A lot of people are experiencing financial hardships right now, but there's hope.
“I think it’s really helpful for anyone today who might be experiencing that to know that people who've had financial setbacks in the past have been able to recover,” said Marcy Keckler, VP of Financial Advice Strategy at Ameriprise Financial.
Pre-pandemic, Ameriprise Financial looked into people who have experienced financial setbacks, how they overcame it, and largely came out better in the end.
About 75% of investors they talked to had experienced a major setback that derailed the plan they were on, but 90% said they did make a comeback.
The timeframe varied depending on whether it was market loss, job loss or even taking care of another family member.
While years to recover may sound like a lot, what's important to note is people felt a greater sense of control afterward.
“So, I think for people who might be experiencing that today, that can be a message of hope that your ability to kind of ride out the storm and address that setback you've experienced can be something that can lead to feeling of greater confidence,” said Keckler.
The most important key to financial recovery is taking a hard look at your spending habits, changing spending and saving behavior, building that emergency fund even if it starts later, and setting goals.
“It makes a big difference to write down your goals,” said Keckler. “There is power in having a written plan.”
Now's also a good time to look at legal documents like a will, trust, health care power of attorney, and advance health care directive.