How to start over from a financial setback

Let’s face it – sometimes things go wrong. In one swift turn of events, your world can flip upside down, and you need to empty your pockets to get right-side up again. The regular money advice is great, but how are you supposed to recover financially when you’re completely cleaned out?

Whether it’s a massive repair, an inflated bill, or a family emergency, these things happen. Let’s explore some ways to make a comeback after a cash emergency (or a few all at once) empties your savings.

First off – adjust your mindset

When something like this happens, it’s really easy to go into blame mode. You might blame the person or company issuing the bills, the people you might’ve looked to for help, or worse still, you might blame yourself for getting into this position. But that’s a great way to potentially make a bad situation even worse.

Whoever’s to blame, remember this: money comes and goes. You earned the funds, and you managed to save it all. Yes, it sucks that it's gone, but if you did it before, you can start working towards making that money again. Try to focus your energy on growing your cash back rather than mourning what’s lost.

Next – determine your ‘lean spend’

It’s easy to slip straight into the mentality that you can’t afford anything anymore – that every new expenditure is catastrophic. But it’s important to remember that there are some costs that are simply necessary.

Rent or mortgage, utilities, food – these are needs, not wants. You could look at the last few months’ bills to see exactly what you might be spending in the upcoming months. The last thing you need now is more surprises, so prepare yourself for these outgoings in advance. That way, you won’t be tempted to skip an important payment or forgo any of these necessities.

Cut back on spending

This one is obvious and follows from working out your ‘lean spend’. If there is any spending that isn’t essential cut it out – for the next few months, at least. The goal here isn’t to be as miserable as possible, but to immediately start building back up your emergency fund.

If you can pause the gym membership that you rarely use, skip weekend restaurants for a home-cooked meal, and put that shopping trip on hold, you could send that cash to a dedicated savings account to form a much-needed buffer for any future emergencies.

Safety first – fill your emergency fund

Though we touched on it in the last point, this is important enough that it bears repeating. Even though it’s a hard pill to swallow when your savings are wiped out – it’s fortunate that you had savings to begin with. Imagine how much more stressful it would be if you didn’t have the cash to save the day.

So, prioritising and rebuilding your emergency fund is a smart thing to focus on now. Remember, you want to aim for 3–6 months’ worth of living expenses.

Make a ‘lose it list’

Budgets are all well and good, but some months are just pricier than others. Whether it’s hefty quarterly bills or a last-minute birthday gift, we can sometimes find ourselves over our spending budget. For these times, a ‘lose it list’ makes cutting back almost automatic.

Your ‘lose it list’ is comprised of the expenses that are nice to have, but that can be first on the chopping block in a particularly expensive month or payment cycle. Maybe it’s the box of doughnuts you regularly pick up for the team, or a trip to the beauty salon. If it's just for one month, what can you do without to keep your finances on track?

Losing anything that’s been carefully built and protected is a hard blow – especially when it comes to our savings. However, if you can focus on the rebuild rather than on the loss, you’re already on the road to recovery.

Looking for somewhere to keep your savings? Bank with Chase and you can open a saver account. Start saving with as little as you like, and we’ll calculate your interest daily and pay it monthly.

18+, UK residents. A Chase current account is required to open a saver account.

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