How to overcome financial setbacks and regain control

August 4, 2023

Financial setbacks can often feel like a formidable storm, but remember, no storm lasts forever. While setbacks are stressful, they can also teach resilience, adaptation, and the power of proactive action.

Here are some constructive steps to help you overcome financial hurdles and get back on track.

Acknowledge and understand the situation

The first step towards resolving any setback – financial or not – is acknowledging it and understanding its extent. Make sure you do a thorough review of your financial situation, considering all liabilities and assets.

It’s important not to shy away from the figures, no matter how disheartening they may be: knowing the reality of your situation is the first step towards regaining control.

Create a recovery plan

Once you understand your situation, it's time to create a recovery plan. Think about strategies to increase income, reduce expenses, and manage outstanding debts.

Setting achievable goals and timeframes can also provide a clear roadmap to financial recovery, keeping you motivated and focused. And remember, you don’t have to go it alone: as financial advisers, we’re here to offer you our expertise every step of the way.

Prioritise essential expenses

During challenging financial times, separating needs and wants becomes all-the-more crucial. The priority is on essential expenses like food, shelter, healthcare, and basic utilities. On the other hand, non-essential expenses, like dining out, subscriptions, or luxury purchases, may need to be temporarily cut back until your financial health improves.

Seek professional financial advice

Not quite sure where to start? Engaging a professional financial adviser can provide valuable insights, helping you understand your options and develop a tailored recovery plan. As financial advisers, we offer expertise in budgeting, debt consolidation, savings strategies, and can provide guidance on more complex financial matters.

Rebuild emergency savings

An emergency fund is a financial buffer, providing a financial back-up during unforeseen circumstances like sudden job loss, illness, or major repairs. If your savings took a hit during your financial setback, make sure that rebuilding is part of your recovery plan. Even small, regular contributions can build up over time, providing a safety net for future emergencies.

Focus on long-term financial goals

While overcoming your immediate financial setback is vital, so is keeping a steady gaze on your long-term goals, like retirement planning or owning a home. Once you're back on your feet, reassess these goals. They may need adjusting but keeping them in sight will ensure you're moving towards your destination.

Learn from the experience

Every setback offers valuable lessons. When the storm has passed, it’s a good idea to pause and reflect on what led to your financial difficulty. Was it due to overspending, lack of savings or insurance, or something beyond your control, like job loss or a global pandemic? Identifying the cause can help you develop strategies to prevent future setbacks.

Here to help take the reins of your future

Overcoming financial setbacks is a journey, often filled with challenges. But remember, you're not alone. Seek support, stay focused, and be patient with your progress. With proactive steps and determination, you can regain financial control and emerge stronger than before.

As financial advisers, we're here to support you through the highs and lows. We'll help you understand your financial situation, create a personalised recovery plan, and guide you towards a secure financial future. Together, let's turn your financial setback into a comeback.

The information contained in this publication is intended for general guidance and information only. It has not been personally prepared for you. Therefore, you should not act on this information if you have not considered the appropriateness of this information to your personal objectives, financial situation and needs. You should consult with us before making any investment decision. Historical market performance may not be indicative of future market performance.