Dealing with a financial crisis is not easy, especially since they are almost always accompanied by other stressors such as losing a job, a divorce or a loved one experiencing a serious illness. Quite often, dealing with money is at the bottom of your list of priorities as all of your energy is poured into dealing with the emotions and logistics of dealing with other precipitating events.
Eventually, the time will come when you have to focus some of your attention on your financial situation even while your life is still in turmoil. It’s not easy. We’ve recently been through this in my own family after a sudden and tragic death in my husband’s family. We’re still in the process of getting our finances back on track and I’ve learned a lot from dealing with this crisis, pointers I want to share with you.
Don’t beat yourself up
After the dust has cleared and the bills start coming in, it’s easy think of ways you could have spent less. Saving money can’t and won’t always be your first priority, particularly during times of emotional stress and upheaval. What’s done is done and chances are you dealt with the situation as best you could considering the circumstances. So don’t add guilt to your list of burdens. That’s one of the worst things you can do.
If you have a partner or spouse, it can be difficult to talk openly with each other about your financial situation without placing blame or becoming overly emotional. Do your best by staying with facts and emphasize that this is something you’ll be working on together. You’ve both been through a difficult experience, so be kind and loving but also insist on being treated with respect.
Face Reality
If you’ve been through the wringer, it can seem almost impossible to do even little things like open the bills or look at your bank balance. That’s completely human and understandable, but things won’t get better until you know the situation you are facing. Often, the dread of what you’ll find is much worse than how you’ll feel after you’ve faced it.
Making a simple spreadsheet can not only help you stay organized but also give you something concrete to do to help you feel like you’re gaining control of the situation. A heap of open bills and bank statements can be very disheartening and overwhelming, but a neatly filed list will look more like something you can tackle.
Ask for help
If you have fallen behind on your bills and don’t have the cash on hand to get current, there is no harm in calling to ask if something can be worked out. Even if not all companies care about you as a person, most want to get paid and understand that working with you is the best way to accomplish that.
Be honest about your situation and don’t let yourself be pressured into making commitments that you aren’t sure you can keep. You can always ask for time to think about or discuss any proposed solution with your partner before agreeing to it.
Family and friends might also be able to offer you assistance. Even if cash help is not a possibility, they could offer valuable advice, help with a job search or move, childcare or even just a friendly ear. I’ve often been surprised how often somebody has just the tip or idea that was exactly what I needed, but I would never have known had I not opened up about my situation. Independence is a wonderful personality trait but don’t allow it to isolate you and deny you potential help.
Never feel ashamed about applying for any government or charitable aid that you need and qualify for in times of crisis. These programs were set up to help people just like you and there is absolutely no need to feel shame in taking the help. You contributed when times were good and you can pay it forward when times are better.
Make a plan
Once you know what you’re working with, you can form a plan to get you back to financial health. Be sure to think about how you’ll build up a new emergency fund; it should be considered a non-optional necessity. You will need to:
Set priorities. What needs to be taken care of first? What can wait? Making sure you have a place to live and food to eat are primary. If the situation is severe, you might have to make really tough choices like selling a house or filing for bankruptcy – these should be discussed with a legal expert before you take actions that might limit your options.
Make a budget. If at all possible, allow a little room for things that will make you feel better. You don’t need to spend a lot of money, but setting aside enough for an inexpensive date night or gas to visit an out of town friend can help you not feel deprived.
If feasible, look for ways to earn extra cash to make the process go faster. In our situation, I started freelance writing to bring in income and give us more stability. If you are getting unemployment benefits or other government aid make sure you check the rules first.
Sometimes, even setting up a part time business can make you ineligible for assistance. You’ll have to carefully weigh the costs versus benefits of earning some money on the side versus any effects it will have on your benefits.
Set goals for your long-term financial stability, including having an emergency fund. Make sure you have adequate insurance and repair any dings to your credit record.
The good news
Although it can take many months or even years, you can recover from a serious financial blow. The first step is taking actions that will remind you that although you can’t control everything, there are many choices that you can make to help your situation improve.
It might not seem fair to have to worry about something as mundane as money during stressful, painful life events but keeping your finances in order is one way to ensure that your life has the stability needed to help you fully recover.
Have you ever dealt with a serious financial setback due to a stressful, life-changing event? How did you turn the situation around?
