Some people live quite happily on a financial knife-edge, and never seem to worry. Others live with constant stress about their finances, and never seem able to relax. But nearly everyone will experience a financial problem at some time in their life, when it just seems that things will never come back under control. How we deal with those times is partly determined by our own psychological framework, and partly by the actions that we take.
Take Back Control
Stress is often caused by the feeling that we have no control over what is happening to us, that we ought to be doing something but can’t. Money can often seem like a monster, as though whatever we do will make no difference to its malevolent power. So most of the resources for reducing our panic are ways of telling ourselves that we can get back control, probably not in one dramatic sweep but in small steps.
If you are in a financial mess, one of the things you can do is to look, not at the big thing that has gone wrong, but at the little things which go wrong all the time. There may be all sorts of ways that you have been wasting money, by your purchases, your borrowing, and your indulgences. Getting these things under control won’t solve your main problem but will give you confidence that you are able to make a difference.
Don’t be Panicked into Mistakes
It is easy, in a crisis, to let your judgment falter. Generally it is better to avoid a dramatic action which could in the long term cost you much more.
Don’t be tempted to raid your pension fund. Pensions are always complicated, but the money you have worked hard to put away will nearly always be doing a better job if it is accumulating steadily. Try to do no more than have a temporary break in your contributions.
Be skeptical about anything that looks like easy money. If an offer looks too good to be true, it probably is. Normally you know that, but desperate people are easy pickings for fraudsters. In a worst case scenario you may find that you have become involved in an illegal scheme. If you suspect that has happened, get advice from a defense attorney straight away.
To resolve your crisis you are going to need to think clearly, and that is difficult when you are awake all night with agonizing thoughts of ‘What if?’ going round and round in your head.
‘Don’t tell me to relax!’ you scream. But you are going to have to try to relax a bit. There are plenty of techniques that are available, and you just have to experiment until you find something that works for you. You can try meditating, focusing on your breathing, or consciously relaxing the muscles of one part of your body at a time. If you prefer something more active, you can walk, cycle, or visit a place where you have calming memories of happier times.
Review the reality of your situation, from a positive point of view. If you can see things in a bigger perspective, remember times when you have got through similar situations in the past, think about how things will be so much better when you have survived, assure yourself that the people you love will always be there for you, then the present crisis may not look quite so large.
Get Help to Make Plans
You need to make plans, for the short-term and the long-term. Your short-term plans will be about getting through the present problems; the long-term plans will be about avoiding similar situations in the future and building a vision of a secure environment for you and your dependants.
Get all the help you can in making your plans. Your friends and family, even if they don’t know much about finance, will provide a sounding board for your ideas—it is much easier to clarify them when you try to explain them. For the immediate situation there may be non-profit organizations that can help you to sort things out, and for the longer term you could consider getting professional financial advice.
Not the End
There is no financial crisis that you are likely to face that has not been successfully managed by someone before you, and it will be successfully managed again. Holding onto the belief that there is a solution somewhere will help you to find it, and to build a better future.
Bill Powers is a partner with Powers McCartan, PLLC. His practice areas include Impaired Driving, DWI, DUI, Traffic Offenses, and Criminal Defense. He is the President Elect for the North Carolina Advocates for Justice (2015) and was named by Governor Pat McCrory to the Governor’s Statewide Driving While Impaired Task Force (2015). Bill is a board Certified Criminal Law Specialist by the National Board of Trial Advocacy – National Board of Legal Specialty Certification, Founding Member at DUI Defense Lawyers Association and General Member of the National College of DUI Defense, Inc.