- Should You Repair Your Own Credit?
- IPhone 6 Is Expected to Include a Mobile Wallet
- SAT Tutor Caters to the Kids of the Very Wealthy
- Report: Students Should Beware of Campus Debit Cards
- 7 Tips to Slash the Cost of Car Repairs
- Bank Fees Hit New Highs
- Millennials Prefer Plastic to Cash for Small Purchases
- Many Believe That Carrying a Balance Will Improve Their Credit Score
These are uncertain times. Jobs aren’t as dependable as they once were, and a serious illness can devastate your finances.
Even people who are well-prepared can make mistakes or encounter misfortunes that ruin their finances. It can happen to the best of us.
If it does, it helps to remember: This is not the end; it’s the beginning of something new. People bounce back from disaster all the time.
In the following video, Money Talks News founder Stacy Johnson interviewed a woman who survived a serious financial setback and is doing well again. Check it out, then read on for eight tips that can help people regain their financial footing.
1. Accentuate the positive
Corny? Maybe a little. But make no mistake: Keeping your attitude upbeat really works. So does staying in the present. You’ll want to learn from your mistakes, but rehashing them endlessly keeps you from moving on.
In the same way, worrying about the future robs you of time and energy.
2. Seize control
Learning precisely where you stand in a crisis is painful. But there’s also relief in knowing what you’re up against. You can’t dig out until you know how deep your hole is.
- Get a grip by tracking your expenses.
- List all the bills you simply have to pay — rent or mortgage, utilities, insurance, groceries, car payment, gas and whatever else you need to cover to keep going. Add them up. This is the basic amount you need each month. Put your wants aside for the moment.
- Make a stripped-down spending plan including, for now, only those crucial bills.
3. Get professional help
Pride has its uses, but paralyzing you isn’t one of them. If you hit obstacles you can’t get around, don’t waste time being stuck. Reach out to people with the expertise you need. A trustworthy credit counselor, for instance, can negotiate lower rates and a debt repayment plan with your creditors, taking bill collectors and pressure off your back.
Find accredited credit counselors. Their advice is free and debt repayment plans should not cost more than $50. Get any agreement in writing before paying a cent. Don’t hand over money before you’ve received services.
4. Beware of crooks
When it comes to credit problems, time is your friend. In seven to 10 years, even negatives as severe as foreclosure and bankruptcy will drop off your credit reports.
Seriously. Exercise has surprising powers to keep your mood up, energize and focus you and move you forward. In this TED Talk video, author and psychiatrist John Ratey explains how “physical exercise turns our brains on.”
6. Safeguard your housing
Call your landlord if you’re renting and ask if you can make smaller payments for a few months until you can get back on your feet.
If you are a homeowner, call the mortgage company right away. Don’t wait to get into trouble. Most lenders have foreclosure prevention programs to help homeowners in crisis. Here’s how to reach many larger lenders and mortgage servicing companies.
Here’s a helpful primer from the Federal Reserve explaining how to proceed with a lender. It also includes immediate and long-term solutions to financial problems and explains options such as deed-in-lieu, short sale, loan modification, repayment plans, reinstatement and forbearance.
7. Find additional income
While you are figuring out where your life will take you next, you’re going to need money to keep the furnace on and groceries in the fridge.
- Check with local schools to ask how to become a substitute teacher. Not all schools require teaching credentials.
- If you love pets, launch a pet-sitting or pet-walking business.
- Have you always wanted to work from home? Read “10 Tips for Finding Legitimate Work From Home.”
- Do house sitting. Keep your rates competitive to get your business off the ground. Or do it free to get free housing. Here are three sites that offer to connect house-sitters with homeowners:
- Ask at schools about jobs as a bus driver, temporary janitor or kitchen aide.
- If you’re handy, set yourself in business doing home repairs. Get cards printed up and post them on bulletin boards at grocery stores, hardware stores and community centers. Put your name out there for free on your local Craigslist (under “services”).
8. Learn about resilience
“Resilience is that ineffable quality that allows some people to be knocked down by life and come back stronger than ever,” says Psychology Today.
“Resilience is ordinary, not extraordinary,” says The Road to Resilience, a brochure from the American Psychological Association. It offers strategies for developing resilience.
Share your ideas and experiences bouncing back from a crisis with us, either in the comments below or on our Facebook page.