No matter how careful you are, there may come a time where enough bad events happen that you simply cannot afford your bills any longer. While there are certain things you can do to protect yourself from ever being in that situation (building an emergency fund, practicing frugal living, etc.), they don’t really help when you have no money and there’s a pile of bills that need to be paid.
If you find yourself in this situation and don’t know what to do, here are some practical steps you can take to get started on the road to recovery.
First of all, don’t bury yourself in guilt and shame. Everyone makes mistakes in life, and you’re certainly far from the first one or the only one. I was in a situation that was quite desperate once upon a time.
Also, realize that there are solutions to your problems, no matter how bad the challenges are. Just because you don’t immediately see the answers doesn’t mean that the answers aren’t there. There are answers, and there is a path to a better situation.
The biggest step you can take is to explain your entire situation to someone and ask them for ideas. This is why checking your shame at the door is so important – in order to be able to talk to someone else about your situation, you need to minimize the shame factor and be willing to lay it all out there.
That being said, be careful about who you choose to advise you. Don’t choose someone that you feel as though you must hide pieces of the story from, or else they won’t be able to offer you strong advice. Similarly, it must be someone you trust who will try hard to offer you a valuable and accurate opinion and help you piece things together.
Similarly, do not ask this person for money, and make that clear up front. Many people will enter such a discussion with some serious concern that it will turn into a money request, so make it clear up front that you don’t want a dime – just some strong advice. Then stick to that pledge, no matter what. Their advice will be more valuable than whatever pocket money they could hand you, anyway.
Don’t be insulted by the advice they give you. If you’re in this bad of a situation, the advice you’ll hear is going to hurt. Expect that, and don’t be insulted by it. The person giving the advice is not trying to hurt you, they’re trying to help you to get in a better position.
Get multiple opinions, if you can. The more input you have, the more likely it is that you’ll find a path leading towards financial freedom. Thus, it makes sense to find multiple people to give you advice about your financial direction.
Start making the small changes now. Stop spending wasteful money now, even if you haven’t figured out the big solution yet. If you’re worried about making ends meet, but dropping $10 a day on lunch eating out, join the brown bag club. If you’re in dire straits, avoid going shopping or charging you credit card. Make those little changes now to pave the way for a brighter financial future.
When implementing solutions, check your ego at the door. One of the best things a person can do is to commit strongly to frugal living, and that might mean giving up some status symbols in your life for a while. Don’t let that drag you down, and really attempt to appreciate the smaller things you can do for yourself.
Don’t be afraid to move on to professional help. Sometimes, you may need to consult a professional (an advisor or a lawyer) to get your situation straightened out. If the people you talk to point you in this direction, don’t hesitate to go forward with it, because the longer you hesitate to make change, the harder it will be.