Dealing With Setbacks, My Two Cents Worth

This is a guest post by Rob in Madrid. He’s a frequent commenter and he wanted to add an experience he had to the guest post from paidtwice. Thanks Rob for guest posting!

I can totally relate to yesterdays post by paid twice. One of the hardest things to do when you first start you journey to frugaldom is how to handle setbacks.

The same thing happened to us a few months ago when we had unexpected death in the family meant a short notice high season flight home for my Wife and I. Compounding matters was the fact that we were planning on flying home in 6 weeks and matter a fact had just paid for the flights a few days before. Basically this blew a 4000â‚¬ hole in our budget. As we had just started budgeting and frugal living meant we still had a lot of debt and only a small emergency fund to start off with. But the good news was even spite of a major setback like we still managed to stay on track with our budget and debt reduction plan, although our emergency fund took a major hit.

Here are a few principals I learned through all this.

1. Minimize the damage to the budget
2. Lessons learned from previous financial disasters
3. Focus on what is within your control
4. Find the positive
5. Set backs are a part of life

1. Minimize the damage

When we first got the phone call we immediately booked flights home on my wifeâ€™s Amex business card which gave us about 60 days to figure out how to pay for it. While it was going to cost us a lot of money my main concern was how to minimize the damage to the budget. As we didnâ€™t have the cash to pay for it (as we had just paid for our planned flights home a few days before) it meant we were going to have to use credit for it. What I did was go to the bank and ask for a 3 month extension on our line of Credit, enough to tide us over until my Wife got her annual bonus and we could pay it back (money that was supposed to go into our emergency fund )

2. Lessons learned

I think this was the most [important] thing I did. With hindsight what would I have done differently? Then apply the lessons to our current situation. The conclusion I came to was they we tended to compound the damage with bad spending patterns, in other words the budgets shot to hell so lets got buy that (flat screen TV, weekend away, afternoon at the mall etc etc). Understanding this made me aware that we needed to check our spending impulses.

3. Focus on what is within your control

For us this meant continued focus on frugal living.

4. Find the Positive

Looking back over the past few months quite a few things jumped out at us. First and foremost we keep our debt snow ball running, unlike previous times we didnâ€™t skip payments take cash advances and we managed to keep the CC charges to a minimum. The only time I used the card was when we absolutely had no cash, usually just before payday and that was much less frequent that before. We also achieved some significant debt reduction goals. Quite a change from when we used to max out the cards trying to survive.

The biggest aspect of our budget which I had the most control over was our discretionary spending, gas food, shopping etc. Careful driving meant I was able to get that extra few miles out of each tank. In spite of food inflation and us eating much better my shopping budget is still about 15% below what it was this time last year. Matter of fact we just made a whopping batch of Garbanzo bean stew for a potluck tonight all within a decreased shopping budget

5. Setbacks are a part of life

Lastly and most importantly is understanding that set backs are apart of life. I looked at our budget after the Wife got her annual bonus and realized that had we not had to fly back to Canada the way we did weâ€™d have some serious cash in the bank now. But unfortunately setbacks are part of life, but think simply as speed bumps on the road to financial freedom they slow you down but they donâ€™t stop you.

Thanks Rob for guest posting!

Posted by Tricia on December 7, 2007 at 8:35 PM in General Debt | 10 Comments »
You can leave a response or trackback from your site.

Newer Posts Older Posts

dawn responded:
Posted: December 7th, 2007 at 9:43 pm
It really comes down to not letting unavoidable or unexpected setbacks become an excuse for slacking. It’s so easy to justify bad choices when we want to. We just got to get back on the path to financial freedom and keep on moving forward
paidtwice responded:
Posted: December 7th, 2007 at 10:48 pm
How fun to have a guest post in response to my guest post

Not fun, the situation, but I am glad that you weathered the storm, Rob!
Esther responded:
Posted: December 7th, 2007 at 11:53 pm
Couldn’t you have just changed your existing flights with a relatively small change fee?
JW Thornhill responded:
Posted: December 8th, 2007 at 3:57 am
This is an especially timely post for me, with all the setbacks that we’ve had this year. I sincerely appreciate it.

Thanks.
Weekend Roundup - Be Sure to Check Back Monday Edition | beingfrugal.net responded:
Posted: December 8th, 2007 at 6:54 am
[...] Â Dealing With Setbacks, My Two Cents Worth at Blogging Away Debt.Â This is a guest post by Rob in Madrid, who frequently comments here.Â Great job, Rob! [...]
Rob in Madrid responded:
Posted: December 8th, 2007 at 11:10 am
We couldn’t change the flights as they were booked with Air Transat a charter, so they are fixed. The advantage was (at the time since changed) they were a direct flight from Madrid to Toronto and you only need a small deposit to hold the flight till 3 months before, as well they were a bit cheaper. Unfortunatly my Mom died a few days after we paid for the flights or we would have simply combinde the two holidays. We debated canceling the second holdiay but the flights were a large portion of the budget. This year in heading home were using my Wife’s frequent flier miles to go for free. Those flights can be changed for a small fee. As well we found out it’s a direct flight this year!
Esther responded:
Posted: December 9th, 2007 at 9:42 pm
Sorry to belabor the point, but couldn’t you just fax Air Transit a copy of your mom’s death certificate so that you might be able to get a refund or to at least change the flight? If not, it would not be surprising. Corporations seem so heartless. Anyway, I’m sorry for your loss. I’ve been thru similar, and it is not fun.
Take On Credit! » Blog Archive » Money Links For 12-10-07 responded:
Posted: February 20th, 2008 at 9:16 pm
[...] Dealing With Setbacks, My Two Cents Worth by Rob In Madrid (guest author) at Blogging Away Debt. [...]
Money Links For 12-10-07 | TapStrike Today responded:
Posted: July 8th, 2008 at 7:37 am
[...] Dealing With Setbacks, My Two Cents Worth by Rob In Madrid (guest author) at Blogging Away Debt. [...]
Financial Freedom Guide responded:
Posted: August 25th, 2008 at 8:56 pm
For even more inspiration, do read Napoleon Hill’s Success with a Positive Mental Attitude.