Getting yourself to a consistent place of financial health can be a rather winding journey, and there are inevitably bumps along the way. A layoff, chronic illness, sudden emergency, or global pandemic, for example, can quickly push you off the path and into a place of hardship.

It’s important to remember that, while stressful, money struggles are common – so common, in fact, that 61 percent of American male workers under 70 report that they’ve gone without earnings for a full year at least once in their lives (and that’s pre-COVID-19 data). So if you’re struggling, you’re certainly not alone. And thankfully, there’s almost always a route you can take to recover.

Below, we explore six practical and fairly simple steps you can take as part of a plan to get out of hardship and ultimately reach a destination of financial stability.

1. Take Stock of Your Current Situation

During times of financial stress, it can be tempting to bury our heads in the sand and simply hope for the best. The truth is, though, knowledge is power, especially when it comes to money matters.

To carve out a path to financial recovery, you’ll want to equip yourself with information about where you are right now and how you arrived there.

Ask yourself these key questions in order to assess your circumstances and determine where you should be focusing your recovery efforts.

• What are your current earnings?
• What are your monthly expenses?
• How much do you owe in debt?
• What’s the value of your assets?

2. Acknowledge Your Difficulties and Seek Support

Financial matters are closely tied to our egos, so many of us don’t want to admit that we’re battling. However, openly acknowledging that you’re in a tough spot financially and reaching out for support can, at the very least, make you feel more in control psychologically. By reducing anxiety in this way, you’ll be better positioned to start making smart money decisions.

What’s more, once you start seeking assistance, you might find there are more options available to you than you originally thought.

If you contact lenders and other service providers about your situation, it’s possible they’ll be willing to make allowances that will give you the temporary relief you need to get back to a place of stability. Many credit card companies, for instance, offer hardship programs under which you might be able to extend your payment schedule, lower your interest rates, and avoid penalties for a period of time.

Similarly, don’t forget about community and government assistance programs. If your financial difficulties stem from job loss, you could consider filing for unemployment insurance. If they’re related to the death of a spouse, you could draw on survivor benefits. During times of economic crisis, you might even be eligible for a stimulus check from the U.S. government.

3. Consider Debt Consolidation

A small amount of debt is healthy, but heaps of it can exacerbate an already challenging fiscal situation. So, to bounce back financially, you’ll want to pay off your loans and credit card balances as quickly as possible, starting with those that cost you the most in interest fees.

If you don’t have the means to dig into your debt right now, don’t panic. You can at least make the process of repayment more manageable (and cheaper in the long run) through debt consolidation. By applying this strategy, you can use a single debt source to pay off everything you owe to other lenders, thereby rolling your debt into one monthly payment, ideally with a much lower interest rate.

This way, you can avoid high APRs on several credit card bills, and because you only have to think about one regular payment and set of terms – not multiple – you’ll likely feel much less anxious.

There are several different ways to consolidate debt, and both traditional financial institutions and various online lenders, like Eloan, offer loans for this purpose.

4. Put Tax Refunds and Payouts to Good Use

As of October 2020, the IRS has given filers an average tax refund of $2,476 each for the 2019 tax year. If you’re anticipating a similarly large refund next filing season – or if you’re receiving a payout in the form of insurance benefits or severance pay – it’s more critical now than ever to use that money wisely.

Experts suggest that it’s smart to split the refund or payout to serve multiple purposes. You might want to keep some in cash to cover immediate expenses, put a portion into a savings or individual retirement account (IRA), and allocate the rest to pay down high-interest debts.

To help improve cash flow throughout the year, though, you should ideally avoid paying excess in tax in the first place by correctly completing a new Form W-4.

5. Leverage Budgeting Tools to Carefully Manage Your Money

To restore financial stability, you might need to tighten control over your money matters. The best way to do so is to create a budget and stick to it.

While you could draw up your own budget spreadsheet, it might be more convenient to use one of the many personal finance tools or budgeting apps out there to support your quest to stay disciplined, allocate funds wisely, and optimize spending.

Some recommended money management tools include:

• You Need A Budget (YNAB)
• Mint
• PocketGuard
• Wally

6. Cut Unnecessary Spending

Chances are that when you start tracking your spending, you’ll quickly realize that you’re channeling precious funds into nice-to-haves you can might be able to do without.

Living leaner might sound like an obvious tip, but it’s not all that easy to do if you’re not equipped with practical cost-cutting tactics.

The Cutting Expenses checklist tool from the Consumer Financial Protection Bureau’s financial empowerment toolkit highlights a range of specific strategies you can implement to cut down on common expenses. It offers up suggestions like:

• Switch to lower-fee or no-fee bank accounts.
• Cancel your gym membership if you don’t use it regularly.
• Consider prepaid or fixed-rate phone plans.
• Find out if you’re eligible for home energy assistance or discounted utility rates.

With such a resource in your repertoire, coupled with a savings and debt management plan, you should be off to a strong start on your path toward financial recovery.