Have you made some poor financial choices in the past? Want to learn how to manage the financial stress the right way?
Unfortunately, you have ended up in this dire situation. There are plenty of people who end up in a financial crisis because of the misinformation that is out there about “how money works”. People are forced to sell their prized assets to get out of such a situation. Imagine filing for bankruptcy twice and then losing your job. How would you tackle such a tough situation?
What is a personal financial crisis? How to know you are in one?
First, you need to understand what this predicament is. In general, a financial crisis is a situation when institutions lose their value in the market. As a result, the entire industry or a particular sector collapses. Unlike an economic crisis, a financial crisis is localized and does not affect the entire economy of the nation. It is viewed more as a setback than a total disaster.
When it comes to a personal financial crisis, things are not that different. It involves you running out of money due to credit card debt, inability to pay your mortgage, losing your job, losing the sole breadwinner of the family, or an acute injury/illness to a family member. There are several more reasons why you might end up in a personal financial crisis, but these are the common ones.
What are some ways to stay calm during a personal financial crisis?
1) Take your mind off of the financial crisis
Sometimes a temporary escape from the situation is the best solution for stress. I am not asking you to be ignorant of your situation or pretend as if everything is fine. But sometimes financial stress like any other stress can throw us off balance. Hence it is essential to partake in constructive activities like yoga, sports, going out with friends and meditation.
2) Create a budget
A budget is an estimate of your income and expenses for a set period. So, if you plan to better your financial situation in the next 3 months, make sure you have a sheet with income and potential expenses listed side by side. You can create a 3 month budget on a piece of paper of spreadsheet software. Doing this will eliminate needless worry and panic attacks.
3) Educate yourself about finances
Self-help is one of the best ways to tackle financial stress and worry. Reading books on financial education will help you understand the fundamentals of money. Learn how to make, save and invest money wisely. I recommend reading books like “Rich Dad, Poor Dad” by Robert T. Kiyosaki and “More than Enough” by Dave Ramsey. Remember the lessons taught by these financial gurus and you will never fall in the debt trap again.
A personal financial crisis can be a bit overwhelming. But you cannot improve your situation without, first, taking the right decisions and then acting upon them. Don’t waste your time finding shortcuts to escape the situation you are in. There are no shortcuts. The best way to tackle financial stress is the have a calm mind throughout the tough period.
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