Are you financially stressed about money? Wondering how to recover from financial problems? Is it bothering you mentally and it seems like you have no direction in life? Well, in this article we shall discuss Steps to recover from financial problems and mistakes mentally.
Financial stress does not happen from debts alone. It could also be an off-shoot of bankruptcy, extravagant spending habits, not earning enough money, medical bills, or the expense of raising kids. It has been found that Money is the number one cause of stress leading to a number of mental and physical ailments. Such as anxiety, insomnia, depression, high blood pressure, cardiovascular disease, suicides, and sometimes even substance abuse.
The reasons for Financial Stress may vary from person to person – yet the ways to financial recovery are a common set of Steps to achieve abundance and prosperity.
6 Steps to Help you ‘Mentally’ Recover from Financial Problems
I. First Step:
Face your Circumstance
Let’s face it first!
The starting point for financial recovery is to stop wallowing in your misery and accept reality. To be able to understand that you have a financial problem and you are a succumbing to thoughts like “They robbed me of all I had built”. “No one can help me get out of this mess?” “I am really bad at managing finances!” “I will deal with it tomorrow.” These thoughts and many more like these will prevent you from finding the facts regarding your financial issues and deter you to Recover from Financial Problems.
Yes, stupid mistakes have been committed. Yes, you are a living victim of some fraud or wrongdoing by someone else. It is heartbreaking!
What is important is that the past is gone and you cannot undo it. You are just resisting the fact – so what matters now is accepting the reality.
No point in wallowing in the past. It makes your progress slower and tougher. Therefore, let go of the past and make a commitment today to only look forward.
It may not be something you ever dreamt you would have to deal with – but it is the only way you can help yourself.
If you waste your time sitting and crying over what can’t be undone – you will use up all that energy you have that you could use to move forward. So feel this is a new day and you are shedding all your fears and inhibitions and investing all your energy into finding a solution and a strategy and working towards it.
II. Second Step:
Stress due to the financial crisis – makes your concentration waver and you find it hard to focus on any one thing for a long time. You could also be suffering from insomnia or may have isolated yourself from friends or family due to lack of self-worth.
Don’t’ be scared to reach out for support. Call up or meet family or friends you can trust or even find professional help as long as they are affordable. To get you out of the rut – financial advisors or counsellors can help you become financially independent once again. Just pick up that phone and go meet them.
You will be happy to know – the counsellors also accept fees as much or when you can afford. It is called a sliding scale of fees until you recover fully.
Patrick Gill, a Financial Advisor teaches different strategies on how to Recover from Financial Problems – overcome debts and save money through his own experience and that of the others in his TED Talk – A Friend in Debt.
“Nowadays people know the price of everything and the value of nothing” – Oscar Wilde
III. Third Step:
Take Stock of your Current Situation
The third step to Recover from Financial Problems is taking stock of your current financial and emotional state. You must know what are your resources and liabilities.
The financial setback you are facing has to be faced by developing a plan to overcome it. Thus, to arrive at a realistic plan for financial recovery you first need to know where do you want to go in future. It is the same as finding a road map on Google if you want to drive to a destination. First, you find where you are situated on the map. Same goes for you financially – first, define what is your current situation based on facts correct today.
Assess your assets and losses by answering the questions below:
1. What are my assets – financial and relationship-wise?
2. How much money I have to pay to clear my debts?
3. Is there someone in my family or friends who can help me in any way?
4. Find your Credit Score?
5. Do you spend more than you earn? How much do you spend?
6. Include in your recovery plan – any long term issues regarding finances, for example, alimony, insurance.
7. Assess the consequences that you may have to face?
The idea is to know where you are rather than groping in the dark. Thus, you will get clarity on where you want to go from here. Take an inventory of your present situation. You know what are the factors you will have to keep in mind when you plan your road to financial recovery and independence.
The moment you face facts – it will be just a one time jolt rather than living a life of avoiding and hiding from a sticky situation. It will make you feel lighter and energised thus preparing you for the Fourth Extremely Crucial Step to Recover from Financial Problems.
Walt Disneys’ take on failure:
“I think it’s important to have a good hard failure when you’re young… Because it makes you kind of aware of what can happen to you. Because of it, I’ve never had any fear in my whole life when we’ve been near collapse and all of that. I’ve never been afraid.”
IV. Fourth step:
Plan a Financial Road Map to Spell-out your GOALS
Our recovery path has to be planned in a manner that doesn’t let us make the same mistakes due to which we arrived here in the first place. If you are in the lane to recover your financial problems, you have to determine the cause of it all. Is it a spending addiction, income issue or a combination of both?
After having arrived at the goal for where you want to be in your financial recovery plan and you know your current status – the next step is to make a financial plan. This will aid you to Recover from Financial Problems. You can walk on the financial plan like a bridge that takes you from where you are to where you want to be. You could analyse between different bridges as options to be taken and arrive at the most effective road map to reach your goals.
Use the S.M.A.R.T. System to aid you in Setting a Goal for your Financial Recovery:
S = Specific: A clearly spelt-out end result must be defined. Not something like “I want to earn lots of money” that is very generic. Instead, you could specify ” I want to have $30,000 in my bank after having paid my taxes, by the end of a year from now.”
M = Measurable: There ought to be a manner to measure your path to success towards your goals. Add small term goals by breaking down bigger goals. It will look for doable and less daunting. How much money you should have in your bank a year from now? 3 years from now? 5 years from now?
A = Attainable: A goal is a goal only when you believe in it and it seems attainable. Thus, arrive at that fine line between stretching your limits and living a balanced life. Don’t’ make your goals too high that you can’t seem to reach it, nor make them so easy that there’s no challenge in meeting them.
R = Realistic: Set a goal that is realistic in relation to the economy, your talents and skills, debts to pay off, expenses to meet, lifestyle to maintain. If you have just sold off all your assets and make a goal to buy a Villa in the Bahamas in the next six months – your goal may sound very far-fetched and unrealistic. Be realistic!
T = Timely: “A goal without a deadline is just wishful thinking.” A goal is just a dream if you, for instance, say I want $1,000 residual income in my bank every month. However, you fail to specify which month of the Year onwards – it becomes vague. Set target dates and months and timeline to formulate a successful financial recovery plan.
People who are SMART Recover from Financial Problems easily.
To arrive at a Financial Road Map suited to your needs – You May:
- You may have to pursue additional sources of income to recover the assets.
- Even cut down on fixed and variable expenses.
- Apply for government assistance.
- Look out for options like debt forgiveness.
- Also, you could consider selling off assets like your car rather than give up on your retirement insurance payments. To help pay off your debts.
- Moreover, you could go for IVA (Individual Voluntary Arrangement) option and pay off debts only as much as you can afford.
- Consider filing for bankruptcy.
Make the journey rewarding and not just a series of punishments for past mistakes. For example: if you are in debt and you use all your spare money to pay off your debts, you soon feel dejected and depressed. The answer is to also keep a little saving for insurance for your old age or other assets. Thus, you feel you are rewarding yourself and you start emotionally enjoying the process. Your emotions are what makes you overcome your mental stress – thus always be sensitive towards them and strive to always feel happy.
V. Fifth Step:
take action to change your financial situation
The car moves only when the rubber meets the road. No plan will be successful until you take appropriate action. It may seem very obvious to take action – however many people sit on financial issues for months and sometimes even years until they explode and become out of control.
It is not only about dreaming to get out of a financial situation. What is important is to bring dreams to reality – is being consistent and persistent. Remember, these are the two key qualities that keep successful people ahead of others.
Start following your plan by paying off what you have committed to. Stay in touch with your creditors- it will help you if you are honest with them and tell them that you have a plan in hand and are already implementing it. Make a win-win agreement with them for your financial recovery path.
Once you change your situation, you will be able to overcome financial mistakes and notice a sense of relief mentally and emotionally. Remember, failure is nothing – you got to keep pressing re-set every time you are unable to achieve your goals.
Take immediate action rather than letting the Golden Goose become weak (that is you) and is unable to produce the Golden Egg.
Oprah Winfrey said in a Harvard commencement speech:
“There is no such thing as failure. Failure is just life trying to move us in another direction.”
VI. Sixth Step:
No one is Perfect – Tweak and Adjust along the Way
Like each one of us is unique – similarly, we all learn on our path to Recover from Financial Problems in our own special ways. There is no one plan that can suit everyone. Thus, accept the fact that you will learn and adjust your goals along the way. No one is perfect.
For instance, we may have planned to give ourselves 5 years to get out of the financial mess. However, when we take action we find that our ambition is to generate a new source of income rather than just overcome the losses. Thus, we alter our goals and want to rebuild the company we had shut down apart from paying off debts. This means new targets and realigning of goals. Now our targets have doubled up and 5 years have now turned into 7 years.
No plan is perfect (almost never) – thus remember, what is important – is to start and stay persistent and consistent. As you proceed on your path of Financial Recovery you will learn new tricks of the trade, learn from past experiences, gain skills, get trained, seek guidance to achieve your goal effectively and efficiently.
Frequently Asked Questions:
At Wellness Works our readers from Pinterest have sent in the following questions to find ways to overcome financial problems. Through my article, I have attempted to help millions who are looking for answers to these FAQs. I am sure if you follow the six-step method to overcome Financial Problems all your money related issues will get solved.
How do you help someone with financial problems?
What are the ways to gain financial stability
Easy way to recover from a financial setback?
Steps to Stop Financial Anxiety?
The above six steps will certainly help you lead a stress-free financial recovery plan. You will soon see yourself recover from Financial Problems.
Yes, we all could fall prey to financial issues sometimes due to our own faults, sometimes due to others fraud or an unforeseen circumstance. The road to financial freedom lies open for us – if we follow each and every one of the six-steps above diligently and believe in them wholeheartedly.
Financial worry reduces age span and is a major cause of mental health issues especially in the Millenials. Thus, after having read the article if there is someone in your life you know who is going through a financial crisis then share the 6 steps to overcome financial problems to help those in need of financial recovery and mental help.
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