These are uncertain times. Jobs aren’t as dependable as they once were, and a serious illness can devastate your finances.
Even people who are well prepared can make mistakes or encounter misfortunes that ruin their finances. It can happen to the best of us.
If it does, it helps to remember: This is not the end; it’s the beginning of something new. People bounce back from disaster all the time.
1. Accentuate the positive
Corny? Maybe a little. But make no mistake: Keeping your attitude upbeat really works. So does staying in the present. You’ll want to learn from your mistakes, but rehashing them endlessly keeps you from moving on.
In the same way, worrying about the future robs you of time and energy.
2. Seize control
Learning precisely where you stand in a crisis is painful. But there’s also relief in knowing what you’re up against. You can’t dig out until you know how deep your hole is.
- Get a grip by tracking your expenses.
- List all the bills you have to pay — rent or mortgage, utilities, insurance, groceries, car payment, gas and whatever else you need to cover to keep going. Add them up. This is the basic amount you need each month. Put your wants aside for the moment.
- Make a stripped-down spending plan including, for now, only those crucial bills
3. Get professional help
Pride has its uses, but paralyzing you isn’t one of them. If you hit obstacles you can’t get around, don’t waste time being stuck. Reach out to people with the expertise you need. A trustworthy credit counselor, for instance, can negotiate lower rates and a debt repayment plan with your creditors, taking bill collectors and pressure off your back.
Find accredited credit counselors. Most advice is free. Get any agreement in writing before paying a cent. Don’t hand over money before you’ve received services.
4. Beware of crooks
Panicked people in financial distress are a juicy target for fraudsters. Credit repair schemes are notorious for fraud.
When it comes to credit problems, time is your friend. In 7 to 10 years, even negatives as severe as foreclosure and bankruptcy will drop off your credit reports.
5. Exercise
Seriously. Exercise has surprising powers to keep your mood up, energize and focus you and move you forward.
6. Safeguard your housing
Call your landlord if you’re renting and ask if you can make smaller payments for a few months until you can get back on your feet.
If you are a homeowner, call the mortgage company right away. Don’t wait to get into trouble. Most lenders have foreclosure prevention programs to help homeowners in crisis.
7. Find additional income
While you are figuring out where your life will take you next, you’re going to need money to keep the furnace on and groceries in the fridge.
8. Learn about resilience
“Resilience is that ineffable quality that allows some people to be knocked down by life and come back stronger than ever,” says Psychology Today.
“Resilience is ordinary, not extraordinary,” says The Road to Resilience, a brochure from the American Psychological Association. It offers strategies for developing resilience.
