My Finances Are in Shambles, Where Do I Start?

My Finances Are in Shambles, Where Do I Start?

Table of Contents

One of the many consequences of addiction tends to be financial debt. Whether it comes from legal fees, debt due to addiction, ignoring financial obligations, or finding a job to afford bills, rebuilding your finances can feel like a nightmare. It can be overwhelming to face your financial woes but ignoring them only compounds the issue. Many financial obligations come with interest, and ignoring them could leave you dealing with debt collectors. Money problems might be scary, but dealing with one issue at a time can help tackle your debt.

The Consequences of Ignoring Your Debt

Owing money isn’t a good feeling. Being in the red can be frightening. Sometimes, people tend to ignore their financial problems in hopes that they’ll go away and won’t affect them if they don’t think about them. Since many financial obligations come with interest or can have severe consequences if ignored, it can be dangerous to leave your debt unattended.

Ignoring student loans can cause the government to garnish your wages, ignoring car payments can lead to repossession, and discounting legal fees can even lead to a prison sentence. Missed payments on credit cards can lead to a lowered credit score, affecting your ability to apply for a home. Additionally, delinquent payments on car loans can restrict you from obtaining employment with some employers. Facing your financial situation is investing in your future. Fortunately, you can take steps to make sure your money is in order.

Finding Stable Employment

If you are unemployed due to your addiction or left your job to seek treatment, you’ll need to find new employment to get back on your feet. Looking for a job and attending interviews can be stressful, and you might face some rejection at first. If you don’t have work experience, you’ll want to start with an entry-level position. While these jobs aren’t high paying, they can be a great start to building a resume and generating some income to pay bills. If you have a degree, you’ll want to try and look for work related to your area of study or any of the skills you have acquired while in school. You can even include skills learned in treatment on your resume if relevant to the job you are applying for. Having a stable income will put you in a better place when tackling your debt.

Assessing Your Debts

Next, you’ll want to list all of your debts. Seeing everything laid out will make it easier to tackle each item. Write down how much and to whom the payment is owed. Having an idea about your debts will make it easier to form a plan of action. Each debt might have different requirements for how to approach your debt. Others might have options to consolidate loans or set up a payment plan based on your income. Knowing who you owe and how much can make it easier to prioritize which debts to tackle first.

Speaking With a Financial Advisor

If you can, consider speaking with a financial advisor. This might not be an option for some as financial advisors do charge an hourly rate, but if you are able, a financial advisor can help you create a plan of action to tackle your debts. Financial advisors can also help you invest your income intelligently and advise you on your current situation. They can educate you on finances that can help you in the future. They might point out poor spending habits that affect your situation and healthier habits to start instead.

Creating a Plan of Action

Now that you have a better idea of what you owe, you can start planning. It’s a great idea to tackle smaller debts first to get them out of the way. For example, if you owe a friend money for gas, it might be better to pay them back first instead of tackling a larger loan. This way, you can make sure to pay your friend back promptly, thus avoiding hurting your relationship with them.

Address each debt and plan how to contact the person owed and how long it’ll take to pay them back. Certain obligations might allow forbearance depending on your financial situation. Forbearance means enabling you to pause payments on a loan temporarily, and many places allow it if you aren’t in a financial position to pay off the loan just yet. This can help you get your finances in order and pay off that debt without worrying about legal repercussions.

Tackling finances takes time. If you have considerable debt, paying it off won’t happen overnight. However, having debt isn’t necessarily a bad thing. Many credit scores are better because of older credit accounts. The missed payments are what impact the score the most. When you are able to get back on your feet, making payments on debts will improve your financial situation. As long as you continue to be proactive about your financial situation, you’ll be in a better place financially. Don’t ignore your debt because there are serious consequences. The best approach is, to be honest with those you owe a debt because there are ways to help. Jaywalker Lodge knows the reality of those who aren’t in a great place financially after addiction. Stress from finances can compound, leaving those in debt vulnerable to relapse. Jaywalker’s goal is to help those in our community be economically self-sufficient. Call Jaywalker at (866) 529-9255 today.

author avatar
Stefan Bate, MA, LAC, CCTP Chief Clinical Officer
Stefan Bate, BA, MA, LAC holds a Master's Degree in Applied Psychology from Regis University and is a Licensed Addiction Counselor in the state of Colorado. Stefan has wide-ranging experience in the field of addiction recovery including: working as a recovery coach, therapist, and program director.

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