How to Rebound from a Financial Setback
It’s no secret that the past two years have been a challenge for all. At Metro, we heard from many members who lost their jobs and came to us looking for financial guidance and assistance. We were able to help many of them in the short-term by offering hardship loans and financial guidance. The repercussions of the virus left many of our members suffering from major financial setbacks. At Metro, it is our responsibility to help guide them toward making financial decisions that allow them to feel more comfortable about where they are headed and more optimistic about their future.
Experiencing a financial setback is not uncommon. In fact, according to a 2017 study conducted by the National Endowment for Financial Education, 96 percent of Americans will experience four or more “income shocks” – job loss, sickness, or divorce – by the time they reach 70. Here’s how to get back on track.
Assess the situation
When experiencing a financial setback, it’s natural to want to turn a blind eye to the problem and avoid facing the damage. Unfortunately, it’s impossible to solve a problem without first identifying it. You may want to start by collecting all unpaid bills and other documents so you know what needs to be paid. Once you have a better understanding of your debt, you can determine the best way to pay it off.
Find the right resources
There are many resources available to help you get back on track. To start, you can get a handle on all unpaid debt by viewing your credit report through the free online credit monitoring tools. You can also begin to garner a better understanding of your finances by using online account aggregators, like Metro’s MoneyView which allows you to see all your finances in one place. If you’re looking to learn more about financial wellness, check out MoneySense where you can learn how to manage money and prepare for a secure financial future more effectively.
Establish a plan
Now that you have what you need to be successful, you can begin to determine their best next steps. First, you should take a close look at your budget and set realistic parameters on where you can cut spending. Our Saving and Budgeting calculators can help you understand what you can afford as you rebuild your finances. You may want to use the money you save to pay off debts accumulated due to your financial setback, contribute to an emergency savings fund, or a combination of both. Whatever you choose, ensure to set realistic goals that are easy to stick to, so you don’t get frustrated and abandon the plan altogether.