PREPARING FOR THE WORST: RECOVER FROM ANY FINANCIAL SETBACK WITH THIS PLAN.

Author:O'Connell, Stefanie
 
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Even the best-made resolutions and most committed financial plans can get thrown off course by an unexpected illness, breakup, layoff or other life surprise.

Making a plan for achieving your money goals is important, but just as crucial is making a plan for managing the setbacks you might face along the way.

FIRST, GET CLEAR ON YOUR COSTS.

The first step is to estimate the cost of your setback.

For example, if you were evicted, you could calculate the cost of moving plus first and last month's rent. The objective is to get clear on what financial resources you need to support you through your emergency.

By doing some research and making some cost projections, you can start grinding your way back to financial health with tangible numbers and clear action steps rather than just crossing your fingers and hoping you'll get through it.

CUT THE NONESSENTIALS.

Financial emergencies can turn into runaway trains full of expenses. Remember to stay grounded in your necessities when considering your emergency costs. You can always move on to funding your priorities once you get fully back on track with your finances.

CONSIDER YOUR FINANCIAL OPTIONS.

Once you figure out how much money you need to manage your financial setback, the next question should be, "Can I afford it?"

If you have an emergency savings account, you might be able to recover pretty quickly. However, if your emergency savings aren't...

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