Financially difficult times can hit anyone. Sometimes, they are the result of a few poor money decisions. Sometimes, they are completely out of the person’s control.
When they hit, you feel like you’ve been delivered a knockout punch. And as you lay on the mat, you wonder if you will ever be able to get back up again.
When you find yourself feeling discouraged, stressed, and afraid about your financial picture, consider taking these few steps.
- Decide to act quickly. Lying on the mat will only make matters worse. Choosing to not address the pain will only result in more struggles. This is how money works. Decide to do whatever it takes to get out of the financial mess in which you find yourself.
- Get organized. Figure out whom you owe and how much you owe them. Gather your monthly bills together. Figure out how much money you have coming in (income) and how much money is going out (expenses). Create a plan (budget) for you to put more money toward those you owe.
- Don’t stop giving. Generosity needs to remain a priority. When finances are stressed, it is easy to cut this part out of your budget. Don’t do it. You may not be able to give as much as you used to. That’s okay. Give something. Keep yourself aligned with the Bible’s teaching on generosity.
- Save $1,500 for a minor emergency. Set aside money for a future emergency. This will help you stay off the mat, even if you are hit with minor car repair costs.
- Don’t miss out on your organization’s match. This small amount of “free money” can make a big difference at retirement. To see how a little bit of money can make a big difference, check out this SlideShare presentation.
- Pay off all debt except your mortgage. To do this, I recommend the Snowball method. Focus on paying off your smallest debts first. Of course, make sure to pay all other minimum payments while doing this.
- Save 3 to 6 months living expenses for a job-loss emergency. Now start preparing for another knockout punch. If you have 3 to 6 months set aside, the punch will still sting, but you can recover much more quickly.
- Work toward putting 15% of your gross income to retirement. Fifteen percent is a good rule of thumb when it comes to retirement savings. However, be sure to determine you true need and retirement timeline. You may need to set aside even more.
You can do this. Financial knockout punches hurt. They make you want to give up.
Don’t give up.
Starting today, take steps to getting up off the mat.