14/03/2020
*Money management* is something some of us are learning the hard way. But even with best-made financial plans, unexpected and inevitable life events such as high medical expenses, misguided loans, layoffs etc, can throw you off course.
It is crucial for you to make a financial plan but of more importance is a recovery plan for any setback that you might find yourself in. Here are some key elements of a sound recovery plan.
1. Get clear on your setback’s implication
First of all, the thoughts and worries of how you will handle this setback are natural but not at all helpful.
Get over the shock and try to assess the situation that is straining your finances to know exactly what you are dealing with. Your situation can be permanent or temporary, a one-time thing or an ongoing problem. By assessing the entire situation, you will get the actual figures and cost of your setback to help you plan ahead rather than moving on blindly with fingers crossed.
2. Consult a professional
When money woes strike, even the most composed employees feel deflated. Seek professional advice to put things in perspective.
A financial advisor can level up any exaggerations or underestimates that may cloud your judgment.
3. Consider your available financial resources
Analyse the financial options available to you that could bail you out of the setback. It could be your savings, insurance or an emergency fund.
Selling your investments should be the last resort when shopping around for loans from friends, relatives and even financial institutions seems not to bear fruit. If you have to sell your assets, allocate some amount to another investment as you sort out your present setback.
4. Prioritise your essentials
When you are struggling to get back on your feet, do not waste your efforts by over indulging in unnecessary items. Make an effort to stay grounded on your needs and keep wants at bay.
Tame your desires. You can always go back to them once you get fully back on track
