Financial consequences from active addiction can be a major stressor during early recovery. It is possible to pay off debt, set a budget, and achieve financial freedom.
Facing the consequences of active addiction can be a harrowing aspect of one’s journey to recovery. Some people are faced with crimes from their past or burned bridges; other people may find themselves in poor financial standing either struggling to get by or drowning in debt.
No matter the consequence of pastsubstance use, recovery is possible.Recoverydoes not just mean abstaining from substance use but also returning to or reaching an effective level of functioning. This deeper level of recovery is just as possible as abstinence from substance use. To heal the damage of the past, a person must first face consequences such as debt.
Facing Debt in Recovery
A common challenge for people just beginning their journey to recovery is being faced with debt. While debt may be overwhelming it is possible to get into good financial standing. When preparing to face debt and beginning to create a debt repayment plan, there are several considerations to consider:
Be Aware of Triggers
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Just as it is important to be aware of your triggers for substance use, when looking to improve your financial status, you must consider triggers for unnecessary or excessive spending. Consider: Do you rely on retail therapy when you are having a bad day? Do you lose track of what you are spending when you use a credit card? Does casual online browsing tend to lead to an online shopping spree? Tracking your expenses and spending habits can be helpful in identifying what situations most often lead you to overspend.
Don’t Get Overwhelmed
It may take considerable time but with patience and commitment, it is possible to get out of debt and stay out of debt. If not handled promptly, debt will likely increase and compound the feeling of being overwhelmed. Understanding the process of becoming debt-free and accepting that it may take a considerable amount of time can help to ease feelings of being overwhelmed.
Know When to Seek Help
Know when to ask for help to avoid getting to a point whererelapseseems like the only viable option. If you are unable to cover your basic needs such as food and shelter, it is likely time to seek assistance. Even before it gets to this point it can be helpful to speak with a debt counselor from a nonprofit agency. You may wish to check out theNational Foundation for Credit Counseling, a nonprofit financial counseling organization with offices in every state. A credit counselor can offer tools and resources to help slow the buildup of interest and regain financial control.
Once you are ready to create your debt repayment plan, there are several initial steps that should be taken.
<span class='accordion-item-title'>Step 1: List all of your debts.</span>
<span class='accordion-item-title'>Step 2: Rank your debts.</span>
<span class='accordion-item-title'>Step 3: Identify any debts that need to be handled immediately.</span>
<span class='accordion-item-title'>Step 4: Focus on one debt at a time.</span>
<span class='accordion-item-title'>Step 5: After repaying one debt, move onto the next.</span>
<span class='accordion-item-title'>Step 6: Build savings.</span>
Learning to Budget in Recovery
Many skills are learned in recovery–relapse prevention,coping skills, interpersonal or social skills, and more. But one of the skills that is most necessary to recovery and often overlooked is financial literacy. It is important to learn how to budget money when embarking on any recovery journey.
By learning to budget, you can avoid future debts and save money allowing you to reach other goals such as buying a home. While a budget may feel uncomfortable or even frustrating at first, it is a highly effective method for meeting your financial goals and getting out of or avoiding debt. There are two types of financial obligations to consider when first constructing your budget. These are:
- Past Financial Obligationsinclude any unpaid bills or debts that may be present due to financial decisions during active addiction. Just as you must pay your monthly expenses, these past obligations that have yet to be paid need to be factored into any budget. Often these will have a set monthly payment and will decline over time.
- Current Obligationsinclude all of your monthly expenses such as rent or mortgage payments, transportation, food, entertainment, and more. Some of your current obligations will not be monthly expenses such as clothing and routine car maintenance. It is important to factor in for these expenses when creating your budget. Any unexpected expenses such as a car repair can be covered either by this allotted money in your monthly budget or from your emergency savings account.
When creating your budget it may help to keep it as simple as possible. You may choose to search for a budgeting plan or spreadsheet online, download a budgeting app, or stick to a handwritten budget.
Whatever you decide, the most important thing is to be consistent. A very basic budget may consist of totaling all of your monthly earnings and subtracting your set monthly expenses such as housing and other bills. The difference between your monthly income and your set monthly expenses is the amount you have to work with or your spending allowance. This amount includes contributions to savings or retirement accounts, entertainment, and more. You may choose to budget out this amount by category or simply keep your spending within the range of your spending allowance.
Needs vs. Wants
When reducing expenses and setting up a budget, it becomes necessary to differentiate needs vs wants. While the difference may seem clear-cut, determining what is a need vs want can sometimes be more difficult than expected. While most people would agree that housing is a need, the line blurs when the question of what type of housing is posed.
Some people may view a house with a yard as a necessity while others would view this as a luxury. It is all a matter of perspective. Ultimately, what you allot for each need will be based on your personal values and choices. It may help to first identify your total monthly income and then determine if the amount you allot to certain needs is within reason for your income bracket. Perhaps you will find that you can afford to live in your dream home, but you may also realize that doing so is preventing you from repaying your debt.
You may decide to rent a room or downsize into a smaller home. Perhaps the best way to determine if something is a need or want is to ask if you can remain comfortable without it.
Financial Freedom on the Journey to Recovery
Much as a weight is lifted once active addiction becomes part of the past, the experience of paying off debt can be liberating. Being accountable for your finances and taking the responsibility to fix the errors of your past can be a major step in your journey to recovery. Simply having a budget in place and a clear plan of action can considerably reduce thestressassociated with financial struggles such as debt.
There are resources for individuals facing debt on their recovery journey. Whether you or a loved one is about to enter treatment and is fearing to face the financial consequences from active addiction, or are finding the stress of debt to be affecting recovery, there is help. The Recovery Village has comprehensive treatment programs for substance use disorders and can provide the support needed to get through periods of stress through their array of services offered including bothinpatientandoutpatientprograms.Speak with a representativeto learn more about your options today.
