Apply for Government support and benefits: Most Governments around the world offer some form of support to those who are struggling. These schemes can include hardship payments, social security benefits, seeking-employment allowances and other benefits to support those in need.You can find a pretty extensive list of the organisations in many countries around the world that provide social security support here.

Start a side hustle

One of the best ways to make sure that you never face financial hardship in the future is to start a side hustle that creates a passive source of income. You never know, your side hustle might even create some financial freedom in your life. 

I remember promising myself that I would figure out a way to never worry about money again. I wasn’t bothered about being filthy rich. I just knew I had to find a way to never let debt ‘own’ me in the way it had before. I had to be free.

I was probably around 26 years old when I made that promise to myself and it took me many years of trying various things, failing at most of them, until I discovered the power of passive income. I read a book called Rich Dad, Poor Dad and, using this book as inspiration, set about investing in real estate

Now I write on this blog encouraging other people to do the same. 

It doesn’t have to be real estate and since having started this blog, I’ve discovered thousands of ways to start a side hustle. There is literally something for every type of person and every type of interest.

One of the best ways to start a side hustle is to create your own blog because there are so many opportunities to monetise an online blog and such a huge audience to sell into. 

For more inspiration about ways to make money outside of the traditional 9 to 5 check out these guides:

Top Side Hustle Guides:

Change your money mindset for good

Financial hardship is not a pleasant situation to face. 

I’m speaking from experience, but if I’m honest with you then, in my case, I have to take responsibility for the financial hardship I experienced. I took out student loans and overdrafts without thinking about how to pay them back and I didn’t have a clear strategy for making money which meant I was constantly just struggling to survive. 

I had zero financial education and my money mindset was all wrong. But I’m kind of grateful; if I hadn’t hit those lows I would never have been motivated to make the promise to myself that I would never be in that position. 

However, in order to pull myself out of financial hardship I had to do a complete 180 on my money mindset and rebuild it from the ground up. Deconstructing years of ingrained money habits is hard!

T. Harv Eker calls it your Money Blueprint. He writes about the importance of your money blueprint in his brilliant book: Secrets of a Millionaire Mind. 

Eker writes: 

“You were taught how to think and act when it comes to money. These teachings become your conditioning, which becomes automatic responses that run you for the rest of your life. Unless, of course, you intercede and revise your mind’s money files.”

T Harv. Eker

Even if you have been pushed into a situation of financial hardship due to circumstances over which you had no control, revisiting your money mindset can really help you increase your resilience to financial difficulties. 

Part of resetting your money mindset means appreciating what it means to be more frugal but fundamentally it also means changing your relationship with money. It means recognising the power and influence it can have in your life and treating it with the respect, attention and focus it deserves.

So what are the first steps we can take to resetting an ingrained money mindset?

1: Take Responsibility for your Financial Education

Yup, you guessed it! That means taking an active interest in how money works, reading personal finance blogs (check!) and reading books about personal finance and managing money. If you don’t take responsibility for your financial education someone else will take responsibility for your money. 

Head over to the Financial Toolbox section to check out some of the best educational tools and resources to help you get started. 

2: Recognise the Value of Frugal Living

I really believe that recognising the value of frugal living is as simple as recognising the value of life. 

Real happiness is created in your mind, not in the things you buy and a keep part of that is learning to know the difference between what you desire and what you need. 

Being frugal isn’t something just for your Aunt, crafters and people that sew (but kudos to you if you do!); it can really transform your outlook on life and help you to discover a healthier, more rewarding life that can help tackle financial hardship.  

Related article: How To Be Frugal: 47 Ways to Master Your Money & Upgrade Your Life

3: Embrace Minimalism

Do you ever look around and marvel at how much stuff you have?

It’s amazing how many possessions we can build up over our lives. And most of the time that stuff stays in storage, unused, gathering dust.

What if we learnt to live with less? After all it is possessions that you’ll remember when you reflect on your life; it’s the things you did, the time spent with loved ones and the experiences that you had together. It’s the places you saw and the adventures that took you to new and exciting places in the world.

None of that comes from having too much stuff. Take an afternoon off to go through all your stuff and donate or throw out the things you no longer use or need.

And if you need some advice about how to get rid of your old clutter, especially your unused electronics, the team over at Dollar Sprout have created this in-depth review of DeCluttr, a company that specialises in buying, and selling, your old unused stuff.

Once you begin to embrace minimalism you’ll stop buying all the unnecessary things that help increase your debt and cause financial hardship. 

Related article: Minimalism: Is Your Stuff Eating the Planet? Find Happiness by Living With Less

Never, ever give up

One thing I know for sure is that the power to change your financial future and to never experience financial hardship lies within you.

Take a look around – everything you’re looking at was once no more than an idea in someone’s mind at some point in the past. Your smartphone was, at it’s very beginning, a product formed by the creativity of a designer’s mind; the room you’re in was built after an architect committed their ideas and designs to paper.  

It’s a strange thought, right? The entire human world, everything we see on a daily basis, was once no more than an idea. But it’s also incredibly liberating because it means you have the power to change the course of your life; you can choose your own path, if you choose to believe in your ideas. 

Even if life throws you a whole bunch of lemons; building up your financial education and following the 7 steps identified above will help you to build up your financial resilience so that you can come out swinging regardless of what happens. If you take it seriously and commit to your own personal financial education you’ll become a mean, lemonade-making-making, machine in no time at all. So next time life gives you lemons, you know what to do.

▶︎ hey, I’m Tom

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