How to Handle a Financial Setback

So you're cruising along... you've got your debt plan in place, you've been watching your spending, you've been sending in extra money to pay off your debts, and have even managed to set a little aside for emergencies.

Then... WHAM! You get smacked with an unexpected car repair bill, or medical bill, or your credit card gets declined.

You feel horrible... you may be feeling ashamed, depressed, or even hopeless.

You were doing so well. Why did this have to happen now?

Don't let a setback derail your financial plan! Unfortunately life is full of surprises and setbacks and even the best plans can get derailed from time to time. That does not mean that you will fail. It just means it may take a little longer to reach your goal, but you will prevail.

Here are some tips to help you stay on track after a financial setback:

The first thing you need to do to get back on track is to review your goals. More importantly, review the WHY of your goals.

If your goal is to get out of debt, why do you want to get out of debt? What will getting out of debt mean to you? Will it mean freedom? Will it mean you'll have the ability to put your kids through school, or to retire early?

It's important to visualize your goals and build rewards into your goals. This will help you stay on track or to get back on track when you have a setback.

Financial setbacks can be very stressful. Here's an exercise that I learned a few years ago to reduce financial anxiety.

Basically, you want to do a brain dump. For 10-15 minutes write down everything that's bothering you about your finances. The setback you just experienced is a great place to start, but then let the thoughts flow... keep writing until you run out of things to write.

Next, review your list. Cross out or put an X next to everything that you can't control. Since these are things that you have no control over, you're not going to spend any time or energy worrying about those items any longer.

Put a star next to everything on your list that you do have control over and that is a priority to you. When you have a problem or a concern about something, you should always determine what you have control over and make plans to change those things for the better. After you have put stars next to each item that you can control and that are important to you, start making plans to improve these items.

You will be amazed at how much better you will feel after doing this exercise because it allows you to let go of the things you can't control and to make a plan of action to improve the things you can control.

I love this exercise. Anytime I feel stress around my finances, I think about ways that I can earn more money. This exercise really gets my creative juices going and it also gives me some positive actions to take (instead of just worrying about my finances).

This list will be different for everyone, but here are a few things I do when I want to earn some extra income:

• Review client work - Do I have any projects that have been delayed? Find out why it was delayed, then find a way to complete the project.
• Follow up with potential clients - Sometimes a quick email or newsletter will prompt them to become a client.
• Write an article (or several) and post to article directories
• Update my blog (stock up on posts so I don't get behind when business picks up)
• Create a HubPage or Squidoo Lens
• Hold a teleclass
• Sell items on eBay, or books on Amazon

What ideas do you have to create additional income?

If you're really feeling down about your finances, sometimes you just need to take a break. Stepping away from the problem sometimes is the best solution.

Here are a few things I do when I just need to get away from the problem for a while:

• Read a good book
• Go for a walk
• Hop on the bike for a while
• Spend time with family
• Listen to my favorite music

After my "break" I'm usually refreshed and ready to tackle my problem with re-newed energy.