What to do When You Have a Financial Setback
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No one becomes financially free without setbacks. It’s inevitable. One thing we need to realize when starting out on our journey to debt-freedom is that setbacks are going to happen, but you can grow from them and be successful anyway. You can use them as fuel to get you to where you want to go.
Bryce and I are proof that setbacks happen. We've had many since we started down this road, but we always pick ourselves up and try again because we know it’ll be worth it if we just don’t give up. Little by little, we are reaching our goal to be debt-free, and I know we will get there. It’s just a matter of getting back on the wagon when we fall off.
Setbacks can come in many forms. Maybe you got sick or injured and had to take time off work. Maybe there was a leak in your fridge and it ruined your flooring ;). Or maybe you were just plain lazy for a couple of months and spent way more money than you know you should’ve. Whatever caused the setback doesn’t matter. The key is getting back on track.
What to do When You Have a Financial Setback
Figure Out What Just Happened and Why
Take a few moments to really look at the situation. What happened? Why did it happen? It’s important to be very clear about why the setback happened in order to not repeat it in the future. History does repeat itself if we’re not careful. If what happened was because of something you could’ve done differently, acknowledge it, own it, and learn from it.
Once you’ve figured out why the setback happened, you can make the necessary changes needed to make sure it doesn’t happen again. Do you need to adjust your budget? Do you need to adjust your goals? Do you need to just suck it up and stick to the perfectly good budget you made the first time? Whatever it is that needs to be changed, make sure it’s realistic. Don’t make a budget that’s impossible to stick to.
Create a New Budget From Scratch and Follow it
Starting over can be super helpful, even if you haven’t had a financial setback. I like to make a new budget every few months just to make sure we’re on track. Starting over is the best thing you can do if you’ve experienced a setback, especially if there are some major changes to make. You want to make sure your new budget is realistic so that you don’t repeat the thing that caused the setback.
One thing I’ve noticed is that people relate the word “budget” to a restrictive fun killer. I think the key to an effective budget is to not look at it that way. Instead, put fun things in your budget that you know you can afford. For example, if you like to go to a movie twice a month or get your nails done, put it in the budget. This will keep you from thinking about your budget in a negative way AND help you stick to it. If making changes to your budget to add those fun things in will help you stick to your budget and avoid another setback, DO IT!
It takes time to see the results of having an effective budget. In fact, it takes an average of three months to even get used to having and following a budget. In those first three months, you’ll make a lot of changes and have to adjust things here and there. That’s just part of the learning curve.
It’s so important to be patient after a setback. Not only are you recovering from the event, you are learning to stick to a new budget. Just remember that anything worth doing right takes time. Be patient. Be patient. Be patient. I can’t say it enough.
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We are currently recovering from a financial setback, so I know firsthand how hard it is to get back on track. We had to stop paying down debt and go back to baby step 1. It was like a punch in the gut to have to start over, but it’s not the end of the world. We just have to put our heads down and focus on the goal. We aren’t beating ourselves up over it; we’re using it as fuel to get to the goal faster than ever.
Have you recovered from a financial setback? How did you get back on track? I’d love to hear about it in the comments below!
Until next time,
I’m Kari, founder of Mom For More. Do you often lie awake at night dreaming about what it would be like if your family was debt-free? What if you could make that dream come true with a business that allowed you to stay home and be fully present with your babies? Mom for More teaches moms that they can start a home business, become debt-free, and gain more overall peace in motherhood. It equips moms with the tools they need to succeed in their finances, home businesses, and daily lives. You don't have to put your life on hold when you become a mother. It's okay to dream. It's okay to believe that you were made for more. I’d love for you to subscribe and follow along with me!