Steps for Rebuilding Your Financial Well-Being in Early Recovery
If your financial situation feels completely chaotic right now, you’re not alone. Many people experience money-related difficulties in early recovery. Substance use often coincides with issues like theft, debt, employment issues, and compulsive spending. It’s also much easier to make poor decisions when drugs and alcohol impair your judgment.
Regardless of your specific circumstances, here are some practical steps you can take to gain better control over your money.
Review Your Financial Assistance Options
Every state in the US has financial assistance options for low-income individuals. These benefits can ensure that you meet your basic needs while you get back on your feet.
You may be eligible for some or all of the following programs:
Unemployment benefits: You may receive some of your income if you have earned enough wages during a standard base period and are laid off from your job.
Disability benefits: Some states allow people to receive short-term disability benefits if they reside at an approved residential addiction facility.
SNAP Food Benefits: SNAP benefits provide monetary support for buying specific foods.
Medicaid: Medicaid is a federal and state health insurance program for people with low or no income. CHIP also offers health coverage for children.
Consider visiting your local social security office if you have other questions about assistance options. They have advisors that can support you in answering questions or filling out applications.
Get a Job
Employment offers structure and accountability in recovery. It encourages you to organize your time well, socialize with others, and practice skills in the real world.
Remember that your first job in recovery doesn’t need to be perfect. Instead, you want to try to be mindful of your ego and be willing to do what it takes to start earning an income. Finally, remember that your job shouldn’t be so stressful or time-consuming that it jeopardizes your recovery.
You may experience some difficulties securing a job if you have a criminal record. If that’s the case, let go of rigid expectations. Instead, try to get in somewhere and actively search for industries seeking employees. Finally, never lie about your criminal history. For one, your employer may do a background check. Furthermore, omitting certain information can result in further complications if you do get hired.
Make a Budget
It’s important to monitor your cash flow once you start earning money. You want to take steps to ensure that you aren’t consistently spending more than you earn.
Your budget acts as a blueprint for how you prioritize what you buy. Make sure that you track both your income and expenses.
Use budgeting apps: Online tools like Mint or Personal Capital make it easy to track your spending and income automatically. You just need to share your bank and credit information with the apps.
Set realistic goals: Think about how much you’d like to save in a month or year. Reflect on how you’d like to use that money (paying off debt, buying a car, etc.)
Review areas where you can cut back: Spend some time assessing how you spent your money each month. Reflect on any changes you can make moving forward. Even small reductions can add up.
Consider only using cash: Some people find that it’s easier to spend less when they have to part with cash. Cut up or hide your credit cards in the meantime.
Truly identify your needs: Many people in recovery are still used to instant gratification. In some ways, everything can still feel like a need. But take time to really distinguish the difference between your needs and wants. What can you delay for another week or month? How can you focus on your larger long-term goals when you feel the impulse to buy something impulsively?
Avoid Predatory Lending Strategies
As much as possible, try to avoid payday loans or other quick methods of securing cash. Even though they may seem to help in an emergency, the loans are obscenely expensive, and they often target the most vulnerable populations. Many people find themselves in a vicious cycle of being unable to pay back these extraordinary debts.
Predatory lending practices can take on many shapes and forms, but be cautious of any company that:
Offers loans at exceptionally high-interest rates
Doesn’t disclose necessary information
Feels forceful or coercive
Uses risk-based pricing tiers
If you need money quickly, consider the following options first:
Build a payment plan with your creditors: Creditors want their money, and they’re usually willing to work with clients to develop a reasonable payment plan. It never hurts to ask about your potential options.
Seek a loan from a credit union: Most credit unions offer affordable, short-term loans. They offer significantly lower interest rates than payday companies.
Ask friends and family for support: If you haven’t exhausted this option, consider asking a loved one to loan you the cash. Make it a top priority to pay them back as quickly as possible.
Use a credit card with a 0% APR: Some credit card companies offer 0% introductory rates when signing up for a new line of credit. Keep in mind that you generally need good to excellent credit to qualify for this rate. After the introductory period ends, you will be on the hook for paying the standard interest rate (although it is still lower than predatory lending rates).
Educate Yourself on Money Management
Many people are in the dark when it comes to their money. This isn’t a problem that’s unique to individuals in recovery.
But knowledge is power, and learning more about your finances can help you feel inspired to make the right choices. Take the time to listen to financial podcasts, read books about money, or talk to a financial advisor. If you have a financially-savvy loved one, ask them for support.
Final Thoughts
Rebuilding your finances takes time and effort- it certainly won’t happen overnight, and it won’t happen automatically. However, the skills you learn in recovery (patience, mindfulness, being aware of your ego, and managing stress) can all help you with your relationship with money.
