Photo Credit: flattop341
Sometimes people really are broke.
Not the I can’t take the holiday I want this year broke, but the world is closing in on me, and I’m going down broke.
Tell-tale signs of the real deal include
- inability to pay bills on time, over an extended period
- chronically “robbing peter to pay paul” (ie. using money intended for one thing to cover something else)
- no cash for saving or investing
- scrambling to pay rent/mortgage over an extended period
- sleepless nights
Sometimes even these extremes are simply a matter requiring better management of income. But usually when this is a chronic lifestyle, it’s time to acknowledge: I’m broke.
This is not the end of the world.
It’s a starting place to take stock, and plan a course of action.
Here are 5 initial steps to take.
- Determine that an increased income is your top priority. It trumps your relationship. It trumps having fun. It trumps any preference to avoid the situation. And against nearly every life coach, dare I say: It trumps (for now) pursuing your passion. This isn’t a downer, folks. It’s a deep recognition that you are in charge of your life.
- Take stock. Do it on paper. What are the most critical financial needs you have? What resources are available to you?
- Write out: with as much clarity as possible, your exact financial situation and cash flow needs.
- Research: Are you eligible for any sources of funding such as insurance or benefits or employment insurance?
- Collect: Does anyone owe you money? Or favours? How can you collect, strategically? Who could help you out, if it comes to it?
- Seek: Do you have any forgotten treasures? Assets you could liquidate (craigslist helps)? Term deposits (which can usually be broken in serious circumstances such as job loss/medical issues)? Savings accounts? even RRSPs (last resort)? unused Lines of Credit or credit cards?
- Call: Which creditors can you call to ask for some temporary relief?
3. Relentlessly seek ways to improve your income. Heads-up: You need to be strategic here. In the gut-wrenching anxiety of the moment, you may be tempted to take any old job. Unless it pays enough to give you financial lift over time, “any old job” probably won’t cut it. It will simply prolong your situation, while it consumes your precious time. Ask, and keep asking, “how will I obtain the income I require?”
Here’s an exercise. For one month, every night before bed (so the ideas can settle and morph in your subconscious overnight), write at least 3 possible things you could do to obtain adequate income. By the end of the month, you’ll have nearly 100 ideas. Allow yourself complete freedom to write down anything. Sometimes crazy ideas make you a millionaire. This exercise also trains your mind to be alert to possibility.
4. Deliberately be gentle with yourself. It’s possible you will take a number of hits until things turn around. Don’t beat yourself up in the mix. Give yourself a break. Hang out with friends who truly care about you. Ask for help, where you can. Identify places to go (literal or figurative) that nurture you. Respect your own privacy – come up in advance with your own key messages if people make enquiries. Press yourself into your faith praxis if you have one. Continue with yoga and meditation if it’s part of your life. Keep yourself inspired, for example, read stories of others who struggled and lived to see another day (of course you will too!). Above all don’t let your current financial circumstances define you. You are So.Much.More than your financial life.
5. Firmly ground yourself in the fact that this too shall pass. Canadians who have not been broke at some time are the exception. Much as we valorize people who build wealth steadily, almost everyone has had really tough times. It doesn’t last. Take it from one who’s been there!