Life is full of surprises, and while some surprises are warmly received, there are unexpected life events that can throw you off – mentally and financially. Many people have walked through unforeseen circumstances that forced them to make quick, critical decisions, and as a result, found themselves set back in terms of financial goals or savings.
Unfortunately, due to the recent pandemic, many people have found themselves in similar circumstances. With many businesses and restaurants limiting service or shutting down completely, many people are facing the future with uncertainty. In addition to being out of work, there are also people who are dealing with other circumstances, such as divorce, medical bills, or caring for a family member.
Experiencing a financial setback is a common occurrence, and we want to help you and your family to get back on track to financial stability. Here are some tips to help you navigate financial setbacks.
Give Yourself Some Time
People often forget that reaching financial stability takes time. It takes a lot of dedication, perseverance, and consistency, and if you have experienced a financial difficulty, it will take time to get back to that place.
The good news is that there are steps you can take to find that stability once again. Please remember not to put unnecessary pressure on yourself to fix everything right away. Financial setbacks take time to recover from, so make sure to be patient with yourself and this season.
Appropriately Adjust Spending
One way to help you recover quickly is to adjust your spending and only spend money on your “needs” and decrease or eliminate spending on your “wants.” It’s important to pay for your essentials first, such as food, rent/mortgage, and insurance.
While it may hurt to eliminate spending on your favorite streaming service or daily coffee, remember that it does not need to be forever. A temporary freeze on your spending will help you get back on track, and after a while you will notice a difference. These small steps will help you recover and work your way towards financial stability.
Find an “In-Between” Job
When experiencing financial hardship, such as job loss, it might make sense to find a lower wage job intermediary. Many people who experience a high paying job loss will often attempt to find a job of equal pay or value. However, this may not always be the best route to take.
With the market still in an uncertain time, it might make the most sense to find a job that is convenient and immediate, so that you can still maintain a cash flow. While it may not be as much in terms of pay, it could be enough to get you through a tough time.
Work Towards an Emergency Savings
If the financial crisis related to COVID-19 has proven anything, it’s that Americans need a backup plan. An emergency fund is just that: money set aside that is only to be used in a true emergency, such as being temporarily laid off or having an unexpected expense.
Even though it may be difficult to save money during this time, having a goal to work towards is a good starting point. A set amount of money put aside for you to lean on in difficult times will help you feel calmer the next time you have to make tough decisions that affect your finances. Typically, you will want to save 3-6 months’ worth of your true expenses and debt payments, so that you have enough cushion to get through a few months of not having an income.
Here at Blackhawk Bank, we want to help you navigate all of life’s occurrences. Do you want to learn more about how Blackhawk Bank can help you? Contact us today!