F.A.I.L. Forward – Overcoming Financial Setbacks

This weekend I had an amazing opportunity to participate in a wonderful experiment. Jason Vitug (phroogal.com) is crossing the country with a team of 3 companions to generate 30 conversations on personal finances in 30 cities over 30 days.

Pit stop #13 landed in Dolton, IL at New Community Church.

My friends, Tai and Talaat McNeely of His and Her Money, partnered with Jason to host the Chicago-area pit stop at their church with the blessing of Pastor (and now Dr.) Dodd.

Jason shared how this Phroogal Road Trip journey morphed from a backpacking trip across the world.

Trea Branch (Trea’s Two Cents) shared how she’s knocking out a 6-figure student loan debt and plans to be done within three years. She’s not playing around.

The McNeely’s shared their story of working through an early betrayal to come together as one in marriage and financially.

Let’s just say, this intimate group was a special treat.

I was all set to talk about using cash to stick to a tight budget. That was my original plan. However, early in the week I received a foreclosure notice – one that I was expecting. However, it was still an unpleasant experience.

I’ve talked previously about the collapse of our previous business – the laundromat. We didn’t know at the time how everything would shake out. I still don’t fully know. However, in recent months we’ve been hopeful that a couple short sell offers would materialize.

It turns out – none did.

I’m not terribly surprised. The building is not in the best shape and even with a small offer one would need a significant amount of cash or plumbing know-how to fix the problems that caused us to close in the first place.

So, I shared this new development with the gathering in the context of F.A.I.L.ing Forward.

Many of us have faced or will face an unpleasant setback related to money. It sucks, but if we’re not careful a setback can do more damage than is necessary. We can’t allow a financial #Fail to shake our confidence to the point that we stay on the sidelines of life fearful to get back up and try again.

 

F.A.I.L Forward

So my suggestion is to take those failures, setbacks, or money mishaps and use them to F.A.I.L Forward. Here’s how you do it.

1. Face the Situation: I realized the morning of our gathering that I had been sleeping a lot more this week than normal. I may have just been slipping into an avoidance pattern. Recognize those patterns so you can counteract them quickly. Facing the problem might mean opening your mail or returning phone calls. Avoiding a financial problem generally makes things worse due to mounting fees or penalty. Facing the situation allows you to move on to step #2.

2. Accept Responsibility: I know that we signed up for a loan that was personal guaranteed by our income. Even though the business was correctly structured, my husband and I knowingly took on this risk. Once I accept responsibility, I no longer waste energy blaming (other people, the economy, etc.). I’m not making excuses and trying to minimize my role. I’m also not burdened by shame or guilt. Now, I can direct my energy toward productive matters like figuring out the best next steps. We made the poor choices…now what?

3. Investigate Your Options: Often the scary part of facing the financial failure is the unknown. This is my first time facing any significant legal issue and I have only surface level or anecdotal knowledge of the foreclosure process. All of that is about to change. However, by finding out what to specifically expect for my situation, I can eliminate the wonder and mental energy spent on worst case scenarios and prepare for my reality.

There’s no need to worry about possibilities that have no relation to your situation.

That’s why you want to open mail and make the calls necessary. Talk to the right people who have knowledge about your specific situation. Once you know what to expect, you can create an accurate plan of action and make well informed decisions.

4. Learn From the Setback: If you haven’t made a mistake, you’re not doing anything of note. Mistakes are part of life. The bigger the mistake, the more engaged the lesson can be. We often learn more from mistakes than from situations that turn out 100% perfect. We learn what not to do in the future. I no longer have to have philosophical debates about why taking out a huge mortgage on a business may not be the best approach. I don’t have to convince myself that starting smaller and growing with the business is a better option in the future.

 

Mistakes do not define you. They suck. It’s not a good feeling, but it’s not the end of the world. Think of it this way – now you know what doesn’t work. That’s pretty valuable information to possess. I hope you take encouragement from my recent experience if you’re facing a financial setback. Use it to F.A.I.L Forward and keep pressing on!

 

What’s the biggest lesson you’ve learned from a financial F.A.I.L?

 Overcoming Financial Failures or Setbacks

 

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