Did you know that financial improvements can be triggered by a negative event in your life? This actually supports the adage that the greatest triumphs are born out of a series of mistakes. If you want the motivation to improve your finances, you may want to look at the bad things happening in your life so you can use it to turn things around.
The truth is, any negative situation in your life has all the potential of turning into something positive. At least, this depends on how you will react to it. If you look at all the difficulties as a challenge, it is possible for you to turn this into something beneficial to you. But if you look at it as something akin to defeat, then you would have lost all the potential for it to do you good.
According to a study published on MerrillEdge.com, negative emotions like fear and stress can lead people to make positive actions that will result in financial improvements in their life. In fact, it is revealed that 1 out of 4 Americans were able to make positive financial decisions while they are going through negative emotions.
While the statistic is far from being the majority, the bottom line is that you can turn a negative experience as a catalyst for financial improvements. You just have to react to it in such a way that will help you feel challenged and not defeated.
Negative events that can lead you to improve your finances
There are a lot of bad events that can lead to financial improvements. Here are three negative situations that can be quite devastating but can be used to propel your finances further.
Death of a loved one.
The first is the death of a loved one. Losing someone is hard – even more so when the one you lost is the breadwinner of the family. Imagine being a housewife with 4 children and your husband passes away. Not only will you deal with the physical loss of your spouse, you also have to think about where you and your 4 kids will get the finances to support your basic necessities. This particular event could cripple you but it is possible for you to learn from this situation. One of them involves securing your financial standing. The death of a loved one will teach you that you need to make your family finances secure – at least for the sake of your kids. If something happens to you, the children will be left with no one to take care of them. You have to work on making sure that their future will be secure in the event that something happens to you. That means getting an insurance or leaving them with a trust fund. Once you have succeeded in making your kids’ future secure, that can be considered as an improvement of your finances.
Getting into an accident.
The second negative event that you can use to motivate yourself to make financial improvements is an accident. Any unexpected event that you will go through will be a reminder that you need an emergency fund. If you do not have one, then do not make the same mistake twice. Make sure you start saving up for it. A trip to the emergency room could put you in debt easily. You need to build up your savings so you will never fall into debt when you are faced with any accident or emergency.
Job instability.
The last negative event that you can use to start financial improvements an unstable job. You need to remember what happened during the Great Recession. A lot of people thought that their jobs were secure but just like that, they lost their source of income. It is important that you do not rely on your 9-5 job alone to finance what you need. According to a study done by Gallup.com, 50.9% are employed in September of 2015. This refers to Americans who are working full time with at least 30 hours each week. That means almost half are working less than 30 hours a week. A lot of them are probably not working at all. When you are not working full-time, your job is considered to be unstable. You can lose it and end up with no income to finance your lifestyle. The lesson that you need to learn here is diversifying your income so you can achieve financial independence. These are the financial improvements that you need to look into so you can survive an unstable job situation.
When you are going through these tough times, you need to do three things so you can ensure that your finances will benefit from the situation.
- Do not despair. It is okay to grieve and feel bad – but try to keep yourself from falling into despair. That will only end up making you act in desperation. Make sure that you are emotionally stable before you make financial decisions. If you cannot control your emotions, make sure that you discuss your plans with someone that you trust.
- Look at the bigger picture. It also helps to look at the bigger picture. Your particular situation is just a part of what is going on in your life. Zoom out and look at the whole scenario. Do not let one event lead you to completely destroy your life.
- Visualize what you want to get out of the event. Finally, you have to think about what you want to happen after this negative event. For instance, if you just lost someone you love, ask yourself what you want to happen. Is it to secure the future of your kids? When you have a goal, it will help you take the necessary steps that will lead to financial improvements.
10 ways you can improve your personal finances
Improving your personal finances will require you to take a lot of steps. To help you get started, here are 10 things that you can do.
- Get rid of expenses that are draining your funds unnecessarily. Think twice about the expenses that you do not really need to spend on. Take note that the money you are not spending can be used to grow your personal net worth.
- Learn about investing. Once you have gotten rid of the unnecessary expenses, you should have some funds freed. Use it to open an investment account. Make that money work for you.
- Save for your future. Obviously, we are referring to your retirement. According to the study from PWC.com, 77% of employees are saving for their retirement. This is a good move that you should follow because you deserve to get your dream retirement. With the rising cost of living and health care prices, it is evident that you need to save a lot to afford a comfortable retirement life.
- Set financial goals. Setting goals is the first step towards the financial improvements that you want to enjoy. It will make your intentions clear and will give your actions direction.
- Be a patient spender. Be a smart spender and learn how to exercise your patience. This will help you avoid spending unnecessarily because you do not feel the need to spend immediately. You will give yourself enough time to think about the expense before you make it.
- Avoid high-interest debts. At least, you need to think twice before you use it. This includes the use of credit cards.
- Maintain a good credit score. Among the financial improvements that you need to work on involves your credit score. Make sure that you will build up this score because it will help you save a lot of money when the time comes for you to borrow money.
- Talk to someone you trust about your finances. Regardless if you are in a high emotional state or sound disposition, it helps to consult someone you trust before making a financial decision. You do not have to rely on their advice, but it will help you see another person’s perspective.
- Increase your knowledge about financial management. It is also important for you to increase your knowledge about managing your finances. The more you know, the smarter you can be when making decisions.
- Do not forget to budget for fun. Finally, you want to make sure that you are budgeting for fun activities. Some people think that this is not necessary. But if it will help you relax and improve your productivity, feel free to enjoy what you are earning.
Financial improvements can happen any time you wish. It does not matter what type of situation you are in. If you are at your lowest point, do not despair because you can rise from that if you put your mind into it.
