At some point during your financial life emergencies will come up. Unexpected expenses – like your car breaking down – happen. Sometimes, through no fault of your own, your regular expenses go up while your salary stays the same. Or, maybe it was a case of human error and you just did some bad math.
Whatever the case, realizing that you’ve lost your savings to an emergency expense or mathematical accident can be a mind numbing feeling. Where you once had a good handle on your savings now seems like a deflated beach ball. Worst of all is the frustration of feeling like you don’t have enough money and have to start over.
We’ve all been there at some point. And if we haven’t yet we certainly will be at some point in our lives. However, emergency expenses and smaller savings don’t mean you have to throw in the towel on your financial future. Below you will find tips on dealing with a savings loss and how to recuperate the money you once had.
It’s very easy to start getting a panicky feeling whenever your finances dip.
When this happens (and let’s face it, we’re human so it will happen) you only need to follow one rule in order for everything else to fall into place: DON’T PANIC.
When you let a feeling of anxiety take over you are only hurting yourself. Giving in to your stress will only make it more difficult for you to take on the necessary action to rebuild your finances. So the next time you find yourself in this position just take a deep breath and calm down. Maybe go for a walk and clear your head so you can come back and tackle the next steps.
Don’t give up on your savings plan.
If you had some savings, or had created an emergency savings account, then you must have had a plan that was working for you. If this is the case and you know how much of your paycheck is going where I urge you not to give up on your current plan. Just because you took an unexpected hit does not mean that you need to stop something that was clearly working for you.
If you don’t have an emergency savings plan, consider setting one up.
Spend less on things you don’t actually need.
Do you really need an upside down non-fat caramel macchiato every single day? Are you eating out on your lunch break every day? Is your bar tab way too high? Take a look at your spending and see where you can make small cuts to start. Remember, even dividends add up. Once you’ve done that maybe you can adjust to making bigger cuts – like getting rid of contracts you don’t need.
Ask yourself how you can make some extra money.
Many financial bloggers will agree that there’s a big difference between saying “I can’t afford it” and “How can I afford it?” and the same principle applies to building up your savings. Rather than saying “I can’t save money” ask yourself “How can I save money?”.
Thanks to the internet you can make extra money doing anything from blogging to being a virtual assistant. If the internet doesn’t work for you than consider dog walking or doing handy work around the neighborhood. The bottom line is that bringing in extra money makes it infinitely easier to build up your savings.
While everyone suffers from a financial hit at some point, there is no need to think that it’s the end of the world. By taking a step back and proactively seeking solutions you can build up your savings again in no time.