2020 has been a year like no other. Whether you’ve experienced a job loss or a loss of financial stability, there’s one thing to always remember: you do have the ability to restore your financial footing. Here are 3 steps on how to bounce back.
1. Create a Plan
It’s self-assessment time! In order to create a plan of recovery that actually works, you have to know what you’re wanting to recover from. Identify two to three areas of focus and commit to those areas only. Remember, as you complete one goal – you can always adopt a new goal. The key here is to build a momentum that fuels you to keep working on your plan. A lot of people tend to take on too much, creating feelings of overwhelm and exhaustion. To avoid this from happening, limit your focus, generate positive feelings about your plan and how it’s going to work in your favor. For example, if you want to focus on rebuilding your emergency savings, you shouldn’t concern yourself with saving for a newer car at this time.
Make sure your goals are cohesive and not in competition with one another. Conflicting goals not only deter you but also distract you. Keep in mind that creating a plan that you feel confident about doesn’t happen in one day. If you notice an increased amount of frustration, take a step back and get back at it once you feel more refreshed to continue. While you want to set some timelines centered around crushing your goals, you don’t want to set unrealistic timeframes. Remember you should feel empowered after creating a plan for your finances.
2. Remain Patient
We live in a microwaveable world. There are so many things that we can easily acquire with the click of a button on our laptops or one tap on our phones. Drive-thrus are everywhere and quick convenience has become something embedded into our daily lives. As much as we’d all like our finances to operate on this same wave, it doesn’t – and never will. Most times the current state of our finances didn’t happen overnight, so in theory, we shouldn’t expect our recovery process to operate any differently.
Remember what it was like to learn how to ride a bike? Training wheels were the first step to get you acclimated with balancing yourself and learning how to steer. Once the training wheels were off, you probably quickly learned there were no reinforcements to ease the fall between you and the concrete. Many bumps, bruises, cry sessions, and attempts later.. you finally learned how to ride a bike with no assistance. What a euphoric feeling! As adults, we can experience that same level of contentment once you understand that patience and commitment will always pave the way to our desired level of financial freedom.
3. Commit to Temporary Sacrifices
Adulthood will throw some curveballs that send us into a frenzied state when we’re faced with something less than desirable. Anytime the word sacrifice is mentioned, many abandon their goals quickly, simply because they do not want to temporarily go without something for a greater good. However, sacrifice at any level is unavoidable. Everything that you currently have was acquired because of your commitment to sacrifice and your financial journey is no different. There are many ways to re-establish your finances that can be used at any time – not just in a situation of recouping.
For example, meal prepping versus spending a large amount of money on takeout can cut costs. Committing to limiting your entertainment budget can also be very impactful. Taking a break from attending all family or friend outings can put you right back on track. For those that prefer a more aggressive approach, picking up a part-time job or setting ‘no spend’ months also prove themselves to be very useful. You shouldn’t feel like it’s a punishment and instead set it up as a healthy challenge. Don’t want to do this alone? Rally your family and friends to see who can save the most money in a set amount of time. Create an environment that allows you to achieve your goals and re-establish yourself financially.
Which one of the methods mentioned can you commit to on a quest towards restoring your financial footing?