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Financial Recovery and Resilience · Talking FACS

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  Welcome to Talking FACS,
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  what you need to know about family,
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  food,
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  finance and fitness.
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  This nationally recognized award winning podcast is hosted by the University of Kentucky Family and consumer sciences extension program.
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  Our educators share research knowledge with individuals,
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  families and communities to improve quality of life.
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  Hello and welcome to Talking FACS.
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  I am Mindy McCulley family consumer sciences extension specialist for instructional support at the University of Kentucky.
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  Today,
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  my guest is Dr. Nicole huff,
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  assistant extension professor for family finance and Resource management.
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  We are going to be talking about financial recovery and resilience.
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  And this is the topic is especially important considering all of the natural disasters that our state has experienced over the last month.
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  So Nicole welcome and thank you for joining us today.
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  Thank you for having me Mindy.
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  So first of all,
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  let's just break it down and talk about what is financial resilience and why is this topic
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  Something that we should care about right now?
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  Right.
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  And so I think that regardless of your financial situation,
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  um it's important to just think about your finances in the new year because you know,
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  the new year is just a time.
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  It's a natural time for us to reflect on our circumstances to re prioritize you know,
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  our efforts in many different areas of life and to refocus our goals.
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  And so financial resiliency especially is the ability to withstand life events that affect your income and your assets.
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  And so,
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  you know,
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  we want to as consumers build financial resiliency because that's a step towards financial wellness and you know,
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  it's just like our,
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  our health and being healthy and physically,
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  we want to be healthy financially too.
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  And so,
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  you know,
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  financial wellness is having the means to fully meet your financial obligations to feel secure in your financial future.
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  And to more freely make financial choices.
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  And I know that that's something that,
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  you know,
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  I aspire to,
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  and I'm sure that anyone listening does as well.
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  Um and so,
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  you know,
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  whether you're experiencing a financial setback rather from a recent weather event or from any any setback that you have,
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  or if you're in a period of financial recovery or if you're just working to grow your wealth and to be financially healthy,
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  you know,
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  really looking at how resilient or your finances is just such a good investment to make for your long term financial health well?
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  And we should mention that this is the topic of the money wise newsletter for January,
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  which is why we're talking about it today.
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  But it just happens to fall at this wonderful time of the year,
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  the beginning of the of the new year.
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  And it did happen to fall at a time that has been a time of great tribulation for our state.
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  So it just,
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  it worked out perfectly,
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  I guess for us whether that's the right use of the words there or not.
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  Right?
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  So what are some common causes for people experiencing financial setbacks?
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  You know,
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  we've we've talked about one of them natural disaster.
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  And so,
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  um you know,
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  that is an example of an unexpected setback,
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  but that that has great impact to our finances.
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  But unexpected financial loss can result from a number of things.
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  You know,
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  it can a sudden medical diagnosis may be the end of a relationship or a divorce.
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  Um It could be the death of a family member or economic downturn like unemployment or recession or things that you know,
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  we're still experiencing a pandemic.
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  And so all of that can cause people to experience financial setback.
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  But those are the unexpected reasons.
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  You know,
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  sometimes there are expected reasons as well that can cause us to have financial stress.
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  And that could be just the result of spending choices or behaviors that you know that we have made,
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  that maybe we can do things better moving forward.
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  Um but any time that we have accumulated debt and where the real stress comes in handy is when you have those,
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  those unwise spending choices like debt,
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  but when they get coupled with an unexpected stressor and then those those the way often is what feels so overwhelming because it's when you know,
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  when we get knocked down that it feels like we just can't get back on our feet.
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  And so you know,
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  I want to offer some encouragement today to say that you know,
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  you can and there are some steps that you can take towards financial recovery if you've experienced a setback of any kind.
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  Well and I can also think of some expected financial setbacks that are happy,
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  like having a baby,
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  you know that costs a lot of money,
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  but those are not happy event and sometimes you don't think about that,
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  how much money that that actually costs.
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  Yeah,
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  that's that's a great point and and that that there are some normative and expected life stressors that can be very expensive.
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  That can kind of,
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  you know,
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  set us back especially again when coupled with something maybe that we're not expecting.
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  And so,
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  but those are good and yes,
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  kids are very expensive.
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  Yes,
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  but but they bring such joy,
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  so they very much worth it.
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  So for someone who is experiencing a financial setback,
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  what are some of those steps that they can take to get back on their feet financially,
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  You know,
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  when we have experienced financial stress,
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  it's important to know that it takes time,
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  but it takes intentional effort to rebound,
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  you know,
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  to reestablish financial stability.
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  There are five steps that I recommend.
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  Um someone take the first to just begin and if you listen to me,
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  this is always where I start because it's such a great first step to just evaluate your finances.
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  So make a list of your assets,
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  which is what you own versus your liabilities,
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  which is what you,
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  oh and so that can be very overwhelming to get it all on paper.
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  But it can also be very therapeutic because when we see everything,
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  when we see a list all of our financial obligations,
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  it can help us develop a plan.
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  Um And so when you are writing down your obligations,
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  you want to also include any monthly payment amounts,
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  your due dates and then any total amounts on for your creditors because you want to get an overall snapshot of your financial situation.
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  Um And then from there,
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  the second step is to prioritize your financial obligations.
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  You know,
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  I am a southern girl.
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  And so that's saying that you can't squeeze blood from a turnip.
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  Um And so I know some of you might can relate to that.
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  And so,
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  you know,
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  our money may only go so far.
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  And so if you're experiencing financial strain,
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  you want to prioritize your financial obligations so that you can make sure those essential needs are taken care of,
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  so your shelter,
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  your transportation,
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  your utilities,
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  your food,
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  medication,
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  but those essential needs.
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  And from there,
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  look for ways to cut back so after your essential needs are met.
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  Look for ways to scale back where you can.
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  The third step Mindy, is to communicate.
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  You know,
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  we don't really want to talk about our finances,
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  especially if we're experiencing financial stress.
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  But to not communicate will not help your situation.
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  So if you are trying to get back on your feet,
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  it's important that you contact your financial institutions or your creditors,
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  discuss forbearance options or deferment options.
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  Maybe you can shift a due date for your bills or negotiate a lower interest rate or work out a debt repayment plan.
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  And that's especially important to note if you've had a major life stressors.
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  So if you have had a major life event from having a baby to losing a job too,
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  being affected by those adverse weather events,
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  the storms and tornadoes that have recently hit our state.
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  Those are all things that justifiably can affect your finances.
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  And if you communicate those needs with your institution with your bank,
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  with your lenders more often than not,
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  they will work with you.
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  Um,
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  and if you didn't experience a life event,
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  but you are trying to pay back debt and to get financially healthy.
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  Most creditors will,
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  will recognize and honor that too and work out a debt repayment plan.
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  So so don't underestimate the importance of communicating and also communicate with your family because if you want to all be on the same page.
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  So if you have a spouse or if you have Children,
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  it's important that you talk about your finances so that everyone can work together and you know,
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  that goes along with asking for help and accepting help.
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  And so,
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  you know,
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  especially in the wake of both the pandemic and um the tornadoes that have hit our state,
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  there are a lot of local and state and federal resources available right now to families to help them get back on their feet.
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  And so take advantage of those.
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  We can list those in the show notes and it is in the January moneywise,
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  some tips for places to start.
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  And then finally the fifth step is just to do things differently moving forward,
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  especially if some of the,
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  you know the stress that you're experiencing is because you didn't have an emergency fund or because your debt is higher than you would have liked.
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  And so you know as you work from financial recovery to financial wellness,
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  it's important to put into place those habits that will help you become and stay financially healthy.
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  So things like budgeting,
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  eliminating debt and then saving for the future.
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  And I can't,
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  you know,
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  I can't stress enough the importance of saving for the future because we never know you know what the future holds and then sometimes we do know what the future holds.
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  Things like races and college education and retirement and there are those known expenses to that we want to be very mindful of and as we prioritize our financial wellness in the new year,
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  are there any final tips you can offer as we consider ways to be more resilient.
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  I know,
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  I know I you know tossed a lot of tips out there too.
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  You just then but that's because it's so important when you're in a period of financial strain that you don't lose hope and that's something that I want to stress that there are steps you can take and it may take time but also to remember that your personal assets includes so much more than what's in your bank account.
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  And so there are other factors that can enhance your financial resiliency,
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  things like your skill set,
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  your experiences,
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  your employability,
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  things like your soft skills,
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  your people skills,
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  your relationships and ability to network um your ability to work and your health.
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  You know,
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  our health is an asset um and and one not to undervalue and then our determination to succeed so much can be said for somebody's mindset and so don't lose hope,
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  stay determined and then be intentional about your spending and you will,
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  you know,
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  move from financial recovery to financial wellness with intention and I think that that is so important to highlight that we are so much more than our bank account.
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  Absolutely.
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  Nicole,
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  thank you so much for talking with us today about steps to building our own financial wellness.
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  I know that that is going to make a difference for a lot of people as we build wealth in 2022 and to our listeners.
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  If you are just joining us,
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  you have tuned in to Talking FACS and you will find us wherever you find your favorite podcasts.
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