We sometimes wonder if the stages of grief can translate to other parts of our lives, like our financial situations. Denial, anger, bargaining, depression, acceptance. We may run through them in a matter of seconds, or it could take years. But think about the last time you owed a little more than you could afford, and remember how you reacted. Did you start with denying that you had missed a payment or that the account was past due? Were you angry with yourself or the bank?

It is this bargaining stage that can get us in trouble. In our last post, we talked a little about juggling bills. But juggling bills is just one type of bargaining. Another is counting on a windfall.

Counting your chickens. Financial consultants see it time and time again. A person runs up credit card bills with the expectation that a future windfall will cover the balances. We are not talking about Publisher’s Clearing House sweepstakes entries — “You may already be a winner!” — but about legacies from relatives, payouts from insurance claims, settlements from pending lawsuits or even tax returns.

As one financial expert puts it, the problem with counting your chickens is that you are setting yourself up for failure. You are living beyond your means and spending money you don’t have. If that money does not materialize, your situation will just get worse. Remember the housing bubble? Homeowners, convinced they would reap a tidy profit as their houses increased in value, ended up in foreclosure when the bubble burst.

When it comes to your finances, bargaining can mean negotiating with credit card companies or banks, but it also can mean rationalizing your spending habits. When that ship does not come in, the next step may be depression or, in some cases, we may circle back to denial. It is important not to lose hope, but it is also important to get a good grasp of the situation and look for more realistic solutions.

Source: Bankrate.com, “8 signs you’re flirting with financial ruin,” Claes Bell, accessed online June 17, 2014