Recovering from a Financial Headache

It’s the holiday season and it’s one of the most festive seasons of the year. This is also a season when a lot of spending happens and financial headaches set in. These can be times when credit card debts and loans increase, when people often seek extensions for their bill payments, when you worry about having insufficient money coming in to cover the required or projected expenditures and many other financial concerns. While it seems like there is much to worry when it comes to your finances, there are also clever and efficient ways to avoid or get through a sticky financial situation.

Accept and Assess the Situation

The first step to handling any problem is to accept your current situation. You have to admit that you or someone else made a mistake that led to the financial trouble that you are finding yourself in. Don’t live in the past and wallow in regret and self-pity. It’s a waste of energy and prevents constructive thinking. You have to accept reality and admit that there’s no turning back. What’s done is done. What matters now is the present and what steps you start today that can help mitigate the effects of your financial trouble in the future.

Self-assessment comes after you have accepted your financial setback and you’re ready to commit to moving forward. By then, you can muster the strength to look at the situation rationally and objectively examine the figures in your bills, debts and invoices.

Take Inventory of Your Resources

Now that you know where you currently stand in your financial situation, it’s time to take inventory of the resources that you have and develop a recovery plan to get back from the financial disaster.

Always be objective and realistic when looking at your current financial situation. Always take note of how much money you owe from someone or from an institution. Also make a mental tab of your current assets that remain. They can prove helpful when the going gets tough.

Objectively look at your income situation. Always look at the net pay and determine the pattern of your paydays and amounts of your income. You may determine a recurring pattern that can help you schedule your payments. For example, if you are paid bi-weekly or once every 2 weeks, you might notice that you get less or no deductions and mandatory contributions on the first payday and have the deduction and contributions made on the second payday or vice versa. You can then plan your payments taken from the payday where you receive a higher pay.

Another important item that should be in your inventory is monitoring how much you spend. This is where you can assess and make revisions to your current spending practices. An important point in planning and executing your spending is to spend less than how much you earn. This way, there is always some money left to set aside and save for other future uses.

Your credit score is also an important item that you should take into account. You should also objectively look at the current rating or score that you have and plan for your next course of action.

Be Open to Another Loan

Being stuck in a bad situation with a loan doesn’t mean that you should be totally closed out another loan in your financial options. While it’s true that a debt should not be financed by another debt, there can actually be smart and manageable options wherein you can get another loan for the unexpected financial emergencies that come while you’re still getting back on track.

Loan institutions across the world more or less follow the same principle of operation, whether you’re borrowing in the US or Australia. Australian loans, like their US counterparts also offer flexible financing options that do not check on your credit score and your financial situation, such as payday loans and cash loans. These can be particularly helpful when you’re still in the process of settling your debts and you have another urgent financial emergency. As you may already know, these emergency loan options need to be settled on your next payday, so it is wise to carefully weigh your options first and plan out your payment terms in case you decide to go for a loan. Never borrow more than the amount you intend to use the loan for. If you’re $100 short on your rent or monthly amortization, just borrow the exact amount and don’t think of adding an ‘extra’ for other unnecessary expenditures. These extras can mean higher interest rates and just compound your financial burdens even more. Remember to settle payday loans once you’re out of the emergency.

Being able to properly settle a small loan can also teach you the value of paying loans on time and help come up with strategies for paying the other bigger loan that you need to settle. Loans can be quicker and faster options than selling some of your possessions or rendering short paid services. Thus, as much as you want to steer clear of another loan, you might as well be open to this option in cases of emergency and immediate need.

Set a SMART Goal

Now that you know where you stand and your starting point and you have equipped yourself with a good assessment and inventory of your resources, it’s time to set your course to your destination – financial recovery. Goal setting is an essential step when you want to achieve something. Thus, it needs to have the S.M.A.R.T. quality, and guidelines are discussed below:

  • Specific – it must be clear, definable and has a definite value. Don’t stop with the goal “I want to save money.” Instead, make it “I want to save $6,000 by the end of 2020” to have a specific goal and have a clear direction.
  • Measurable – your goal must have a way where your progress is measured as you proceed toward your goal. For the example above, you have a 1-year timeline to achieve your projected savings goal. Thus, you can monitor your progress each month and set smaller goals for each month, wherein you’ll need to save $500 for each month.
  • Attainable – make your goal attainable in a way that it challenges your ability, but still remaining within your reach. Setting a goal that’s too easy is not challenging, while something that is too hard can set you up for failure. Instead, make projections of your goals while taking into account the possible setbacks and challenges that can prevent you from achieving them.
  • Realistic – never take into account, chances and luck when setting your goals. If you’re currently in progress with your debt settlement, don’t set goals of saving a million in just a year. Stick to what is real and what you have at present.
  • Timely – now that you have a specific amount you want to save, you need to set a deadline for it. Based on the earlier example, the exact date would be on the 31st of December of the year 2020. Being specific with your deadline can condition your mind to have a mental planner set up and remind you of this significant date.

Take Action

Your plans and goals will remain so unless you take action. To make your goal a reality, take the necessary action to achieve the items stated in your goal; otherwise, your goals are nothing more than wishful thinking. Take consistent and continuous action until the fulfillment of your goals. As a reinforcement, leave notes on your fridge and your work desk reminding you of your goal in the coming year. This way, you won’t lose track of your goal and you can take action to achieve your goals.

Recovering from a financial headache takes a few basic steps. In fact, the steps provided are applicable not just for financial recovery, but for facing and resolving just about any problem. If you are dead set on getting out of your financial mess, be brave to accept your situation, be smart in assessing your resources and making your goals and be strong in taking consistent and persistent action to achieve your goals.


Shari Olefson

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