Most of us have times in our lives when financial challenges threaten to overwhelm us. Whether it’s an unexpected car repair, or whether it’s a job loss, financial setbacks happen in most of our lives. At these times, it’s tempting to give up and sink into despair — especially if the setback is a large one.
However, you can overcome your financial challenges. It takes hard work and determination, but it is possible. Here are 4 steps to take as you work to overcome your financial challenges:
1. Don’t Do Anything Rash
First of all, take a step back. In the first blush of a financial setback, the instinct is fight or flight. You want to do something, and do it quickly. However, these types of snap decisions, made when you are under emotional stress, are rarely good decisions. Instead, you are better off stepping back, taking a deep breath, and putting off action. Don’t rush to withdraw money from your retirement account, or make any other similarly large decision. You’re already facing difficulty, and a rash move could make it worse.
2. Take Stock of Your Resources
Now that you have taken a step back, it’s time to consider your resources. What do you have available to you? Do you have an emergency fund? Can you cash in some stocks? Do you have relatives willing to help you out? Do you have the option to get a part time job? Is there a side hustle you can start? Can you sell a few items to raise extra cash?
Take stock of your skills and abilities, as well as number your assets. Once you know what you have, you can start thinking about taking effective action.
3. Make a Plan Based on Your Resources
Create a plan to address your situation based on your resources. If you have been laid off, one of your resources is unemployment. Go down to the appropriate office and apply for benefits. Then make a plan to start a side hustle, look for a job, and take other action. In some cases, your plan is as simple as selling some items collecting dust in the attic so that you can buy a new appliance to replace a broken item. Create a plan based on your situation and resources. You’ll be surprised at how much better you feel just for having a plan.
4. Execute Your Plan and Get Help if Needed
Now it’s time to put your plan into action. The severity of your financial setback will determine how long your plan needs to be in effect. Look for support as you implement your plan. Get help from friends and family. Devise rewards to mark your progress. Stay motivated and acknowledge how far you’ve come. Eventually you will overcome your financial setbacks and start down the path to financial freedom.