In foreclosure, negative emotions can shackle and discourage you from taking action to fight the situation at hand. While government relief–as we’ve all seen all over the news these past few days and months–may make up part of the “help mix” coming your way, there may be other avenues for you to take.

In the meantime, I want you to understand how negative emotions can sink your ship. When you see these problems possibly coming your way, you can perhaps do something about them.

1. Yelling your way to the poorhouse: Unless you stop playing the blame game, the crisis can continue to escalate, until nothing gets done and everyone loses. You can end up losing your home and all the equity in it, not to mention your relationships with the people who matter most to you — your family and friends.
2. Who’s really to blame? If you find yourself blaming a family member, you need to realize that what’s past is past and that you’re both responsible for correcting the situation moving forward. The only thoughts you should have about the past are that you won’t repeat it.
3. Becoming paralyzed with fear: A defeatist attitude can be your worst enemy. It can cause you to lose everything unnecessarily. By keeping your emotions and fears in check, and taking a more proactive approach, you may be able to significantly improve the outcome.
4. Shaming yourself out of asking for help: “Loser, you’ve always been a loser, and soon it’s going to be official. In a matter of days or weeks everyone in your neighborhood and your family is going to know that you failed to pay your bills and shelter your family.” If that’s what you’re thinking, stop right there. Plenty of people who’ve been far more successful than you have suffered greater failures. The only real losers are those who let others and their negative emotions control the outcome. As long as you do your best to achieve the optimal outcome, you can hold your head high.

Remember: It’s important to involve family members in positive and productive ways. Never make and implement a plan without informing your significant other, and never assign all the responsibility to one partner. The more you and your mate sacrifice and work together, the more successful the plan will be.

My recent book, Foreclosure Self-Defense For Dummies, will take you all the way through the above topics, and more, and help you regain emotional and financial composure.

My last few blog entries have focused on rebuilding your life after foreclosure. In today’s post, I’ll show you how to assess your current situation and set a steady course (financially speaking), so you can more effectively deal with coming out of foreclosure without making matters worse.
Here’s exactly what we’ll cover (again, from my book, Foreclosure Self-Defense For Dummies):

• Finding out how much you’re worth
• Calculating your monthly income and expenses
• Checking your credit report
• Searching for other sources of cash
• Holding a steady course.

1. Calculating Your Net Worthiness: If you sold everything you currently own and paid off all your debts, how much money would you have? That’s your net worth, and when you’re facing foreclosure, that amount is key in assessing your options. One of the first questions your lenders or future lenders are going to ask you is “What’s your net worth?” So grab a pencil and a piece of paper, and do the math. Officially, the equation goes like this: Net Worth = What You Own – What You Owe
2. Taking the Pulse of Your Current Cash Flow: Imagine your house is a big bucket with a garden hose pouring water into it from the top and a spigot at the bottom where the water flows out. The flow of water into and out of the house is like your cash flow. As long as cash flows in fast enough to keep up with the cash that’s flowing out, your finances are stable. If more cash flows in than flows out, you can sock away some money. If more cash flows out than flows in, however, you begin losing your financial footing. Now that you know what cash flow is, you know enough to realize the importance of a budget. To establish a healthy, positive cash flow, your household needs to be bringing in more money (from wages, salaries, bonuses, odd jobs, and so on) than it’s spending (on groceries, utilities, mortgage and car payments, gas, and so on). The formula for calculating cash flow is fairly easy to remember: Cash Flow = Income – Expenses
3. Checking Out Your Credit Report: Access to loans can often buy you time and enable you to restructure payments in such a way as to make them more affordable. To gain access to loans, however, you need a a fairly clean credit report. If you apply for a loan, one of the first things a loan officer is going to look at is your credit history, so make sure yours is accurate and do what you can to remove any blemishes and boost your credit score. Remember: No irregularity is too small to correct.
4. Hitting up Relatives for Gifts or Loans: If you need a one-time cash infusion to set you on the straight and narrow, consider asking a relative for assistance. Tread carefully when borrowing from relatives — you want to make sure that whatever arrangement you agree to doesn’t jeopardize your relationship. Treat their money better than you would treat your own, and pay it back as soon as possible.
5. Keeping a Bad Situation from Getting Worse: As soon as you begin to sense your financial situation has taken a turn for the worse, you and the rest of your household need to work together to prevent the problem from getting any worse. The situation is as though you’re in a boat that’s taking on water. Before you start bailing out the water, you want to find the holes and plug them.

In Part 1 of this blog entry, I pointed out that everywhere you look on the Internet, everyone’s concerned about how they’re going to make it through this credit situation of ours.

With that simple thought in mind, it’s always important to remember  that true failures in life occur only when people stop trying. As long as you’re alive, you have opportunity. If you managed to keep yourself going and/or your family together through these trying times, you have even more to start out with and keep you going. Some of the most successful people I know were baptized by fire.

Here are some more tips from my recent book, Foreclosure Self-Defense For Dummies, that speak directly rebuilding your life post-foreclosure:

1. Downsize to More Affordable Accommodations: Over the past 20 years or so, families have shrunk while houses have expanded. In the old days, a family of six managed just fine in a rinky-dink three-bedroom house. A second bathroom was considered a luxury. In modern homes, everyone has his or her own bedroom and each person shares a bathroom with, at the most, one other person. You don’t need much to live. Having a roof over your head, a place to sleep, a kitchen in which to cook meals, and a shared bathroom is sufficient for most families. It may feel a little cramped, but you can certainly get by until better days return.
2. Make a Lateral Move:  People often feel like failures when they’re not constantly ascending the ladder of success. You don’t need to constantly strive for promotions. If you’re good at what you do and you’ve simply lost your job, don’t worry about finding something better. Look for something that can bring in about the same amount of income or even less, if you’re able to make some lifestyle adjustments.
3. Pep Up Your Pocketbook:  You downsized, slashed your budget, and are holding down a fairly steady job, but you still can’t make ends meet. What do you do? Well, you have to find another source of income. You have to earn more. Here are some options:

• Pick up some overtime.
• Take on side jobs.
• Work shifts that offer premium or time bonuses.
• Moonlight by taking on a second job.
• Put other family members to work to cover some expenses.

4. Healing Your Bruised Credit:  Although cutting up all your credit cards and paying for everything with cash is certainly a possibility, you need to think about rebuilding your credit for the long haul — especially if you’re thinking about buying a house again someday. Take some positive steps to heal your bruised credit:

• Get into the habit of paying all your bills on time every time.
• Apply for a credit card if you don’t have one (use the new card to pay for necessities only, and then pay off the balance in full when you receive your monthly statement).
• Keep tabs on your credit report.
• Start saving a little every month and socking the money away in a savings account.

5. Get Back into the Game of Life:  When you suffer a series of minor setbacks or one big setback, you may feel as though life has just knocked the stuffing out of you. Perhaps you feel as though, no matter what you do, you can never get the break you need to make it. However bad you feel, you need to wake up every day, get out there, and do it. Otherwise, you’ll never get the big break you’ve been waiting for.

Recent articles on rebuilding or reestablishing your credit after foreclosure are popular and can be in all corners of the Internet. But what about rebuilding your life after foreclosure?

“Life goes on” may sound like a cliche, but no matter how devastating the experience, it’s true: Life does goes on. How well it goes on for you and your family hinges a great deal on how well you prepared for and controlled the foreclosure fallout, as well as on your financial resources and emotional frame of mind.

Here are some tips from one of my latest books, Foreclosure Self-Defense For Dummies, that speak directly to rebuilding your life post-foreclosure. In Part II of this post, which will appear later this week, I’ll share five additional ways to rebuild your life after foreclosure.

1. Reboot: As you run and then exit programs on a computer, those programs are not completely removed from your computer’s memory. Over time, the computer’s memory is overrun with errant instructions that slow it down and cause all sorts of mysterious problems. Rebooting the computer by shutting it down and restarting it often resolves the problem. The same is true in life. Sometimes a fresh start is all you really need to get back on track. Leave all the bad stuff in the past, especially any mistakes that you or your partner/spouse may have made leading up to the foreclosure. You can’t change the past. You can only make adjustments to ensure that history doesn’t repeat itself.
2. Swear off the same mistakes: If some human foible led to your foreclosure — overspending, not working hard enough, gambling, substance abuse, or some other weakness — own up to it and then make a commitment to change. The same applies to any errors of judgment you may have made, such as making your partner/spouse solely responsible for the finances or letting a loan officer convince you that you could “afford more house.”
3. Lean on family and friends: After foreclosure, whether you managed to keep your home or ended up losing it, friends and family can give you the support you need to get back on your feet:
   • Encouragement and love to keep going.
   • Financial support in the form of loans or a job.
   • Watching your children, so you can take on an extra job.
   • Driving you to work and back if you have no reliable mode of transportation.
   • A temporary place to live.
4. Move on, literally: The United States is a big country and jobs often move from one state to another. Consider moving to wherever the best- paying jobs are. Move to where the housing is cheapest. Move to where the schools are excellent and free. Whatever your most pressing needs are, research to find areas that are best suited to meet those needs. The loss of a job in Ohio may be just the opportunity you need to pick up and move to North Carolina.
5. Slash expenses and your cost of living: Chances are good that when you first set out to seek your fortune, your standard of living was fairly low and you needed very little to survive. You lived frugally, had plenty of time, and probably enjoyed life more than ever. What’s to stop you from doing that again? Do you really need a big house and all the trappings of “success?” Most people don’t. Society has sold us a bill of goods, making most of us believe that happiness hinges on owning things.

Check back later in the week for Part II of this important topic.