Making a Financial Comeback After a Setback

Financial setbackSo you first messed up your finances in your 20s, then made matters worse in your 30s. But now you're ready to act your age, get serious about the business of fixing your credit and start writing your financial comeback story, right?

Whether you went on a few too many credit card-fueled shopping sprees, missed a series of payments that damaged your credit report or lost your job for a prolonged period of time, there are still ways to bounce back and take control of your financial future.

It's all about getting back to financial basics and creating a realistic plan that will help you achieve your financial goals.Here are some things you can do right away to make a financial comeback after a setback:

Check your credit report.

Order your credit report from, and verify that all the information listed on there is accurate. Don't fall into the trap that so many people do and live in fear about your credit report. Unfortunately, according to the National Foundation for Credit Counseling, about two-thirds of adults in the U.S. haven't seen their credit reports in the past year.

You won't know what's in your files with Equifax, Experian and TransUnion until you check those reports. So just go ahead and do it. If you find errors in your credit reports, dispute credit mistakes right away.

Track your spending.

If maintaining a budget hasn't been your forte, now is a great time to start tracking your income and expenses. Don't look at budgeting as a necessary evil. Instead, focus on the benefits it offers: knowledge of where your money is going, better cash flow management and peace of mind as you stop living paycheck to paycheck.

Start living on a cash basis.

One of the most powerful ways to get a handle on your finances – and stop living beyond your means – is to start living on a cash basis. Simply put, this means that if you can't pay cash for something, you don't buy it. Living on cash helps to break the cycle of dependency on credit cards. It also makes you far more conscientious about your spending habits, since it's a lot tougher to part with cash than it is to simply whip out a credit card to pay for something.

Create your "rainy day" fund.

If you've struggled with finances in the past and never seemed to be able to get ahead, one reason may be that you lack a "rainy day" fund. This is a small savings account, usually between $500 and $1,500, that can help you deal with the unexpected things that pop up in life – like the flat tire on your car or the leaky toilet that requires you a visit from a plumber.

Without a rainy day fund, you're forced to constantly use credit to pay for short-term or one-time emergencies. A better strategy is to set up a rainy day fund, and make small, regular contributions to it in order to properly prepare for those inevitable setbacks that happen to all of us.

Work on building an emergency fund.

In addition to creating your "rainy day" fund, you should also work on amassing a more sizable emergency fund. This savings account should be between $3,000 and $10,000 in size – or even larger.

Unlike a rainy day fund, which helps you recover from a one-time event, the purpose of an emergency fund is to tide you over during a long-term personal or financial crisis, such as when you get a pink slip or go through a divorce.

Therefore, an adequate emergency fund will have enough money in it to cover all your monthly bills for a period of at least three but preferably six months. To accumulate this fund takes time. So set a goal of saving either a percentage of your paycheck or a base amount that's non-negotiable – and insist on making this savings a priority so you're not spending everything that you earn. Your hard work will pay off if you ever find yourself in need of cash to cover an unplanned, long-term setback in your life.

Get financial help.

If you want some professional advice on how to manage your current assets and finances, set up a meeting with a financial planner or a financial advisor. Experts from the Financial Planning Association and the National Association of Personal Financial Advisors are good starting points. Professionals from these reputable groups can take an objective look at your financial situation, help you set some goals and create a plan that will help you achieve your financial goals after your setbacks.

If budgeting blunders, credit issues and debt problems are plaguing you, turn to a trustworthy non-profit credit-counseling agency, such as the National Foundation for Debt Management.

Whatever setbacks or embarrassing money issues you've experienced in the past, those personal or economic challenges don't have to be the final chapter in your life story. By getting back to financial basics, you can write a happy ending for yourself and make a financial comeback of which you can be proud.

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helped a lot. I started to use my credit card, and I paid off my balances each month. The next thing I was able to do was to get a small car loan. Those two things were what started to get me on track. It's been three years now, and my credit is beginning to look really good now.

August 03 2012 at 4:04 PM Report abuse rate up rate down Reply

Do yourself a "HUGE FAVOR" and carefully read this:

The 21st Century Act: Final Amendments to Regulation CC Section:
"Prohibits" reimbursement of Credit, Loan, and Finance Balances to a "Bank Entity" leaving only "Nonbank Consumers" able to receive reimbursement, as specified on Pages 85 and 86.

The 21st Century Act states on pg. 85 and 86 that "Only Nonbank Consumers can suffer losses and File for
Re-credit or Re-claim on any Accounts under the Federal Reserve System" also “Any Second or Third Party Presenters utilizing a Banks Documentation, Contracts and/or Agreements to seek Claims shall be considered to be that Bank under the Rules and Regulations”, the Expanded Definitions also includes Credit Cards and Home Equity Lines of Credit.
Also on Pages 100 and 101 "In any Financial Claims the Indemifying Bank (Parent Bank) must be Identified".

(Left-Click to Search Link)
21st Century Act: Final Amendments to Regulation CC

This Federal Law signed January 1, 2006 makes it "Fraudulent" and therefore "Illegal" for the 3 Major Personal Credit Reporting Agencies: Equifax, Experian, and TrasUnion to allow the Banks and the Banks "Third Party Presenters" to place any claim of "Negative" or "Potentially Negative" Accounts on your Personal Credit Based upon the fact that they have no "Legal Grounds or Claim" to the Money.

This is an "Unfair Practice" that diminishes our Financial ability to support ourselves and adversely affects our ability to gain work in many areas which breaks "Antitrust Laws".

These Rules also back claims of: "Aiding and Abetting" Racketeering and Extortion (of Finance Accounts and Personal Credit Reports), Pandering (of Credit and Loan Accounts, and Conspiracy to wit), Theft, Fraud, Federal Mail Fraud, and Telephone Harassment. Also "Threatening of the U.S. Financial Infrastructure", which is a "Capital Crime".

In order to engage the Federal Trade Commission to act against this injustice we must File many Claims, as these Reports must be Filed by a large number of people in order for the Federal Trade Commission to pursue
"Legal Action".

(Left -Click to engage Email Address)

This is way easier than "Occupying Wall Street"!

March 11 2012 at 4:49 PM Report abuse rate up rate down Reply
Lucas Hartmann

Hey, thanks so much for the tips on how to make a financial comeback. I've been a little stuck under a mound of debt for a few years, but thanks to you I'm slowly working my way up. I'm going to see a non profit credit counseling ( guy tomorrow to see if I can work things out a little faster. Thanks again!

August 09 2011 at 11:00 AM Report abuse rate up rate down Reply