Even the most common setbacks (the failing of a business venture, a period of unemployment, or end of a marriage) can have catastrophic effects on your finances. Fortunately, it is possible to bounce back, even when crippled with debts: with earning prospects and consistent discipline, you may be able to get past your immediate problems. By acquiring financial insight from an advisor, or creating “rainy day” savings, you can also ensure you never find yourself in that situation again. Here’s all you need to know.
Getting Past The Shame Of A Bankruptcy
The most daunting part of setting up a business is the possibility of facing bankruptcy. Having been raised to meet financial responsibilities, most Americans will associate paying bills to overall respectability. However, a Findlaw.com survey found that 1 in 8 American adults have considered filing for bankruptcy.
With rapidly changing, volatile economic forces, it isn’t always possible to pay all our bills, let alone all our debts. Accepting the reality that not all businesses are destined to succeed is essential in surmounting your bankruptcy. You will need to regain trust in your judgment soon enough to save your future in business, or transition into standard employment. Therefore, it is essential to forgive yourself for past mistakes, and open the door to new ventures.
Saving For A Rainy Day
Adults often believe their savings need to surpass a specific figure to be purposeful. However, even savings of $500 to $1500 can help you avoid accumulating debt, in case of a personal problem or global crisis.
By having a rainy day fund, you can find rapid solutions to urgent problems without the mental and financial strain of overdrafts and unplanned credit card billings. If you have faced foreclosure, in particular, you will want to avoid credit card overuse, which is likely to have a negative effect on your credit score.
Re-Establishing Your Credit After A Divorce
According to AnnualCreditReport.com, in adherence to government mandates, you will need to obtain credit reports after the finalization of your divorce. While it can be challenging to consider financial matters early after a challenging emotional journey, not having your credit in your own name as a single individual can cause long-lasting financial instability.
You will need to request your reports from Equifax, Experian, and TransUnion, noting and reporting any potential mistakes. Make sure to close any joint credit account you may share with your ex-spouse. By paying all your bills on time after the divorce, and maintaining a stable rate of saving, you can ensure your credit isn’t hindered by the event.
It is often difficult to attain viable financial solutions to traumatic events; however mild they may seem. Fortunately, the simultaneous use of the above options is likely to protect you from any future financial mishap.
Tom serves as the Financial Consultant for Heritage Bank. In partnership with LPL Financial Services, he assists individuals, families and business owners with all aspects of financial planning including retirement.
LPL Financial Consultant • 678-284-3302 • [email protected]