Sisters, the pandemic period has made it difficult for many people. There are those who run out of work or have their income cut, so that business turnover has fallen badly.As a result, you face financial distress. What’s that?
Financial distress is a condition in which a person or industry cannot generate sufficient income to cover expenses within a certain period of time.
The next thing that happens is being forced to apply for debt to meet needs or finance expenses. If this situation lasts for a long time, and you continue to dig a hole, then the debt will pile up.
Same kind of illness, this could be called a financial illness. That’s why financial distress also has characteristics or symptoms. There are various triggers for financial distress. Starting from the size of the stake rather than the pole, mismanaging finances, and others.
The following are signs of financial distress for your personal finances:
- No time to record income and expenses
- No savings, emergency funds, insurance, or investments
- Debt exceeds the threshold, is 30% of income
- Consumptive life
Financial distress is not insurmountable. You can cure this condition with some of the following methods:
1. Improve your lifestyle
To cope with financial distress, try to look at expenses during the last few months of the same year. Then compare with the following year. If in fact the number is slightly different, let alone passed, it is time to carry out a revision.
Starting to shift from a consumptive lifestyle to being more efficient so that the decreased income can be enough for a month. Cut expenses that are not meaningful or of a nature can still be postponed.
Prioritize the main needs. Get rid of the will because you only want to increase your financial burden, such as coffee snacks, buying expensive skincare, perching, vacations every month, or something else.
2. Debt restructuring
Sisters, if it turns out that you have continued to have a lot of debt, especially to the point of bad credit or failing to pay, treat it with debt restructuring.
Restructuring is an effort that can be tried to improve credit from debtors or borrowers. The revision was tried because the debtor had difficulty making payments to pay off his debt.
There are 3 types of restructuring that can be given to debtors in bad credit conditions, namely:
Rescheduling (rescheduling)
Loans or credit of course have a payment period for the debtor to pay off the debt and interest. This is known as the tenor.
In the case of bad credit restructuring, the bank will get used to the tenor of your loan so that you can repay the loan in installments.
The loan tenor from debtors who face bad credit is extended by the bank so that the installments that must be paid continue to be lighter. This tenor extension will be adjusted to the debtor’s ability to pay.
Return Requirements( restructuring)
There are conditions that can be replaced by the bank when its customers face bad credit. Changes to these provisions include changes to the payment agenda, time period, and others.
But what must be underlined, this return requirement can be tried on the condition that it does not change the maximum credit ceiling. So, customers are expected to be able to pay the principal loan.
Reconditioning (reconditioning)
In simple terms, restructuring can be referred to as an effort by banks to change credit conditions to relieve the responsibilities of debtors who have bad credit. The trick is to increase credit facilities, convert arrears into new credit principals, to reschedule and re-condition.
By restructuring, banks can also lower the interest rates charged to debtors. The goal is that the customer is able to pay off the principal debt to the bank.
Moreover, if the debtor’s condition has been so critical that it is thought that he cannot escape bad credit, the bank can provide the option of waiving interest to the debtor. So, the debtor is able to pay off the remaining principal loan.
3. Find additional income
You must carefully look at opportunities to increase or change lost income. The trick is to make changes or adapt, for example, you are good at cooking, the culinary business is open pre-order so as to minimize losses, is good at sewing, making masks and selling online.
Looking for a side job as an insurance agent, open jastip, SPG, or other jobs that sell your skills and expertise, such as photographers, freelance writing, graphic design, teaching, and so on.
You can also rent a car or motorbike for passive income. This is called the thing that works for you. So while sleeping too, money flows into the pocket.
In addition to carrying out the efforts to overcome financial distress above, you must always remain calm in this difficult situation. By not panicking, you will be able to think clearly to find solutions to overcome these problems.