How to Recover from Financial Crisis
I’ve spoken about How I Lost Everything in 83 days and how I was going to write a book about it but chose against doing so. I realised as I was re-thinking about whether I should write a book or not, that it wasn’t just the last 83 days that brought me to where I am, but a steady march of time over years that brought me to have nothing.
It’s not always just one thing that brings a financial crisis, even though it may be one thing that precipitates the acknowledge financial difficulties. Like me you may have invested in the stock market from time to time over your life and experienced the market crashing down and losing everything.
I watch the younger financial gurus talking about their financial theories and they have yet to wake up one morning and find their whole portfolio wiped off the face of the earth. It will be interesting to see how they handle these situations as you and I both know, it’s already happened a couple of times in our 50+ life spans and it will most likely happen again.
So with all the instant wealth that seems to be out there from young youtubers and bloggers, especially personal finance bloggers, I wonder how they would actually cope in a financial crisis?
My march of time really started when I was 18 and got my first job and I learned to save half of my money every week. It helped that I had a big goal – to own property. It was the thing back then – you worked to buy yourself a house to live in happily ever after in. I also wanted to buy a car and this was the first priority I set my mind too. I would withdraw my ‘allowance’ every week over the counter from the bank because ATM’s weren’t even a thing yet, and ask it to be broken up into $5.00 and $2.00 denomination and I would fold them into $7.00 lots – my daily spending money while I worked. This included travel, lunch and cigarettes for the week, spread over $7.00 a day.
The rest stayed in the bank. I eventually bought my first car, a lemon I am proud to say, for $1200.00 and spent the next year buying parts and installing them with my then boyfriend until we got it roadworthy and drivable.
That car lasted me the next 5 years and I ended up driving it up the East Coast of Australia a couple of times, until I totally blew up the engine, literally leaving a piston on the West Gate Bridge in Melbourne. I vowed never to own or drive a van after that. After seeing the damage a piston causes as it comes out of the engine was nothing I wanted to sit on top of – just in case.
Fast forward to now, I have come into nearly a million dollars and spent it all over a period of 30 years. I have 3 children and it went to them. I lost my husband 14 years ago and had to raise them on my own. I used the liquidity in my house to do that and eventually ended up with only a small amount of liquidity at the time of selling it which I invested into a business because I couldn’t get a job.
The business went under in 83 days and all I had left went with it.
But it wasn’t just those 83 days that caused my ruin. It was also all the days that went before me and all the decisions and necessities that came before it.
A financial crisis can be waking up one day to find everything you had in the market is gone, but it can also be the slow realisation that due to events mostly beyond your control, you are in a financial situation not of your making, but nevertheless are responsible to get out of.
You are in debt beyond your dreams. Your income is not covering half of your liabilities and you have people depending on you.
You get to a crisis point and realise that you have got yourself stuck in the game and are exactly where they want you – owing them and earning only to repay the basic minimum payment.
The only way out of this is to be absolutely 100% honest with yourself at where you are. Where are you spending your money? What can you do without? Really, do without. Sell off assets if you have any, reduce debt and increase income.
It’s the only way because it’s maths and maths does not lie. Banks do. But maths doesn’t. The need to decide for yourself and your own life and your own way of living, regardless of how everyone looks they’re winning, you have to suck it up princess and face the reality of where you are.
This won’t happen in a day or an hour or even a month. It will take time to realise where you truly are and months to devise a real plan to get yourself out. Along the way you will give up and say fuck it everyone else is in the same boat and it is very tempting to do that.
BUT, this is your life. No-one is going to save you in retirement. You have to start this year to get this sorted and start solving your financial crisis.
You’re not alone it sure. But not many others are actually going to do the work to get themselves out of it either.
There is a plethora of information on the internet about saving, living frugally, investments, stock market and it’s all terribly confusing.
The very first thing you have to do, like with any addiction, is realise you have a problem and then work on a plan to get yourself out. It’s possible.
I believe it is. I may not make it and you may have evidence to prove to yourself that ‘see, nothing works’ in my potential failure. But what if I don’t fail?
You’ve probably heard this saying “If you knew you couldn’t fail what would you do?”
Ask yourself this question now and do it. Make the financial decisions you need to to get yourself to where you need to be. It’s going to take years. Why? Because it took you years to get here and it’s going to take years to get you out. You have to commit to this course and stay firm. You committed to spending yourself into this mess, and now you have to commit to saving and earning yourself out of it.
I believe this is possible. Follow along on the blog or Youtube and see how I do.
Stay In Touch
