Use Your Survival Skills for a Money Crisis

Have you ever wondered why some people seem to have an innate ability to survive, no matter what problems they face?

Is it luck that allows these people to beat the odds? Skill? A combination? Some would say there's a science to it—like Ben Sherwood, author of the new book The Survivor's Club: The Secrets and Science That Could Save Your Life.

"There's a whole field of people who study what are called human factors of survival—why some people live and other people die. I put it together and am using it to help regular folks deal with the everyday stuff we all have to go through," Ben says.

I bet I know what you're thinking: What does this have to do with my money? A lot.

While the "everyday stuff" Ben is talking about could be a car accident or a fire, it could also be layoffs or struggling to pay the rent or coping with a dwindling retirement portfolio. Believe it or not, some of the same strategies apply.

Danger of Delaying

No one likes to think about the scary things in life. "People are not psychologically wired for what are considered to be low-probability, high-consequence events," Ben says.

That means when it comes to something like premature death or getting laid off, we want to push preparation aside. We procrastinate on a will; we delay building an emergency fund. But seemingly healthy people do die abruptly—just look at Natasha Richardson—and they do, as we've seen so dramatically, lose their jobs. If you've prepared, you'll find yourself feeling a bit calmer. 

Hug the Monster

Turning a blind eye to your finances always brings trouble. When you let the bills or late notices stay in their envelopes, you're making matters worse. When you finally have to deal with the problem—believe me, you will eventually—it will be exaggerated because you didn't take action.

Face your financial issues head on. Open your bills, pick up the phone, call your lender. If applicable, tell them you're struggling and explain why. If you lost your job or took a pay cut, be ready to prove it. Lenders are now used to these kinds of conversations and are more willing to help.

Take Control

Faced with a scary situation, it's natural to let fear take over. You may start to predict the future—"I lost my job; now I'm going to lose my home"—and it becomes your reality. Don't let it, says Alissa Lukara, founder of LifeChallenges.org, a group that supports people facing adversity.

"Rather than acting from a place of fear, bring yourself back to the present moment. All of the things that you've been projecting out about what might happen aren't happening yet, and it's important to remember that," she says.

Instead of assuming a lost job means you'll fall behind on your mortgage, brainstorm ways to replace that income until you find a new position, whether that means selling things on eBay, tightening your budget or doing odd jobs around your neighborhood.
 
Learn to Be Flexible
The reality is the recession has thrown us all for a loop, and life is not going to go exactly as you'd planned—at least for the near future.

"It's okay to grieve for a moment ... but recognize that since what you planned isn't playing out, something else amazing might," Alissa says.

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