5 Steps to take after a financial disaster
Many Americans are struggling with the aftershocks of financial disaster. Whether it’s due to a layoff, a smaller workload, medical expenses, or a change in family circumstances, the financial fallout of COVID-19 has also been devastating. Recovering from a financial disaster due to a pandemic or any other reason is never easy; however, with hard work and the ability to look forward, you can do it. Here are 5 steps to take after a financial disaster.
Step 1: Assess the damage.
Evaluate exactly how much financial recovery you need. Are you thousands of dollars in debt? Do you need to find a new job? What are the long-term financial implications of the recent disaster?
Crunching the numbers and putting it all on paper will make it easier to take concrete steps toward recovery.
Step 2: Accept your new reality.
Shock and denial are valid stages of grief for any major loss or disaster, but it’s important to reach a place of acceptance for recovery to be possible. You can vent to a close friend, express your feelings in a journal, de-stress with your favorite low-cost hobby and then let go. Constantly harping what could have been will only drain you of the energy you need to move on.
Step 3: Outline your goals.
Clearly defining your goals will make it easier to go forward. Are you looking to rebuild a depleted emergency fund? Find gainful employment? Pay down your medical bills?
As you work through this step, choose SMART goals:
Specific
Measurable
Attainable
Realistic
Timely
Here are a couple of free SMART Goal templates to help you get started.
Step 4: Create a recovery plan
Your plan should consist of consecutive steps that lead to a life of complete financial wellness. Here are some steps you may want to include:
- Trim your spending until you can spend less than you earn.
- Build a small emergency fund to help get you through an unexpected expense.
- Seek new employment or new income streams.
- Start paying down debts.
- Save more aggressively, with one eye toward your retirement and another toward a large emergency fund with up to six months of living expenses.
Step 5: Make it Happen.
Put your plan into action! If you were careful to set SMART goals, you should immediately take the first steps in your plan.
With these 5 Steps to take after a financial disaster, you are on your way to getting back on track. Remember, financial hardships are temporary, and you will get back on your feet. If you need a little help, as a member of Elevate Credit Union, you can apply for a personal loan to help you through these tough times.
