5 Tips to Help You Recover from a Financial Setback
I’m not a financial expert. My last name is not Orman or Ramsey, and I don’t give financial advice for a living. But I’m a wife and mother of five. I run a busy household and my own business. I know what it feels like to have to juggle finances and sometimes rob Peter to pay Paul. Yes, I have experienced and overcome many financial hardships in my life, especially in my early twenties.
In fact, when I was just 24 years old, my bad financial decisions led me to file bankruptcy. I also lost a home to foreclosure. So, you see, I’ve been where you are. I’ve made money mistakes, but I’ve learned a few things along the way that I want to share with you.
Here are five ways to bounce back and recover from a financial setback.
#1 Decrease Your Spending
Decrease your spending by doing things like lowering your monthly bills and commitments. It’s easy to increase your spending whenever you get a raise, bonus or lump sum of money, but, you should never spend more than you make. I also don’t think you should spend everything that you make and be down to zero.
Look into which monthly bills you can consolidate or remove altogether. Regardless of how much money I bring in, I do my best to keep my monthly bills low. I downsized or cut out what we no longer needed.
I’ll be honest, I never thought I could live without cable, and my husband is a sports fanatic, so he certainly didn’t see himself without cable. But we did it. We’ve invested in other alternatives work just as well as having cable AND that help save us money.
#2 Invest Your Savings
I’m not just talking about a rainy-day fund. Use your surplus to help you go back to school, start that business and even invest in coaching, training and personal development.
While a rainy-day fund is necessary, so are other activities and opportunities that have the potential to grow your bank account in the long run.
Don’t just let your money sit, invest it in ways that will benefit you. And if you do let it sit, make sure you’re earning as much interest as possible.
#3 Decide to Make Better Financial Choices
I believe that every choice begins with intention and a decision. No matter where you are in your process, you can always decide to make new and better financial decisions. Create a new financial vision for yourself and a plan of action to get you there.
#4 Don’t Beat Yourself Up
We all have made some bad financial decisions. Don’t beat yourself up! Learn from your mistakes, make the corrections, and move on. Wallowing in self-pity will not get you out of a financial bind, it will only prolong your frustration. Forgive yourself, dust yourself off, and move on.
#5 Get Help and Support
To learn how to better manage your money, you may need to hire a coach or a professional planner to help you make changes in your life. Take a course; educate yourself. Being educated helps you to better understand your options and gives you the ability to negotiate.
After going through a foreclosure, I took a homebuyer’s course before I purchased my next home. Afterward, I was better equipped and prepared to deal with the challenges of homeownership.
“Trying to convince yourself that if you could get a raise, make more money, or win the lottery, you would become a better financial manager usually doesn’t work. Regardless of the size of your paycheck, you can still find yourself living paycheck to paycheck, if you are not a good money manager.”
It took me many years to repair my credit and bounce back from being “bankrupt.” I had to work hard at my finances and practice discipline. In fact, I’m still working hard and practicing every day to continue to make good financial decisions.
Remember, when you receive a raise, or get a better-paying job, it does not mean you have to go out and create bigger bills. That extra money can be used to invest in yourself or to start your own business. It can also be used to start a savings account or an emergency fund. You do not have to spend it as fast as you make it.
I hope that you learned something that you can use to make some positive changes in your life. If you’ve enjoyed, please be sure to like it and leave your comments below. Share this with others who are trying to recover from their past financial mistakes.
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Originally published at www.tamarahartley.com on May 24, 2018.
