A 5-Step Plan to Get You Out of Financial Distress And Back on Track

Financial distress is a common and complex issue that can affect anyone, regardless of income or financial status. It can be caused by various factors, such as job loss, medical bills, overspending, or poor financial planning. When faced with financial difficulties, it’s easy to feel overwhelmed, stressed, and unsure about what to do next. However, taking control of your finances, seeking professional advice, and adopting good financial habits can help you overcome challenges and achieve financial stability.

In this article, I will discuss some of the most common mistakes people make when dealing with financial distress, practical advice to help you get started, top financial habits to consider adopting, a framework to assess your debt situation, and when to seek help. Finally, I will highlight the Odus that speak on this subject and share their advice.

Factors Contributing to Financial Distress

Financial distress can arise from various factors, including unexpected medical bills, job loss, overspending, or poor financial planning. While the nature and severity of the situation may differ for individuals, some common mistakes people make while trying to cope with financial difficulties are:

• Avoiding or delaying dealing with the problem: Many people tend to ignore or delay addressing their financial troubles, hoping that the situation will resolve on its own. However, in most cases, the situation worsens, and the longer they wait, the harder it becomes to resolve the issue.
• Relying on credit cards or other high-interest loans: In desperate situations, people may resort to taking out loans or using credit cards to cover their expenses. However, this can lead to a vicious cycle of debt, as the interest rates can quickly accumulate, making it challenging to repay the borrowed money.
• Not seeking professional advice: While it is essential to take control of your finances, it is equally crucial to seek expert advice from a financial counselor or advisor. They can provide a clear understanding of the situation and suggest actionable steps to overcome the difficulties.

Practical Tips

If you find yourself in a financially distressing situation, the first step is to acknowledge the problem and take ownership of it. You must be willing to face the situation and commit to finding a solution. Some practical tips to get started are:

• Create a budget: Start by making a comprehensive list of all your expenses and income. Then, identify areas where you can reduce spending and create a realistic budget plan that you can follow.
• Prioritize debt payments: Make a list of all your debts and prioritize payments based on the interest rates and amounts owed. Focus on repaying high-interest debts first, as they tend to accumulate quickly and can be challenging to manage in the long run.
• Seek professional advice: Consult with a financial counselor or advisor who can guide you through the process and provide personalized advice on how to manage your finances better.

Recommended Financial Habits

Adopting good financial habits can go a long way in ensuring financial stability and security. Two essential habits that people should consider adopting are:

• Saving: Saving money regularly, no matter how small the amount, can help build a financial cushion that can be used during emergencies or unforeseen circumstances. Aim to save at least 10% of your income each month.
• Living within your means: Avoid overspending and prioritize your needs over your wants. Make conscious decisions when it comes to spending and try to find ways to save money without compromising on the quality of life.

Create a Debt Assessment Framework

When assessing your debt situation, it’s important to gather all the relevant information and create a comprehensive picture of your finances. Some steps that can help you create a debt assessment framework are:

• List all your debts: Make a list of all your debts, including credit card balances, loans, and mortgages.
• Identify interest rates: Determine the interest rates for each debt and prioritize them based on the rates.
• Calculate monthly payments: Calculate the minimum monthly payments for each debt.
• Assess your budget: Review your budget and determine how much money you can allocate towards debt payments each month.
• Create a repayment plan: Based on the information you have gathered, create a repayment plan that prioritizes high-interest debts and fits within your budget.

When Do You Need Help?

It is essential to seek help when you feel overwhelmed and cannot manage your finances effectively. Some signs that indicate you should ask for help are:

• You are struggling to pay your bills on time.
• You are using credit cards or loans to cover everyday expenses.
• You are constantly worried about your finances and feel stressed.
• You are unsure about how to create a budget or manage your debt.

Financial distress can be a challenging and stressful situation, but taking ownership, seeking professional advice, and adopting good financial habits can help you.

What Does Ifá Say About Personal Finances

As a Babalawo and spiritual leader, I can tell you that Ifá offers wisdom and guidance on all aspects of life, including financial management. There are several verses that offer advice and counsel on how to manage finances and avoid financial distress. For example, in the Odu Ose Otura, Ifá advises that “Awo awo l’osun, Omo eniyan kii f’osun sori” meaning “It’s the wisdom of money that counts, for no one gives away money for nothing.” This verse reminds us that money is a valuable resource and that we should be wise in its management.

In the Odu Ogunda Meji, Ifá advises that “Eepa oju efon ni o da, oju owo ni o se da” meaning “It’s a plague to have too much debt, but it’s a blessing to have enough money.” This verse highlights the importance of managing debt and avoiding financial obligations that can become a burden.

Another Odu, Irete Ogbe, advises that “Owo ti a ko ma la, won ni ki npe ara eni ni” meaning “The money we don’t have, we say belongs to someone else.” This verse reminds us of the importance of living within our means and avoiding the temptation to overspend or accumulate debt.

In conclusion, Ifá offers valuable advice and counsel on financial management, highlighting the importance of wisdom, debt management, and living within our means. By following these principles, we can avoid financial distress and achieve financial stability.