Financial Trauma - Avoidance

Financial Trauma – Avoidance

The third aspect of financial trauma shows up as avoidance. 

In insurance, one of the techniques I learned to manage risks was Avoidance.  Yes, to ensure you eliminate the risk, avoid the risk.  If you don’t want to drown, don't get in the water.  If you don’t want to get hurt on a skateboard, don't buy one.  Simple - Avoid it. 

But this does not work in managing our finances.  Avoidance is another problem for those dealing with financial trauma.  They avoid emails, phone calls, letters from collectors or banks. Thinking if the email is not read, the debt will magically disappear.  

Here's the bad news:  It will not disappear.   It will not go away.  It is there.  It is right there in front of you.   And guess what?  It is going to get worse - more interest payments.  More fees, attorney costs and lower credit score which means higher interest rates.  It also impacts job opportunities and housing.   

Here's the good news:  You are in control.  Yes YOU!!!  You can determine your own financial future.  But you will have to take some hard steps.   And if you take these four steps, I promise you will have a better financial life that you manage.    What are those steps? 

1. Open your eyes.   What's out there?  Let's create a Net Worth Statement for You, Inc. 

  a) What are all your assets - checking accounts, savings accounts, money markets, stocks, bonds, life insurance policy cash value, and real estate.   You can have liquid or non-liquid assets. 

b) What are your liabilities - college loans, car loans, mortgage, credit cards, and any personal loans.   Put it on paper or use a software provided by your bank.  I use Rocket Money (free with my mortgage with Rocket Mortgage).

2. Do a Cash Flow Statement -

   1. What is coming in monthly - income, interests paid and child support, etc.

   2. What is going out monthly - rent/mortgage, taxes, utilities, car expenses, daycare, personal care, groceries

3. What are your financial goals?    

   1.  buy a house?

   2. Save for retirement?

   3. College fund for your children?

   4. Travel?

   5. Charitable Giving?

4. Budget Budget Budget

   This is where you put your plan to work, Create a budget for you.  It needs to be flexible because life happens,

One more thing, a Financial Life Coach can help you with the creation of your budget.   This would be customized based on your dreams, plans and goals.  I am available to help you co-create your beautiful financial journey.  It is not too late to get your ship in order.  Don’t avoid your financial situation.  Let's face it head on.  Schedule some time to review the process in a free Sample Session for Financial Coaching.