September 5, 2022
|In Credit, Financial Fitness
|By Money View
“Failure is a teacher; a harsh one, but the best” – Thomas J. Watson
Life is a continuous journey where we keep trying to put our best foot forward. However, sometimes even the most well-intentioned, well-researched actions do not produce the desired results, even in our financial lives. A financial loss such as unexpected expenses or business loss can strike us hard and it can seem like life will never be the same again.
However, looking at the bigger picture and taking one step at a time can help one cope with losses of any kind, including the financial ones.
1. Do not take any impulsive action
When we are confronted with challenges, it is natural to want to take impulsive actions to sort these issues out as soon as possible. It is only human to sometimes give in to your emotions and resort to impulsive actions, be it to run through all your savings, withdraw all possible investments or mortgage remaining assets.
However, when it comes to your finances, this action will not serve you well.
Know that it is not a good idea to take action in the heat of the moment. Just taking the time to cool your horses, letting things and swirling emotions settle in your head will help you make better long-term decisions.
2. Consider taking professional help for emotional support
Sometimes, it is difficult for us to process our thoughts in case of life’s unexpected twists and turns. While we might think, financial losses are all about rationality and can be resolved using only the head, sometimes our mind and heart needs help.
Unlike a few years ago, seeking professional help today is no longer a taboo especially thanks to the COVID-19 pandemic. A therapist can help you process your thoughts in a healthy manner while helping you cope.
If you do not have access to a therapist, consider talking to a family member or a friend to whom you can open up without any shame or embarrassment.
3. Assess the situation impartially
Once you have found a way to cope with emotions, take stock of the situation in a rational manner. Assess the magnitude of the loss, understand what it would take to rebuild, plan for the rebuilding stage and strategically go about it. Often the situation is not as bad as we make it out to be initially.
Try and look at the situation in totality to make sure you have all your facts in place. This would make a good starting point for the rebuilding process.
4. Cut back on your expenses for some time
Rebuilding after a financial loss requires you to fill the gap left behind. This gap can be filled in two ways – increasing the cash inflow and reducing the cash outflow.
Track your expenses and find small yet impactful areas to cut down your spending. This could be eating out or even smaller expenses like Cable TV. Know that it is a short term measure and once your financial situation stabilizes, you can go back to integrating your preferred spends back in your life.
5. Increase sources of income
Now that you have a rebuilding strategy or vision in place, you have some idea of what efforts or monetary inputs would be needed to close on the gap left by your financial loss.
One way to supplement your current income is by finding additional sources of income. Thanks to the internet, there are now multiple ways to earn money just by sitting at home. If you are great at writing, why not look for freelancing opportunities? Or if your desserts are the talk of the town, why not monetize this hobby?
If you think your current income does not suffice, consider increasing your sources of income. Most successful people have and also advocate building on multiple sources of income to reduce risk at all levels.
6. Take measures to avoid similar losses in future
Each failure, when seen through the right lens, is a great teacher and a stepping stone to greater success. Once you can distance your emotions from the situation, it is important to look at what happened through a microscopic lens.
Was it an investment that went south ward? What steps can you take to prevent this situation from occurring again?
Did you lose a property due to an unforeseen tragedy, for instance a factory fire? Could a good insurance cover have reduced the extent of losses that you faced in such an instance?
Methodically, go through the situation in hindsight and take measures that you might need to in order to not have to go through those again. If need be, talk to a financial planner or advisor for help to do this.
7.Take a Personal Loan
Sometimes a financial loss can be crippling in its magnitude and leaves us with problems dealing with financial expenses even in our day-to-day lives. In that case, it is okay to take a short-term personal loan to tide over the situation.
You can get a quick and easy collateral-free personal loan from Money View through their website or app. The loans are disbursed within 24 hours of application approval making it perfect for emergency situations.
In Conclusion
Nothing in life is insurmountable. When looked at in a cool and rational manner, the biggest problems including financial loss can be resolved.
Have you ever faced a big financial loss? How did you cope in its aftermath? Let us know in the comments below.
