Making a Financial Turnaround

Have you ever found yourself in a negative financial situation, either broke or deep in debt? Maybe you’re in the midst of such a situation right now. In this article I’ll share with you some insights on how to successfully recover from a negative financial situation.


The first step in recovering from a negative financial situation is to fully accept where you are. You’ll never solve your problem while in a state of denial. This acceptance process comes in three parts:

First, accept that you’re not going to magically transform your financial situation from scarcity to abundance overnight. If you want to solve this problem, the first thing you have to do is respect the magnitude of the challenge, which is on the order of overcoming a major addiction. Maybe it will in fact take you years to recover, so you may as well surrender to that idea now.

Secondly, accept the reality of your present financial situation. I don’t think it’s necessary to calculate your net worth to the dollar, but at least do a halfway decent assessment of where you stand in terms of income, expenses, assets, and liabilities (debt). Consider what will happen if your situation continues into the future. Is it sustainable, or are you headed towards a crash? If it’s the latter, then accept and acknowledge that one way or the other, something must change, either by choice or by force.

Thirdly, accept and acknowledge how you honestly feel about your financial situation. When you’re broke or in debt, you know something isn’t right. That sinking feeling you get whenever a bill arrives in the mail isn’t healthy. When your finances are strong, a bill is nothing but a piece of paper that takes two minutes to process. But when your finances are weak, a bill can be a stressful burden. It’s easy to fall into the trap of denying these negative feelings and going into escapist mode. Those feelings of stress and worry are there to tell you it’s time to make a change. You need to do something to correct this situation. The way out is through action, not avoidance.

Acceptance basically comes down to admitting to yourself, “This is a bad situation I’ve gotten myself into, and I accept that it’s going to take some serious effort and commitment on my part to turn things around. It won’t be easy, but it will be worth it.”


The next step is to set some goals or intentions for how you’d like to improve your financial situation. Don’t worry about the how at this point — just focus on the what and the why.

I don’t think it’s realistic for most people to set a goal of going from total scarcity to total abundance. It’s too hard to believe, so the intention will just be overridden by fear and self-doubt. Start with a realistic goal such as stabilizing your financial situation at a certain level you feel is reasonably attainable. As your financial situation improves, you can always set new incremental goals.

When I was broke and in debt, I wrote down all kinds of abundance goals. I focused on my ideal financial situation. Very little changed because I couldn’t see how it was possible to get there, at least not anytime soon. So I stepped back and set much more reasonable goals, ones I could believe were possible from my current starting point. That was very effective. Big goals are great, but if you can’t see how they’re even possible, step back and define a milestone that’s a little closer to you. This will allow you to use the process of Creative Observation to begin seeing your goal as real.

I highly recommend posting your monthly income goal in a place where you’ll see it often. Many years ago Erin and I wrote our income goals on pieces of paper and taped them to our apartment walls. By keeping the goals in front of us at all times, we stayed focused on doing what needed to be done.

For some tips on how to set realistic goals, read The Power of Clarity.


Before you jump into the planning phase, let your goal/intention incubate for a few days. This is especially important if you’re not sure how you’ll achieve your goal. Goals and intentions can be very powerful, but most likely you’ll be the primary vehicle for them to manifest, so be prepared to put in some effort. Allow your goals to manifest through you. Often within a couple days after setting a goal, you’ll begin getting ideas for how to make it work. You may also attract some helpful synchronicities to speed you along your path.

Once you’ve allowed your goal to incubate and have generated some ideas, develop a plan of action. How much planning you need to do depends on you. Some people require a detailed step-by-step plan to get moving. Others only need the general idea, and they’re off and running. Just make sure that no element of your plan requires a mystery step equivalent to, “Magic happens.” Good plans have an aura of inevitability to them: If I work the plan, I’ll eventually reach my goal.

What if you’re too deep in debt, the bills are piling up, you don’t have the skills to generate sufficient income to cover your minimum payments, and your creditors aren’t willing to wait? If you’re forced to conclude that bankruptcy is inevitable, then bankruptcy needs to be part of your plan. If you can’t avoid it, then plan through it. Despite the social stigma, bankruptcy is intended to be a financial recovery tool. Bankruptcy laws help people who’ve made financial mistakes avoid lifetime financial ruin and get back on their feet with a fresh start. Restoring people to productive capacity is to the benefit of all. Over a million Americans file for bankruptcy each year. Bankruptcy filers include Donald Trump, Abraham Lincoln, Walt Disney, Francis Ford Coppola, Richard Harris, Larry King, Stan Lee, Jerry Lewis, Willie Nelson, Mickey Rooney, and Samuel Clemens. Of course you want to avoid this situation if at all possible, but if you do find yourself filing for bankruptcy, visit the non-profit After Bankruptcy Foundation and read every issue of their free newsletter — with their help you can be fully recovered in two years or less. I know that many countries don’t have bankruptcy laws as liberal as the USA (even after the US laws were recently tightened), but do your homework and see if there’s a bankruptcy recovery process in place that you can use. It might be a difficult path, but there’s usually a light at the end of the tunnel. For some people, bankruptcy is a very positive step in the turnaround process.

Sometimes when you’re making plans, you have to consider what sacrifices you’re willing to make. What costs will you cut to reduce your expenses — cable TV, newspaper and magazine subscriptions, coffee, going out to dinner, etc? But cost cutting will only get you so far because you have a hard limit on how low you can go. While cutting costs can make things easier in the short-term, it’s usually much more productive to focus on boosting your income, so unless your expenses are irresponsibly high, I suggest you invest most of your planning attention on the income side.


Once you have a reasonable plan, you must commit to it. If you won’t commit to your plan, you’re just wasting your time.

Saying to yourself, “OK, I’m committing to this,” is Commitment for Dummies. That’s like saying, “OK, we’re married,” as your entire wedding ceremony. If you want to succeed in your financial recovery plans, you need to marry them in a big way.

Similar to getting married or moving in with someone, committing to a goal is a process in itself. There are a couple articles that can help you with that process: Cultivating Burning Desire and Overwhelming Force. Read those articles to learn how to really commit to a goal.

If you want an honest assessment of your commitment level — and if you’re brave enough to hear the answer — tell a friend or family member about your recovery plan, and ask him/her if you seem 100% committed to it. Then bite your tongue while you listen. It’s important that you uncover anything that might hold you back from sticking to your plan. If something comes up, modify your plan to account for it. For example, if your friend says you don’t have the discipline to follow your plan, and you think there’s some truth to that, then integrate building self-discipline into your plan.

You know you’re committed when you can ask yourself, “Is this a done deal?” and answer yes without hesitation. It’s extremely unlikely you’ll be able to do that right off the bat. To be certain your goal will be achieved means you need to have sustainable motivation and self-discipline to follow through. Sustainable is the hard part. You need to reach the point of being in a committed relationship with your goal, so you don’t jump ship when the water gets a little choppy.

Just as it takes time to plan a wedding, it takes time to establish a true commitment to your goal. In many ways it does resemble a marriage. You’re about to embark on a new life, leaving behind your bachelorhood period of financial scarcity. Respect that the process of commitment can take days, weeks, or even longer — it all depends on how badly you cling to your current situation and resist leaving your comfort zone. You’ll know you’re ready when you can finally say, “I do,” and mean it.


Work the plan you’ve established, and never give up.

Perform some action from your financial recovery plan every day, even if it’s just balancing your checkbook to keep your finances in order. This will build positive momentum. You won’t always have the awareness to think about your plan consciously, so it’s important to habitualize the routine actions, so you learn to do them automatically. In the long run, your financial habits will largely determine your results.

One of the best ways to get started on your new plan is to kick it off with a 30-Day Challenge. Use the first 30 days to establish the new habits you’ll need, and break the old habits that no longer serve you. If you view your plan as something you only need to maintain for 30 days, you’ll find it easier to commit to it. By the end of the 30 days, you’ll be able to see some results coming in, which will make it easier for you to commit for the long term.

Wealth Consciousness

Recovering from a negative financial situation is one of the most fascinating challenges of the game of life… and an amazing growth experience. Even though you may feel very down when you’re stuck in debt and can’t pay your bills, the long-term process of improving your financial situation can be extremely rewarding. The best part is that once you figure out how to achieve financial abundance for yourself, you can turn around and share your lessons with others who are still struggling. So you aren’t just solving this problem for yourself — you’re solving it for all the people whose lives you’ll touch. If you fail to overcome this challenge, you’re letting down a lot of people you could have otherwise helped.

Moving from financial scarcity to financial abundance is a process of getting past our limited egos. Financial scarcity is what you attract when you focus on me, me, me — my needs, my problems, my wants. Financial abundance is what you attract when you focus on we, we, we — our needs, our challenges, our potential. The ego is too small a container for wealth. If you want to attract financial abundance, you need a container worthy of it, like contribution or service.

I remember the moment when my financial situation began to turn around for the better. I can trace everything back to a specific shift in my mindset that happened in late 1998. Up until that point, my focus was largely on ego-driven goals, and no matter how hard I worked, my financial situation kept getting worse. Eventually I was so fed up that I abandoned that mindset and replaced it with a new one. I said to myself, “Living just for myself is getting me nowhere. I’m going to concentrate on making a contribution instead. If I go broke, then at least I’ll go broke doing something worthwhile.” Unbeknownst to me at the time, that shift in consciousness would have the long-term effect of turning my financial situation completely around. The problems weren’t corrected overnight, but it became clear after a short time that this was the right path. Now Erin and I earn more income each month than we used to earn in a year. What a difference a seemingly subtle shift in mindset can make…

Overcoming problems merely for your own satisfaction is very weak motivation. Doing something you know will benefit a lot of people is much more sustainably motivating. The more you fall into your ego, turning your personal problems into your whole world, the more you lower your consciousness, shrink your options, and attract scarcity. The more you focus on serving others, even in the midst of financial crisis, the more you raise your consciousness, expand your options, and attract abundance.

This mindset shift is the real solution to financial scarcity. The goal-setting, planning, and action steps are just a facilitator. The reason those steps help is that they shift your consciousness away from fear. When you set goals and make plans, you build certainty that you’re about to move in a more positive direction. This reduces your anxiety and summons courage. And in turn this helps shift your focus away from your ego (which is fear-centered) and towards contribution (which is love-centered).