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Help for Financial Problems

Updated on November 22, 2012

We've all had personal and financial setbacks. We are merrily going along, or at least normally going along. And wham! the unexpected happens. We get into a car accident, have a health problem, or find our spouse cheating on us. Normal is no longer normal, and our life has suddenly shifted, leaving us wondering how to react and recover.

Luckily, there are proven strategies that have worked in recovering from financial setbacks.

Trying to get things back to the way things used to be wastes time and energy in your efforts to recover from a financial setback.
Trying to get things back to the way things used to be wastes time and energy in your efforts to recover from a financial setback. | Source

Don't Look Back

Alice, from in Alice in Wonderland, Dorothy from Wizard of Oz, and the Gates family in National Treasure 2 - Book of Secrets (Widescreen) have all taught us that the way to recover from a setback is to look forward. There is no turning back.

Too often, we struggle to bring things back to normal, and try to make things the way they were. This doesn't work and wastes a lot of energy. Accepting that this is the new normal gives you the proper perspective.

You have a new situation now. Instead of trying to go backwards in time, you move forward in time and space. Figure out how to go from where you are now to where you want to be in the future.

Stabilize Your New Normal

Now that you have realized that this is your new normal, you will need to figure out how to stabilize it. You probably feel like you are on shaky ground. The setback has created new challenges for you, and you need to find a way to make ends meet in your new financial situation. Often these types of setbacks can cause additional setbacks if you are not careful. If you don't pay your bills, you will have more penalties and interest, and you will get deeper and deeper in debt.

I have written two hubs for this situation:

What are the Advantages and Disadvantages of Being Poor

How to Make Ends Meet in the Short Term, in the Long Term and for a Lifetime

These two hubs provide steps you can take to stabilize your situation, so you don't continue to keep falling backwards.

Call Your Creditors

You need to create a new budget based on your new circumstances and go over each bill to see how you can reduce it.You will need to cut back on your spending in order to make it through the tough time without getting further in debt. You may need to get a second job temporarily until you are through the crisis.

Call Your Creditors

The key is to keep on top of your bills before you miss any payments. You may need to refinance a car loan, for example, to spread out the payments over a further period of time. In this way, you will have smaller payments. If, in the future, your income increases, be sure to make extra payments to make up for this, since you will be paying more interest over time.

Next, if you think you will have difficulty paying your bills is to call your creditors and let them know. They need to know that you are willing to pay and are having issues. Most likely, they will work with you to come up with arrangements that will spread out your payments further and may even be willing to forgive part of a bill.

Debt Consolidation Loans

There are consumer counseling agencies that may be willing to help you get through a tough time. You can get a debt consolidation loan which may make bill paying easier for you. The company may be able to negotiate lower payments for you or get portions waived. You may be able to do some of these things yourself. Be sure to ask around to see whether the company is reputable, look at the fees and consider whether the debt consolidation loan will work for you. A debt consolidation loan will appear on your credit report, which may make it more difficult for you to obtain future loans.

Take Responsibility

Taking responsibility is not about assigning blame so that you can punish the culprit, or make anyone feel guilty. Often, when things go wrong, there is something we have done, or something we could have avoided doing that would either have avoided the problem, or at least have lessened the blow. If we had driven more carefully or paid more attention, we could have avoided the accident, even if the other person caused the accident. If you had car insurance, or had saved enough money to cover the deductible, you might not be suffering a financial setback right now.

The point of identifying the problem is to find ways you can avoid this problem in the future. You don't want to make the same mistake twice. Thinking the problem through and then actually taking the steps to implement the ways to avoid it will help you a great deal. These types of situations are learning opportunities. You can at least say you learned from it.

Move Forward

Once you have stabilized the situation, and taken the steps to make sure that it doesn't happen again, you have to move forward. You are probably still in a position that is slightly less than your old normal. Aim your sights on the future, and decide how you can make your life better. Maybe getting additional training will help you advance in your career. Maybe saving up for a new car to replace the one you lost.

You will likely find that you won't have to spend as much to reach your goal as you think. Like an arrow, you have been pulled backwards, but now is your chance to fly off to the future.

Comments: "Help for Financial Problems"

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    • Millionaire Tips profile image

      Shasta Matova 4 years ago from USA

      Thank you Peggy and EuroNinila. Being prepared by keeping up with a variety of skills, and being flexible and adaptable does help the recovery from financial setback easier.

    • EuroNinila profile image

      Fotinoula Gypsyy 4 years ago from NYC BABY

      Great hub, thanks for sharing!

    • Peggy W profile image

      Peggy Woods 4 years ago from Houston, Texas

      It is much more common today than several generations ago to have a series of jobs and perhaps even in different lines of work as compared to the past when a good worker could work for one company and retire with a secure pension. That being the case, it is smart to study with an open mind to possibilities of the future; save money and live below one's means having that all important rainy day fund...and not dwell on the past, as you said but look forward. Instead of wallowing in self pity, sometimes we need a kick in the pants to get us going in the right direction again after a setback. Your hub is filled with valuable advice. Up votes and sharing!

    • Millionaire Tips profile image

      Shasta Matova 5 years ago from USA

      Thank you alocsin - sometimes I think the financial setbacks will make you stronger, and more capable of not just surviving but thriving in your financial goals.

    • alocsin profile image

      alocsin 5 years ago from Orange County, CA

      Good advice and it matches up what I've read from people who have made a ton of money. They all suffered financial setbacks and recovered from them. Voting this Up and Useful.

    • Millionaire Tips profile image

      Shasta Matova 5 years ago from USA

      Thanks Keri. I find it is very helpful to me to think of a "new normal" instead of wishing that things were the way they used to be, or the way I think they should be.

    • Keri Summers profile image

      Keri Summers 5 years ago from West of England

      The "new normal" makes so much sense. A comforting hub, thank you.

    • Millionaire Tips profile image

      Shasta Matova 5 years ago from USA

      Seeker7 - Good for you for thinking ahead and planning ahead. Sorry about your contract not being renewed.

      nicregi - thank you,

      DowntroddeninDC - you're right, setbacks will happen, but there re things we can do to prepare.

      carol3san - thanks for the vote

      Everyone, thanks for reading and the comment. I really appreciate it.

    • carol3san profile image

      Carolyn Sands 5 years ago from Hollywood Florida

      Thanks for the hub Millionaire Tips. Your advice makes perfectly good sense. Voted up.

    • DowntroddenInDC profile image

      DowntroddenInDC 5 years ago from Houston, TX

      Great advice! I agree with re-evaluating what occurred to make the set-back happen, but don't dwell on it. Sometimes (more often than not, actually) avoiding set-backs is entirely out of your control. Having emergency funds and reducing liabilities is a sure fire way to make set-backs less of a big deal.

    • nicregi profile image

      Reginald Chan 5 years ago from Malaysia

      Excellent article you got here! Great advise and thank you for sharing buddy!

      Keep it up (as usual)!

    • Seeker7 profile image

      Helen Murphy Howell 5 years ago from Fife, Scotland

      Hi MT - another excellent hub and very timely for myself - my contract of work is up in January and due to the economic crisis it won't be getting renewed so that will be me out of work again! Anyway, reading your hub has given me a great start to the planning I need to put into force before January. I found it very motivating and useful. Many thanks for sharing. Voted up!

    • Millionaire Tips profile image

      Shasta Matova 5 years ago from USA

      Thank you yols-a

    • yols-a profile image

      yols-a 5 years ago from Trinidad and Tobago

      madam millionaire good advice