While it’s good to strive for financial stability and not ever having to worry about money, many Americans still struggle with money issues every year. In fact, this year 1.5 million Americans will declare bankruptcy, and another 58% will worry about not having enough money to pay for emergency situations. Saving for retirement is also a huge concern. Living in a society where the inevitable need for money seems to control our lives, it is evident that maintaining financial security is essential to a healthy overall well-being. Unfortunately, financial instability can happen to anyone and at any given time regardless of their current financial situation. Approaching your financial struggles with a positive attitude is the best practice you can take to minimize emotional damage.
Coming to Terms
Experiencing a state of financial instability—whether it’s a business going under, incurring unexpected expenses, student loans escalating, or simply overspending and budgeting poorly—can happen to anyone. Unfortunately, stress may not be the only outcome of your financial situation. Financial stress can lead to long-term mental illnesses such as depression, anxiety or other mood disorders.
Disregarding your financial instability, known as debt denial, can lead to even more stress when reality catches up with you. Therefore, being aware and in control of your feelings is the first step to overcoming financial instability. This doesn’t mean you give in to the stress and let it consume you. Analyze the circumstance you’re currently in and how your financial instability is affecting your life. Often, financial instability is not as bad as it seems. Many individuals associate financial instability with failure and give up or accept defeat, making their situation seem much worse than it really is. When faced with financial instability, accept the situation in a positive light. Retain your ground and begin considering your next steps.
Have People You Can Turn To
Dealing with financial instability is difficult, however, it is even more difficult when you’re dealing with it alone. For this reason, reach out to those you trust and with whom you are comfortable. Reveal your situation to them and see how they can help. Perhaps they or someone they know can offer you financial advice.
Be it a job opportunity or a loan that someone is willing to give to you, never forget that networking is your best friend and will expand your list of possibilities. And if nothing else works, surround yourself with loved ones who can help you cope with the emotional stress. As previously mentioned, emotional stress is most often the biggest struggle attributed to financial instability. The faster you can accept your situation and move on past the initial shock, the quicker you can begin working towards a solution. And this can be an easier process with love and support from those you cherish.
Plan and Take Your Next Steps
After accepting your circumstance and coming to terms with any emotional damage you may have experienced, it is time to figure out your next steps and begin putting them into action. First, consider your money spending habits. Ask yourself where you spend money, what you spend it on and how you can go about minimizing the amount of money you spend. If you’re out of a job, evaluate your skill set and explore where and how your skills can be utilized and turned into profit.
While no one wants to hear this advice, declaring personal bankruptcy can be one of your most strategic moves. Depending on the degree of bankruptcy you declare, you will lose most, if not all, your assets and have bankruptcy on your credit record. However, declaring bankruptcy is the easiest way to a fresh start for those who are unable to make debt payments, unable to sort out their finances or for those who are unsure of how much they owe. And for those who are considering declaring bankruptcy but are nervous about the steps afterward, know that it’s not uncommon for recent bankruptees to purchase a home and get their lives back on track.
Whether you are financially unstable or not, a financial crisis can happen to anyone at the most unexpected of times. Therefore, it is best practice to always have a savings account or an emergency fund on hand should you come across unforeseen expenses. Financial instability, however, is not the worst thing that can happen to you. Millions of Americans deal with financial instability and bankruptcy every year and come out even stronger than before their financial struggles. You can too with the right mindset and the right strategy!