How to Overcome Financial Hardship

July 30, 2020 Stan

A financial hardship can bring extreme emotional trauma, as it threatens one’s survival, security, and sense of belonging. Professional financial therapists help people understand the emotional concerns associated to problems in money management.

It’s a good thing there are ways to regain control over your own emotions, as well as your money, by considering the following tips:

1. Confront the guilt and shame. These two feelings are very common when individuals make major financial blunders, such as accumulating enormous credit card debt. Some people fee that they have been a big failure.

While many people do a lot of things to keep other people from discovering their financial situation, the simple admission to someone about the financial failure could be liberating. Often, this admission is enough to start letting go of the shame. Talking to a financial planner can be greatly helpful.

2. Focus on behaviour. Some people who’ve endured tough financial situations rebuke certain financial tools and swear never to use them again. For instance, an individual who accumulated credit card debt might decide to not use a credit card ever again. But the card isn’t the problem, it is the use of the credit card that gets people into big trouble. In reality, if used wisely, credit cards could even save people money through purchase protection, rewards, and other bonuses. One good solution to this is by modifying your behaviour so financial products won’t become a curse but a great blessing.

3. Take responsibility. It is essential to closely look at factors that caused the problem. The actions of other people or even bad luck might have played a role, however in most cases, there were times when one could have altered the course of events. Perhaps you took shortcuts or unreasonable risks, or yielded to the desire for materials things or to social pressure.

Once you acknowledge any role you may have played in the development of your financial struggles, you can empower yourself towards a better future. If your own choices was powerful enough to ruin your finances, they’re also powerful enough to improve and fix them.

4. Develop new habits. It is not enough to merely say you are going to alter your money behaviour. In order to cope with financial hardship, some habits should be changes or eliminated. This will pay off emotionally and financially. Implementing certain rules like saving 10% or 15% of your monthly salary or fully paying credit card bills every month will be very helpful and make a safety net that will cause you to feel significantly less worried if financial hardships emerge again.