A little over 5 years ago, I actually learnt that there is such a thing called “financial injuries”. I had just started working, was excited about earning my own salary and getting a place to rent. In the process of finding a place to rent, I made a mistake of walking out of a signed lease agreement . I found something better after signing an agreement and as such had to cancel the first one. In the end, I ended up having to pay two rental deposit ( one for the place I just cancelled last minute) plus 1 month of rent before moving in the new one .
Fresh out of university, I had no savings to lean back on. My budget for the month was all of a sudden not feasible anymore. What will I do? I thought long and hard about the situation and eventually I realized that the only way out of this was to recognized I was financially injured and ask for help.
Starting a job with no family to stay with, I was taken in by a generous “family” that saw how “poor” I was and tried to help me financially. They offered me a place to stay for free for two month while I save up money for a deposit, rent and a bed for my apartment. They did not know me nor my family but they were moved by an answer I gave them to a personal question they had asked me ( This is a separate blog on its own).
Back to my financial injuries situation, I could not ask my mother for this money, it was going to worry her a lot. I also did not think my siblings will be in position to help. At that stage, they had already done a lot of me ,so asking them was also out of the question. I also did not have much of a history to even consider applying for a personal loan . My last option was to ask the “family” that had already provided me free rent for two months to give me a loan. I gathered my courage and asked if they can pay for me the second deposit of N$2000 and I will pay them back in two installments ( interest free). To my surprise they assisted.
With their loan, I was able to heal over a two month period before my budget could resume to normal.
Financial injuries can come from many sources. Unlike my instance, they commonly come from:
- An unexpected death in the family of someone that did not have funeral cover
- An accident that can cause an outflow of money on top of what the insurance can cover
- An illness that was not covered by medical aid
- A last minute loan to fix something that got broken and cannot be left unattended
- A reckless spending on your credit card due to impulsive holiday plans
These are just some of the instances that can leave you broken. These situation leave you with an amount of debt that lead to your expenses exceed your income or that threaten the amount that you can put away in savings. They can also leave you with regrets as well as potentially broken relationships.
Whatever the case may be, the most important thing to do is to acknowledge that you are financial injured and you possibly need to start a healing process. This healing process need to be one that is carefully thought of as well as informed. Trying to ignore that you are injured can lead to unintended consequences such as:
- Missing scheduled debt commitment
- Messing up your savings strategy
- Incurring more debt to try and pay other debts
- Spending more to avoid the giving an impression that you are broke.
These actions do not do anything to your financial health other than worsening your injuries. If you realize that you are in anyway injured , here is the step by step process to start your healing:
- Be honest with yourself and identify the root cause of your financial injuries.
- Assess if it is a problem that you can solve yourself or seek advise before deciding on the next step.
- Consult relevant parties affected. This could be coming clean with your spouse or children about the financial standing . It could also mean approaching your creditor and see if you can reach some sort of agreement. This could include asking for a grace period ( a payment holiday) or a reduced premium. Cash is king and people will listen if you they see you are trying to meet your commitment rather than just not making effort to pay at all.
- Come up with a time frame on how long it will take before your financial situation improves. With this, you will need patience as your recovery time is most likely going to depend how deep/serious your injury is.
Trust the process, healing does not happen overnight. Lastly, during this phase you will begin to notice a lot of get rich quick schemes ( read it here), but I urge you to keep away from this. You might just be throwing your last chance of recovery!