How To Rebuild Your Life After A Financial Downturn

How to rebuild your life

Rebuilding your life after losing everything can seem like a daunting task. Whether you’ve lost your job, are going through a divorce, or have huge medical bills, a financial downturn doesn’t have to impact your well-being.

You can recover from a financial loss, but it may take some time. You’ll need an action plan to get back on your feet again. So keep reading to discover our tips on how to rebuild your life.

But first, let's dive into what could cause you to have a financial downturn.

What could cause a financial downturn in your life?

Financial downturns don’t just happen to the economy. While an economic recession can have an impact on your life, it’s not the only cause. Here are a few examples of what could cause a financial downturn in your life:

A job loss

You can lose your job due to layoffs, or if the company you work for goes bankrupt. Job loss is also a possibility if your company merges with another.

Unforeseen health issues

There is no doubt people are getting sick more often. So if you were to unexpectedly get sick, it could create a lot of medical bills that cause a huge financial burden.

Divorce or separation

Divorce is another common cause of financial hardship. Many experts say divorce costs about $15,000. Not to mention that you may lose spouse health benefits and go from a two-income household to one.

The death of a loved one

The death of a loved one can also cause financial hardship. There’s the cost of a funeral, plus any medical expenses that may have been incurred. You may need to pay for a lawyer to help settle the estate, especially if there was no will.

However, no matter what your situation is, rebuilding your life after losing everything is possible!

How to rebuild your life after losing everything

Losing a loved one, going through a divorce, or facing medical bills can be overwhelming. But it’s not impossible to learn how to rebuild your life.  Here are some tips for rebuilding yourself even after you’ve hit rock bottom.

Step 1. Let go and forgive the past

Holding onto the past will only bring you more pain. So if you truly want to start rebuilding yourself, you should forgive those who wronged you and move on.

Holding a grudge for something that can’t be changed and that happened in the past won’t help you move on. Instead, release all the negativity that person was bringing into your life and focus on resetting your life anew. 

Step 2. Take stock of where you are financially

Knowing what you have in your inventory can help you rebuild your life. You need to know what resources you have and what your biggest liabilities are. Make a list of all of your income sources, as well as your debt.

What is your credit score? How much do you spend each month? What assets do you have? This might seem overwhelming at first, but it’s important to understand where you are now in order to figure out the steps to build a better life in the future.

Step 3. Make a plan to rebuild your life and your finances

Once you know where you want to be, it’s time to make a plan. Figure out the steps to go from where you are now and where you want to be.

Create specific life and financial goals

Try to come up with specific goals. Do you want to save a certain amount by the end of the year? Or would you like to pay off your credit card debt?

Establish a plan of action

Figure out the most efficient way to get from where you are now to your goal. Maybe that means refinancing your student loans. Or maybe you need to figure out a better budgeting system. You may also want to explore avenues to increase your income. If you are struggling and need support, financial counseling can be incredibly helpful.

Tackle any debts you are behind on

If you have debt in collections, you'll also want to ensure you communicate with your creditors to create a plan. Many creditors have programs that can help but you have to ask.

Track your progress

Make sure to take steps that are measurable and realistic so you stick with them. Be sure to track your progress and celebrate your wins no matter how small they are.

Step 4. Dream big

One of the most important things you should do when you’re rebuilding your life is to visualize where you want to be. Where do you want your finances to be? What is your ideal life? Close your eyes and be as descriptive as possible.

You can keep it simple, like describing the room you wake up in, or spending time watching movies with a loved one. Where do you feel the calmest and happiest? How much money in the bank would make your comfortable? Write down that image or use a mood board to show where you want to be.

Step 5. Take it one step at a time

Once you have your plan in place it’s time to take action. But before getting overwhelmed with everything you need to do, remember to focus on the small things when you are rebuilding yourself.

For example, if you have a lot of credit card debt, that can mean focusing on paying off just one credit card debt at a time. The important thing is that you are doing something. So take small and consistent steps and your perseverance will pay off.

Step 6. Be gentle with yourself

Rebuilding your life after losing everything can take time so don’t be too hard on yourself. Take care of yourself and listen to your body and what it needs. Take time to get outside and spend some time in nature.

Another important thing to do is to find a time to exercise regularly. These small things can do wonders for your mind. In fact, studies show that being outside can improve your mental health. Finding ways to nurture yourself is how to rebuild your life with care.

Step 7. Practice gratitude and mindfulness

As you start to rebuild your life and your finances, don’t forget to be grateful for the things you do have. Be in the present. It can be easy to let yourself become negative and fall into old habits.

Instead, develop an attitude of mindfulness. Become aware of the current moment by practicing meditation or incorporating breathing practices into your everyday routine.

Step 8. Surround yourself with people who love you

As you’re rebuilding your life after losing everything, it’s not uncommon to feel alone or discouraged. Creating drastic change isn’t easy or comfortable.

So try to find others who understand and can provide emotional support. You need cheerleaders who can help you on this new journey. Not to mention that being in a healthy relationship with people you care about is also good for your mental and physical health.

Step 9: Focus on getting a little better every day

Some of us are guilty of having an all-or-nothing mentality. But it’s essential to remember that the key to rebuilding your life and finances is taking baby steps.

Setting small goals to achieve your big goals makes them much easier to accomplish and prevents you from getting overwhelmed.

For instance, even saving $1 every day is better than nothing. In fact, if you save $1 every day for a year, that’s $365 you have that you didn’t before!

It works for personal goals as well. Try to exercise for 10 minutes a day and work your way to a longer session.

For more help and ideas, check out our post “How To Become 1% Better Every Day” for a step-by-step guide on improving yourself!

Get inspired and rebuild your life!

Now you know how to rebuild your life! Remember that rebuilding yourself and your life after a financial downturn isn’t always easy. However, with a lot of perseverance and planning, it’s possible.

Figure out what your ideal life would be like. Set up a plan to tackle your financial hardships, take care of your mental health and surround yourself with caring and supportive people.

Take each day at a time and little by little, you’ll start to see your life improve!

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