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How to cope when your finances hit a speed bump

Sometimes no matter how we’re traveling, you’re going to encounter a few obstacles on the road. 

Some call for a small shift in gears, while for others we have to slam on the breaks and stop dead in our tracks. Some obstacles we can see from far away, others leap right out in front of us without any warning.

It’s the same with it comes to progressing with our finances. Accidents, illness, deaths, divorces, the loss of a job or the collapse of a business- these are all occurrences that can present big financial speed bumps.

So what’re the best ways to keep trucking despite these? Jason Andreissen from our sponsor State Plus had some advice.

 

Preparations:

A rainy day account: It involves discipline, but establishing a separate savings account to be used purely in emergencies can often save a lot of stress when you’re hit with an unfortunate circumstance. It’s often a good idea to ensure this is just in your name as well. 

Insurance: Of course insurance can help when disaster stikes- that’s what it’s there for- but going overboard and protecting yourself against everything that could happen at the expense of your lifestyle or retirement savings might not be the best answer. After all, there are loads of things that could happen, but living and retiring are certainties.

 

Reactions:

Don’t panic: Managing how you react to financial stress is very important for how everything else will play out as this is what’s going to affect the decisions you make. It’s natural to feel bad or sorry for yourself to start with, but eventually you have to take action. When that time comes, it’s important to remember there are always options and resources- whether that be welfare, savings or just a good idea. 

Seek advice: a fresh perspective from someone who isn’t directly involved can be very helpful. Try talking things out with a friend, family member or even financial planner.

 

Recovery

After a financial speed bump, you might never get back to travelling at exactly the same speed as before. But that’s ok. It’s a part of life. Sometimes the best that can be done is just to step back, assess and make the best decisions you can. 

For more of Jason’s tips, have a listen to the player above.

 

Download this podcast here

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