How to Bounce Back from a Financial Setback
It can feel incredibly devastating to go through a financial crisis. Not only does it create chaos from a budget perspective, it also impacts physical and mental health in negative ways. Financial setbacks can bring out feelings of guilt, shame and loneliness. Relationships suffer. Here are some clear actions to help you bounce back from a financial crisis.
Safety First
Whenever we face difficult challenges, our minds kick into high gear to protect us from harm. You may have heard of the “flight or fight” response. Our bodies are designed to survive even the most horrific situations. The most important thing to do is to acknowledge how you are feeling about the situation. Be honest about the circumstances leading up to the financial crisis and all of the ways it is affecting your life.
Some folks find it helpful to journal. By putting things down on paper or typing a word doc can help get it out of your head. Think of it as a brain-dump. Read back to yourself what you wrote and look for the things you can control. Ask yourself, “what’s the next step?”. Organize your thoughts around positive, impactful actions that will guide you in the direction you want to go.
Build Healthy Routines
One of the strongest financial habits to develop is to consistently track your cashflow. Use a monthly calendar to track your recurring income and expenses on the date they occur. You can manage your cashflow weekly, biweekly or monthly. The goal is to know what money is coming in, what has already been spent (upcoming bills) and what is left over.
Pay or schedule payments for your upcoming bills at least ten days in advance. Deduct each bill immediately, don’t wait for it to clear – because those dollars are gone. If you have $250 left after paying your bills, then that is what you have for everything else. Your online banking balance is rarely a true reflection of your spendable balance.That has to do with electronic fund transfer rules and not something you can control or change.
Figure out what daily expenses you need to cover before the next influx of cash. This might include gas, parking, snacks, groceries or gifts. Be creative about minimizing costs by using what you already have – make a snack, babysit/dog-sit for a friend in lieu of a gift, make pizza from scratch and watch movies at home, work out in your kitchen or look up free things to do nearby. Find joy and rest in what you have, where you are and the good friends you have today.
Be intentional with how you allocate your resources. Both time and money are precious. Take care of yourself and your needs first. It’s impossible to help others when you are burned out, sick or angry. Contribute what you can within safe boundaries. Life is a long journey. Your wellbeing and health depends on pacing your spending goals.
Even Bears Have an Emergency Stash
Seriously, though, everything in nature stores up energy and resources for lean times. It’s all around you. Take a lesson from the earth and set back a portion of your daily harvest for the future.
- Freeze leftovers or desert for next week’s lunch
- Grow your own mint or herbs for tea, seasonings
- Save any non-earned income – like tax refunds, birthday gifts or bonuses
- Buy second-hand, vintage or make it yourself
- Learn how to fix, repair, refurbish and immediately save $$$
- Make your own gifts & cards
- Create exchanges with friends – they help you with your task/repair and you help them with theirs
- Host friends for a cooking date where everyone makes a dish and splits it
- Build a meaningful community of trust
- Be relentless about putting your hard earned money towards the precious things that matter most to you
- Redefine your true needs
You Are Not On Your Own
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