Managing a Large Financial Hit

Answer 1

Whether a financial crisis is expected (your employer has been in trouble for months and coworkers have been dropping like flies) or a complete shock (your business partner has been secretly draining your accounts), it's still a tremendous loss. And as with any other kind of loss, you're likely to go through some version of Elizabeth Kubler-Ross's well-documented "five stages of grief."

Do any of these sound familiar?

Denial: "It'll be fine. We've got some savings. No big deal. Say, who wants steak for dinner?"

Anger: "It's not fair! I don't deserve this! This is all that jerk in Accounting's fault!"

Bargaining: "Okay, okay, I'll take the Kate Spade handbag back. But that's it."

Depression: "What's the point of getting out of my pajamas? I'm never gonna get another job and we're just gonna lose the house anyway. Pass the Doritos."

Acceptance: "Okay, this is real and this is serious, but there are steps I can take to minimize the damage."

Obviously, the key to getting back on track is getting to acceptance as quickly as possible, and finding a "new normal" that allows you and your family to regroup and survive the crisis. Understand, however, that it's common to go through these stages in a different orderor even revisit each stage from time to time. Grief is not linear, and it doesn't follow specific rules. Allow space and time to honor your emotions, without getting so triggered by them that you're non-functional.

There are actions that need to be taken, and I'm guessing you know what they are: pay off your credit cards if you canthe interest is simply draining your resources faster. If you can't, consolidate your debt on one, low-interest card, or see a financial advisor (credit unions offer this service for free to members) to figure out how to keep up with payments.

Almost everything non-essential needs to be eliminated from your budget. I say "almost," because without small joys and pleasures, it's easier to get swallowed up by inertia and depression. So, by all means, cut out the premium cable channels, the bi-weekly house cleaning, the magazine subscriptions you don't keep up with anyway, and the $5 specialty coffee drinks.

On the other hand, make sure you allow for a treat now and again: an ice cream cone as a reward for sending out ten resumes, for example, or family movie night with inexpensive take-out pizza. It won't make or break you to allow your teen to buy one new iTunes song at 99 cents a pop every few weeks, or to keep your $10 a month Netflix membership so you don't spend money going out to movies.

Discover the joys of free stuff: community events, library books and videos, visiting supermarkets on Saturdays to taste all the free samples, outdoor activities like running and walking, network TV (there really is some decent stuff on, honest!), digging out old Board Games, free long distance calling plans, live music at coffeehouses (order the plain coffee!).

Make a game out of finding quality used stuff when you need to make a purchase: refurbished electronics, yard and estate sales, Craigslist, eBay. Many communities have a "freecycle" program where people post their free stuff onlinethere's many a decent couch or piano to be had for free just because the owners want it gone.

Be willing to change your paradigm. Doing things "the way we've always done it" probably isn't working for you anymore. That might look like exploring job opportunities outside of or indirectly related to your former field; challenging whether your family actually needs two cars; starting a vegetable garden instead of buying the high-priced stuff from Whole Foods; borrowing instead of buying books and movies; coloring your own hair or enjoying the gray highlights instead of dropping $150 every six weeks at a high-priced salon.

Finally, open yourself up to seeing the opportunity within the crisis. If you were less-than-happy in that job you lost, now's the chance to redefine your career. If you thought you needed a lot of gadgets and toys to be content, this is a great time to simplify and notice how, in doing so, you create a deeper connection to othersand to yourself. If you defined yourself by your financial status, your job, your bling, or your ride, there's no better chance to challenge the notion that you are the sum total of your accomplishments and your stuff.

No one welcomes a financial crisis. But it's interesting how many of us emerge from one stronger, wiser, and with a clear idea of what matters and what doesn't. So breathe. Grieve. And make a plan, knowing that you'll come out of this in a different, and quite probably better, place.

Answer 2

Whether a financial crisis is expected (your employer has been in trouble for months and coworkers have been dropping like flies) or a complete shock (your business partner has been secretly draining your accounts), its still a tremendous loss. And as with any other kind of loss, youre likely to go through some version of Elizabeth Kubler-Rosss well-documented _five stages of grief.

Do any of these sound familiar?

Denial: _Itll be fine. Weve got some savings. No big deal. Say, who wants steak for dinner?

Anger: _Its not fair! I dont deserve this! This is all that jerk in Accountings fault!

Bargaining: _Okay, okay, Ill take the Kate Spade handbag back. But thats it.

Depression: _Whats the point of getting out of my pajamas? Im never gonna get another job and were just gonna lose the house anyway. Pass the Doritos.

Acceptance: _Okay, this is real and this is serious, but there are steps I can take to minimize the damage.

Obviously, the key to getting back on track is getting to acceptance as quickly as possible, and finding a _new normal that allows you and your family to regroup and survive the crisis. Understand, however, that its common to go through these stages in a different orderor even revisit each stage from time to time. Grief is not linear, and it doesnt follow specific rules. Allow space and time to honor your emotions, without getting so triggered by them that youre non-functional.

There are actions that need to be taken, and Im guessing you know what they are: pay off your credit cards if you canthe interest is simply draining your resources faster. If you cant, consolidate your debt on one, low-interest card, or see a financial advisor (credit unions offer this service for free to members) to figure out how to keep up with payments.

Almost everything non-essential needs to be eliminated from your budget. I say _almost, because without small joys and pleasures, its easier to get swallowed up by inertia and depression. So, by all means, cut out the premium cable channels, the bi-weekly house cleaning, the magazine subscriptions you dont keep up with anyway, and the $5 specialty coffee drinks.

On the other hand, make sure you allow for a treat now and again: an ice cream cone as a reward for sending out ten resumes, for example, or family movie night with inexpensive take-out Pizza. It wont make or break you to allow your teen to buy one new iTunes song at 99 cents a pop every few weeks, or to keep your $10 a month Netflix membership so you dont spend money going out to movies.

Discover the joys of free stuff: community events, library books and videos, visiting supermarkets on Saturdays to taste all the free samples, outdoor activities like running and walking, network TV (there really is some decent stuff on, honest!), digging out old board games, free long distance calling plans, live music at coffeehouses (order the plain coffee!).

Make a game out of finding quality used stuff when you need to make a purchase: refurbished electronics, yard and estate sales, CraigsList, eBay. Many communities have a _freecycle program where people post their free stuff onlinetheres many a decent couch or piano to be had for free just because the owners want it gone.

Be willing to change your paradigm. Doing things _the way weve always done it probably isnt working for you anymore. That might look like exploring job opportunities outside of or indirectly related to your former field; challenging whether your family actually needs two cars; starting a vegetable garden instead of buying the high-priced stuff from Whole Foods; borrowing instead of buying books and movies; coloring your own hair or enjoying the gray highlights instead of dropping $150 every six weeks at a high-priced salon.

Finally, open yourself up to seeing the opportunity within the crisis. If you were less-than-happy in that job you lost, nows the chance to redefine your career. If you thought you needed a lot of gadgets and toys to be content, this is a great time to simplify and notice how, in doing so, you create a deeper connection to othersand to yourself. If you defined yourself by your financial status, your job, your bling, or your ride, theres no better chance to challenge the notion that you are the sum total of your accomplishments and your stuff.

No one welcomes a financial crisis. But its interesting how many of us emerge from one stronger, wiser, and with a clear idea of what matters and what doesnt. So breathe. Grieve. And make a plan, knowing that youll come out of this in a different, and quite probably better, place.