How to Bounce Back from Financial Failure

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Bounce Back From Financial Failure

How to Bounce Back from Financial Failure

Managing money is a task we earn by default, whether we like it or not. As a
result, not everyone charged with managing personal cash flow possesses expert-level
finance skills. In fact, financial failure is common, as money managers at all
income and experience levels work their way through wide-ranging financial
challenges.

Despite playing a natural role in personal financial development, monetary setbacks
are nonetheless discouraging. In practice, unanticipated financial distress
typically set-in when you least expect it, injecting fear and uncertainty into your
finances. And when failure is unavoidable, the consequences can be long-lasting.

Fortunately, financial loss is not a permanent condition. On the contrary, a
positive attitude and a few proven financial practices are all that’s needed to overcome
financial misfortune
and put failure behind you.

Take a crash course in personal finance

Individual money matters are influenced by a host of external forces, interfering
with even the best financial planning. Still, the more you know about economics and
personal money management, the better you’ll respond to financial difficulties.
Community organizations and government agencies often promote financial education,
maintaining resources for those seeking greater understanding. Free municipal
events, for instance, reinforce sound money management principles and furnish
practical advice about personal economics. These adult education programs also
focus on individual aspects of personal finance, such as helpful software, tax
preparation, and other specifics.

Web-based financial resources are also available, highlighting various concerns
facing personal money managers. Though there is an intimidating array of
information to sort through, valuable online lessons can help you recover from
financial missteps.

Build on financial success

Depending upon the scope of your financial turmoil, it may take time for you to get
back on your feet. As you recover, each successful financial outcome builds a base,
from which to generate positive momentum. Whether you failed at business, suffered
losses from a poor investment, or fell victim to negative economic conditions,
reversing your fortunes and finding financial success requires a forward-thinking
frame of mind.

Incremental gains pave the path to recovery, starting with realistic goals and
raising the bar as your financial health improves. With diligence, covering daily
expenses expands to long-term financial planning, saving, and investment in your
future. And though it doesn’t happen overnight, time heals credit problems, so even
your credit report will eventually improve – provided you steer clear of further
difficulties.

Consult and collaborate

Financial matters are deeply personal, but bouncing back from difficulties may call
for outside help. Formal credit counselling is available, but there are other
channels to explore, when financial uncertainty sets-in. Your investment advisor or
tax professional may be able to help speed-up your recovery, furnishing information
and referrals you can use to reinforce financial stability.

Pre-existing relationships with banks and other creditors may also prove beneficial
during times of financial crisis. Your personal banker may have access to financial
products you can use to get back on your feet, including credit programs reserved
for credit union members or existing bank customers. Your employer is often in a
position to help, extending hardship assistance for workers. And unions protect
members with crisis funding, bridging financial difficulties related to employment
or personal health. When hardship strikes, use others’ experience and success to
map your best course, navigating the road to financial recovery.

Prepare for future financial fallout

Even the most thorough financial planning is interrupted by unforeseen events. To
the best of your ability, strive to prepare for an uncertain future, by building an
emergency financial safety-net. A savings account, for instance, earmarked for
household emergencies, helps ease the negative financial impact of broken
appliances, mechanical upgrades and other costs of home ownership. And a designated
fund aimed at incidentals ensures money is available when your cost o0f living
unexpectedly rises.

Though setting-aside cash may be difficult, as you recovery from a financial
setback, prioritizing a rainy-day fund can help mitigate future financial distress.

Financial fortunes rise and fall, sometimes leading to lasting money problems. When
financial failure leaves you vulnerable, sound practices are enough to get you back
on course. Education, expert consultation, and a positive attitude are essential
features of a prompt recovery, giving you the tools needed to build financial
momentum. Once you’ve found firm footing, contingency planning can help protect you
from future financial distress.

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12 Comments


  1. //

    I think one of the most important things when coming back after a financial crisis is to make sure you have a fully-funded emergency fund. A solid emergency fund can protect against so many financial problems. The fact that almost 7 of 10 Americans can’t cover an unexpected $1,000 expense shows just how important having some savings in the bank really is.


    1. //

      I totally agree! Without an emergency fund, one little unexpected bill could undo a lot of hard work.


  2. //

    Solid advice. I think the most important point is the last one — learn from your mistakes! So many people end up back in the same place they were because they don’t make changes. Also I completely agree that the internet is a great resource for learning about personal finance. Case in point: this article ;)
    Jonathan Dyer recently posted…Could Mobile Banking Apps Begin to Charge?My Profile


    1. //

      You are so right. You definitely have to change your behavior or you will be right back in the same boat you were to begin with.


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