Financial setbacks can be tough and a great source of stress. It can indeed be such a damning and hopeless situation to be in, but don’t lose hope, you can get through it and come out on top. Jumia Travel, the leading online travel agency, shares 4 smart tips to get your finances back on track after a setback.
Avoid Making it Worse
Try to avoid making it worse by falling into the trap of quick fixes because most of them are scams and will end up making you lose even more money in the process. Rather than panicking and trying to get a quick fix, try getting help from financial institutions or non-governmental organizations that have recovery programs for financial setbacks; you can also try to get help from religious or service organizations that have personal finances programs to help with recovery from financial setbacks.
Assess The Situation and Change Your Attitude
Sometimes financial setbacks occur due to circumstances beyond our control and sometime they might have been caused by carelessness, negligence or poor financial choices. Regardless of the cause, it is important to first assess the situation that led to your ‘financial downfall’, try to figure out what you did wrong and what you can do differently next time to avoid such an occurrence. Also, if you are able to assess the situation and figure out what exactly caused your financial misfortune, it will be easier for you to make a plan to get yourself out of the mess.
Changing your attitude from that of despondency to hope, determination and resolve is probably the one thing that will make properly assessing the situation and getting out of the financial mess possible. Frankly, without a positive attitude, you are destined to fail and remain in the financial mess you have found yourself in.
Postpone Making Big Decisions With Money While Recovering
It might be very tempting to want to ‘get back in the game’ and make big decisions with money to maybe even help speed up the recovery process.
However, no matter how tempting it is, please don’t do it. Many times such ‘big decisions’ might weigh too heavily on your already weak finances and cause another setback. Postpone making big decisions with money until you are able to, at the very least, adjust your finances to a comfortable level and ‘acclimate emotionally and practically to your new circumstances’.
The fact is that dealing with stress diminishes your ability to make smart money decisions and if you do not give yourself time, you will end up making bad investments that can regress whatever progress you have made in your financial recovery.
Adjust Your Budget and Set Realistic Goals
It takes money to bounce back from a financial disaster (well duh), so if you’ve lost everything, you would need to prioritize your spending more than ever because it is how well you manage your income that will make or mar your road to financial recovery.
You also need to set realistic goals for your recovery process so you don’t end up discouraged and frustrated, and ultimately set yourself up for failure.
It is advisable to be patient with yourself and not lay down any plan that will put unnecessary pressure on yourself; try to remember that stress diminishes your ability to make smart money decisions, so you need to ensure that your goals will not contribute to the stress you’re already dealing with.
Be realistic about the whole process and be practical about the time you would need to fully recover. Speaking to a financial mentor or counselor (this might be a friend or family member that has either gone through the same thing or has some experience in the area) can be of significant help in setting goals to guide your financial recovery process.