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Escaping The Grief Of Financial Disaster

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Sarah and Peter’s financial life was a disaster. They graduated from college with a mound of debt. Then in a whirlwind of trying to get their life together off the ground, put themselves further in debt, burning their credit cards right up to the max. Their earnings weren’t matching the trajectory they had expected and the result was devastating. 

Jim and Carol—in their 50’s—decided to buy that lake house they’d been dreaming about for years. They had saved enough for a down payment and financed the rest. They calculated their monthly carrying costs and felt they could swing it without too much difficulty. They didn’t expect that Jim would lose his job. Suddenly, they were caught with more expenses than they could handle and panic was about to set in.

Judy and Sid, a couple in their mid-70’s, thought they would live out their lives in comfort. Their expenses were reasonable and between Social Security, her small teacher’s pension and the savings they’d accumulated, they felt pretty good. That was until Judy was afflicted with dementia and she needed care beyond what Sid could provide at home. Sid, being in good health, was still active and independent, but the cost of maintaining Judy in the nursing home was breaking the bank quickly. Sid became desperate. 

These examples are not outliers, but real situations that happen through unexpected life events. When financial strife hits, we are left in panic, despair and devastation. There doesn’t seem to be a path to a comfortable solution. Dread and depression become partners with despair and devastation. We can sit in self-blame, self-pity or denial—or recognize that the only way out is through positive action. It starts with three mindset shifts:

Stop the blame. Nothing is solved while blame is being spread around.

Avoid the self-pity. It is a downward spiral of defeat.” Oh woe is me” is not a solution.

Deny denial. Burying your head deeper in the ground is going to give you nothing more than a mouthful of dirt.

Taking serious action is the way—the only way—through these painful situations.

You want to know the facts. Understand your current financial situation clearly and understand whether your money mindset led to the problem.

There are always options and you want to explore them. Start capturing possibilities to get you out of the muck.

Seek help and support. You might need the help of a financial planner, attorney, CPA, therapist and/or social worker. There is zero shame in asking for the help you need.

Consider whether your money mindset is the first issue that needs to be addressed and what new beliefs need to replace them in order for you to navigate the challenges ahead. Depending on your situation, you might need to start off working with a therapist so that you have the emotional tools necessary to navigate the rest. Money problems can be an offshoot of your money mindset—your money beliefs that you acquired in childhood. They can include a sense of entitlement, the need to show wealth, discomfort in talking about money or your aversion to anything financial. Your attitude is the difference maker between creating problems and developing solutions.

There might be several potential tactics and strategies that can help—and while none might be ideal, doing nothing is never the right answer.

Consider four key questions when you’re assessing your situation or making financial decisions:

  1. What’s the worst-case scenario if I do X or just continue doing what I am doing?
  2. What would provide me with the greatest sense of comfort and security?
  3. Who do I need support from?
  4. Why is this important?
     

As you work through these questions, consider whether you might benefit from making some changes that will add to your happiness. You could find yourself like Sarah and Peter or Jim and Carol or Judy and Sid unless you take the time and focus to change what might break you.

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