How To Bounce Back From A Financial Setback

These past two years have been rough for many families, not just with the pandemic but also with the financial fallout.

Depending on the industry, families had to deal with significant squeezes to their budgets due to furloughs, layoffs, and businesses shutting down. It became a necessity to make every dollar count.

Thankfully, things are looking better. According to the U.S. Bureau of Labor Statistics jobless rates decreased in nineteen states in January.

Now could be the perfect time to bounce back and start working on building up finances.

Getting Good with Money

Jessi Fearon knows this firsthand. Years ago, she and her husband Pat had $55,000 of debt. So, they knew they had to make some significant changes to get out of living paycheck to paycheck.

It took a lot of work, but Jessi and Pat became debt-free - mortgage included- on around $50,000 a year!

I recently spoke with her about what changes they made to their budget and habits to reach that tremendous milestone.

If you had a setback with your finances, here are 4 ways you can pivot and start tackling those money goals as a family.

1. Communication is Key

One of the best things you can do as a family is to come together on your goals. It can speed up the process with whatever you're trying to tackle. However, talking about money is stressful for many, especially when dealing with debt.

You can take the pressure of the money talk and instead focus on having regular conversations.

Those first conversations can skip out on the numbers and instead focus on your goals. What would you like to do this year? What plans do you have for the next few?

I'm a big fan of money dates for couples. They allow you to discuss finances and more in a low-key way. For example, you can review the numbers from last month and create your budget for the next one. 

These discussions allowed Jessi and Pat to cement their goals, giving them an added motivation to stay on their plan.

Another reason why it's great to have regular check-ins with one another is so you can quickly adjust your budget when something comes up. It's easier to get back on the plan when looking at it monthly or by paycheck.

2. Consider Both Sides of Your Budget

Of course, if you're tackling a goal like paying down debt or saving up for a house, the money has to come from somewhere. In most cases, that means evaluating your finances.

You have to look at your monthly expenses to optimize them. For example, Jessi reduced their food expenses by using the cash envelope system when shopping. As a result, she could stick to the budget more frequently.

You also consider increasing your income, whether it's negotiating a raise, switching jobs, or taking on a side gig.

3. Keeping up with the Joneses will Make You Unhappy and Broke

One of my goals with highlighting different families on my podcast and site is to see that every financial journey is different.

While it can be inspiring to read and watch others pay off their debts or save for financial independence, it's critical to make sure it doesn't become a comparison.

Whenever you read a debt-free story, please use it for ideas and inspiration instead of comparison.

4. Building your Financial Team

Finally, having a support network as you get into your new routine can keep you motivated and insights into improving your finances.

As a Coastal member, you have resources you can use to bounce back with your finances, including free seminars and an assistance program if you've experienced a hardship.

You can also schedule to work with the Coastal Wealth Management team, available through CFS*. They're all dedicated to helping you craft a financial plan that reflects your goals and priorities.

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