How to Recover From a Financial Setback | Cleveland Bradley County Teachers Federal Credit Union

No matter how much we plan, budget and save, financial setbacks can still happen when we least expect it. There can be many reasons why you may have to spend money when you were not expecting to, such as a pay cut, animal emergency or unexpected doctor’s visit. While these things are always a bummer, they can also help you and your budget come back stronger.

The most important thing in the wake of an unexpected expense? Do not panic! Big life changes and sudden expenses can be frightening, but keeping your emotions in check and taking a practical approach to recovery is key.

Tips for Recovering in the Wake of a Financial Setback

Make a recovery plan. Just like you have a financial plan to keep track of your usual cash flow, it may be helpful to establish a recovery plan to help you get back to a spot where you are comfortable. First, identify your goals—maybe you want to save back what you lost or want to build up your emergency fund further so you are less impacted by future emergencies. Second, figure out what needs to happen to get you there, such as saving a certain amount each month or hitting a target number in your account. From there, you can take actionable steps to make it happen!

See what you can cut temporarily. If you already have a tight budget, you likely do not have many areas you can cut to help your finances recover from an emergency—but there may be things you can cut temporarily until you have time to recoup some of the savings you have lost. Things like multiple streaming services or the best phone plan can be a luxury, but if you are trying to build your savings back up, you may be able to scale back for a few months to help you save.

Celebrate your successes. Losing money you were not expecting to can be deflating, so as you start to recoup your losses, it is important to acknowledge your well-earned accomplishments! Make sure to celebrate when you reach milestones toward recovery—but avoid celebrating in a way that might set your budget back even more!

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