I promise that in today's episode, we're going to help you make sense of financial turbulence that follows traumatic life events. We all know how quickly life can throw curveballs our way, like a natural disaster, a job loss, a divorce or even the loss of a loved one. These unexpected moments can leave us feeling helpless and emotionally battered, not to mention financially strained. Let me walk you through the steps to regain control, and find your financial footing once again, using the right tools and resources.
To do that we dive into defensive strategies to survive financially post-trauma. And of course, understanding your new financial landscape: your expenses, your income, and how to balance them in a budget plays a vital role.
And let's not forget about credit recovery and dealing with debt, as these can take a serious hit during a traumatic event. So join us, and let's take that first step towards financial recovery together.
Join the The Financial Moment community on: Instagram Facebook Website Email: info@thefinancialmoment.com
Grab this FREE guide with 10 easy tips to keep your budget on track!
I promise that in today's episode, we're going to help you make sense of financial turbulence that follows traumatic life events. We all know how quickly life can throw curveballs our way, like a natural disaster, a job loss, a divorce or even the loss of a loved one. These unexpected moments can leave us feeling helpless and emotionally battered, not to mention financially strained. Let me walk you through the steps to regain control, and find your financial footing once again, using the right tools and resources.
To do that we dive into defensive strategies to survive financially post-trauma. And of course, understanding your new financial landscape: your expenses, your income, and how to balance them in a budget plays a vital role.
And let's not forget about credit recovery and dealing with debt, as these can take a serious hit during a traumatic event. So join us, and let's take that first step towards financial recovery together.
Join the The Financial Moment community on: Instagram Facebook Website Email: info@thefinancialmoment.com
Grab this FREE guide with 10 easy tips to keep your budget on track!
Hello everyone. My name is Carolyn. Welcome to the Saving for your First Home podcast. I am the CEO of the Financial Moment. We offer money coaching for those who are ready and willing to make financial changes in their lives. For the most of us, there comes a point in time where we think to ourselves it would be really nice to own property, but it sometimes can feel like a pipe dream and not very easily obtainable. So I created this podcast to give you all the information and tools you need to take the steps forward toward home ownership. Take it from me my husband and I started our lives together, working part-time jobs with a young child. Fast forward, through many hiccups and failures, we stepped our feet into our very first home. For us it was a pile of dirt, but eventually our family home was built on that dirt. Now we are in the midst of growing our investment property portfolio. I created the savings for your first home podcast to give you easy, actionable tools for you to do the same. If you have that same gut feeling that I did and want to create a life for yourself and your growing family, but don't know where to start, you are in the right place. Let's do this. Hello everyone and welcome back to the Saving for your First Home podcast. I'm Carolyn, your money coach. So how are you guys doing?
Carolyn:
I'm finding myself kind of in a cleanup mode, you know, trying to get rid of some of the old stuff, things that you don't use anymore, don't you find? When you clear out things and you have all this additional space, you kind of wonder yourself why did you hang on to it for so long? Right, and I had to give myself some grace, because, although I know my whole house needs a big overhaul and for me to go through every closet and every drawer, I just couldn't manage all that in a weekend. And so what I did and I said to myself was you know what, let's just pick one thing. If I can accomplish one thing, I'm going to feel so much better and it's going to be like a stepping stone towards finishing up the entire space. So that's what I did. I just opened up my closet this closet is the one where all your jackets and shoes and all this stuff ends up and I took everything out, you know, and I sorted it in piles and, one by one, we went through each thing and decided do we want to keep it or do we want to get rid of it? Afterwards we had a pile of what we were going to donate and what we're going to sell and you know, and we look at the closet and it is so freeing knowing that there's all this space. And you know, we're always fighting for hangers and like there's a ton of hangers now and it was just really refreshing we were able to close the door without problem. Anyway, just having said all of that, it just kind of reminded me that when we have big, overwhelming things or tasks that we need to do, it's important just to take a step back and say you know what I can do one thing and I can do one thing well, and focus on that and see what you can accomplish.
Carolyn:
This is kind of what's leading me into today's topic, and it's a difficult one, to be honest with you, because you know I've heard from several people that their financial problems are not problems that they kind of brought on themselves. It's due to a traumatic event. Now, this can come in so many different forms. Right, we can have a medical emergency, where that causes us to have substantial medical bills or lost income. It could be a natural disaster like a hurricane or a flood or an earthquake or wildfire. You know we've having so many of these things lately and these are not things that you can control, right? I think I said on my podcast I had booked a trip to Hawaii and just before we were about to leave, a few weeks before, there was that major wildfire that happened and I feel for those people I mean, majority of that area that was destroyed was historical places, people that have lived and had generations grow up in that neighborhood and so I really feel for the areas that have been hit by hurricanes and floods and earthquakes and wildfires because you know they are the ones that have to pick up after severe devastation to their home and belongings, and a lot of these places don't even provide for adequate insurance coverage. So you know it really is something that it's hard to kind of bounce back from, but it's.
Carolyn:
Having said that, there are other things that you know that also are traumatic events in our lives, for example, a job loss or unemployment. Sometimes these kind of things happen suddenly. You don't even realize. Like you know, the company is laying off like 300 people and you just happen to be one of them and you know you were just going into work that day and all of a sudden now your life has been thrown upside down and you know you have no income coming in. How do you cover your daily expenses? Your obligations, mortgage, rent, all these different things like flood your mind and you have to adjust and it's very, very difficult. You know I personally have gone through this before where you know we've had a sudden job loss in our family and it really takes a toll, not only financially, but your mental health really is affected by something like this. It not only does it impact you, it impacts the people around you.
Carolyn:
Another thing where it involves your family is a divorce or a separation or even a death in the family. Like. There are so many costs that are associated with these types of events, like legal costs, court costs, child support that now needs to be paid Someone that is now coming from a double income dropping down to a single income family. It's very hard to kind of adjust when you're so used to being in a certain way and taking care of in a certain way that to have to go through all of that and clear all of those costs and expenses, bring on new expenses and then try to figure it all out with one income is very difficult and can lead to a lot of financial strain. And I mentioned the death of a family member, right, if we're not prepared for these things funeral expenses, settling in a state, you know, even the loss of that particular family member's income can create financial hardship. These type of things have a very big impact on the family financially, but also as a family unit just adjusting to all the change. And so you know, having some strategies and ways to cope with this is very important.
Carolyn:
Let's talk about theft. You know theft can come in the form of identity theft that's what we're seeing more and more of now which can lead to financial fraud and authorized charges and then legal expenses that try and resolve that type of issue. I mean, I know that each one of you that are listening to this podcast have experienced a scam call or someone that has kind of reached out in a very, you know, sneaky way and kind of gotten information from you. People have had their accounts locked, money taken, like it is just right now. Identity theft is very, very rampant and you have to be so careful with your information, and we're also having a lot of property damage in theft. A lot of vehicles are being stolen.
Carolyn:
When we go out of a pandemic and we're going into sort of what we call a recession, it's very difficult for people and we're going to see that crime is kind of escalating. So burglaries, vandalism, property damage that you may have to incur and having to replace it, dealing with the hassle of the insurance, everything these events are just so prevalent now and then, as I think about it even more, I think about people that struggle with substance abuse and addictions, the mental health issues and the family kind of going through this. You know they have to deal with maybe some legal problems that result from this, or medical problems and added debt, to be honest with you, and all of this can lead to an ability to work and have substantial medical expenses for therapy and other things that they need to help them cope through these certain challenges. Now, I am not a counselor or a therapist or anything like that. All I do know is that, coming out of situations like this, after the dust has settled, once you have kind of understood what the problem was, you're getting help, you're dealt with all the legal implications and then you're left with the financial burden that any one of these problems can bring. What do you do now? And I thought I'd talk a little bit about how to cope when you're trying to get back on your feet, and it just leaves me back to my original little story that I had over the weekend, which is just tackle one thing at a time. So I'm going to go through some strategies that I hope that you put it in your back pocket, because I'm hoping that for all of you you don't experience any of these things.
Carolyn:
But you know, maybe that time may come where you need some kind of strategy to get through and back on your feet again. So let's talk about some strategies that can provide some guidance and support for anyone who has faced a difficult circumstance. So if any of you have children, you'll understand the feeling that I'm about to describe. So your child has done something, whether they were running or jumping or you know something that you probably have told them a million times not to do and then they do it and they fall and they get hurt, they break an ankle or something happens, and as a parent, your first reaction is not to scold them but to pick them up and hold them and make sure that they are okay. It is our first instinct when we see our child suffering and sort of some sort of pain. And it reminds me because after you go through a traumatic event, the first thing is not to try and find a strategy that's going to help you work through your financial situation. The first thing is you need to make sure that you are okay or your family members are okay, and so dealing with that first, I think, is most important before tackling anything that comes with your finances, because if you're not okay, then you can't help yourself or others. So that I just wanted to add that in there because it's very important.
Carolyn:
Okay, so let's get into some of the financial strategies that are important after you're coming out of a traumatic event. So protection that is an important word to remember. Protection you want to protect yourself in the event something else would happen. So this is where the emergency funds come into play. So emergency funds, having insurance you want these resources available so that if an event, something were to happen, you have somewhere to go to access some resource to help you in the times of the traumatic event. So building that emergency fund or getting insurance is probably, I would say, the number one thing you should do or look into after having a traumatic event. This is just so you can start right away and putting money aside for anything that could possibly go wrong in the future. You really want to stabilize your finances in this very early stages of recovery and so putting that in place and it doesn't have to be a large amount People get kind of, you know, almost freaked out by the numbers, and it really doesn't have to be that way Just take a small amount and contribute that towards your emergency fund, any insurance that you may need that you don't have, and just start somewhere, because it's very important to stabilize your finances in these very early stages of recovery.
Carolyn:
Now the next thing to look into is your budget and some financial planning. Now, I know when you're coming out of a traumatic event, the last thing you want to do is to think about a budget, but your financial situation has likely changed. You know you may have lost a partner, you may have lost your home, like whatever it is. Your financial situation has changed and so you can't keep doing the same things you were doing before. So this is why you need to take an assessment of what your new expenses are, how much money and income you have coming in and really sit down and create a budget. If you're anything like I was, staying on top of your budget is not an easy task. Paycheck to paycheck would go by and you're no further ahead.
Carolyn:
For my listeners, I am giving you this free guide that is going to take you to the next level. It's got 10 easy tips to follow to help you stay on track with your budget. Just head to thefinancialmomentcom backslashbudget-tips, enter your information and you can download this guide right now. Now I'll know a lot of people don't know how to do this. If you need help with that, feel free to reach out, because there's all types of budgets right, we don't have just one budget for everyone. There's budgets for people that love tracking. There's budgets for people like, or more of, a free spender. There's budgets for people that just wanna get an idea of where to put their money, like. There are budgets for every personality type. I can guarantee you that. So you want one that is gonna be catered to you, that is now reflecting your new income or your new situation, and it's going to help you to put and save money for emergencies and things like that, and it's going to help you to maybe create some short term or even long term financial goals. Now, I know the goal setting is not important at this point because you're in, again, early stages of recovery, but it's going to set the stage right. It's gonna set the stage so that eventually, you can start to put those goals into place and rebuild your financial situation. Okay, and the next strategy is talking about rebuilding your credit.
Carolyn:
Now, how many of you listened to the episode from last week? If you haven't, you need to go back and listen to that one. We talked all about credit scores and what's involved, why they affect us and what they're used for. So it was a really great conversation I had with Siobhan, the mortgage broker. Now, trauma has a really big impact on credit scores, and I'll give you an example of this. I was talking to someone and they were talking about how they are self-employed and so they work with a lot of clients and they do some client work and then you know they get paid for their services.
Carolyn:
Now, in this particular situation, it was a very big project and I know there was invoicing that was happening beginning, middle and the end of this project, and the client just kept saying oh you know, don't worry, I'm gonna find, but we're gonna cover it, don't worry. Well, it got towards the end of the project and the person did not get paid for their services. Now we're talking, you know, almost thousands, tens of thousands of dollars lost of income. And during the time period when they were working on this project, they were heavily using their credit cards to get through right, because they knew that the paycheck was coming. They knew that the money was coming, and so they thought oh well, it's, you know, I have, you know, 21 days to pay off the credit card, and so it'll be fine. Well, the payday never came, and so the credit cards just kept getting racked up and up and up, and if you're not able to pay those payments in full at the end of the month when they say it's due, it has a really negative impact on your scores, and that can be through late payments, it can be through utilization of the credit cards, it can be through how many credit cards you have.
Carolyn:
There's so many ways where your credit score is being affected if you're using credit to deal with a situation right, and so rebuilding that credit and seeking help when you need it is very important. So if you have debt in the next couple of weeks we're gonna do a lot of episodes about how to deal with debt, really trying to tackle it and making some improvements in your life, because debt has such a big impact on our mental health. You know the way we treat our families, the way we treat others, because it's such a heavy burden, and so I think it's really important to deal with that debt. And it doesn't mean that you're going to pay it off tomorrow, but it just means that you have a strategy that you can follow to get to your end goal of repayment. So, again, rebuilding credit is really important after trauma has happened.
Carolyn:
So the next thing to look at is really your income level. Is it enough to cover your current expenses as it is right now? Coming out of trauma situation? Perhaps may need to generate a little more income during this recovery time. So that would mean doing some freelancing or picking up some part-time work or, you know, even a side gig, right. So I've worked a very long time in healthcare as a finance manager, so I have seen firsthand these nurses who, you know, they pick up a double shift or they add, you know, some extra OT on there just so that they can make a little bit extra money for their families, and you know that's great. You know I applaud them. But I think it comes to a point when your time sometimes is more valuable. But coming out of a traumatic situation, this is a great way to just kind of slightly boost your income to help you out of a tough situation.
Carolyn:
Okay, so that would take us to the first phase. Right, those are your fundamentals that you need to kind of focus on coming out of a traumatic situation. But then there is a phase two. So the things are, you know, going smoothly. Now you have a budget in place, you know you're making a little bit more income if you need to, you're starting to rebuild your credit and now it's time to do a little bit of planning. But before that, before you start to plan for the future, what is so important is to build a support system, and support can come and show up in so many different types of ways, right, whether it comes from family, whether it comes from your friends, and it can definitely come from, you know, therapy and counseling and a support network or coaching. Right, it can't come from so many different places, but it's important to develop that because you can't just go it alone, right.
Carolyn:
These traumatic events are severe and sometimes, like I said, not caused by you, and so you need someone that you can rely on and talk to and share with about how it's impacting you, how the stress of the new financial situation is playing a toll on you. So I really wanted to dive into this a little bit more, because sometimes we really don't seek out the help we need, especially when it comes to our financial situation. So here's just a couple of ways or things that you can do to create a support network. So first off is choose the right time and place. So you want to have a specific designated time and space to really talk to someone about your financial concerns right. You don't want to have any distractions or a time constraint. You want it to be a time when you really can have an open communication with that person.
Carolyn:
The next thing you just really want to be honest and transparent. Right, people are willing to listen. They will help you with specific challenges that you're facing and maybe even give you some suggestions on how you can overcome that financial circumstance. Right, but you need to come forth and be honest and transparent and express your feelings. Talk about how your financial situation, how you got there, what you're trying to do to improve it, any of the stress that it may be causing you. Just talking and expressing your feelings sometimes it really can help to reduce anxiety and reduce the fear and concern that you have for the future.
Carolyn:
And you know what. Be clear and articulate what it is that you need from them, right? Sometimes it's just about listening, it's just about the emotional support you know what, and sometimes it really is about financial assistance and perhaps that person maybe can assist or lead you to where you can find some financial assistance. Just be clear, articulate what it is that you need, because people really appreciate the honesty. Then also give that person the opportunity to respond and share their perspective. So you know what that means. That means you need to listen and listen actively and empathetically to their thoughts and concerns. This way you can kind of take it in, take the time to listen so you can take into what it is that they're saying and maybe it will apply to you and maybe it won't, but at least you would have heard it and Maybe it'll give you a little bit of a different perspective and then set some realistic expectations what is achievable in a certain period of time.
Carolyn:
I always talk about achievable goals, right. So sometimes this person can be just a confidant and they just want to listen and help you through a situation. But maybe, if it's like someone that's more of a professional, like a therapist or a coach, maybe there's something that you can actually work through and make something that is achievable. Like how good does it feel if you set some realistic and achievable goals and then you work through it and you get there, just like my closet right Set some realistic expectations, get the work done and you feel so much better at the end of it when you've accomplished your goal.
Carolyn:
So I can't stress enough how important collaboration is on finding solutions, developing strategies to address your financial challenges that you're having. Open and honest communication is really truly essential for building understanding and support from your loved ones or from professionals right, it's a two-way process, so you both want to be prepared to share what your needs are and to listen to their concerns and suggestions as well. So I only hope that these strategies kind of resonated with you. Some of the things that we talked about are the fundamentals of financial wellness, so that would be things like setting up the emergency fund, developing and understanding how to budget and plan financially, rebuilding your credit and managing your debt and then even income generation. Those are all the fundamentals of financial wellness.
Carolyn:
But that bonus and the thing that's going to really take you to the next level and get you out of the situation is the support system. So I highly recommend that you create that and take action when you need it, seek out those necessary resources and support, and remember I'm always here to be a guide for you, especially when you're coming out of a financial nightmare. I hope to help with strategy and get you on the right track and provide you with that lift of the burden of the weight that comes from not knowing what to do next. All right, I hope you guys enjoyed this episode and we will see you in the next one. Take care. Thank you for listening. We are committed to helping you place your very first steps into your new home. See you next time.