Boy, have I got news for you! I was recently fired from my corporate job that I’ve had for around a year. What does this have to do with anything, you may ask? Because today we’re talking about managing financial setbacks!
With the loss of my job, I’ve had to put a bunch of my financial goals on hold. As much as this sucks, it’s only temporary until I figure out what the hell I’m doing with my life. In the meantime, I figured I’d share what I’m doing in case you’re in a similar situation – now or ever. I don’t wish it on anyone, but it does happen.
While I was employed, I made a huge dent in my debt, saved a bunch of money, and lived relatively comfortably. In fact, check out my TikTok where I break down how I paid off $22,000 in debt in just over a year. I also formed healthy financial habits that will carry over into this next phase of my life; habits like budgeting, setting financial goals, and setting financial boundaries. Now it’s time to fall back on all the work I put in until I’m employed again. So here’s how I’ll do it:
First Things First: Changes I Made Immediately
The first things I did to manage losing my income and the subsequent financial setbacks that come with a change like that were within my budget. If you’ve seen my budget, you’d know that I make extra loan payments to pay off my debt faster. Those extra payments were the first thing to go.
I also removed and adjusted any non-essentials in my budget. I completely removed my eating out category, and cut my fun money in half. Just between cutting out extra payments and non-essentials, I was able to reduce my expenses by $850.
Emergency Funds Reign Supreme in Times of Financial Setback
If there’s one thing I recommend you do, it’s have an emergency fund. I’ve been stashing away money every month while I had my job and built a decent savings for financial setbacks such as this. Now it’s time for it to shine – until I can replace my income from my lost job, I have enough in my emergency fund to sustain my basic needs for about 5 months.
Typically, 3-6 months of expenses is ideal for an emergency fund, and mine falls right in the middle. I was planning on adding more, but of course that will have to wait for now. Now, you may have noticed that I also have debt. Some may say that you shouldn’t save while paying off debt so you can pay your debt off faster, but I say that you should do both at the same time.
If I hadn’t been saving while paying down my debt, I wouldn’t have the security of my emergency fund to fall back on after losing my job. Sure, I’d have less debt, but I wouldn’t be able to sustain myself very long without savings and would likely end up going into more debt just to stay afloat. So if you take anything away from this, it’s to save while paying off debt. You don’t want to be left without a coat in the rain.
Supplementing My Savings
In order to make my savings last longer, I got a part time job to bring in some income while I figure out my next steps. I would highly recommend finding something that brings in even just a little bit of money because some money is way better than no money. Even if you feel the job is “beneath” you, take it.
Find side hustles to help as well. If you can, drive for Uber, DoorDash, walk dogs, babysit. Really anything that will help you not rely completely on your savings so you can stretch them even further. And get over any ideas or feelings you may have about taking jobs you deem “less than”. You’re in survival mode and now’s not the time to be picky.
Your Mindset Matters to Your Financial Situation
When dealing with your financial setbacks, whatever they may be, it’s important to remember that it’s just a temporary situation. Cutting back on your lifestyle, working a less than ideal job, and the stress and anxiety that come with these situations won’t last forever. Remind yourself that you will get to where you want to be – just be patient and do what you need to do.
Whatever feelings may arise due to your financial setback, it’s okay to allow yourself to feel them. Whether it’s grief from losing a job you loved, sadness, anger, frustration from having to put your financial goals on hold, or even the aforementioned anxiety. Give yourself time to process these emotions, then you can work on moving forward. I find that writing down a plan is helpful because it provides a sense of control and gives you some of your power back.
It’s also important to not be too hard on yourself during this time. That’s not to say you get to give yourself a blank check to f*ck off and do nothing, but don’t agonize over the situation. It is what it is and you’re doing your best to fix it. Remember that your financial situation is not a reflection of your worth as a human being; you have the same worth you did before experiencing this financial setback and it will be the same once you’re through this season.
All in All: Managing Financial Setbacks
When managing financial setbacks, you have to make adjustments. Whether you’re dealing with job loss, getting hit with a major expense, or any other imperfect situation, assess the position you’re in and adapt accordingly.
Your emergency fund is likely to be your best friend, so if you don’t have one, get started on that like yesterday so you don’t get caught with your pants down around your ankles. Don’t forget to supplement it and make it last longer with any form of income you can find (though I don’t recommend selling drugs or offing people’s enemies).
Perhaps most important of all is your mindset. Your mind is your strongest tool and will have the biggest impact on your ability to change your situation and deal with whatever financial setback you’re going through. Positive affirmations, creating a plan, and separating your self worth from your finances will all have a constructive effect on your ability to deal with your financial setback.
For me, I know that this is just a season of my life and I will get back on track. Before I know it, I’ll be adding to my savings instead of taking from them, I’ll be making extra payments on my debt again, and spending some extra money on things I enjoy. Consistently affirm to yourself that you are doing your best and that everything you want is falling into place. Then do the work to get yourself there.