We have all dealt with minor to catastrophic disappointments with our finances. When your journey seems to be smooth sailing, that Iceberg seems to always appear and cause you to get off course. You developed a plan for your money and have navigated through several WayPoints to find that your plan is being derailed by a financial disappointment.
Disappointments happen for a variety of reasons. A job loss may have wiped out your emergency fund or a health issue has created a medical bill that has sunk your life savings. Understand, however, that most people are not immune to financial disappointment. It might be a major setback, but you CAN recover.
With any financial hardship, a grieving period is normal and expected. Grieving and feeling down over a loss contributes to the healing process. An emotional release is normal, so do whatever it takes to release that burden. Bottling up your feelings may slow down the recovery process.
However your financial downfall occurred, do not isolate yourself from family, friends and co-workers. It is healthy to talk about your emotions and most people in your life will provide the support that you need. Listen to their advice, vent your frustration and allow them to encourage you. Your situation may not be as bad as you think, and it may take a casual observer to help you see it.
Since your situation cannot be changed, it’s time to accept the outcome and prepare to move forward and not look back. Beating yourself up will prevent you from pulling up your bootstraps and keep you stuck where you’re at. Acceptance will renew your motivation and get you started back again on a healthy financial journey. You may not agree with the setback or totally understand it, but now that you accept it, you can make strides to make your situation right.
In order to move forward, you need to understand the circumstances that led to your financial letdown. Knowing what went wrong or recognizing what contributed to the adverse situation, can help you avoid this same downfall in the future.
Start to strategize your next move. Think of possible ways to recover from this disaster. If you’re struggling with high credit card debt and you’re having difficulty making minimum payments, try calling your creditors and asking for a lower interest rate. Ask your employer for extra hours or seek part-time work elsewhere to generate disposable income. If you can earn an extra $100 a week, that’s $400 a month or approximately $4,800 a year that can go toward your debt.
Don’t let your financial disappointments sink your ship, learn from your situation, set a plan in motion to get back on track and find a solution that will lighten the financial risk moving forward.
We have seen some severe storms over the past two days. As I was driving in a torrential downpour this morning, my vision would have been obscured by the heavy rain that was beating against the glass if it weren’t for my windshield wipers. With every oscillating swipe, I was able to stay on course and reach my destination safely.
Many families are experiencing torrential storms in their financial life. Their journey is obscured and they risk their safe arrival to their destination without some financial wipers. WayPoints Financial Services Navigators can provide you with the wipers you need so your journey can be smooth and safe. Let one of our crew members show you our Financial GPS so you can clearly see the path ahead.
Many people begin to consider filing for bankruptcy when they have no ability to repay debt, and no other way to stop the incessant telephone calls and collection efforts of creditors.
Some people, however, consider hiding from their creditors, shutting off the telephone ringer, and pretending there is no problem.
Avoiding creditors not only doesn’t make them go away, it doesn’t solve the problem and could hurt your finances severely.
Without a court-ordered repayment plan or some other alternative, there is nothing stopping creditors from garnishing your wages, or issuing a summons to your financial institution, such as your bank.
If you owe a debt to a creditor and have funds deposited at a bank, the creditor may serve a Garnishment Summons and Disclosure Form to the financial institution along with other notices.
The financial institution must retain as much of the amount you owe that you have on deposit, but not more than 110% of the creditor’s claim.
The creditor will mail you a copy of the Garnishment Summons and anything else that the creditor served on the debtor’s bank, including notices.
You will then have 14 days to notify the financial institution and the creditor of any claim for exempt property you wish to assert. If the financial institution does not receive any such notification within 14 days, the debtor’s funds at the financial institution remain subject to garnishment.
Hiding from creditors is not the best option to address financial problems.
Even if you do not qualify for a discharge of debt in a bankruptcy proceeding, a reasonable repayment plan, generally over three to five years, may be obtained.
This is a much better resolution than garnishment.
As you can see, it is not difficult for a creditor to obtain a garnishment of your bank account. Garnishment may arise quickly and completely destroy the plans you have for your money.
Be sure to explore all available options – but do not ignore creditors and hope they will go away. Hiding from creditors is a dangerous and unsuccessful tactic.
Many people we meet say they are stressed about their financial situation. Very few tell us that they are secure and at peace with their money. People deal with financial stress in many different ways — sometimes healthy, but often not. People commonly deal with anxiety by avoiding whatever it is that makes them anxious. Unfortunately, if you avoid dealing with your finances, you’ll likely create more financial problems, and more anxiety, in the long term.
Money matters are too important to ignore. Many times our upbringing sheltered us from the reality of financial responsibility. This unawareness is often linked to money mismanagement and to debt. Debt, in turn, can result in lower self-esteem, lower productivity and greater stress.
If you’re struggling with financial avoidance or financial denial, you can take action to get your financial journey back on track.
Are you avoiding reality when it comes to finances? A few questions to consider:
Do you try to put money and finances out of your mind?
Do you avoid talking about money with family and friends?
Do you avoid opening bank statements or credit card bills?
Do you fear your finances but take no action to resolve those fears?
If you can relate to any of these feelings and behaviors, it may be time to take a hard look at your relationship with money.
We develop our beliefs and attitudes about money early in life. Often, we aren’t even consciously aware of what our beliefs are, let alone who we learned them from. If you’re dealing with financial avoidance or financial denial, it can help to think critically about the money beliefs you learned in childhood. Think about what your parents taught you about money. Talk to family members about their money beliefs. Then try to challenge your existing beliefs about money.
Many people feel embarrassed about their debt, ashamed that they let bank statements pile up unread. But that shame keeps you stuck. Try to move past the self-blame so you can take some concrete steps toward better financial health.
Here are some Actions you can take that will help:
Keep tabs. Tracking your income and your spending is critical to your financial journey. If you’re not tracking money coming in and money going out, you don’t know if you’re spending your resources on the things that really matter to you.
Develop a spending plan. For some people the word “budget” like the word “diet,” calls to mind deprivation. Instead of figuring out where to cut back, think about what you want to spend. If going to concerts or sporting events is really important to you, you might decide to spend more money on those outings and less on dining out or cable television. By making such decisions more intentional, you’ll get the most distance for your dollar.
Make it easy on yourself. Use automated systems as much as possible. Arrange to have a portion of your paycheck automatically deposited for emergency savings and periodic expenses. Set up automatic reminders to alert you when a bill is due. It’s a lot harder to make a bad decision when the decision is out of your hands.
Use tools. Technology makes it easier than ever to stay on track financially. We offer a useful Financial GPS (Goal Planning System) that can help you track spending and set spending and saving targets.
It’s not easy to challenge your deeply held beliefs or to change ingrained behaviors. No matter how good your intentions, change is difficult. Here at WayPoints Financial Services, LLC, we offer a variety of programs that can reduce stress and anxiety and improve financial health with anyone dealing with problematic financial behaviors.
As we begin to prepare for Christmas Eve and Christmas Day, let us not forget that many people we will encounter over the next couple of days may be experiencing a variety of stress, anxiety, loneliness, and hopelessness feelings. Many of these people may be one paycheck away from financial disparity. They may have added debt to an already crippling amount and don’t know how they are ever going to begin to pay it back. Some people may be many months delinquent with their house payment or car payment facing inevitable foreclosure or repossession. Some may have medical debt that has consumed their whole being and some may even have such high student loan debt that they can no longer function in their everyday life. Let’s take some time during this festive season to provide hope to those in despair. Let them know that there is help available and that they no longer need to walk this journey alone. Merry Christmas my friends!