How to Mentally Recover After a Financial Setback

Couple Talking Over Bills, money

By Sabah Karimi, Contributor, US News

Whether you’ve lost your job or are stuck with huge medical bills after an accident, a financial disaster doesn’t have to take its toll on your well-being. It might take some time to rebound from a financial loss, but you need to stay level-headed and focused to get through this period of misfortune. Here are some tips to help you mentally recover after a financial setback.

1. Don’t overreact. If you tend to spend more when you’re stressed or take more risks with your money in hopes of recovering faster, you could be setting yourself up for even more financial problems. Try to take your emotions out of the picture when you’re assessing your situation and looking for solutions. Instead of trying to make yourself feel better about the loss, get comfortable accepting the loss. Stay focused on practical steps such as earning extra income or reducing costs.

2. Find support. If you’re stressed or having a hard time staying focused because of your financial crisis, don’t be afraid to reach out for support. You can contact trusted friends or family members to talk or seek out affordable professional help. Counselors, financial advisors and others in your area can help you get out of your rut and get you back on your feet – all you have to do is pick up the phone. Many will offer a sliding scale of fees, so you can pay what you can afford until you recover.

3. Make a list of losses. Facing the problem head on may not be easy but doing so can give you a better perspective on how big the problem is and how much of an impact it may have on your goals. Assess the situation, so you have a fair idea of how much you have lost in total and can start putting together a plan to restore those funds. Keeping yourself in the dark about your finances can be a source of worry, too. Get all of the details out in the open. This will give you a chance to feel the sting of the loss just one time, so you can accept the situation as it is today and start moving on.

4. Sit down with your budget. Neglecting your current budget and bill due dates can make it that much more difficult to recover from a financial setback. Take stock of your current expenses and reevaluate your priorities to free up some extra cash. This can make it easier to replenish your savings. Reexamining your budget can also give you some relief from any anxiety or stress you may be experiencing about your financial situation. Reach out to your creditors to explain the situation and seek alternatives. You’ll feel better by taking actions to improve your financial situation, even if the numbers will remain dire for some time.

5. Take care of yourself. When stress or anxiety are getting the best of you, it’s easy to neglect basic needs, which can make your situation feel much worse than it is. Make sure you’re still getting plenty of sleep each night and eating properly. Avoid unhealthy coping strategies, such as drinking alcohol or overeating, which will not only make you feel worse but can also turn into expensive habits. Remember that you need to be in good shape mentally and physically to take control of your financial situation and turn things around for the better.

6. Don’t beat yourself up. Everyone makes financial mistakes at some point in their lives, and financial setbacks often are out of your control. Avoid dwelling on what happened or how you would have done things differently, but do recognize any mistakes you made, so you don’t end up making them again. Accept your mistakes without judgment, so you can move on and direct your energy elsewhere. Beating yourself up can lead you down the road of making even more mistakes or turning to harmful addictions and behaviors to cope.

7. Create a new vision. Sometimes thinking positive thoughts just isn’t enough to take action and correct your course. Consider creating a new vision with your current financial resources – especially if you had been counting on the money you lost to support dreams of buying a home, paying off debt by a certain date or going on vacation at a certain time. Now is a good time to accept the reality of your financial situation, so you can carve out some new financial goals and work with a new vision in mind.

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