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Bottom Line Up Front

  • Good financial literacy and budgeting habits can help you avoid or overcome financial hardship situations.
  • Building a budget and identifying areas of overspending is one of the first steps toward rectifying financial problems.
  • You can often work with lenders and providers to find repayment solutions in the event of poor cash flow or loss of income.

Time to Read

7 minutes

April 20, 2023

By Thomas Racca  

Good financial literacy is essential to managing your finances and achieving your goals. Just a few missteps can put you in a position of financial hardship. Fortunately, there are things you can do to work through these challenges and get back on track.

Today, many Americans are struggling with financial hardships either related to debt, increased cost of living, decreased or loss of income or just under-prepared emergency savings. Here are some useful strategies to tackle those financial bumps and change your financial journey for the better. 

Create a Budget and Stick to It

There’s nothing wrong with treating yourself now and again. However, if you’re consistently spending more money than you have budgeted for, you might find yourself in a sticky situation. It’s very important to keep a close eye on how much money you have available versus how much you’re spending each month.

The first step to conquer budgeting challenges is simple: Build a budget you can stick to! 

  1. Determine how much income you have coming in each month.
  2. List out all your expenses. Start with fixed expenses like your rent or mortgage payment, debt payments like car loans or credit card payments, utility bills (water, sewer, electricity, internet, etc.), cell phone bills and childcare costs. 
  3. Create a list of expenses that are your “needs,” like groceries, household goods, personal care and gas. Next, add up your fixed expenses and the cost of your “needs”.
  4. Then, create a second list of your “wants,” like entertainment, dining out and personal shopping, and determine how much of your “wants” you can afford after covering your fixed expenses and “needs”.

Try using budget tracker apps like Rocket Money® or YNAB® for 30 days to track how much you actually spend on the expenses you listed. At the end of those 30 days, review the budget to identify where you may have overspent. If you have a negative cash flow (meaning you spent more than you earned), you’ll need to make budget adjustments to decrease expenses or increase income. Determine how far your spending landed from your original budget and see whether you overspent on needs or wants. 

Navy Federal Personal Finance Specialist Kaitlin says, “Meal plan your weekly dinners and do an online order for pickup. This helps avoid impulse buying when grocery shopping and making sure you are only getting what you need. Groceries are one of the biggest expenses people have a hard time budgeting.”

Manage Your Spending

If you’re overspending  on necessities like groceries, look for clever ways to cut back on expenses. I’ve found that simple tips like ordering pickup at the grocery store or shopping the outer ring keeps me from impulse-buying items I don’t really need. You might also be able to find coupons or shop on Wednesdays, when many stores launch new promotions while the previous week’s are still active for greater savings. For other expenses, consider ways to cut back on utility usage or negotiate a lower bill with your provider.

Your approach might need to change if you’re overspending on wants. This doesn’t mean you can’t occasionally treat yourself. Perhaps, instead of swiping a debit card, give yourself a weekly or biweekly cash budget to ensure you don’t overspend on unnecessary things. If you don’t like using cash, you could also try a prepaid debit card, like Navy Federal’s GO Prepaid card. Just pre-load the card with your weekly budget and monitor your spending closely!

Build Your Rainy-Day Fund

It’ s equally important to make sure you’re paying your future self by growing your savings. Treat savings deposits like a bill—once the money goes in, it can’t come back out. Start small and contribute a little each month while you manage your budget. It helps to have a portion of your paycheck automatically withdrawn into a separate account. That way, it’s not available to spend in the first place!

Once you have a cash-positive budget in place, it’s helpful to set aside time to review it regularly. Your spending might change over time, so you’ll need to adjust the budget to raise or lower expenses. Revisit your budget once every few months to make sure you’re staying on track.

Balance Paying Your Bills and Debt

Debt can add up quickly. If you have one or two tight months, it’s easy to accidentally miss a payment or struggle to balance bills with basic necessities. However, missing debt payments can accrue late fees, make it harder to manage your finances in the future and greatly impact your credit. You’ll want to identify the reasons you’re falling behind on bills and develop a plan to repay them consistently.

If you’re delinquent on your debt or mortgage, you first need to find out why. If it’s because you’re overspending on your budget, then maintaining a tighter budget can help you build in breathing room to tackle those bills. 

How to Make a Difference Right Away

Talk To Your Lender

Many lenders are willing to work with you. There may be repayment assistance programs available to potentially lower your monthly payments or your interest rate. You may even be able to get more time to repay your debt.

Change Your Due Dates

Sometimes, bill due dates are just poorly timed. Maybe your credit card bill is due on the 27th but you don’t get paid until the 30th. Ask your lender to move the due date to make managing your cash flow easier. If possible, try to split your debt obligations up throughout the month based on your payment frequency. This helps lessen the load around a single paycheck.

Inquire About Mortgage Assistance

Keeping your mortgage in good standing is crucial for your and your family’s wellbeing. If you’re falling behind, ask your lender about potential mortgage assistance options. You may qualify for forbearance, which can give you time to rebalance your finances. They also might be able to modify the terms of your mortgage or offer refinancing options to potentially lower your monthly payments.

Avoid Additional Debt

Taking on more debt to pay bills is just a temporary solution that could lead to more trouble later. It’s better to use other options, like working with your lenders or finding additional sources of income.

According to Navy Federal Personal Finance Specialist Melissa, one exception is a credit card balance transfer. “You want to ensure you’re not using that new credit card for anything other than the [balance transfer]. Making a conscious decision based on your budget and creating a steady plan for how you plan to pay off the balance before the promotion ends—these are all important things to consider when looking into these kinds of promotions and reaching your goal to be debt free.”

Medical bills are another common source of hardship I’ve seen. One unexpected injury or illness could cause medical bills to pile up. This can be overwhelming to manage. Fortunately, there are solutions.

  1. Contact the medical facility. After you receive a hefty medical bill, you should first contact the medical facility where you received care. Ask for an itemized bill to review the charges and ensure you weren’t over- or mis-charged for treatment. For very large bills, you may have the ability to negotiate lower costs or request fee waivers. Also inquire about payment plan options. Many facilities will let you pay toward the balance each month with low or no interest. 
  2. Research lower-cost care. There are a lot of options out there for medical cost assistance or low-cost medical care. Look into state-funded medical assistance or contact the Social Security Administration (SSA) to determine eligibility for medical benefits. Even if you don’t qualify, you may be able to find low-cost community clinics or charitable organizations that offer medical care. Some facilities also offer discounted plans for those without medical insurance. 
  3. Seek medical bill forgiveness. If you have a chronic medical problem that prevents you from obtaining employment, you may be able to seek medical bill forgiveness and state assistance.  


Lucille, Personal Finance Specialist at Navy Federal, advises, “If medications are what are giving you trouble, see if there are other sources for them. Local pharmacies will sometimes have more competitive prices. At any pharmacy, you may be able to ask the tech assisting you if they have any coupons that could be applied. If either of those don’t work, there are sites like Cost Plus DrugsTM and GoodRx® which help find medications for less.” 

In order to overcome problems related to debt and bill delinquency, you must understand how much you owe and find ways to lower or arrange your payments in a way that works for your budget. There are plenty of assistance programs available to help you get back on track!

Take Immediate Action After Job Loss

Losing your job or taking a hit to your main source of income can be extremely scary. It can easily upend your financial situation or derail future financial goals. By acting quickly, though, you can make a plan to recoup the income you’ve lost and manage your finances in the meantime.

If you’ve lost your job entirely, there are a number of financial resources you should turn to while you look for new employment. The first is your state’s unemployment insurance, which pays you money for a certain number of weeks while you’re out of a job. You should also look into other financial support programs hosted by your state, like Temporary Assistance for Needy Families (TANF) and the Low-Income Home Energy Assistance Program (LIHEAP). These programs may provide childcare, utility costs and bill pay assistance if you lose your income. Local nonprofit organizations like charities and churches are also great sources of community-focused emergency financial assistance.

Once you’ve determined whether you qualify for financial assistance, you’ll need to revisit your financial plan and obligations. Take a look at your budget and find areas where you can cut costs. Contact your utility providers, lenders and creditors to negotiate repayment terms. You may qualify for temporary forbearance due to loss of income. 

Consider Additional Sources of Income

Whether your income has taken a hit due to fewer hours or shifts, it’s a good idea to supplement your income with side jobs. These can give you a little more wiggle room in your budget and make it easier to pay immovable bills.

  • Weekend shift work: Look into job shifts you can pick up on the weekends or after hours, when a lot of employers struggle with staffing. Retail stores, grocery stores or even your current employer may have shifts available for you to make extra cash.
  • Gig work: The gig economy is also a great way to bolster your income. These types of jobs offer lots of flexibility, so you can fit in jobs between shifts or when you have spare time. Consider delivery or driving services like DoorDash®, Uber Eats®, Postmates®, Amazon Flex®, Instacart®, Uber® and Lyft ®. There are also service- and skills-based gigs like babysitting, housesitting, pet sitting, dog walking, lawn care, appliance servicing or tutoring. You could also go through your home and closet to find clothes or items to sell at a yard sale or on resale websites like Poshmark®.

Navy Federal Finance Specialist Trey says, “It’s easier to make an extra $5,000 than it is to save with your existing income stream. [Looking] into supplemental income opportunities before it’s a must may be the easiest way to avoid unexpected emergencies or one-off situations. It also may be the best way to start your rainy day or emergency fund.” 

Get Ahead of Financial Roadblocks With Help From Navy Federal

I understand how scary financial hardship can be to families, which is why it’s so important to me to help build financial literacy among our members. Remember: If you find yourself in one of these situations, you’re not alone. Many people struggle with financial challenges.

There’s also help available. Navy Federal members have access to free personal finance counseling services. Our team is here to support you, find financial recovery resources and get you back on your feet. 

Author Bio: Thomas Racca is the Manager of Navy Federal Credit Union’s Personal Finance Management Services.


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This content is intended to provide general information and shouldn't be considered legal, tax or financial advice. It's always a good idea to consult a tax or financial advisor for specific information on how certain laws apply to your situation and about your individual financial situation.