"What to do when the well runs dry" The late pop star,
Ricky Nelson, used to ask the question in a song, "What
you gonna do when the well runs dry?" And his answer was
"You're gonna run away and hide!" Although that is what
we may feel like doing, that obviously is not the
solution to facing such things as unemployment,
lay-offs, or downsizing.
Here are 4 tips that will help.
1. Deal With Reality. Our first response to bad news
like this is often "This can't be happening to me!" or
"This is not fair!", or "What did I do wrong to deserve
this?" or even "Who is going to get me out of this
These human responses are understandable as we move
through the stages of shock, anger, mourning, and
acceptance. But sooner than later we must shift gears
and deal with the reality of the situation. We must
focus on what we need to do to get through the crisis.
2. Discover Your Financial Condition. Many Americans
have a false sense of financial security because they
believe their financial health is shown by paying their
bills on time, having a good credit score, and being
able to easily get more credit. Although these are
important, they are not necessarily good indicators of
one's financial health. The reality of where you are
financially can be better determined by looking at these
' Your Cash Flow. This is the difference between what
you earn each month and what you spend each month. To
discover your cash flow might require tracking your
expenses for a month in a pocket journal to see what you
are spending and where. This can be a real eye-opener.
For many families their cash flow is negative because
they spend more than they make. If you fall into this
category you must either make more or spend less.
' Your Debts. Make a list of your creditors and find out
how much is owed to each. Also tabulate how much payment
each one gets monthly and total these. Divide them into
unsecured (nothing to repossess) and secured (something
' Your Savings. How much money is set aside for
emergencies (for most Americans this would be zero!)? If
you have not been setting aside savings, begin now -
even with a very small amount. The process will become a
' Your Assets. Do an inventory of your assets to see
which ones are worth more than you owe on them. If worse
comes to worse, these can be turned into money to pay
bills. Also check the cash value of insurance policies
and the details of borrowing against retirement plans if
3. Devise A Plan.
' Get the entire family involved. Kids can learn
responsibility from seeing this crisis as a joint family
effort. You might be surprised how their help in cutting
back serves to encourage everyone.
' Prioritize Bills. A good rule of thumb is to "pay
first who can hurt you the most". Secured debts are paid
' Proportion Spending To Income. Avoid the temptation to
use credit to live as though there was no crisis. This
mistake subtly motivated by pride can literally take
years to correct. By determining the "have to spending"
from the "want-to spending", you can cut your expenses
to a bare minimum.
' Contact Your Creditors. Let them know what is going on
with you and keep in touch with them. Document your
calls and correspondence.
' Seek The Help Of A Credit Counselor. If you get behind
on your bills, a certified credit counselor may be able
to help. He can help fine-tune your budget or he may
suggest a debt repayment program if applicable. The
program can offer valuable creditor concessions which
might include lower interest, Cessation of
late/over-limit fees, and lower payments.
4. Determine Your Perspective. You can choose how you
are going to view this situation. A positive perspective
will most likely set a positive tone for the entire
' Accept the fact that bad things happen to good people.
See this as an opportunity for you and your family to
learn valuable life lessons. Interestingly enough, we
learn more lessons through problems than through
' Treat this as a temporary problem. The cuts, the
sacrifice, the crisis will not last forever. Determine
to do whatever it takes to make it through this short
"bump in the road."
' Focus on what you have. Even in the midst of crisis,
you are still a rich person. Many people on planet earth
would be happy to trade placeswith you, even the midst
of this crisis. And remember that financial things are
just stuff. Not life, just details! The things of real
value are still intact!
About the ICFE:
The Institute of Consumer Financial Education (ICFE) was founded in 1982 by the late Loren Dunton (creator of the Certified Financial Planner (CFP) designation). The ICFE is dedicated to helping consumers of all ages to improve their spending, increase savings and use credit more wisely.
The ICFE is an award winning, nonprofit, consumer education organization that has helped millions of people through its education programs and Resources. It publishes the Do-It-Yourself Credit File correction Guide, which is updated annually. The ICFE has distributed over one million Credit/Debit Card Warning Labels and Credit/Debit Card Sleeves world wide.
The ICFE became an official partner with the Department of Defense/Financial Readiness Campaign in June of 2004.The ICFE was an active partner in the California Student Debt Resource Awareness Project (CASDRAP) which resulted in a new web site: (studentdebthelp.org). CASDRAP disbanded in 2010, shortly after the web site project was completed. In 2011 the ICFE assumed the single sponsorship of the (studentdebthelp.org) web site and is now responsible for its content and operation.
The ICFE is also an on-line help for consumers who spend too much. ICFE's spending help was featured in PARADE Magazine in the Intelligence Report section. The money helps and tips are from the ICFE's Money Instruction Book, our course in personal finance.
Visit the ICFE's other web sites at: www.financial-education-icfe.org and studentdebthelp.org. Both sites helps consumers and students with mending spending, learning about the proper use of credit, budget and expense guidelines, how to set up and implement a spending-plan and also how to access financial education courses and how to teach children about money. Other ICFE services include: Ask Mr. G, a free eNews, and an online resource center for students, parents and educators, plus financial education learning tools and a book store.