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Turning financial setbacks into stepping stones.

Financial setbacks are a part of life and they happen to just about anyone. Whether it’s loss of income, unexpected debt, falling victim to a scam, or going through a divorce, experiencing a setback can feel like you’re taking one step forward and two steps backward.

One definition of setback is “an event that delays progress,” with the keyword being “delayed.” In other words, what you’re working toward still happens – just at a later time

To be fair, it’s perfectly okay to feel sad or angry. However, it’s important to remember that while setbacks can be disheartening, they don’t have to be the end of the world. The sooner you accept what happened, the sooner you can find the silver lining (even if it’s tiny and faint) and start planning your comeback.

Here’s why a financial setback isn’t always the worst thing ever. 

1. Financial setbacks can teach a lesson

Setbacks are rarely enjoyable experiences. They often cause stress and sleepless nights, and there isn’t always a quick solution.

However, when reflecting on past setbacks, there’s often a lesson to be learned. Whether it resulted from poor decision-making or circumstances beyond your control, each situation can provide valuable insights.

For instance, maybe you postponed starting student loan payments after finishing college. And as a result, you ended up paying thousands in extra interest.

Looking back, you now realize this was an expensive decision. Yet, this experience might have sparked your interest in finance, leading to better decision-making.

So the point is: By closely analyzing setbacks and learning from them, you can make smarter choices in the future.

2. Financial setbacks can build resilience

One positive aspect of facing financial setbacks is that they can make us more resilient.

As we navigate these, especially during our younger years, feelings of defeat and being stuck can be overwhelming. However, setbacks are rarely permanent, and with time and determination we can bounce back.

Each one can help us develop coping skills and problem-solving abilities, allowing us to tackle future obstacles more efficiently. When we recognize that setbacks are temporary and refuse to give up, we become better equipped to handle challenges.

3. Financial setbacks can help you embrace new opportunities

Sometimes, setbacks serve as a wake-up call, prompting us to change direction and embrace new opportunities.

When we step back and examine the bigger picture, we may realize that our current path is no longer working for us. In which case, the setback was the catalyst for change – pushing us to try something different.

For example, in the face of financial loss caused by the pandemic, many individuals successfully pivoted their careers. Some pursued further education, acquiring skills in different fields, while others ventured into entrepreneurship.

Bottom line is that setbacks can inspire us to step outside our comfort zones and explore uncharted territory.

4. Financial setbacks can help you realize what’s most important

A financial setback can also help us reassess our priorities and get our lives in order. Sometimes, we might become too focused on earning money or chasing unrealistic financial expectations. And when setbacks occur, we might be forced to downsize and simplify our lives.

While this may initially feel like failure, this shift in circumstances can lead to unexpected appreciation. Years ago I read an experience about an individual who lost a high-paying job, and as a result, they had to downsized their life.

At first they were upset with the change. However, it didn’t take long for them to realize that they were happier. They had more time for themselves, more energy to spend with loved ones, and their needs were met.

In this case, what seemed like a setback was actually a blessing in disguise.