Financial setbacks can strike at anytime and without warning. So it’s best to be prepared.
“Come to terms with the reality that a financial disaster is not the end of the world. Companies and individuals experience financial disasters everyday, know who you are when this occurs to you and start preparing for your recovery by discussing it with your loved ones and the entities that are going to be impacted by this disaster (employer, insurance company, creditors, bank, etc.),” explains financial expert Paul Lawrence Vann, president, Wealth Building Academy, LLC.
Reach out to your creditors and alert them to the situation. “Let them know about your hardship, they may provide relief in the form of debt relief. Contact your local social services office, credit counselor service for your county/state and everyone who needs to know about your plight,” he says.
Take time to understand why the setback happened. “Examine, re-examine and move forward. Take a close look at what you are doing, what you’ve done and what you can do better. If you are living above your means, charging too much, taking on non-emergency debt such as pay day loans, change your behaviors,” notes business coach Chantay Bridges, of Clear-Choice Realty & Associates.
Don’t be overwhelmed with grief at the loss of possessions. “If you lose your house, car or job, they are things and can be replaced,” says Vann.
Look for avenues to get ahead. “Consider studying, reading books on habits of the rich. Ask yourself, what are they doing that I am not? Then implement habits of extremely wealthy individuals. Many save, buy what they can afford and practice debt reduction mechanisms,” offers Bridges. “A surprising tip, they don’t always pay retail, they search out deals, utilize negotiation strategies and practice spending their hard earn cash wisely.”
In order not to get stuck in the same situation, create a financial plan. “As with all successes you need a plan. Create a plan by making a budget that not only assists in turning your financial disaster around but prepares you for difficulties in the future,” says Bridges. “Let’s say all of your credit cards are maxed out, begin no longer utilizing them for non essentials. Reduce the number you have. Pay them off one by one. If you run into another emergency, you will be more ready. You would have already gotten rid of all of your high interest cards and reduced your debt ratios.”
