The Bridge Out of Financial Storms

Shortly after I earned my CFP® certification, my financial life fell apart.

It wasn’t because I failed to create a plan, I planned for all the usual things – living expenses, retirement, savings, insurance. Essentially I planned for financial fair weather and in case of rain, I created an emergency fund that was larger than the recommended amount.  As I learned, sometimes financial planning isn’t about avoiding every financial storm, it’s about recovery.

Years ago, my husband and I decided to relocate so he could take a job offer with a raise and room for growth. I ran the numbers, and concluded we could afford to live solely on my husband’s income due to lower living expenses in our new area.   I also had an opportunity to do occasional contract work while I stayed home with our first-born child. I combed through the new corporate health insurance policy to compare coverage, and concluded we would be fine in all the usual scenarios.

Enter storm clouds into our sunshine.  Enter medical catastrophe.

A few weeks after our move, my one year-old son was diagnosed and hospitalized with Type 1 Diabetes.  It’s an extremely rare disease for someone that young, and it’s especially dangerous if diabetes causes complications when a child gets sick with a flu or cold.  For the next 4 years, he had multiple stays in the pediatric intensive care unit, and the costs of his medical supplies were staggering. We were able to handle it financially, for a while, but the unending stream of bills obliterated our ample emergency fund and carved away at our savings.

So we encountered a scenario we thought was unlikely, I mean who plans for a chronic illness of a baby? Looking back and searching for a bright side, even if we hadn’t moved to one-income, we still would have had a sick child. Had we both been trying to work just to pay the mortgage, I don’t know how we would have managed to pay for adequate child care, because our son required medically licensed caretakers that cost $60 an hour whenever we weren’t with him. Nonetheless, knowing we could not have avoided the situation is little consolation when you can’t pay your bills.

When you find yourself in the midst of a financial storm, what do you do next? I have learned that is precisely when you need to shift your focus to the bridge of recovery. Here are some practical steps to help you bridge the gap.

• Resist the urge to blame yourself. Regardless of whether the situation was preventable or not, you need to focus on the fact that you can recover from this.  That is most important.
• Give it time. For me, I was in the middle of survival mode, and the only way I could deal with medical bills I couldn’t afford was to stick them in a drawer.  Then, eventually, on a day when my emotional state was stable (if only temporarily) I would determine it was a good time to approach our bill problems in a rational way. I would go through the whole stack of bills and come up with a plan to pay them or contact the payee.   In the middle of a financial storm, you might not be able to summon that presence of mind every day a bill arrives.  And unless you can afford to hire someone who will manage your bills, you need to make sure you’re in a good frame of mind to handle the challenge. Taking baby steps toward financial health may seem like it’s taking too long, but believe me, they are better than getting stuck.
• Remember your resources. In the middle of financial setbacks, we tend to feel poverty stricken.  But money is only one of many resources at our disposal. At the end of a hard day, make a mental inventory of your resources and you may discover you are –- in fact — rich.  For me, I leaned on my faith, family, friends, and our church community to get through the toughest days.  And I sought out support networks of other parents who were in similar situations.  That made me feel much less alone.

Becoming financially well means more than simply trying to avoid every possible pitfall.  Sometimes, it requires believing you can recover. Envision yourself bouncing back from this. Then get on your way to financial confidence, it’s within reach no matter what your financial weather looks like.