7 Ways to Bounce Back From Financial Disaster

These are uncertain times. Jobs aren’t as dependable as they once were, and a serious illness can devastate your finances.

Even people who are well-prepared can make mistakes or encounter misfortunes that ruin their finances. It can happen to the best of us.

If it does, remember that this is not the end. Instead, it is the beginning of something new. People bounce back from disaster all the time.

Following are seven tips to help you regain your financial footing.

1. Accentuate the positive

Corny? Maybe a little. But make no mistake: Keeping your attitude upbeat really works. So does staying in the present. You’ll want to learn from your mistakes, but rehashing them endlessly keeps you from moving on.

In the same way, worrying about the future robs you of time and energy.

2. Seize control

Learning precisely where you stand in a crisis is painful. But there’s also relief in knowing what you’re up against. You can’t dig out until you know how deep your hole is. So, take the following steps:

  • Get a grip by tracking your expenses.
  • List all the bills you have to pay — rent or mortgage, utilities, insurance, groceries, car payment, gas and whatever else you need to cover to keep going. Add them up. This is the basic amount you need each month. Put your wants aside for the moment.
  • Make a stripped-down spending plan. For now, include crucial bills only.

3. Get professional help

Pride has its uses, but paralyzing you isn’t one of them. If you hit obstacles you can’t get around, don’t waste time being stuck. Reach out to people with the expertise you need.

A trustworthy credit counselor, for instance, can negotiate lower rates and a debt repayment plan with your creditors, taking bill collectors and pressure off your back.

Find accredited credit counselors. Their advice is free, and debt repayment plans should not cost more than $50. Get any agreement in writing before paying a cent. Don’t hand over money before you’ve received services.

4. Beware of crooks

Panicked people in financial distress are a juicy target for fraudsters. Credit repair schemes are notorious for fraud. Start now to repair your credit yourself — for free.

When it comes to credit problems, time is your friend. In seven to 10 years, even negatives as severe as foreclosure and bankruptcy drop off your credit reports.

5. Exercise

Exercise has a surprising ability to keep your mood up, energize and focus you, and move you forward. In this TED Talk video, author and psychiatrist John Ratey explains how “physical exercise turns our brains on.”

6. Safeguard your housing

Call your landlord if you’re renting, and ask if you can make smaller payments for a few months until you can get back on your feet.

If you are a homeowner, call the mortgage company right away. Don’t wait to get into trouble. Most lenders have foreclosure prevention programs to help homeowners in crisis. The Federal Reserve also explains how to proceed with a lender.

7. Find additional income

While figuring out where life will take you next, you’re going to need money to keep the furnace on and groceries in the fridge. Tips for generating income include:

  • Check with local schools to ask how to become a substitute teacher. Not all schools require teaching credentials.
  • Launch a pet-sitting or pet-walking business.
  • Start working from home. Get ideas by reading “10 Tips for Finding Legitimate Work From Home.”
  • Consider house-sitting. Keep your rates competitive to get your business off the ground. Or do it free to get free housing. Here are three sites that offer to connect house-sitters with homeowners:
  • Ask at schools about jobs as a bus driver, temporary janitor or kitchen aide.
  • If you’re handy, set yourself up in business doing home repairs. Get cards printed up and post them on bulletin boards at grocery stores, hardware stores and community centers. Put your name out there for free on your local Craigslist (under “services”).
  • Here are 50 more ways to scare up cash and “8 Weird Ways to Make Extra Money.”

Share your experiences of bouncing back from a crisis by discussing them in our Forums. It’s a place where you can swap questions and answers on money-related matters, life hacks and ingenious ways to save.

Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.

Read Next
Could You Give Up These 7 Expenses to Save Thousands of Dollars a Year?
Could You Give Up These 7 Expenses to Save Thousands of Dollars a Year?

You could save more than $30,000 by setting aside these costly expenses for just one year.

7 Reasons Not to Move When You Retire
7 Reasons Not to Move When You Retire

Sunny skies and warm breezes sound great. But in reality, you might be better off retiring closer to home.

10 Bad Money Habits That Are Robbing You Blind
10 Bad Money Habits That Are Robbing You Blind

Here’s how to change those bad behaviors.

7 Things That Prove Cheaper Isn’t Always Better
7 Things That Prove Cheaper Isn’t Always Better

These purchases can end up costing you more if you try to go the cheap route.

How to Fix 6 Common Retirement Mistakes
How to Fix 6 Common Retirement Mistakes

Here’s how to strengthen your nest egg before or even during your golden years so these missteps don’t ruin your retirement.

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Most Popular
7 Kirkland Signature Items to Avoid at Costco
7 Kirkland Signature Items to Avoid at Costco

Even if it seems you save a bundle buying Costco’s Kirkland Signature brand products, they may not be the bargain they appear to be.

If You Find This Thrift Shopping, Buy It
If You Find This Thrift Shopping, Buy It

Whether you resell it for a big profit or add it to your own wardrobe, this type of clothing is a hidden steal.

3 Ways to Get Microsoft Office for Free
3 Ways to Get Microsoft Office for Free

With a little ingenuity, you can cut Office costs to zero.

9 Things You’ll Never See at Costco Again
9 Things You’ll Never See at Costco Again

The warehouse store offers an enormous selection, but these products aren’t coming back.

This Surprise Factor Can Raise Your Risk of Dementia
This Surprise Factor Can Raise Your Risk of Dementia

Nearly half of U.S. residents may face this threat.

Organize Your Home With These 10 Thrift Store Finds
Organize Your Home With These 10 Thrift Store Finds

Resolve to be clutter-free in 2021 with these secondhand purchases.

11 Laws You Could Be Breaking Without Knowing It
11 Laws You Could Be Breaking Without Knowing It

Seriously? Fibbing about the weather is a crime? This and other little-known legal traps await the unwary.

Is This Treatable Condition Causing Your High Blood Pressure?
Is This Treatable Condition Causing Your High Blood Pressure?

Researchers say too many doctors are overlooking this potential source of hypertension.

13 Things Seniors Can Get for Free — or Almost Free
13 Things Seniors Can Get for Free — or Almost Free

There are many ways to get cheap or free services and goods after reaching a certain age.

These Are the 3 Best Used Cars You Can Buy
These Are the 3 Best Used Cars You Can Buy

These vehicles boast reliability, safety and long-lasting value.

Taking a Multivitamin? Here’s Why You Should Reconsider
Taking a Multivitamin? Here’s Why You Should Reconsider

A new study has bad news for the millions of Americans who spend money on multivitamins.

Am I Eligible for My Mother’s Social Security Benefit?
Am I Eligible for My Mother’s Social Security Benefit?

Can an adult daughter tap into her late mother’s benefit?

21 Items to Cut From Your Budget That You Won’t Even Miss
21 Items to Cut From Your Budget That You Won’t Even Miss

Start off the new year by implementing these small-but-smart savings strategies. They’ll soon add up.

Internet Providers Can’t Charge You for This Anymore
Internet Providers Can’t Charge You for This Anymore

Starting this month, your ISP no longer can bill you for this fee.

15 Painless Ways You Can Cut Costs in 2021
15 Painless Ways You Can Cut Costs in 2021

Follow these tips to save, so you’ll have money for things that really matter.

9 Small Expenses That Are Bleeding Your Budget Dry
9 Small Expenses That Are Bleeding Your Budget Dry

Keep more of future paychecks by eliminating these budget-busting unnecessary expenses.

Prepare to Pay More for These 31 Drugs in 2021
Prepare to Pay More for These 31 Drugs in 2021

More than 700 prescription medications have seen price hikes so far this year. Here’s a look at the worst.

5 States Lowering Taxes This Year — and 2 Raising Them
5 States Lowering Taxes This Year — and 2 Raising Them

State personal income tax rates, brackets and deductions just changed in these places.

20 Amazon Purchases We Loved in 2020
20 Amazon Purchases We Loved in 2020

These practical products made everyday life a little easier last year — and will do so in the new year, too.

View More Articles

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Add a Comment

Our Policy: We welcome relevant and respectful comments in order to foster healthy and informative discussions. All other comments may be removed. Comments with links are automatically held for moderation.