Navigating financial hardship: A comprehensive guide
Managing debt during financial hardship
Debt is one of the most common challenges people face during financial hardship. If you're feeling overwhelmed, you're not alone. The first step is understanding what kind of debt you have, such as credit cards, student loans or medical bills. Each type may have different repayment options.
If you're juggling multiple debts, debt consolidation can help by combining them into one payment, often with a lower interest rate. This can simplify your finances and reduce monthly costs. Be sure to compare lenders and avoid offers that seem too good to be true.
You can also contact your creditors directly to ask about hardship programs. Many offer temporary relief, such as reduced payments or waived fees. Be honest about your situation and ask what options are available. Westerra members can also explore personalized support through the Member Assistance Resource Center.
Watch out for scams. If someone promises to erase your debt quickly or asks for upfront fees, it's likely a scam. Stick with trusted organizations and verified resources. Westerra offers credit education tools and calculators to help you make informed decisions.
Budgeting & emergency planning
When money is tight, budgeting becomes essential. Start by listing your monthly income and expenses. Focus on covering essentials like housing, food, transportation and utilities. Westerra offers budgeting tips and tools to help you track spending and stay on top of your finances.
If you don’t have an emergency fund yet, start small. Even saving $10 a week can build a cushion over time. Aim for three months of essential expenses. You can open a savings account with Westerra in just a few minutes and begin earning interest right away.
To reduce expenses, look for areas where you can cut back temporarily. Cancel unused subscriptions, cook at home and search for free recreational activities in your area.
If you're looking to boost your income, consider gig work, freelancing or selling unused items.
Accessing emergency assistance & support
If you're experiencing financial hardship, there are local organizations and community programs that can help with essentials like food, housing and utilities. Westerra partners with several nonprofits to support members and the broader community.
Start by calling 211, a free service that connects you to nearby resources such as food banks, rental assistance and mental health support.
For food support, organizations like Food Bank of the Rockies and Metro Caring offer groceries and meal programs. If you're struggling with housing or utility bills, Energy Outreach Colorado provides emergency aid and referrals.
Westerra also supports the Colorado Homeownership Coalition, which offers mortgage assistance to Colorado families facing temporary income disruptions. This program helps prevent foreclosure and promotes housing stability.
Avoiding scams
Scammers often target people during financial hardship, using urgency and fear to trick them into giving up personal information or money. Knowing how to spot and avoid scams is key to protecting yourself.
Start by being cautious with any unsolicited calls, texts or emails asking for account details, passwords or Social Security numbers. Westerra will never ask for sensitive information over the phone or via text. If you receive a suspicious message, do not respond. Instead, call the number on the back of your card or visit a branch directly.
Watch out for payday loan offers, debt relief companies that charge upfront fees or anyone promising to “erase” your debt. These are often scams. Use trusted nonprofit resources like the National Foundation for Credit Counseling or Green Path for safe guidance.
Westerra also shares regular Fraud Watch alerts and hosts seminars to help members stay informed. For older adults, Westerra partners with the Denver Police Department to offer fraud prevention education tailored to seniors.
Financial Hardship Questions and Answers
Start by contacting your service providers and creditors. Many offer hardship programs or payment extensions. Westerra members can explore options through the Member Assistance Resource Center.
Use a flexible budgeting method like zero-based budgeting. Start by listing your fixed expenses, such as rent, utilities and insurance. Then estimate your variable costs, like groceries, transportation, and personal spending. If your income fluctuates, base your budget on your lowest expected monthly income to avoid overspending. Set aside a small buffer for unexpected costs. Even if you can only save a little, having a cushion can help you avoid relying on credit cards or loans when emergencies come up.
If you're renting, check with local housing nonprofits or your city’s emergency assistance programs. Homeowners can explore support through the Colorado Homeownership Coalition, which offers mortgage relief for families facing financial hardship. You can also search for help through HUD’s rental assistance directory.
Be cautious with unsolicited calls, texts or emails asking for personal information or money. Scammers often pose as lenders or government agencies. Never pay upfront fees for debt relief or loan offers. Learn how to spot and report scams at consumer.ftc.gov.
Even small amounts matter. Try saving $5 or $10 a week if possible. Automate your savings to make it easier. Building an emergency fund over time can help reduce future stress and give you more financial flexibility.
Looking for more ways to take control of your finances?
*The information provided on this website and within Westerra Credit Union’s financial education resources is for educational and informational purposes only. It is not intended to provide, and should not be construed as, financial, investment, tax, legal, or healthcare advice.Westerra Credit Union does not offer or provide guidance on individual tax situations, legal matters, or healthcare decisions. You should consult with a qualified financial advisor, tax professional, attorney, or healthcare professional for advice specific to your personal circumstances.While we strive to ensure the accuracy and timeliness of the information presented, Westerra Credit Union makes no guarantees or warranties, express or implied, regarding the completeness, reliability, or suitability of any information, products, or services referenced herein.Your use of this website and participation in any financial education materials or programs signifies your acknowledgment and agreement that Westerra Credit Union is not liable for any losses or damages that may arise from reliance on the information provided.
