Making a Financial Rebound

by TTMK on May 13, 2013 · 4 comments

If everything in life went perfectly according to plan, we would have great success in every single area of life.  By that, I mean have the very best health, relationships, and finances.  Not just something we’re happy with – but the best.  I don’t know anybody who is the best at everything!

Not only do I not know anyone who’s perfect, everybody I know has some quirks or has had some failures.  Or, more nicely put, situations where things didn’t work out for them.  In a few cases, these situations cost them money.

Just a couple of people who come to mind: someone going through a divorce where he was taken to cleaners, and another guy who overextended on a house and ended up having to sell and take a huge loss.  These two that come to mind are just the tip of the iceberg; people can find themselves in a financial crisis due to other situations as well, such as job loss or health issues.

Yet other people have problems because they can’t control themselves financially, and aren’t able to avoid debt in life.

For those with such issues, it can be possible to make a financial rebound.  Here are 6 ways to make rebound with money:

  1. Be honest with ourselves.  This means truly embracing why things went wrong in the first place.  It might be a total miscalculation that was made about a job, investment, or relationship.  It could be laziness or carelessness.  Regardless, we should figure out what part of this truly wasn’t just bad luck, and what part was in any way our responsibility.  Chances are, we can take ownership of most things if we are truly honest with ourselves!
  2. Have a mindset of wealth.  If we think with the same views and act with the same habits that got us in a tough situation to begin with, we might be going anywhere.  Instead, thinking positively and realistically, taking on wealthy habits, we can put ourselves in position to rebound.
  3. Make a plan for success.  If we want to rebound, it probably helps to create a plan.  In terms of finances, I envision this as setting goals for where we want to be in terms of our income and net worth at a certain point in time.
  4. Set and follow a budget.  We have to be able to tell the difference between what we need and what we want.  This helps us prioritize our expenses, and will facilitate our efforts to make a budget.  Then, of course, we have to have the discipline to follow it!
  5. Maximize the gap between income and expenses.  This might be a part of the budgeting process, but really it’s important to be sure that income and expenses don’t equal each other.  There should be a gap, and of course that gap needs to mean income exceeding expectations.  But focusing on this allows us to build up our savings and ultimately our net worth.
  6. Remember the pain of the original problem.  If we have to make a financial rebound, then there was obviously a problem in the first place.  It didn’t feel good to have the issue, so it’s smart to remember how it felt when it happened, to remind us and motivate us to get back on track.  For me, this concept is applied in terms of my health.

My Questions for You:

Have you or anyone you have known had to make a financial comeback?

Do you have any other suggestions for those who are looking to turn their finances around?

{ 4 comments… read them below or add one }

Grayson @ Debt Roundup May 13, 2013 at 1:22 pm

I, myself, had to make a financial comeback and did so by first being very honest with myself and asking myself “why?”. That is the first step to moving on and I highly recommend it to everyone.

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TTMK May 13, 2013 at 6:32 pm

Grayson – I think we’re on the same page here, it’s important to ask “why”. Understanding what created the problem helps us avoid it (and maybe similar issues) in the future.

Reply

Daisy @ Prairie Eco Thrifter May 14, 2013 at 8:16 am

I have, and I think the most important step that you listed was being honest with myself. Boiling it down to the fact that nobody could control my financial situation like I could, and take responsibility. I got myself into my situation by telling myself that I didn’t make enough money and therefore couldn’t save.

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TTMK May 14, 2013 at 7:45 pm

Daisy – it’s great how taking personal responsibility can accelerate getting us to where we want to go!

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