Even when you think you’re doing everything right financially, things can still go wrong. Job loss, divorce, and illness can all wreak havoc on your finances, as can car accidents, natural disasters, and—well, you get the idea.
What do you do if an unexpected financial emergency costs you everything in your emergency fund and more? How do you bounce back from a financial setback, whether you get rear-ended, get divorced, or find yourself in the middle of yet another recession?
At Kiplinger, Chartered Financial Consultant® Mike Piershale suggests taking action right away:
Start by facing the reality of your situation. This may be easier said than done, especially when you’d rather avoid the anxiety and guilt from facing up to the reality that you are not financially prepared.
From there, Piershale offers what you might consider the Standard Financial Advice:
- Make a budget. Cut every unnecessary expense, if necessary.
- Figure out how to increase your income. Get a job if you don’t have one; get a side hustle if you do.
- Begin putting as much money as possible towards whatever area of your finances was hit hardest by the setback, whether you’re paying off debt, rebuilding your emergency fund, or trying to hit your retirement savings goal.
This is good advice, of course—but I wanted to get a little more specific, so I put together a collection of the best Lifehacker advice on how to handle some of the most common financial setbacks.
Take a look and share your thoughts. If you’ve successfully rebuilt your finances after an unexpected setback, what advice do you have for other people in similar situations?