The 8 lessons I've learned from surviving financial oblivion.

What would you do if you lost everything – money, assets, everything you’ve been saving for and building towards? Would you survive financial oblivion or would you be completely undone?

None of us are immune to financial catastrophe. We can lose our jobs, our businesses can fail, we can default on our mortgages, our savings can be eaten up by unexpected expenses and we may find ourselves faced with having to start from scratch.

My family went through this in 2009 shortly after the financial crisis began. We lost every single cent and we are still trying to rebuild our lives four years later. Ten years of savings, mortgage payments, car payments and superannuation contributions were gone thanks to our business failing and a stupid decision to give a personal guarantee against our home to secure the business loan.

Do you think it couldn’t happen to you? What would you do?

My husband and I always knew our business may not be the success we dreamed it would be but we also knew that if the worst ever happened, we could just start over. It’s been such a learning experience that we can now honestly say we are happy we lost everything. The lessons we learned are invaluable but more than that – we learned that when the shit hits the fan, we both put our heads down and our bums up and get back to work. We are very calm in a crisis and we are pretty damn proud of ourselves for surviving it, marriage intact.

When we started experiencing financial problems my husband would always say, “Don’t worry, if worse comes to worse we can both get out and find jobs. Employability is the best insurance, better than savings.”

With our financial slate wiped clean we emerged battered and bruised but very clear on a few things – we were done with personal debt, we would become excellent savers, we wouldn’t rush into another mortgage and we’d structure our spending much more carefully than ever before.

Our budget is now so clearly set out that we know exactly what we spend on everything, down to the last cent. It’s actually become pretty fun to sit down, go through it all, know exactly where we are headed and what we need to do to get where we need to go.

Whenever our savings take a hit we remind ourselves – we have our family, we have our health, we have a roof over our heads and we both have jobs. It’s really empowering. I hope it doesn’t happen to you but you’d be okay. You really would.

There are worse things than losing all your money but also, you don’t have to lose it all to learn the lessons I have learned…

1. Keep your personal debt as low as possible;

2. Know what you spend. Write it all down;

3. Make financial decisions together. Don’t hide anything;

4. Live in the house you can afford, not the house you necessarily want;

5. Debit credit cards are the only credit cards you need;

6. There’s always something you can cut back on;

7. Saving up to buy something can be fun;

8. Children are never too young to learn about the value of money.

It’s fitting that we are discussing this as we all spend up for Christmas but I think it’s a good time for us to consider our financial road map with a New Year looming. It’s never too late to hit the reset button and become considered spenders and savers. Because at the end of the day, the only real control we have over our lives is our financial position.

And don’t forget to budget it room for a little bit of fun – it makes saving for a rainy day much easier if you still get to have some fun along the way.

Jo Abi is the author of the book How to Date a Dad: a dating guide released by Hachette Livre Australia.  You can read more about her many and various exploits here.

Have you had a period in your life where money was really tight? How did you cope?

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