Getting Back On Your Feet After A Financial Crisis - Refresh Financial

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Getting Back On Your Feet After A Financial Crisis

 Getting Back On Your Feet After A Financial Crisis

'Life is what happens to you while you are busy making other plans' it's a quote from John Lennon, and when it comes to your finances, it fits perfectly. Unforeseen events can wreak havoc on our personal and financial lives. When you're hit by an unforeseen financial crisis, it can cost us time, employment, assets, and money. Although digging yourself out of a financial hole can seem like an impossible feat, it's not. It takes time and effort, but everyone can recover financially. Here's a step-by-step guide to getting back on your feet after a financial crisis:

1. Assess The Damage

- Sometimes, when we experience a financial crisis, we get to a point where we just stop looking because it's too painful. As tempting as it sounds, this is not an option. Sit down and take a hard look at where you're going to begin to recover. If you haven't looked for a while, it may not be as bad as you expect.

2. Take Stock Of Income And Expenses

- List all sources of income and everything on which you spend your money. Be honest when you do this, as an inaccurate list doesn’t do you any good. List every embarrassing thing you buy. A picture may emerge that will help you with the next step.

3. Find Where You Can Cut Down On Spending

- After listing your income and expenses, it will become clear where you can cut back. For example, if it’s clear that your rent is beyond your means, consider moving or a getting a roommate. Maybe you didn't realize just how much you spend on gas when you can easily walk or ride to work. After you add up all those pumpkin spice lattes every morning, you may be horrified to find out what you're spending on them. Pinpoint areas of excess and unnecessary spending and plan to cut it out.

4. Create A Budget That Works For You

- An effective budget will leave you with a little wiggle room, but will also force you to trim some fat. Budgeting isn't easy or fun, but it's invaluable when it comes to creating positive spending habits. It's also important to allow room on your budget for things that are crucial to your happiness. Moderation is key.

5. Stick To Your Budget

- This is going to require self-discipline and sacrifice, but it's all worth it in the end when you’ve achieved financial security.

6. Consider A Secured Savings Loan

- A secured savings loan is a great way to build your credit score. You don't need any money up-front to qualify and it doesn't matter how damaged your credit score is. The best part, is that it reports just like a traditional loan, which is why it works so powerfully. It's also a fantastic way to train yourself to save money, as your regular payments are what goes towards your payout at the end. Click here if you'd like more information on a secured savings loan.

It's not the fact that you've had a financial crisis that determines your future, it's how you respond to it. The steps above will ensure that you recover fully. The only variable is how well you stick to it.

Have you ever had to recover from a financial crisis? Let us know in the comments!

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