Navigating Financial Setbacks After Identity Fraud

March 27, 2024

Navigating Financial Setbacks After Identity Fraud

Many Americans are facing financial setbacks every day, and it can often feel almost impossible to see the light at the end of the tunnel and regain stability. No matter what financial stresses you may be dealing with, you are not alone. Luckily, there are some strategies that can help you overcome some of these stresses when facing financial adversity.

Looking at the Facts

According to 2023 data collected by Gallup, American’s financial confidence has been at a steady decline since 2021 for people of all financial classes. Only 64% of people in total said they lived comfortably, with the top three concerns being having enough money for retirement, being able to afford medical costs in the case of a serious accident or injury, and being able to maintain their enjoyable standard of living.

According to an Ameriprise Financial study, nearly three-quarters of people have experienced at least one major financial setback. These setbacks have often costed them more than $50,000. In some cases, it was more than $100,000.

Proactive Strategies to Overcome Financial Adversity

Whether it is losing a job, excessive debt, illness, identity fraud, or whatever financial setback it may be, one of the best ways to overcome it is by turning it into a learning experience. According to HealthGuide, there are five proactive strategies to take when facing financial setbacks. These include talking to someone, taking inventory of your finances, making and sticking to a plan, creating a monthly budget, and finding ways to manage stress.

1. Finding Support in Others

Sometimes one of the best ways to overcome financial hardships is threw seeking out help from other people – whether that be professional help or support from your friends and family. No opening bills or picking up calls, and ignoring bank or credit card statements does not allow for forward progress. It is important to instead remember that you are not alone.

Sometimes speaking with a friend or family member is a way of not only receiving comfort and support but also gaining some perspective and reassurance. Whether or not they have the ability to help you solve your problems, they may also offer helpful advice or make you feel a little better. They may be able to come up with new solutions you have not thought of yet.

Professional guidance can also very very constructive. Consider speaking with an organization member or counselor to discuss solutions to issues such as debt, finding the next steps, financial assistance, or securing a new job. Sometimes, depending on location, these services may even be free. Taking help from others is a sign of strength, not weakness.

2. Taking Financial Inventory

One of the first steps to creating a successful plan to navigate your financial setbacks is to put together the details of your income, debt, and spending. It is often helpful to do this with the information collected over at least a month.

To regain control of your finances, start by using websites or apps to track your income and expenses. Make sure to include all sources of income, whether it be salary, bonuses, benefits, alimony, child support, or anything else. You should also list your debts, including past-due bills and minimum payments, and identify spending patterns and triggers to find healthier coping mechanisms. Make small changes to reduce nonessential spending and eliminate impulse buying by waiting before making purchases.

3. Creating an Actionable Plan

With a wide range of possible financial problems, there are a wide range of possible financial solutions. This could include living with a tighter budget, lowering interest rates, reducing online spending, taking advantage of the benefits provided by the government, and much more. No matter what the solution may be, a plan should be set in place to follow.

For example, if you are dealing with identity fraud, you may start by alerting involved companies about the fraud and setting up fraud alerts and credit freezes. The you may file reports with the FTC and local police to create official records of the fraud, before reviewing your credit reports and correcting any errors promptly by filing disputes with the credit reporting agencies.Your last step would be to continue monitoring your credit reports to ensure the issue is resolved.

For less extreme scenarios, once you have taken inventory of your finances, you may choose strategies to either increase your income, lower your spending, or some of both. To start setting up a plan, first, identify the financial problems that you are dealing with. Each problem should have a separate plan. Next, start brainstorming some solutions. It may be useful to get professional guidance for this step.

Then it is time to put your finalized plan into action. Continue monitoring the progress being made and make adjustments if necessary. Finally, remember not to let setbacks discourage you. If something does not go to plan, it is important not to be hard on yourself and get back into the routine as soon as possible to continue making progress.

4. Setting a Budget

One of the most beneficial strategies for recovering financially is by setting a monthly budget. Make sure to factor in the cost of groceries, work travel, rent, and any other bills that are owed at a monthly rate. Bills that may be set to annual payments should also be factored in. You can easily do this by taking the total expense, dividing it by 12, and adding the amount to each month’s budget.

To take this all a step further, planning ahead of time to make sure you have extra money set aside in case of an emergency can also be very strategic in the long run. Finally, to make the most of this new budget, make sure to eliminate anything unnecessary to leave yourself with some more room for spending and saving.

5. Stress Management

Overcoming financial obstacles requires patience and a long-term perspective. Being proactive can help reduce anxiety and build resilience for the future. Some helpful tips for managing stress include staying active, practicing relaxation techniques, prioritizing sleep, boosting self-esteem, and maintaining a healthy diet.

Finally, make sure to focus on the positive aspects of life. Meaningful relationships or simple joys, can bring comfort, lift spirits, and reduce stress levels. These strategies will enable you to come back and emerge stronger than ever before.

Shielding against Identity Theft with iLOCK360

If you are a victim of social media account theft, then you should contact iLOCK360 and take advantage of our identity theft and credit monitoring system. We provide you with the utmost personalized protection for your identity and credit.

We monitor your personal and financial information and alert you of any suspicious or fraudulent activity. Our services also help you restore your identity and credit when stolen. Get in touch with us today for more information on the privacy and security of your social media accounts.

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