It’s something that can happen to any of us- a series of setbacks spiraling into a financial crisis. So if you find yourself in dire straits with money – you indeed aren’t alone. The severity can range from completely decimating your savings to having to call in bankruptcy attorneys, but it’s a situation where panic is not your friend. Divorce, ongoing medical bills, overspending – there are many reasons you may find yourself sinking. But what can you do when things are past the point of merely trimming your outgoings down a bit?
Accept the Situation
When things start to slide, so many people’s instinctive reaction is to bury their heads in the sand and deny reality and credit card balances – but this is only going to cause more pain. There’s no point at this stage wasting time analyzing The minutiae of what went wrong or bemoaning a streak of bad luck. What’s done is done, and now it’s about the best way to climb out of the hole. Wallowing in misery is a psychological energy drain, and you need to put that energy to better use solving the immediate problems.
Take Stock of The Situation
However bleak what you’re facing is, it’s essential to have a precise inventory of your complete financial picture. This will help you to develop a realistic financial plan to get out of the difficulty you’re facing. Look at any remaining assets you have and how best they can be used, how much you owe and to whom, what your credit score is and the maximum income you can generate in a month.
Create a Goal
This step gives you something to aim for. Learn how to set SMART goals – including end date, an achievable monthly target, and milestones along the way. What moves to you need to make to get from your current situation to where you want to be? And what is the most efficient way to get there? If you break down the actions required into manageable steps, it will help spur you along and give you a definite focus that makes the whole experience seem less overwhelming. The important thing is to be consistent, even when the going seems terrible – it’s the only way to turn the situation around.
Learn From Your Mistakes
Not just the major ones that led you here – but the little ones you’ll inevitably encounter along the way to sorting it all out. Don’t get paralyzed by trying to make everything perfect from the get-go – make a start and commit to learning on the job. Set up that new budget spreadsheet. Seek out that little bit of work on the side that might give you more headroom. Cut those expensive subscriptions and switch to the essential brands and deals at the market. Most of all, try to embrace the process. You’re going to have to get through it, and resenting every sacrifice will make it worse. Try to frame it to yourself as a learning process and a proactive approach to mending a bad situation, which is something to be proud of.