At some point in life, everyone has felt some form of financial shock. Be it because of a loss of a job, unpaid debts or any other financial emergency, you may have ended up in a situation wherein you struggled to make ends meet.
While financial setbacks may be common, many still experience difficulty coming to terms with them. No matter what may have caused your financial setback, it’s important that you’re honest with yourself so you can get started on your journey to financial recovery.
In fact, the faster you plan and address what needs to be done to stabilise your finances, the faster you can get back up on your feet.
In this article, we will be exploring some essential steps that can help you bounce back after you’ve experienced financial shock.
Let’s begin!
1) Accept the Situation
It’s only natural to experience feelings of shock or denial after any kind of financial mishap. However, if you wish to recover from it, one of the biggest steps to take is to accept your new reality.
You could do this by venting out your frustrations to a close friend or partner, writing down your feelings in a journal or even channelling your frustrations into another activity. The most important part is to let these feelings go after you do so.
Revisiting the past and reliving what could have been done differently will only drain you of your energy and dampen your morale. You need to make a commitment to yourself to move forward from your financial crisis and succeed. It is only after you accept your situation, that you can actively begin to deal with it.
2) Know Your Financial Resources
Begin by taking inventory of all the financial resources available to you. From emergency funds to payday loans, you need to evaluate all your options.
One of the best ways to initially combat any financial setback is to dip into your emergency savings fund. If you do not have one, no worries, take this opportunity as motivation to start building one as soon as you are able to do so.
If you’re truly in an emergency and do not have the funds to take care of it, you may need to consider applying for a payday loan. While they may appear intimidating, if managed responsibly they can give you the initial boost you need to help you get back on your feet.
By knowing your financial situation and understanding what resources are accessible to you, you can start planning the next steps on your recovery journey.
3) Set Up a Budget
If you do not already have a budget, now is an excellent time to make one. By setting up a budget, you can understand exactly what resources are available to you and what debts need to be paid in what order.
A budget also helps you identify areas where you can cut back on expenses—for example, cancelling unnecessary subscriptions, switching to less expensive mobile packages, dining out, etc.
Furthermore, you can also use a budget to track your income and expenses accurately. This will help you get a better understanding of where your money is going.
4) Create a Timeline and Find Support
Now, based on your budget, set a deadline to get through your financial shock. Your deadline could be based on practically anything, whether it’s paying off a certain expense, finding a new job, or any other goal.
Creating a timeline for yourself and marking when you wish to achieve certain goals will make it much easier to power through difficult times. If you wish to go the extra mile, you could also share your goals and milestones with friends and family members during your journey.
By doing so, you can open new avenues of support as you attempt to cut back on frivolous expenses and work on improving your finances.
5) Take Action
Having a plan is great, it shows that you’ve put in the time and effort to plan a series of actions to help bounce back from your financial crisis.
Careful planning certainly is half the battle. However, the other half of the journey to bounce back from financial shock is taking action to turn your plan into a reality.
Only creating plans is not enough to take you to where you want to be. Alongside this, it is the execution of these plans that truly help you move forward.
Your plans may not always be perfect and could require some adjustments along the way. However, as long as you stay consistent in your efforts, there is no end to what you can achieve.
To Wrap Up
In many cases, personal financial crises may be the result of events that are beyond our control. As such, there’s often nothing that could’ve been done to prevent them from occurring.
Even if your disaster was a result of your own financial decisions, you can still use this opportunity to learn some important lessons.
By keeping the above steps in mind, you are well on your way to recovery from financial shock and getting ahead of any potential financial setbacks in the future.
