Best Personal finance rules can be broken during financial crunch - CentZip

Best Personal finance rules can be broken during financial crunch

You’ve spent years building good financial habits and sticking to the rules of personal finance to achieve stability and security. But when times get tough and money gets tight, some of those hard and fast rules need to bend.

Strict adherence could make a difficult situation much worse. Knowing which rules can be safely bent during a financial crunch and which must remain rigid will help you weather the storm without jeopardizing your financial future.

Rule #1: Tap Into Your Emergency Fund

During times of financial hardship, certain personal finance rules can be bent to provide relief. One such rule is tapping into your emergency fund.

An emergency fund is money set aside specifically for unexpected life events that disrupt your income or cause large, unplanned expenses. The general recommendation is to have 3-6 months of essential living expenses in your emergency fund. However, if you find yourself facing job loss, medical bills, or other financial crises, don’t hesitate to use these funds to keep yourself afloat.

You’ve built up your emergency fund for exactly this purpose. Use it to pay for necessities like:

  • Housing costs (rent/mortgage, utilities, insurance)
  • Transportation (car payments, gas, public transit fees)
  • Food and household essentials
  • Minimum debt payments (credit cards, loans)

Once the crisis has passed and your income has stabilized again, focus on replenishing your emergency fund to the appropriate level. While it can be difficult to refill when money is still tight, even putting aside a small amount each month can help ensure you have a financial safety net the next time unexpected expenses arise.

An emergency fund gives you a financial lifeline during turbulent times. Don’t feel guilty using it when needed – that’s what it’s there for. With prudent management, you can bounce back and continue exercising good financial discipline. Staying solvent during difficulties is the priority, so you can live to budget another day.

Rule #2: Reduce Non-Essential Expenses

To reduce expenses during financial difficulties, re-evaluate your budget and cut out non-essential costs.

Rule #2: Reduce Non-Essential Expenses

When money is tight, focus on basic necessities like housing, food, and transportation. Look for expenses you can reduce or eliminate, at least temporarily.

  • Cancel unused subscriptions and memberships. Things like streaming services, gym memberships, credit cards with annual fees, etc. can often be put on hold or canceled to save money each month.
  • Cut the cord on cable TV. Most of what you watch can be streamed online for free or via more affordable services. Basic internet and an streaming device can replace expensive cable packages.
  • Eat out less frequently. Cooking at home is significantly more budget-friendly. Focus on meals that provide leftovers to minimize waste.
  • Buy generic or less expensive alternatives. From groceries to clothing to home goods, less pricey options can save you a lot of money over name brands.
  • Consolidate errands into one trip. Minimize driving to reduce fuel costs. Carpool or use public transit when possible.
  • Take advantage of free entertainment. Your local library, parks, and community centers offer free resources and events. Museums often have free admission days each week.
  • Ask about bill reductions or payment plans. Contact service providers to inquire about temporarily lowering or suspending bills, or setting up a payment plan during financial hardship. They may be willing to work with you.

Making a few changes to reduce non-essential costs can help get your finances back on track. Stay disciplined and regularly re-evaluate your budget to make sure you’re focusing limited funds where they matter most.

Rule #3: Look for Ways to Earn Extra Income

Looking for ways to earn additional income during financial difficulties can help ease the burden. Here are a few options to consider:

Take on a side gig

A side gig, like driving for a ridesharing service in your spare time or doing freelance work in your field of expertise, can generate extra money to put towards essential expenses. Promote your services on websites like Upwork, Fiverr, or TaskRabbit.

You may also want to ask friends and family if they know of any side jobs you can take on, such as tutoring, dog walking, or helping with house cleaning and yard work. An additional benefit of side gigs is that the income may qualify for certain tax deductions or credits. Always check with a tax professional to understand the implications.

Develop a hobby into a revenue stream

Do you have a hobby, craft, or special skill that you can monetize? For example, if you enjoy woodworking, you can sell handcrafted goods online or at local markets. Skilled photographers and videographers can sell stock photos and footage. Crafters can open an Etsy shop to sell their creations.

While developing a hobby into a business takes time, the rewards of doing something you enjoy can make the effort worthwhile. Start small by selling to people you know, build your confidence, and then expand into online sales and local retail outlets. Make sure to price goods and services competitively and keep good records for tax purposes.

Reduce or eliminate unnecessary expenses

In times of financial hardship, look for expenses you can reduce or eliminate, at least temporarily. Things like dining out, entertainment, and hobbies are discretionary costs that can often be cut back. You may also want to renegotiate recurring bills like insurance premiums, cable service, and gym memberships to lower your payments. Every dollar you can save on expenses is one more dollar you have to put towards essentials.

Making additional income and cutting unnecessary costs during difficult financial times can help relieve stress and give you more control over your situation. With time and perseverance, these strategies may even help turn your finances around for the better.


As difficult as it may be, breaking some personal finance rules during times of financial hardship can help you weather the storm. By reducing or stopping contributions to your emergency fund, retirement accounts or other sinking funds, you free up cash flow to pay for essential expenses.

While not ideal, taking on some high-interest debt may be necessary to cover costs in the short term. The most important rules to not break are avoiding bankruptcy, tax evasion, or failing to make minimum debt payments which can have serious long term consequences.

Once your financial situation stabilizes, restart your contributions and work to pay off any high-interest debts as quickly as possible. Rules are meant to be broken only when absolutely necessary. With discipline and commitment to your financial well-being, you can get back on track to build wealth and achieve your goals.

Difficult times often lead to greater things, so stay focused on the light ahead rather than the darkness around you. You have the power to improve your situation and regain control of your finances.

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