I’m sharing with a group of women tomorrow about personal finance, particularly on the subject of “Financial Recovery”. And, I want to share a few highlights on this area. It seems many of us are going through financial distress because of the bad economy. It is tougher to recover from a financial setback. I am no financial guru but I recommend we do four things when face with a financial setback.
- Assess your current financial situation – Do this for yourself! Answer these questions: How much do you make a month (after tax), of that amount how much do you spend? Track those expenses. Do you tend to over indulge in a particular area? For me personally, my love for traveling is my number one most expensive categories. This realization helps me to establish goals and reign in my impulses.
- Identify ways to increase income
- Turn a hobby to a paying job. A friend of mine turned her love of cooking into a catering business
- Review and change your tax-deduction status. You don’t want to withhold too much money.
- Consider receiving these tax credits
- Rent out an extra bedroom
- Sell your junk – I cleaned my garage two weeks ago and found one thousand dollars worth of books. I have already created a seller account on Amazon to sell these books online.
- Take on a part time job. A few years ago while I was a full time accountant just out of college, I applied to work at Ann Taylor Loft to earn extra cash.
- Decrease and prioritize expenses
- Start small by eliminating one expense every month. I cut my cable a year ago. I thought I would not last but I am doing just fine.
- Eliminate or reduce expenses that are “wants” versus “needs”
- Prioritize your expenses in terms of “necessities”. Mortgage/Rent, food, utilities, and transportation are considered must-haves. They come before other expenses and creditors.
- Develop a financial recovery plan – Write your financial goals down. Assign a due date to each goal. Track your progress. Make sure your goals are specific and measurable.
Here are a few websites that provide financial assistance. I am not affiliated with these organizations and have not used them.