* You've lost your job. It's happened before, you know you'll survive, but this time it's taking a while to find something comparable. The weeks stretch into months. Your financial plans are on hold. Money is tight.
* You were on the way to debt-free status, but somewhere along the way you accepted a credit card offer with a terrific initial credit rate. The holiday season was expensive, suddenly several months have passed since you've made anything but the minimum payments. You are startled to realise you're approaching the credit limits on all your cards.
* Your plans for financial independence have suffered a major derailment: a baby is on the way, something you never anticipated at this stage in your life. Or, an aging parent has special needs, and someone in the house needs to give up a paying job for a few months or more to provide support. You were proud of your steady progress, but that's seems like history now
* You've successfully paid down your credit card debt, stayed the course, and you're walking tall these days with self respect. That is, until a few weeks ago when you wandered into new place offering "payday loans." It seems like a great way to cover cash shortages, until the day you take out a loan to cover the last loan. You're in over your head. Again
* Disaster hits. Market changes wipe out your savings, your credit is destroyed by fraud, or divorce rips apart your finances. You know you'll get through this, but you suspect your plans to make your finances work for you, instead of you working for them, are permanently shot.
Financial independence means different things to different people. You long to leave your full-time job for an interesting and varied career of part-time work and projects of your choosing. Or, you are on your way to debt-free, striving for the freedom and satisfaction of knowing that you don't owe anything to anybody.
You want a deposit on a home to shelter your growing family, or a solid University fund to insure a quality education for your children. Perhaps you plan to pay down your mortgage much earlier than you thought, so you can know that you own every brick and every stone of your home without encumbrance.
Step One: Face up to the process
You know something is wrong, and you're trying not to think about it. You've put off addressing it, because you don't have the time/energy/focus right now, and most of all you don't have the desire to deal with this, on top of everything else that's going on in your life these days.
Stop. Take a break from whatever you're using to avoid the situation. Sit down with a pencil. Breathe deeply. You are moments away from clarity.
Step Two: Determine where you stand
When a powerful storm blasts through your neighborhood, the first thing you want to do is get out there and check the damage. With as much dignity as you can muster, draft a "Where do I stand?" financial review: outline your financial assets and liabilities for a net worth statement, and list your income and your expenses, for an income statement.
Get at least a rough idea of what is going on with your finances. Are you still showing some forward progress? Are you right back where you started? Are you continuing to fall behind?
All is not lost. The skills and focus you have developed from working your financial program are still with you. For now, just take a good, hard look at where you stand. You are on your way to recovery.
Step Three: Determine what caused the problem.
After you have a sense of where your finances are standing right now, take a few minutes to determine what it was that made you veer off course.
Sometimes the problem is none other than ourselves. Honesty is the best course here. Were you slipping into old financial bad habits? Were there steps that you could have taken to mitigate the damage, which you didn't take? Did you make a promise to yourself to follow your goals to a brighter financial future, but take the easy road instead?
If so, join the rest of the human race. Immediate gratification is always easier and always the more attractive option. The important thing is to recognise it and take steps to get yourself back on track.
Sometimes the problem can be attributed to other people: family members or a resistant partner. See the end of this chapter for some ideas on how to deal with this issue. The important thing is to recognise it and take steps. Other people have power, and so do you.
Or perhaps the situation is truly beyond your control. Despite the best-laid plans, life sometimes runs us smack into a ditch when we least expect it. The new house required unforeseen repairs. Hospital bills spiraled after a medical emergency. You encountered a string of sheer bad luck. It happens.
To paraphrase a very well-know quote, "s**t happens." Put it down to one of life's little surprises and take some steps to limit the damage. Don't blame yourself.
There is one other possible take on your problem: you may not have a problem at all. Despite appearances, it's possible that you are doing exactly what you should be doing, and your finances are reflecting that.
Have your goals changed without your realising it? Child care, elder care, a lower paying but more rewarding career, or a more relaxed lifestyle for you and your family may all be reasons why your financial plan is not where you think it should be.
Take another look at your core values, which are the foundation of your financial plan. Review the next few steps with an eye to tweaking your financial strategies. Values are key, and flexibility is the name of the game.
Step Four: Revisit your values.
Whatever your definition of financial independence, ask yourself what deep-down values or personal principles create resonance for you. Why are you doing this?
Perhaps you crave independence from the employment runaround, the freedom to choose a career or work that truly satisfies instead of just paying the bills, or the pride and security of knowing you are providing the best possible future for your loved ones. Find your values, and you'll begin to reconnect with the process again.
Personal values change. Independence, once such a driving force for you, may grow into a craving for greater connection with family, community, or the environment. The desire to be a terrific parent for your young children may evolve, as you aspire to provide the best possible model of an independent, fulfilled adult for them and for yourself.
Consider adjusting your timeline. Reconnecting with your deepest principles is one of the most important lessons in creating your own version of financial independence.
Step Five: Take steps to get yourself back on track.
If you've been following this plan, then you already have most of the skills you need to make your financial goals a reality.
Make a list of three crucial steps you need to take to redirect yourself in your financial life. Or, start with one small step, gathering forward momentum to get back on track with your goals. Pick up the telephone to set up an automatic debt payment plan or investment plan. Schedule a professional association meeting to connect with people in the your field of expertise (or desired expertise). Consider putting something up for sale to bring in a little extra cash, if cash is scarce. The important thing is to take action, today. And keep on keeping on.
Step Six: What if the time is not right for action?
Sometimes we're stuck in holding pattern. We're waiting for the kids start school so we can expand our income opportunities, until the house finally sells so we can move to a less expensive place, until the court case is resolved so we can get back on track with our plans. Sometimes, we just need the courage to hang in there until the time comes when we can move forward again.
This is where your focus comes in for a real test. Hang on to your power by keeping your values in the front of your mind through all the chaos or frustration.
Stand your ground. Take tiny steps, to position yourself for your next move. Care for yourself and those who rely on you, and keep yourself as positive as you can in what may be a very negative situation. Get support, get right with yourself, get your plan in order. And when the time comes, you'll be ready to hit the ground running. This is where your real power kicks in.
Step Seven: Deal with the human factor: Resistance.
Sometimes, resistance comes from other people. Your spouse won't let go of destructive spending habits. Your kids pressure you to spend money in ways that are no longer in your family's best interests. Or, your adult siblings, parents, or friends, whom you rely on for support in this new endeavor, continue to pull you back into routines that don't work for you anymore.
* Resistance from other people is tough to manage, and it can disrupt our financial plans like a stone in a paper boat. Here are some strategies for dealing with resistance from others:
* Slow down. Sometimes we expect too much, too fast, and family members resent it. Kids and partners have a lot invested in the status quo, and people are notoriously resistant to change of any kind, even if they agree with it in theory. Take your financial changes at a slow, steady pace and they're likely to find the process a lot more palatable.
* Include them in the planning process. Kids can provide valuable feedback on reasonable ways to cut costs. Ask them for help shopping, brainstorming ideas to reduce household expenses, or finding part time work to help with miscellaneous expenses. Your partner may hate the idea of buying second hand, until he finds out that he's got a real knack for negotiating the best price. Your family members or friends may have a few good ideas for keeping costs down, once you explain how important it is to you. Get people on board by including them in the process.
* Remind them why you are doing this. The same family member who considers "financial independence" a waste of time may love the idea of looking into another line of work, once the financial underpinnings are in place. Kids may not care about credit card bills or education funds until you start to post results in a place where the whole family can monitor progress. People connect with a project when they see a personal benefit.
* If your spouse or partner flat-out refuses to cooperate, consider separating your finances as much as possible. Keep credit cards in separate names. Open a spending account of your own and be responsible with it. Your behavior may provide a valuable model for your spouse. At the very least, you can get back in line with your own values, and begin to take pride in your forward progress.
* Sabotage: it happens. Sometimes, despite all your best efforts, you regretfully conclude that someone who should have your best interests at heart, doesn't. Your sister may be jealous, your boyfriend may not want you to succeed, your parents may prefer you as a dependent child, instead of an adult responsible for your own financial life. If these people support you in other ways, simply recognising that consciously or unconsciously, they may not want you to succeed, will allow you to quietly separate yourself from their feedback on the issue and go your own way. Where nothing else works, extricating yourself from a consistently negative relationship may be necessary. Recognising that not everyone wants to help is a step toward living your own life.
Sometimes, resistance comes not from others, but from within.
Perhaps you make yourself vulnerable to the criticisms of others, because you feel you're not worth the best in your finances or in life. You may feel out of line with your deepest values, or maybe you're angry and frustrated that you have to keep deferring gratification in your financial life.
The strategies for internal resistance are the same as those for dealing with other people: Slow down. Review your deepest motives, and determine how the plan works for you. Be responsible with what you can, and try to minimise the damage of your own worst behaviors. Sometimes, just recognising that you are sabotaging your own progress can free you to behave in a way that originates from your personal values, instead of from your negative feelings.
You are embarking on a noble and difficult task. Now is the time to take a deep breath, remind yourself of what you're trying to accomplish, and stick with the process. You will make financial freedom, on your own terms, a reality in your life. You will triumph, and when you remember how you overcame these obstacles, you will relish your success.
Article Source: https://EzineArticles.com/expert/Christine_H_Williams/1268500 © 202
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