Financial setbacks happen for a number of reasons: Your car breaks down, you have a health issue, you lose your job, you get divorced, your credit card bills or loans are impossible to escape from, or an unexpected money emergency of any kind occurs.
When a financial setback occurs, it’s only natural to panic and get emotionally distressed, thinking there’s no way out.
Luckily, financial setbacks occur frequently. In fact, “by age 70, 96 percent of Americans experience four or more major life events — such as a layoff, illness or divorce — that cause their incomes to drop 10 percent or more.”
Here’s how you can bounce back after a financial setback.
Access your situation
First things first. You have to look at how bad your financial situation is, what caused the setback, and what you can do to make it better right now.
Everyone’s financial setbacks are different and everyone needs different amounts of money to bounce back as a result. For people with bad credit or limited incomes, online payday loans can help to get you out of a financial disaster. It’s important to make sure you can pay the money back on time, though, because the biggest thing that’s going to make a financial disaster worse is owing more money and missing payments.
You can’t move forward until you let yourself off the hook. You have to forgive yourself for your financial blunder or else your emotions could lead to your setback becoming worse.
According to a Credit Karma survey, “More than half (52 percent) of respondents said they have impulsively shopped to deal with feelings of stress, anxiety or depression.”
Spending money when you don’t have it will make your setback worse.
A financial setback occurred. There’s nothing you can do to change that, but you can let yourself off the hook and create a plan to get back on track.
Make a plan
If you don’t sit down with your budget and make a plan, then how are you going to know if you can make things better? Try to free up cash on subscriptions that you can live without, or other areas where you can save money.
You might come to the conclusion that you don’t have enough money to make all of your payments. Finding another job, whether part-time or full-time, is an option to increase your income. There are avenues out there, whether you’re looking for a Securities Training job or want to pick up part-time employment at a local coffee shop or bookstore.
Once you know how much money is coming in and how much is going out, you can have peace of mind and know your bills (and possibly creditors) are going to be paid off by sticking to your plan.
Be realistic with yourself and create something you can stick to.
The most detailed and thought-out plan won’t mean a thing if you don’t take action and if you don’t follow through with your payments. Let your actions do the talking from this point forward.
Find ways to save money, such as eating at restaurants less, not going out on the weekends, or cutting back in other entertainment areas.
Your plan is created. Now stick to it so you can bounce back.
Reward yourself for small victories
People are constantly worrying about money. That’s especially the case if your options are limited. However, once you’re taking action on your plan, it’s important to reward yourself for small victories. Mental health is important, after all.
Don’t celebrate by splurging and getting back to where you were. Celebrate by going on a hike, hosting a get-together at your home featuring a potluck night, or binge-watch your favorite show.
You experienced a financial setback, but you can bounce back in no time by following the steps above.