The Only Way to Go Is Up: How to Come Back from Financial Ruin
Around one-third of Americans from lower-income households fear that they may never recover from their financial disasters, according to a survey conducted by Transamerica Center. If you find that you can relate to this, it would make sense if you’re more stringent with your financial decisions about family, friends, and businesses. Financial ruin is tough but when you’ve hit rock bottom, the only way to go is up. On that vein, what are the first steps you should do to recover from financial disaster?
Accept the Reality
When you find yourself in the midst of a financial disaster, it can be rather tempting to pass the blame. Fear, shame, and even anger are the emotions that are closely tied to financial loss, says financial expert Suze Orman. Holding on to such negative emotions and mindset is counterproductive to what you need to do to financially recover. One of the first things you need to do is to fully accept the reality of your financial ruin. Once you’re able to do that, your mind will be more open to constructive and productive plans to rehabilitate your finances.
Check Eligibility for Chapter 7
Bankruptcy is a word that is surrounded by negative stigma. However, it just might make the difference between bouncing back or digging a deeper ditch for yourself. Depending on the facts of your financial issue, you may find yourself eligible to file for Chapter 7 bankruptcy which can help you pay back some of your debt. There are different forms of bankruptcy filings so it’s good to consult with a financial consultant or a bankruptcy lawyer to help you. Before you decide, it is important that you have a full understanding of what’s involved once you’ve filed for bankruptcy and how it will affect your future plans.
Set New Financial Goals
Another one of your first steps toward recovery should be about having new financial goals. Simply targeting “financial recovery” is too broad an aim and it would benefit you to narrow it down. It helps if you were to have specific goals like aiming to save up an X amount by a certain date. To help keep you on track toward financial recovery, it’s best to keep your financial goals measurable, says Todd Tresider of FinancialMentor. That way you can actually see the progress of your recovery and will help promote a feeling of positive movement.
Like all things in life, you will hit speed bumps. The same is true for your new financial goals and plans. So to help start up your journey toward fiscal recovery, it would be important to remember to be flexible. If your goal has hit a few bumps along the way because of any unexpected payments or expenditures, it would be in your best interest to be flexible. If that includes moving back the target date of recovery or lessening the amount you’ve wanted to hit, you need to be able to do that with an open mind. That way, you won’t be blindsided or feel like all your plans are going awry.
Financial disasters are truly disheartening but they certainly not the end of you. Particularly, if you’ve got your eye set on better financial decisions and steps to start up your fiscal recovery. It may be hard but no journey is ever easy. Always remember that just by taking the first step, you’re already on your way back up.