Episode: 339 - When Life Happens: 3 Steps to Regain Financial Control
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Life happens unexpectedly, doesn't it? Whether it's a surprise car repair, an unplanned medical bill, or reduced hours at work, setbacks have a way of making us feel like all our progress has vanished overnight. It can be disheartening, but here's some good news: setbacks don't mean you're starting over. You just need a clear, calm game plan to keep moving forward.
Step 1: Pause and Get the Full Picture
When faced with unexpected expenses, our instinct is often to panic. We might freak out or bury our heads in the sand. It’s especially challenging when you’re dealing with emotional and financial stress simultaneously. Take a moment to pause and breathe. Get a clear, full picture of the situation. Ask yourself: How much exactly is this costing? What bills or priorities will this impact? Is it a one-time expense or ongoing?
Writing it down won't change the facts, but it will change how you feel about them. This step moves you from panic to planning, setting the stage for actionable decision-making.
Step 2: Make a Short-Term Plan
Once you have clarity, it’s time to create a short-term plan. Notice the emphasis on "short-term"—you don't need a 12-month strategy today; just a survival plan for the next 30 to 60 days. Consider these immediate actions:
Temporarily cut non-essential spending, like dining out, online shopping sprees, or subscription services.
Use sinking funds designated for emergencies.
Consider picking up extra shifts or selling unused items around your home.
In times like these, prioritize essentials such as food, housing, transportation, and utilities. The goal is to stabilize your situation, focusing only on what’s truly necessary for the moment.
Step 3: Focus on Building Momentum
After stabilization, focus on regaining and building momentum. Setbacks often feel like failures, but you haven't lost everything. You still have your habits, knowledge, and experience. Start small. If you’re refilling an emergency fund, it might mean starting with just $20 or $50 at a time. Set a tiny win for yourself each week and track these wins to see your progress over time.
Give yourself grace. One setback doesn't erase all progress; it's a detour, not the end of your journey. Remember, you’re not broken. Life is just presenting its reality, and you can handle it.
Stay Resilient and Hopeful
If you’re facing a financial setback right now, know that it’s temporary. You have the power to address it and move forward. This phase of life doesn’t define you, and it’s certainly not the end of your journey. Keep focused on your path, take small steps consistently, and celebrate the progress you make.
Resources Mentioned
The Totally Awesome Debt Freedom Planner https://www.debtfreedad.com/planner
To learn how to take the stress out of your finances so you can breathe again, follow this link: https://www.debtfreedad.com/lwp-masterclass-opt-in-page-podcast
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Transcript:
Amber:
Maybe it's a surprise car repair, a medical bill you didn't see coming, you lost some hours at work, or just had a bunch of life happen all at once. Whatever it is, setbacks have this way of making us feel like we've completely blown it, like all the progress we've made is just gone out the window. And listen, I get it. I've been there recently. Actually, the good news is, setbacks don't mean you're starting over. You just need a clear, calm game plan to keep moving forward. Hi, I'm Amber, today's host for the Debt-Free Dad Podcast, where we help everyday people like you take control of your finances so you can live a happier, less stressful life. My husband and I saved and paid off $54,000 in just 20 months and have been living debt-free outside of our mortgage since 2018. Now, after listening to this episode, if you're ready to take things to the next level, ready to break free from living paycheck to paycheck, reduce financial stress, build your savings and finally pay off debt for good, but you're not sure where to start, we've created an incredible free resource that I'll be sharing with you later Today. I'm walking you through three simple steps that can help when life punches you in the wallet. So step number one it. So, step number one pause and get the full picture.
Amber:
When something unexpected happens, our first instinct is usually panic. We either freak out or bury our heads in the sand. And I'll be honest when you're dealing with emotions on top of money stress gosh that's even harder. A couple of months ago we lost our sweet dog Bonnie, and just a month later we had to say goodbye to our other dog, clyde. It was absolutely heartbreaking and on top of the emotional side, between the vet bills, medications, euthanasia costs, it added up to around $4,000 in just three short months we had to pull from our emergency fund to cover the costs. Now I want to be really clear about something. We didn't always have a large emergency fund just sitting there. We started exactly where a lot of you are starting right now. We built a small emergency fund first, we paid off our debt and then we spent time growing that larger emergency fund over the years. So, just so you know, it didn't happen overnight. It took consistency, discipline and a lot of saying no to other things so we could say yes to peace of mind. So if you're just starting, don't get discouraged hearing big numbers like that. Everyone starts with the savings of $100, $500 to their first $1,000 and it grows from there. But even with that foundation, facing a big emotional and financial hit like this wasn't easy. It still hurt to see all that money leave our account, but because we had built the safety net over time, it meant that the setback didn't completely derail everything and we could focus on grieving and healing after having to say goodbye to our furry friends, our beloved family members.
Amber:
So it all starts with step number one Pause, breathe, Get a clear, full picture. Ask yourself how much exactly did this cost? What bills or other priorities are affected now, is this a one-time hit or something that's ongoing? Writing it all down might not change the facts, but it changes how you feel about the facts. It moves you from panic to a place where you can actually make a plan and focus.
Amber:
Step number two make a short-term plan. Once you know where you're at, take the next step and make a short-term plan. Notice I say short-term. You don't need a long, 12-month solution today. You just need a survival plan for the next 30 to 60 days. So here are a few things that you might want to do Cut back on temporary, non-essential spending.
Amber:
This might mean pausing takeout, holding off on Amazon purchases, canceling some subscriptions for now. If you've got sinking funds saved up for emergencies, now's the time to use them on the emergency All right, not on the stuff like the takeout and stuff like that. That's what the emergency fund is there for for those emergencies. Maybe you pick up extra shifts. If it's something that's possible, sell a few things around your house, small stuff that can give you a little breathing room fast. And while you're making this plan, don't forget about your priorities Food, housing, transportation and utilities. Cover these first. Everything else can be put on hold for a little while.
Amber:
The goal isn't to fix everything perfectly, it's just to stabilize. Give yourself permission to focus only on what absolutely matters for the next month or two. Now number three focus on building momentum again. After you stabilize, it's time to shift your focus to build momentum again. Here's where a lot of people get tripped up, because setbacks feel like failure. It feels like you lost everything you worked for. But you didn't lose everything. You still have your habits. You still have your knowledge. You're moving forward with more experience. You're not starting from zero.
Amber:
So here's what you got to do. Start small. After covering our dog's expenses, we knew we needed to fill our emergency fund again, even if it meant starting with $20 here and $50 there, and it's going to take time to rebuild it back up. After all, we took a $4,000 hit hit. Set one tiny win for yourself this week. Maybe you meal plan, maybe you save your spare change. Whatever it is, it's a step forward. And keep track of those wins. They add up a lot faster than you think and when you're keeping track of them, you can go back and see that you still are making progress, because sometimes we get lost in the hustle and bustle of life and we think we aren't making progress.
Amber:
And then, of course, you're going to want to give yourself some grace. One setback doesn't erase all the progress. It's just a detour, not the end of the journey, all right. So let's quickly recap. Not the end of the journey, all right. So let's quickly recap. Step one you want to pause. Get a clear picture of where you're at. Step two make a short-term plan to stabilize yourself. Step three start building momentum again, with small steps moving forward.
Amber:
If you're dealing with a setback right now, I'm really sorry. You're in that. I know it's hard, but remember it's temporary. You're not broken. You haven't failed. You're just facing real life and you can do something about it Now. As I mentioned at the beginning of the episode, if you're ready to stop living paycheck to paycheck, lower your money stress, build savings and finally crush your debt, you're in the right place. Every Sunday, we send out our weekly newsletter Simplify my Money a quick, easy to follow guide to help you take control of your money with simple strategies, make money decisions without stress and build the confidence to hit your financial goals. Want in? Just click the link at the top of the show notes and you can get started today. Thanks for hanging out with me. We'll see you on the next episode.
