14 Tips for Overcoming Financial Setbacks
We all experience financial disappointments, setbacks, and struggles. Setbacks can occur for many reasons, including an unexpected rise in necessity costs, a divorce or relationship ending, an illness, or unemployment. What matters is how you respond and overcome.
This year, two-thirds of Canadian adults will suffer a financial setback. The effects can be devastating and, in some cases, last a long time. There is hope and a way to rise above. Here are some tips for overcoming financial setbacks to remember.
Be Proactive
You can’t run from financial setbacks. If they’re not resolved now, you’ll have to deal with them in the future. Don’t avoid them. Tackle your finances without fear and make an intelligent plan.
Make Sure the Financial Setback Is Over
You can only move forward once the event is complete. If your financial setback is tied to a divorce or ongoing situation, do what you can to wrap it up so you can start healing and moving forward.
Focus On the Comeback
Don’t be embarrassed. Don’t bully yourself. Don’t let a financial setback bully or shame you. Instead, focus on what you can do today to get out of it. Start focusing on what you can do to prepare for a comeback.
Commit to Making a Monthly Budget
Download an online budgeting tool, an app, or simply a paper, pen, and calculator. Write down your sources of income and expenses. Consider ways to increase your income or cut costs to craft the most efficient budget possible as you recover from a setback.
Be Cautious About Tapping into Savings
If you have savings, be cautious about withdrawing money or liquidating investments for cash. Both could have tax implications and long-term impacts that you must still plan for. Unless an advisor tells you otherwise, leave your savings alone.
Use Payday Loans for Temporary Security
Any time you need a little money to cover you until your next paycheque, payday loans Canada can help. They’re easy to arrange and approve, and you can get your money instantly. In a pinch or an emergency, they’re an excellent resource to have on hand and will ensure you always have access to cash.
Ways to Increase Your Income
There is no magic way to increase your income without more work. Ask for a raise in your existing position. Ask if there is overtime available at your current employer. Apply for another position at your company. Get a second part-time job on the side. Start a side hustle to make a few bucks. Think of similar ways to help you.
Cut Your Expenses Where It Makes Sense
Even if you can’t create more income immediately, consider ways to cut costs. Choose a less expensive internet or TV package. Eliminate fast food trips. Buy your groceries at a better price. Move in a roommate to cut down on rent or mortgage costs. Find a few ways to shave off some money and reinvest it elsewhere.
Know the Spending You Can’t Cut
Cutting expenses is important but be careful not to reduce essential spending. Don’t cut it if you enjoy the gym or have a nutrition plan to follow, which increases your ability to work and get things done. Don’t irritate yourself by reducing expenses that benefit you.
Start Saving with an Emergency Fund
An emergency fund should cover six months’ expenses. Start saving for it immediately. Even if you don’t make a lot of money, define a percentage you can spare from every paycheque, even if it’s only 1%. Take that amount and deposit it into a savings account. That emergency fund can be used if you have a financial setback like this again.
Start Buying Used and Not New
When you need something – clothes, kitchen appliances, furniture – always shop used and don’t buy expensive. Check out thrift stores, Facebook Marketplace, and online ads. For books and magazines, get a library card. For activities, look at free things to do where you’re living and do them.
Come Up with a Debt Repayment Plan
Look at your debts. Write down the amounts and interest rates. See if you can negotiate a debt consolidation loan. Look at ways to consolidate, reduce interest, and eliminate debt. In times of financial setbacks, it’s wise to incorporate a debt repayment plan while creating your monthly budget.
Meet with a Financial Advisor
Either through your bank, credit union, or other means, consider discussing your setback with a financial advisor. If you need assistance or want to manage your income to make the best use of it, they can recommend certain products to help you manage your finances.
Reward Yourself
Pick a way to reward yourself when you’ve done a good job with your budget. It could be your favourite restaurant meal, going to a movie, or buying an exciting video game. Whatever it is, reward yourself when progress has been made without penalizing yourself financially.
Last Updated on May 7, 2025
