When I was 18 I was on top of the world. I had a good paying job at the mall, a checking account that was almost $500, and I felt that nothing could stop me.
After getting my first paycheck it was time to get what I deserved. I bought some cool clothes. I bought some creatine at the local GNC to fuel my desire to “get buff”. And I bought a bunch of other crap that I convinced myself I needed (but obviously didn’t).
I was a young man in control. That is until “it” happened.
The “it” was me not balancing my checkbook which in then turn led to me bouncing a check. Now bouncing a check is not a financial disaster. But in my case it wasn’t one check. It was three.
Bouncing three checks where your 18 years old very much felt like a financial disaster.
If you are like so many other people today, you either missed the signs that you were headed for financial disaster (I obviously did), or you were unable to stop yourself from hurdling through it. Unfortunately, a lot of people have found themselves in this situation, and are in need of some much looked for advice as to how to dig themselves out and get back on their feet.
How Did We Get Here?
Financial disasters can happen for a number of reasons, including big events like deaths in the family, not being properly insured when someone needs emergency medical care or an uninsured or under-insured home when a natural disaster hits. There are plenty of people as well that are not prepared to handle any financial stressors because they live paycheck-to-paycheck, don’t have anything saved up, and have other debts that are in their history that they can’t keep up with by paying the minimal payments.
Digging Out Into the Light
No matter what happened to get you here, it will take some careful planning and probably a substantial amount of time to get you back out and on your feet again. The first thing you should do is assess the situation so you know exactly what happened and you can try avoiding the same thing in the future. Also, it is time to accept it. Even though it is uncomfortable and no one likes being here, it is where you are at, and if you don’t accept it, you won’t ever be able to move on.
You next need to look at where you are currently and ask yourself some questions. After realizing that I had bounced those three checks, I remember sitting in my room wondering how in the heck I let this happen. You need to take into account how much money you make, how much money you owe, how much do you spend, and things like what is your credit score and if there are any long-term implications to your financial situation like health issues or I.R.S. liens.
Where You Going?
Once you have assessed where you are at, you can then figure out what your goal is at the end of all of this. You need a clear and specific goal, like planning on making a certain amount of money more each month or year. It must be a measurable and attainable goal so you can keep track of it, and so it is something that you can actually achieve. Don’t be unrealistic so that in the end you are no better off than you were to begin with and you have left yourself with another failure to deal with.
If you need, getting the advice of someone who has gone through this before or a knowledge financial planner may be in order. Make sure you take whatever steps you need to plan out your personal financial goals and to be successful so that you can get your finances back on track. Sometimes this means taking on an extra job to make up the difference and to pay things off, but it is well worth it in the end to have yourself free from the debt and back out of the crisis.
Then, you can develop your plan so that you connect where you are at now to where you want to be. Make it so that it is successful, but rewarding for you as well. Then, take action! Nothing here will happen until you actually put your plan into motion and sometimes this is the hardest step to make.
Jeff Rose is an Illinois Certified Financial Planner. He blogs at Good Financial Cents and Soldier of Finance. He loves Crossfit workouts, writes about Roth IRA rules and craves In-N-Out burger. You can follow his updates on Twitter.