How to Overcome Financial Loss – Five Tips for Confronting the Pain of Debt

Dominique Grubisa
Dominique Grubisa

Published 2:04 am 3 Mar 2020

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Do you know how to overcome financial loss? DG Institute founder Dominique Grubisa offers some tips based on her own experience with debt.

How to overcome financial loss

  1. Don’t Live in Denial
  2. Don’t Let Stress and Emotion Dictate Your Decisions
  3. Adjust Your Priorities
  4. Start With Small Steps
  5. Consult a Financial Planning Expert

It all seemed to be going so well for me.

Along with my husband, I’d spent many years building my wealth. I owned several properties and believed that I had no money worries.

I also thought that, should the worst happen, my background in law would help me protect my assets. After all, I specialised in asset protection. If anybody knew how to protect themselves, it was me.

Then it all came crashing down.

I lost everything. 

Financial setback followed financial setback as all of the wealth I’d built evaporated. I’d failed spectacularly and found myself staring massive financial losses in the face.

Thankfully, I came out the other side. Now I’m in a better position than ever. But there are many people out there facing huge financial losses of their own who aren’t so lucky.

Coping with financial loss is no easy thing. Beyond the loss of security, you also have the emotional trauma to deal with. You have the feeling of being a failure and not being able to do what you need to do to provide for your family.

You also feel ashamed of the financial consequences of poor financial management.

How on Earth do you recover?

These five tips will show you how to get your life back on track financially after a big loss.

Tip #1 – Don’t Live in Denial

Dave Ramsey, who’s one of America’s leading authorities on money management, once said:

“You must gain control over your money or the lack of it will forever control you.”

What stops people from taking control of their money?

Denial. They won’t accept the situation they’re in. We see this so often when it comes to money problems. People struggle with how to deal with financial loss so much that they just never do it. They never confront the mistakes and problems that led them into the situation in the first place.

And then things just keep getting worse.

The first step to overcoming financial loss is accepting that it happened and confronting it. Don’t try to hide away from it. Talk about it with your friends and family. No change can come until you accept the situation and dedicate yourself to controlling it.

Tip #2 – Don’t Let Stress and Emotion Dictate Your Decisions

Emotions can be dangerous when it comes to your financial recovery. Unfortunately, you find yourself in a position where emotions constantly run high. Your money problems cause you to feel stressed all the time. You’re probably bickering with your partner and feeling drained by the situation.

These emotions can lead to bad decisions.

You could start spending money on things you don’t need. You might start searching for any way to make yourself feel better, which usually means spending even more.

You have to remove emotion from the situation.

Logically look at where you are and aim to manage your emotions. Focus on the practical things you need to do to change your situation.

Tip #3 – Adjust Your Priorities

How do you go about budgeting your money?

For a lot of people, budgeting is a thing they know they should do…

But they just don’t do it. They don’t take the time to figure out how much money they have coming in and going out.

That’s what often leads people down the road to financial ruin. Their lack of awareness about what’s happening with their money means they have skewed priorities. They’re spending on things that they don’t need, while neglecting things that need attention.

If any of this resonates with you, you need to adjust your priorities.

Focus on the expenses that you need to clear, such as debts with high interest rates attached to them. Aim to ensure that every dollar you spend has a practical purpose.

Tip #4 – Start With Small Steps

When budgeting, many people make the mistake of starting too big. 

For example, you may decide that you need to save $500 per month. But when you’re really struggling financially, $500 per month is a lot of money.

If try to take that massive leap, you’ll soon find yourself making excuses for why you can’t save that much. And eventually, you give up trying to do it at all.

That’s why you should aim to start small.

Don’t try to save hundreds of dollars every month if you can’t afford it. Save $30 or $50 and build from there. Focus on your small debts and get them out of the way.

Your recovery from a financial loss isn’t a sprint. It’s a long journey that starts with small steps. If you try to do too much too soon, you’ll end up feeling overwhelmed. This can create even more feelings of guilt that prevent you from taking positive steps toward recovery.

Tip #5 – Consult a Financial Planning Expert

Finally, recognise that you’re not in this alone.

Don’t let those feelings of shame I described earlier prevent you from reaching out for help. You’re dealing with so much right now that it’s tough to handle your debt on your own. You can’t get any perspective and you don’t know about the various techniques you can use to escape debt and recover.

A financial planning expert can help you create your recovery plan. They can take the emotion out of the situation and show you what you need to do to overcome it.

If You’re in Debt

Being in debt places you into a precarious financial situation which can quickly snowball into a catastrophe.

One of the clients at DGI Debt Management was a business owner and the primary provider for his family, when the pandemic hit and dramatically reduced his income. In order to continue paying his bills and putting food on the table, he began to take on more debt than he could afford and quickly found himself with $20,642 in debt.

The Debt Management team was able to reduce his debt down to just $3,759, cutting 82% of his total debt off and giving him the breathing room he needed to get back on his feet.

On top of that, he no longer had to worry about the possibility of bankruptcy, or having to deal with creditors anymore.

To find out if the Debt Management team can improve your debt situation, visit DGI Debt Management today.

Good Debt Vs Bad Debt With Dominique Grubisa - DG Institute

Lawyer, Asset Protection Specialist and Property Educator

Dominique Grubisa is a practicing lawyer with over 25 years experience. She is a property investor and developer, an entrepreneur with businesses in Australia and Southeast Asia, a speaker, educator, writer and published author.

This column has been written for general information purposes only. It is not intended as legal, financial or investment advice and should not be construed or relied on as such.

About DG Institute

Founded in 2009, DG Institute strives to empower everyday Australians to grow and protect their wealth. Our goal is to provide direction, motivation and inspiration to our clients and help them perform at their very best. We do that through our professional services, in addition to teaching them how to grow their wealth through property and business education.

This column has been written for general information purposes only. It is not intended as legal, financial or investment advice and should not be construed or relied on as such.

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