Things happen. Good things, strange things and unfortunate things will happen in your lifetime.
When an unexpected situation occurs you can still keep your financial composure. Of course illnesses, accidents, catastrophes and tragedies usually cost quite a bit of money and time to recover. They can mean being out of work for a period of time and losing out on income.
While none of us actually knows how much time we have, it’s a good strategy to plan on living a long time and knowing you can recover from unexpected events.
How to plan/recover from unexpected events:
- Accept the situation and where you are. When catastrophes hit, it is often difficult to make sense of it, accept it and admit that you may not have been fully prepared. Analyze the situation and write a list of possible scenarios and how you will respond to them and move forward.
- Save, save, save! When you are working and earning income, stash away some of it. Some advisers recommend several thousand dollars, six months of income or recommend saving 30% of your income. Pick a strategy that works for you and save.
- Look ahead before something happens. Most people will have significant events in their lives that will require unexpected expenditures. Ask yourself, if I need to pay several thousand dollars for an unexpected and important situation how would I do it? Do you have savings, could you borrow it?
- Cut your expenditures. When financial hardships hit, cut out all unnecessary expenditures. Look at every bill you have and determine if you can reduce it. Unplug appliances when not in use, reduce your grocery bill, turn off lights when not needed, avoid convenience fees and cancel services you do not need or use.
- Look for additional income sources. If you can work, evaluate getting a second job to help you through tough times. If you cannot work your regular job, look at different options you can do with your limitations. Ask friends and family if they know of any positions or side work that would be suitable for you. Look at job sites, go directly to small and local businesses and ask them if they are hiring. Register with a temporary job agency. Sell an extra car and sell items you no longer need or use.
- Look ahead during tough times. It’s easy to get caught up in the moment and think things are going to be difficult forever. But that’s not true. Things in life are constantly changing. The decisions you make during difficult times are even more critical to your ultimate financial outcome. Breathe. Make the phone calls, ask for discounts, research your options and move forward. Everything can and will be different in a few years.
- Be patient. When going through difficult times you have much more going on in your life than during normal times and managing your finances will be one of many items on your plate. Prioritize your needs, necessities and wants. Focus on one bill at a time, one project at a time and one issue at a time. Remember, you may be in survival mode and it may take a long time to recover but you will survive and things can be brighter and better in the future.
- Look for inexpensive or free activities that you enjoy. Going through difficult times can take your attention away from good times and doing things you enjoy. Strains on you finances can cause people to stop doing things they previously enjoyed. Spend some of your time finding things you enjoy such as family activities, walking outside, playing with your pets and talking to friends. Go online and follow an educational course, learn a new skill or explore information and topics that interest you.
- It’s only money. While money fuels our lifestyles and provides necessities it is only part of our lives. Money is not as important as your health, family or happiness. If you have to spend it, borrow it or make payments for the rest of your life to get through a tragedy, it needs to be done.
- You can always recover. Sometimes, hardship, illness, debt and life can really drag you down. Looking at your financial picture may seem hopeless. It never is. You can always recover.
Photo by Mitchell Griest on Unsplash