People in recovery are often discouraged to discover their money situation is in bad shape. They may have made a lot of bad decisions during active addiction, including taking on a ton of debt and ignoring other financial obligations. When they get sober and have to face these problems, it can feel overwhelming. Here’s how to start digging out of a bad financial situation.
Money problems are incredibly stressful and your money situation may make you feel like giving up and relapsing. That will only make things worse. If you are going to straighten out the situation, you have to stay sober.
Figure out what you owe.
This may be the most depressing part, but it has to be done. Get everything together in one place. Get a notebook and write down each debt–how much and where from–and then add it together. As hard as it is, having all that information in one place where you can see it and touch it is much less scary than the feeling you’re just floating through a nebula of debt.
Figure out which debts are urgent and important. Usually you’ll want to prioritize things like rent and utilities. It’s super important to have a safe place to stay in recovery. If you’re behind on rent, that should be a top priority. Likewise, if you need your car to get to work but it’s about to be repossessed, take care of that as soon as possible. After the immediate necessities are taken care of, look for debts with high interest, like credit cards. Store credit cards are the worst offenders. If you’re paying 20 percent interest on some credit card, you’ll want to put that fire out as soon as possible. Things like student loans, medical bills, and some personal loans should definitely be paid, but maybe not right this minute.
Figure out what you’ve got.
This includes any savings you might have, possibly even retirement savings, assets you might be able to sell quickly to raise money, any money friends or relatives might be willing to give or lend you, government programs such as food stamps or welfare, and, of course, income from a job. You’ll want to use your own real money first and only borrow more if absolutely necessary. It might make sense to consolidate some of your high interest debt, either through loans or refinancing your home, if that option is available.
Execute your plan.
Pay off your high priority debts first. Typically lenders will work with you to work out a payment you can afford. They mainly want to know you intend to pay them back. It may take a while to get caught up on everything, but if you stick to your plan and work steadily, you should be able to get there. If not, you may be able to file bankruptcy to discharge some of your debt, but that’s expensive and should be a last resort. The good news in all of this is that if you are sober, you are saving a ton of money and your employment outlook should improve considerably. A situation that looks hopeless now may look much better in a month or two.
If you or a loved one struggles with addiction, we can help. Recovery Ways is a leading addiction treatment provider with an excellent recovery rate. Our expert staff includes masters and PhD level therapists and board certified addiction psychiatrists. Our comfortable facilities will help to make your treatment as enjoyable as possible and our therapists use proven techniques like sensory integration and recreation therapy to help to engage the world without the assistance of drugs or alcohol. Call us today at 1-888-986-7848 or email us through our contact page to learn more.