A 10-step guide towards financial recovery

Maybe you’ve declared bankruptcy, or perhaps you recently paid off your credit card debt, or maybe you are trying to do so. The journey back from the bottom of the financial pit is never easy, but is worth every minute for the freedom it brings in the end. Here is a ten-step guide to get back from financial setbacks.

1. Identify your biggest goals

Focusing on your significant goals, regardless if it’s to travel around the world or to purchase a new house, such goals can help keep you stay motivated. By writing them down and displaying them where you can always see them,you can resist any temptation for indulgence whenever it arises.

2. Be introspective

Think about what caused your financial problems in the first place.Is it a spending addiction or the tendency to overuse your credit cards? By making a commitment to change those habits, you can stop yourself before they get you again.

3. Keep an eye out for your credit score

Credit histories usually contain errors which unnecessarily hurt your score. There are various websitesthat make it easy to obtain free credit reports once in a year. These sites can provide significant help for you to keep track of any erroneous activity that can lower your credit score.

4. Slowly boost your credit score

The best and most recommended way to boost your credit score is by paying off all of your credit accounts regularly on a monthly basis. Within a year of paying steadily, your score will show signs of improvement, and in7 to 10 years, whatever previous damage from a bankruptcy you filed will start to disappear.

5. Ignore potentially fraudulent services

Many companies make promises to help you repair your credit score, or even find you access to credit despite having a low score– these should be considered with suspicion. Unfortunately, fraudstersusually target people who are having financial strugglesbecause they are more likely to grab such opportunities.

6. Get the help you need

We all need a support system, most especially at a time when drastic changes are being implemented – breaking a bad habit, or starting on a new and better one. By having a solid group of family and friends that can be counted on to be constant reminders of your goals and your achievements, the journey should not be as painful at it seems to be.

7. Schedule a regular, weeklycheck-up

Look at your progress either with your partner or by yourself, and sit down at for least once a week to take a look at your spending patterns as well as recent purchases. Through this, you could identify potential problems and eliminate them before they snowball.

8. Create a portfolio for yourself

A photo compilation of the goals you have identified for yourself can serve as a great visual reminder of what you have accomplished and where you are going. It is something that you can turn to whenever you’re feeling frustrated, down or low about your progress so you can keep your motivation up.

9. Give yourself a break

A strict budget without any room for indulgences may quickly feel restrictive. Hence, it is good to at least, once in a while, give yourself an allowance or a spending break - even a small one, to allow yourself some “fun” buys, whether it’s your occasional high-end coffee or a dinner out.

10. Always stay on track

While revisiting your goals and checking your spending habits regularly, it’s also important to re-evaluate your entire approach on a quarterly basis. With this, if you have bad habits that may have re-emerged, or should you need to come up with more significant changes, you can also consider them.