The stock market crash leading to the
recession
at the end of 2008 caught many by surprise. If you’re among those whose
savings and investments were ravaged by the economic downturn, don’t
despair. To lose your assets in such a manner is a traumatic experience,
to be sure, but you
can bounce back. The first thing you should
do is explain the situation to your loved ones so they can offer their
support during these trying times, then follow our 7-step financial
recovery plan to reclaim your monetary standing.
1- Evaluate the damage
The first action to take in our 7-step financial recovery plan is to
catalog all of your losses as well as your remaining capital. Don’t rely
on your initial panicked realization. You need to look at hard numbers,
which is why it’s important that you take every asset into account,
including your house. The situation may not be as dire as you think. You
should also contact the credit bureau or any of your financial
institutions to check your
credit report.
2- Set short-term financial goals
Don’t try to achieve everything all at once. Getting back on your feet
is going to take some time, which is why our 7-step financial recovery
plan recommends that you set temporary objectives to minimize your debt.
This can include saving a modest sum every month and paying off
high-interest loans. Make sure to keep your goals realistic. You may not
be able to clear all of your
credit cards immediately, so it’s a good idea to rank them by interest rate to determine which should be handled first.
3- Redo your budget
Given your current monetary situation, you’ll likely need to tighten
your belt to achieve your short-term goals, so track your spending
habits and eliminate any superfluous expenses. Be reasonable about it
and avoid compromising your health. You may not have much use for cable
television or a golf membership right now, but you still need to eat. As
part of our 7-step financial recovery plan, we also suggest that you
get rid of any unnecessary debt, such as the lease on a second car.
4- Follow your revised budget
Depending on how you typically deal with
stress,
this can be the most difficult part of our 7-step financial recovery
plan. If you’re prone to splurging, it’s imperative that you resist your
compulsive spending habits for the time being and that you always
follow through on your new monetary decisions. This is not to say that
you shouldn’t adjust your budget if you find you were overly optimistic
about certain expenses, but keep in mind that you can’t afford your
usual luxuries anymore.
5- Update your budget regularly
A key point in our 7-step financial recovery plan is the importance of revisiting your
budget
every few months. This will allow you to track your progress while
adapting to the ever-shifting economic climate. However, be careful not
to let your expense budget escalate each time you review it. A slight
increase can be expected from time to time as your immediate needs
change, but you should always prioritize your short-term financial
goals.
6- Pad your income
The most obvious way to increase
your revenue is to take on additional work. If your current occupation
allows it, you can either
volunteer
for extra shifts or stay late to accumulate overtime. Otherwise, you
may have to get a part-time job elsewhere. Our 7-step financial recovery
plan also advises you to develop a passive source of income such as
accumulated interest or paid advertisement on a blog. If you’re a
homeowner, you can rent out a room as well.
7- Set new financial goals
Once you have achieved all of your short-term goals from the beginning
of our 7-step financial recovery plan, it’s time for you to assess your
overall monetary situation and formulate
long-term
objectives. To ensure that you can weather another market decline, your
aims should include building a retirement fund (or replenishing it if
you already had one), saving a fixed amount of money every month and
establishing a more flexible budget. It’s also crucial that you maintain
a practical lifestyle that’s adapted to your monetary means and needs.
making a full financial recovery
Though our 7-step financial recovery plan will help you get back on
your feet, keep in mind that the process can be particularly long and
arduous, depending on the gravity of your situation and the extent of
your responsibilities. Some days will seem harder than others, but it’s
important that you never get discouraged. Try to learn from your
experience. After all, what doesn’t kill you only makes you stronger --
and you’re not dead yet.
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