How to Recover From a Big Financial Hit

Technically speaking, I live below the poverty line, but this has never been an enormous problem for me, as I live in Southeast Asia, where the cost of living is quite low, in an apartment that costs me less than $200 a month, and eat meals that hardly put a dent in my wallet.

This all changed, however, when a health crisis struck.

I found out that I had a BRCA1 mutation (the breast cancer gene) in January 2018 while I was home for the holidays. It seemed likely that I would get it because my grandmother died of breast cancer, and my aunt suffered from this same disease multiple times.

Every doctor’s visit I made, whether it be with a breast specialist or to get an MRI breast biopsy done, was paid for up front, and I later had to claim everything with insurance. Long story short, determining whether or not I had breast cancer after finding out about the BRCA1 mutation cost me close to $4,000.

I was determined to never have to go through the financial burden or endure the stress these procedures were causing me, so I decided to have a prophylactic double mastectomy. A few weeks after the surgery, I received a distressing bill in the mail. It came to over $148,000. And that was the first of three surgeries I needed.

This bill was a shocking one. If it weren’t for having good insurance and a good support system at home, I’m not sure I would’ve come out of all of this without being hundreds of thousands of dollars in debt. In the end, I hit my deductible and owed more than $7,000 for the surgeries alone. For those of you facing a similar, unexpected financial hit like a totaled car, housing emergency, or health crisis, here are a few tips to assist you in the bill paying process afterward.

1. Save, save, save

Saving is key to being able to bounce back from a financial crisis. Be sure to set saving goals at the beginning of each month and sort out ways to keep them, like having a designated amount from every paycheck automatically transfer into your savings. Even if it’s just a few dollars each paycheck, it can make a difference in the long run. This may also include eliminating the finer things in life, like treating yourself to a coffee weekly instead of daily.

2. Establish a support system

Whether you lean on friends or family, it is always important to have some type of support system to help you take on a financial crisis with grace. Ask someone you trust to be an accountability buddy, and talk with them openly about your financial goals. Check in with each other frequently to make sure you’re on track. For me, that support system was my family. Openly sharing my financial challenges with them gave me the encouragement and advice I needed to keep going.

3. Live a sustainable lifestyle

Making changes to a somewhat comfortable lifestyle can seriously cut costs. This isn’t as simple as buying fewer coffees. Acquiring a roommate, getting rid of your car or taking up a side hustle can make a huge difference in your financial status. Again, it has to be sustainable. Make sure you’re living within your means. That doesn’t mean never taking a taxi, buying new clothes, or eating out, but thinking of it more as a rare treat than a necessity.

4. Have multiple sources of income

It’s all about the hustle. An extra paycheck or two will come in handy should you ever be burdened with a financial crisis.  Check out Upwork, Freelancer and Fiverr to find freelance work and side jobs. Other websites that are good for bringing in extra traffic include Rover and Care, for example. In addition to my full-time job, I freelance write for publications and travel platforms. It’s not a lot, but every little bit helps.

5. Have a Budget

Know how much you want to spend on the major aspects of your life, like housing, food, and fun. Make sure you have those budgets in mind when you grocery shop, sort out a new apartment, or head out for a weekend of festivities. Lastly, always have room in your budget for a three-month emergency fund. New to budgeting? Give Mint or YNAB (You Need a Budget) a try.

Originally from February 25, 2019.

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Kelly Iverson

Kelly Iverson works full-time as a marketing manager for Mad Monkey Hostels, a socially responsible hostel chain in Southeast Asia and Australia. She is also a freelance travel writer and photographer, and her work can be seen on a number of websites, including the Huffington Post, Culture Trip, and the Kansas City Star. Find out more about her and see more of her work on her website.