What to do when all your hard work gets wrecked by unexpected financial challenges

An email came in asking a question on a very important topic: handling the disasters that hit when you’re in the process of getting your financial situation under better control, but haven’t yet reached paydirt.

Donna asks:

‘… what about those times when I’m doing everything right – created the budget and staying on it, cutting out the impulsive and unnecessary spending, setting realistic goals for eliminating credit card debt – and then something happens totally out of my control that *feels* like it’s wrecking all my hard work. (Specifically, in my case, a company debited $180 instead of $20 out of my checking account, and you can imagine the snowball effect from that point on and getting it all fixed and straightened out.) Would love some encouragement for those “rough days.”

That’s an outstanding question, Donna. It’s one that actually highlights what is one of the primary reasons why efforts at financial self-improvement fail. While you’re working your way down the path toward financial salvation, something always seems to happen that has the potential to get you off track.

If you’re going to succeed in your financial plans, you’ll have to have a strategy to deal with these unpleasant surprises. It’s a multi-step process, so let’s try to lay that out right here.

1. Accept that there WILL be Troubles Along the Way

You’ve finally created a blueprint on how to improve your financial situation, and you’ve summoned up the courage and the discipline to make it happen. But unexpected financial troubles continue to show up.

However unfortunate this may be, the reality is that we face troubles all of our lives. The Apostle Peter warned us to expect as much:

“Dear friends, do not be surprised at the fiery ordeal that has come on you to test you, as though something strange were happening to you.” – 1 Peter 4:12

Trouble is a constant traveling companion in virtually every aspect of life. If your financial situation is tight, this pattern will continue.

That’s not at all comforting, but to say otherwise would be completely dishonest. Recognize that there will be unexpected obstacles on the way to financial freedom, but resolve that you will overcome them.

This is probably the main reason why you have embarked on a plan of financial improvement. As you begin to reach your goals, the troubles will become less frequent and less severe. For that reason, you should anticipate troubles, and promise yourself that you will never allow them to take you off track.

Like I write about in Chapter 27 of our book Simple Money, Rich Life financial progress isn’t linear. The first part of the journey is what I call the “vision phase” which is filled with ups and downs and most people don’t realize that there tend to be more “downs” on the front end. Like a rocket trying to escape earth’s gravitational pull, there is a lot that has to be overcome to get to orbit, but once you reach that tipping point you transition into the “momentum phase” where you begin getting far more rewards for LESS effort and energy spent.

2. Creating Affirmations: Always Focus on the End Goal

Reaching anything that looks like financial freedom is a lot like going on a diet. There will always be situations that will interfere with your game plan. Sometimes you’ll falter due to a lack of self-control. You’ll have days that will seem to blow your diet out of the water.

When you’re confronted with these events, it’s important to pick yourself up and continue going forward – always forward.

Progress doesn’t always come in straight lines. More typically, it looks more like a zigzag pattern. That’s okay, as long as the general direction is forward.

In order to do that, you always have to focus on your end goal. To do this, you should create a list of affirmations – literally, a bullet-point list of all the benefits of reaching your goal.

In the case of pursuing financial freedom, that list can look something like this:

• I will gain control over my finances – they will no longer control me
• I will be debt-free
• I will have savings that will give me more freedom of choice in my life
• I will have enough extra room in my budget that I won’t have to worry every time something unexpected happens
• I will have enough financial resources to make a career/job/business change

Your affirmations should be displayed somewhere in your home or your workplace (or both) that you see regularly. It should function something like a lighthouse that shines brightly on stormy nights, always redirecting you back toward your goal.

Additionally you might want to check out our Devotional Bible Plan called ‘Prayers for Finances’.

3. Create an Emergency Fund

Maybe one of your goals is to build an emergency fund that will cover several months living expenses. But until you reach that goal, it will be helpful to create a mini fund to help you deal with disasters before that day arrives.

You don’t have to go for big money here. Having just a few hundred dollars salted away can provide you with the cushion that you need to deal with troubles along the way. What you’ll find is that just the fact that you have the extra cash will keep small problems from turning into big ones.

There’s a bonus here too: the mini emergency fund that you create early on can be the foundation for a more generous one later. It all works toward the same goal.

4. Find a Small Source of Extra Income

Sometimes in spite of your best efforts to manage your money, you still come up short. It can make the road to financial freedom easier if you can increase your income even just a little bit.

We’re not talking about taking on a 20 hour a week part-time job to go with your full time job. It would be more along the lines of perhaps a five hour per week part-time job. Or a side business doing odd jobs. You can even see if there is any extra work you can do on your regular job that might earn you some extra money.

Increasing your income by just a few hundred dollars per month will not only help insulate you from unexpected problems, but it will also speed your progress toward your goals.

5. Get an Accountability Partner

It’s almost impossible to achieve any major goal in life by yourself. It always helps to have a partner along the way.

You should be very deliberate in making this connection. It could be a close friend or family member who understands your situation and wants to help. It can also be someone who has embarked on a similar journey. You can help each other by encouraging one another when distractions hit.

You can also consider joining some sort of support group. Such a group can be available to swap ideas and strategies, that will help you to navigate past short-term troubles.

6. Track Your Progress

Your goals should always be measurable. You should establish parameters that define success. For example, if you have $10,000 in credit card debt, you should track your progress in reducing the debt. You can do the same thing with a savings goal.

This will give you an opportunity to see the progress that you are making, and this is incredibly important. Achieving any kind of financial improvement is always a long-term project. You’ll need to know that you are making progress along the way, which will encourage you to continue the fight no matter what obstacles you’re facing.

In addition, it’s important to know that even though you have not reached your goals yet, that you are still in a better position than when you started. That will provide the incentive to keep moving forward.

7. Celebrate Your Victories!

You know how there are rest stops on major highways? You need to have something similar on your financial success plan. Set up milestone accomplishments. For example, plan to reward yourself once you reach the halfway point in funding your emergency fund. Or maybe when you reach the halfway point of paying down a debt.

You can use your mini emergency fund for this purpose. Have some extra cash set aside, and when you reach a milestone, do something that’s consistent with your affirmations. For example, maybe you’ll want to indulge yourself in a short shopping spree, in which you’ll buy something that you really want but without worrying about the financial consequences.

Obviously, you don’t want to go crazy with this. But the purpose is to give you an opportunity to feel what accomplishing your goals will be like. When you can experience the benefits of your goals, it makes accomplishing them a lot more than a shadowy “someday” dream.

Achieving financial freedom is a long-term project, so you’ll need to dig in and be ready for what happens along the way. These strategies should help you to do just that.