SBLI of Massachusetts
December 15, 2010
Divorce, loss of a loved one, serious illness, or loss of employment can all lead to a personal financial crisis. Starting over may be one of the most difficult challenges anyone will face, but with strategic and incremental steps, you can rebuild your financial foundation.
Perhaps most complex is first dealing with the emotional hardships while trying to figure out how you’re going to meet your financial obligations. Having a support network is critical during this time, as you will be able to better separate your issues and stay focused on working toward your goals. A support network of trusted family members, friends, neighbors, or a therapist will help you work through your grief and worry.
Here are some steps to take when starting over:
- Having a financial planner would be ideal, but if it’s not realistic there are many online resources (some are listed below) that can help you get moving in the right direction. No matter how bad your circumstances, it’s crucial to face the financial facts. Knowing exactly where you stand is the first step in taking control of your situation. This includes documenting all debt, income, assets, and monthly bills. Reconstructing a new budget will enable you to determine how much you earn, spend and have available to save.
- Review all areas of your budget to identify where you can cut down on any extra costs, as well as where you can share resources and/or expenses with family members or friends. This includes buying food and bulk items together, sharing meals, swapping children’s clothing, and/or carpooling.
- If you’re not working, you can seek out career services, job fairs, and job-hunting workshops, which are offered for free in many communities. If you’re not sure what your next career move should be, you could begin earning money by pursuing temporary work. You may want to consider temping in a field that you are interested in and/or have some experience, as it could lead to a permanent position.
- If you’re working and need more money, consider a second part-time job that won’t be too overwhelming. Just a little extra income might help you reach your goals more quickly, and the short-term investment would be worth it. Here are some ideas on how to earn extra money: http://www.kiplinger.com/features/archives/2009/04/11_ways_extra_cash.html
- Be sure you and your family have adequate life insurance to protect against the unexpected. It’s not wise to eliminate your coverage during times of financial hardship. Term insurance may be a good option.
Here are some financial resources to consider:
Working toward a specific goal will help you stay focused during this difficult time. Remember that setbacks can happen to anyone, and with the right planning, you can turn your circumstances around and begin looking forward to the future.