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Money Fix: Bouncing back after a financial setback

Financial setbacks will happen. What's important is how

Financial setbacks will happen. What's important is how you bounce back, experts say. Photo Credit: Getty Images/iStockphoto/kitzcorner

You probably need no reminder, stuff happens. You have the best intentions, and out of nowhere comes financial trouble.

You’re not alone. In a recent survey by the National Foundation for Financial Education in Denver, 68 percent of the more than 2,000 people polled online said they experienced an unexpected financial setback in 2018, an increase from 63 percent in 2017. Drama included transportation issues, housing repairs/maintenance, medical care for an injury or illness, the inability to keep up with debt and falling behind on bill payments.

Setbacks happen. What’s key is moving forward. Here’s how to push the reset button.

Create a plan: If your issue is debt, Gary Schwartz, a financial adviser with Madison Planning Group in Hauppauge, offers a recovery plan. “Organize your debt. Most people are in denial regarding how much they actually owe.”  Aim for a small victory. “Pay off a small bill immediately to provide a sense of accomplishment.” Call creditors to renegotiate debt and set up payment plans. Be patient, progress takes time. “Consider hiring a financial adviser who can act as your personal money coach,” says Schwartz.

Rethink numbers: Develop a short-term, one-, three- and five-year budget, advises attorney John Graziano of Hunter & Graziano in Lee, Massachusetts.  Locate additional income sources, like a side hustle, part-time work or consulting. Cut unnecessary or frivolous expenses. “Monitor your credit reports. Lower your credit utilization rates to increase your FICO score,” says Levar Haffney, a financial adviser with Fayohne Advisors in Manhattan.

Learn the lesson: Stop beating yourself up.  Says Aviva Pinto, director of wealth advisory at Bronfman Rothschild in Manhattan, “Believe in yourself and your ability to persevere.”

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