Families In Financial Crisis – an Exhaustive Survival Guide

In 2015, life hit our family hard, and we found ourselves in the middle of managing a family financial crisis. My husband came home with a severe concussion, a week later my daughter was born and was flown immediately to a NICU for care, and in the fallout of multiple health crisis’ we saw our dual income drop to 60% of my single income.

I wish at the time I had someone holding my hand, giving me a clear list of things I needed to do or pay attention to, and so I hope this survival guide helps you take back your power in a bad situation.

1. Take a deep breath

I know that you are scared right now. I want you to know that you are not powerless here, even if your life has thrown you a curve-ball that you didn’t see coming. For myself, fear always runs rampant when I feel overwhelmed and lost, so today we are going to start making a list, and making a plan.

It doesn’t matter if you have suddenly lost a job, landed in the middle of an unexpected medical emergency or find yourself suddenly single. You are not alone. You CAN do this, and manage this crisis like a boss.

You CAN do this.

2. Go on the Offence – and fast.

The first step to surviving a financial crisis is to recognize you are in one. The quicker you are honest about what you are facing, the better you and your family will fair.

I knew we were in a financial crisis situation, but I allowed myself to remain in that overwhelmed state without taking massive action while the problem just got worse and worse. It took nearly two years after my husband’s accident to take the hard look at our finances, and make the cuts necessary for us to start thriving.

3. Carve out some quiet time

When sitting down with your financials, you will want to dedicate some time where you can devote your whole brain, free of distractions if possible, to starting a priority list and getting things going.

At the time of our financial crisis point,  I was under so much stress by what was happening around me, that I needed time alone in the quiet to make sense of our mess.

If you have children, wait until they are in bed, shut off the tv, and give this the attention it deserves.  When you are sitting in that kind of quiet space, it is much easier to find solutions to the problems you are facing, then when you have a million things pulling at your attention.

Our Ultimate goal here is that you leave this time feeling more in control of what is happening in your life, and building a plan to keep away the chaos.  You may need to dedicate a few evenings to this; for us it took me 4 full days to build out an action plan, and a priority list.

4. Figure out how much your minimum monthly requirements are.

To start, sit down with a good budgeting app, and figure out how much money you need each month to survive. Print out your bank statements while you are filling this out to make it a little easier.

Everydollar is perfect for this. What I like about it, is that prior to adding in any income, it will tell you the EXACT amount of your total monthly expenses. This is the amount you need to aim for when you are looking at your income.

Once you have added in all of your expenses to the app, then add in your expected income. It will tell you at the top of the app in red if you do not have enough income, and the dollar amount that you are out (and need to be bringing in).

Some budgeting tools that may be helpful include:

*free printable download can be found @ debtfreecharts.com

“By the time I was in a head space to face our finances head on we were $51, 000 in debt. Learn from our mistakes, and go on the offence quickly.”

5. Start a budget

Now that we know how much money you require for survival each month, are you better off or worse off than you thought?

I am assuming because you are here, things are not good. At this point, we now have two options – to either bring up your income to match your expenses, or to decrease your expenses to match your income. Or option number three, do a bit of both and end up in the middle somewhere.

I am here to tell you that for most people, there is always room to make some budget cuts. It is time to cut out all non-essentials to flush out the gap between your expenses and your income.

If you need some ideas about where to start, his is how we cut out nearly $3000/month out of our monthly expenses. If we had done this immediately after my husband’s accident, we would not still be paying off the $51, 000 in debt we accumulated after it.

Our goal is to get your family back in the black as quickly as we can.

6. Save up a mini-emergency fund of $1000

When you are in a crisis situation, you need a buffer for life, because life has a way of trying to kick you when you’re down.

When we started trying to get our finances in order we had a fully funded emergency fund that first month. The following five months were spent getting hit with one unexpected expense and emergency after another.

A couple mistakes we made were using our emergency fund for things we should have had a sinking fund for, and dipping into our emergency fund for things like subway on a Wednesday night when I was tired.

More on how we solved this problem later.

7. Hunker down in Storm Mode.

What is storm mode? Storm mode is that that financial space where your outflow of money is exceeding your income. It is the time where no matter what you are doing, you are going deeper and deeper into the red every month. It coincides with a drastic change/threat to your income.

Priority number one in storm mode, is protecting your 4 pillars.

Priority number one in storm mode, is protecting your 4 pillars. Dave Ramsey talks about the 4 pillars of life being food, shelter (utilities included), transportation and clothing. This means that BEFORE your money goes anywhere else, you MUST make sure that these things are paid for.

Keeping a roof over your head and food in your bellies makes everything else a manageable problem. If you can sleep, and you are fed, you can keep working, keep hustling, and start moving forward.

From time to time this may mean that your credit card goes unpaid, or other other payments fall behind everything else. That’s okay. We are aiming to make this a very temporary state.

Picture someone hunkered down, walking into the wind during a crazy rain storm holding an umbrella. Wind and rain are deflecting off the umbrella – this is what we are trying to do. Temporarily deflect the rain to protect your family financially.

If you are being harassed for payment by creditors, tell them that you simply have no money for them. Try to proactively approach credit card companies, explain your situation, and perhaps try to negotiate lower interest rates.

If possible, look into loan consolidation – the goal being to reduce interest rates, and reduce your monthly minimum payments. If there is any money left after your pillar payments are made, whatever is left goes into making minimum payments on everything else.

Once your minimum payments have been made on everything, then the left over money can be saved, or lumped onto reducing debt.

8. Pay Close attention to your food costs

It is unbelievable how much money you are able to save if you know how to manage your grocery budget well. I have an extensive blog post about how I learned how to do this here. This single change saved us $7,200 this year.

We live in a very high cost of living area, and we were able to cut our grocery bill in half using the techniques in the above blog post. This is a skill, and a worthwhile investment of your time to learn. If you can set a tight, but doable grocery budget, you can save a ton.

9. Be prepared to make hard decisions

Financially speaking, there is absolutely nothing that is more important than protecting your family unit. I am specifically talking about your stuff. I want you to have a place to live, transportation, and food in your bellies. This means if selling that brand new car accomplishes this, then you sell the car.

There was a time during our financial crisis year where I considered selling the car, the house, and everything else that wasn’t vital to us. If my husband hadn’t recovered when he did, the van would have gone up for sale that next month.

In order to keep our house, and the ability to buy food, we rented out a bedroom in our house. This meant sharing a living space with complete strangers, but it also meant we could feed our kids.

If we were renting at the time, we would have started looking into cheaper living options that did not include room mates. I was prepared to do whatever it took to keep our family together.

10. Get a side hustle

Whatever it is that has limited your income, I bet you could find some way to make a little extra money. Get creative. If you have been limited physically look into online income options.

If you have had a job loss, and you can’t find anything in your field, start looking for temporary jobs that might be outside of your field. Especially where I live there is a mentality to not want to work a job that “is beneath you.” Lets get real here for a minute, if it comes to keeping food on the table for your family, and you have to deliver pizza’s in order to do it, then you deliver pizza.

During our financial crisis I was unable to work my normal job because I had an infant at home and my husband required frequent trips for treatment in a city 6 hours away. Daycare costs were so high that I couldn’t bring home enough money to make going back early to my traditional job worth it. So I started up a small sewing side gig, and started hand making items to sell at local markets.

Here are some other ideas to consider:

  • collect bottles for returns (I still do this with my kids, only now they get the money)
  • do online surveys
  • start delivering pizzas
  • become a field agent
  • start a small side business
  • create niche websites
  • sign up to be an uber driver
* free printable can be found @ inspiredbudget.com

11. Don’t scoff at small bill savings. $5, $10, $20 savings add up.

One thing that has continually blown my mind while we have been working our way out of debt, is how quickly just $5 adds up. If you made just one choice every single day that saved you $5/day, it would add up to $1825 at the end of the year.

Remember this little tip, especially when it comes time to start cutting things out of your budget, or decreasing your bills through negotiations. If you take just that small amount saved, and project its savings over the course of a year, the amount will surprise you.

For example, This past year we bought out our smart phones because I found a cell phone plan that decreased our monthly cell phone bill by over $90 each/ month. $90 x 2 = 180/month in savings, but $180 x 12 months = $2160 for the year – even at the extra expense of the early buy out, we still came out ahead by $1800.

We saved $2160/ year simply by switching to a different cell phone plan, simply by paying attention and making a change when it benefited us. Imagine how much you could save if you apply that mind set to every single bill you have.

Go through your bills one by one, eliminate what is not absolutely necessary, and negotiate the remaining. If you can decrease a bill by even $5/month it is worth it. Keep in mind that things like Cable are an easy expense to give up completely by switching to cheaper online subscription services like Netflix and Hulu.

12. Stop using plastic for payment.

Did you know that according this study when you pay using a credit card you spend up to 100% more? According to Consumercredit.com, 58% of people making a large purchase used credit cards because they could not afford the item, but hoped to pay it when the bill came. Don’t. Just Don’t.

If you use cash for payment instead, you have a higher likely-hood of staying within pre-assigned budget amounts. If you are in a financial crisis and you are using a credit card to mask the symptoms, you are just ensuring that this crisis will follow you around for much longer than if you take charge right now.

I wish I could go back in time, and stop using the visa right after my husband’s accident. It lulled me into feeling like we were okay, and it stopped me from taking action sooner.

We certainly would have been more likely to live within our means, and much less likely to have accumulated so much debt in the after math of our crisis.

13. Create a system that makes you think twice before spending

This step will vary greatly depending on what works for your family. Try out an envelope system, a folder system, dividers in your wallet, or a mix between cash and debit cards.

Our family chose to do a mix. I carry cash for groceries, gas, and our tiny restaurant budget, and now use Tangerine for sinking funds (more on that below).

The reasons we chose to go with Tangerine, an online bank, is truthfully because they offered $50 for opening up a savings account, and they give a kick back for referrals. Added benefits included a higher yield savings account compared to traditional banks, no banking or service fees, and it allowed us to separate our funds and create unlimited savings accounts (which works great for sinking funds).

We kept dipping into our emergency fund for wants simply because we could see it sitting there on our primary card. Now that we have gone with two completely different banks, we keep enough money in our primary account for everything that comes out on auto-debit, take out cash for immediate needs, and move sinking funds over to our secondary accounts with Tangerine.

The Tangerine card is bright orange and it makes us think twice about using it for anything that is not pre-budgeted. If I want to use the card itself, I have to use the app to move money from a saving fund into the checking portion of the account. Its completely a mind game, but it is working, and we have completely stopped using our emergency fund for non-emergencies.

If you are interested in opening a Tangerine account, use my orange key (52519495S1) for your $50 referral bonus – keep in mind you need to make a $100 deposit to get your cash, get even more if you set up an automatic saving plan, or sign up for direct deposit. They have different perks all the time, so read up when you open your account on how to maximize the benefits you will get when you sign up.

14. Create sinking funds

What is a sinking fund?   A sinking fund is simply a savings account for large purchases.  Previously anything that we would have pulled out a credit card to pay, as we did not  have enough money in our account to manage is now a sinking fund. 

Some sinking fund ideas include:

  • home owners insurance
  • car maintenance
  • medical or dental expenses
  • large item replacement (new phone, cars, couches, dishwasher ect.)
  • trips
  • professional license renewal fees

The idea behind sinking funds is that they are anticipatory, meaning you see the expense coming in the future, and you add money at such a rate that you can pay cash for it when the time comes.

15. Celebrate your wins

Listen to me carefully, when life is this hard, you need to celebrate every single win you have. Whether or not you have trackers in a bullet journal, celebrate coffee with a friend, or pre-set rewards for your progress, celebrate the small stuff.

Its too easy to get caught up in the struggle, it helps to focus on the light. Make it visual, make it something your whole family can see. You are all making sacrifices together, you need to celebrate together too (or with friends).

16. Ask for help

No one ever anticipates crisis arriving in life, financial or otherwise. There are resources out there to help keep your family afloat, and it is okay to access them.

If you find yourself not being able to afford food or housing, there are people who can help, and its okay to ask for it. Find people who are able to get you in contact with low income housing if it comes to this, or to sign up for the food bank.

There is never any shame in doing what you need to do for your family to survive.

Hope is being able to see that there is light despite all of the darkness.

Desmond Tutu

17. Be patient with yourself, this will take time

From one mom making headway in our financial crisis, I want to remind you again that you are not powerless. You are capable of doing hard things, and the payoff for your family will have ripples for your family for years to come. Those little choices you make every single day, will add up to massive returns over time.

May God bless you as you work through this season, may you find the best cheering squad, and experience the full kindness of strangers. You can do this. I am fully confident.

Much love,



Comments 2

  1. Great article Nikky, will book mark it and pass it on to all who are struggling. Now in my 60’s and retired, we did all of these steps in 1980-1987 when interest rates were atrocious! I shopped for the best interest rate and renewed at 22% one year. Ouch! Needless to say my first hot holiday happened at 55 yrs of age after our mortgage was paid. My first pedicure and manicure was a gift for my 50 th birthday. Did I live a happy life? Yes I did and still am. Now I can travel, not work, and enjoy our grandchildren. When budgeting becomes cool, we all win!
    Good for you! Keep going ! You got this!
    Dawn Carter

    1. Post

      Thank you for the support Dawn! We have been looking at the interest rates slowly rising, and I think that we need to start considering locking in our variable mortgage. It has been worth it while we have gone that route, because we have paid down the mortgage by over $50K in the past 4 years, but those interest rates could put us in a big bind if they crept up like the 80’s. Thank you for sharing the article, and I hope that you have a great New years!

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