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Repeat and Try Again: Five Steps to Financial Recovery after Personal Setback

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Personal Finance instructor. Advisor to the penny-saver and frugal-minded friends.


As life happens, setbacks occur: death in the family, job loss, car accidents, house fire, sickness, tornado, etc. Cambridge Dictionary describes setbacks as “something that happens that delays or prevents a process from developing”4. Setbacks are simply problems, interruptions or delays that obstruct progress. Setbacks consist of no advance warning, no prescription for quick recovery, no “handle-with-caution” label and no impossibility of expediting future failure. Setbacks kind of just show up uninvited! Yet still, we learn time and time again that setbacks are not the end of a rope, but the beginning of a new lifeline.

How individuals approach life’s setbacks - as threats or opportunities, cautionary tales or blessings-in-disguise - determine how well we collectively sustain our lives overall. Personal handling of setbacks impacts each individual psychologically, biologically and socially. Adjusting our lenses from negative to positive perspectives of setbacks evades the power of loss, stimulates humans’ will to survive, mobilizes community, embraces the challenge and triumphs! CNBC’s Chris Collins describes 8 mental tips for overcoming setbacks.2

  1. Keep pushing ahead and adjust to new situations
  2. Show up to perform, helping others along the way
  3. Focus on those life’s activities you can navigate
  4. Have faith that everything will work out and stay diligent
  5. Find and surround yourself with others that encourage you
  6. Handle or embrace the challenge
  7. Don’t make failure an option for your life at any time
  8. Accept responsibilities to change your situation at any given time

Such helpful tips apply to different types of setbacks as well - i.e., recovering from addiction, rebuilding your home after a fire, returning home after imprisonment, pregnancy after losing an infant, finishing school after dropping out, etc. Collin’s list endeavors to impassion and motivate individual’s progress regardless of setbacks. The message is clear: Stay focused, remain diligent and overcome setbacks. Forbes’ psychologist, Dr. Brett Steenbarger, questioned how to help others recover from occurrences that are quite frankly unrecoverable.10 In 2018, suicide, after all, was a common result from various types of setbacks.3 My simple response: “Try”.


For some, on the other hand, the road back is either not paved with gold or not paved at all. While overcoming setbacks is challenging, financially recovering after personal setback is a struggle of its own. The journey may be treacherous at times, but pace your steps. Rebuilding your finances is a step-by-step process. Consider these five steps or phases for rebuilding your finances after destructive setbacks.

  • Obtain Support and Assistance
  • Pursue Employment
  • Save Money
  • Invest in Your Future
  • Diversify to Grow


Obtain Support and Assistance

“Everyone needs someone sometimes”, surely you’ve heard this expression. Ironically, getting someone or some organization to facilitate your road to recovery is not as easy as conveyed. If you’re fortunate, a spouse, family member or friend will graciously accept sacrifices of time, housing, transportation, food, money and effort to help you get back up on your feet again. However, if family and network support is not readily available, you may consider local organizations, such as the Salvation Army8, Goodwill5, hospitals, shelters, churches, libraries, community centers or soup kitchens. Local governments and politicians may likewise provide citizens with resources or information for humanitarian relief. Returning to college is also an effective segue into financial recovery, as colleges provide housing, meal plans, resources and equipment necessary for learning. Higher education may be financed with temporary loans for repayment in the future.7 You may also consider bartering employment for housing and support as necessary. For example, you may provide child care services, cleaning or repairs in exchange for a small room rental, groceries or transportation. Similar types of community lifelines provide resources and information to directly assist the beginning of your financial recovery process.

Pursue Employment

Once you have secured housing, food and transportation, you may then pursue new employment opportunities. Ease your way back into the workforce after a long hiatus. Apply for lower-level, re-entry jobs, such as a cashier, construction laborer, front desk agent or delivery driver. Depending on how long you were out of work, economic, social and technical changes will impact your resume’s marketability. Develop your resume while employed at the re-entry job temporarily. Learn new skills and technologies, update yourself with economic and social news headlines impacting the workforce, build your professional network and practice current workplace etiquette. Pursue employment advancement opportunities such as internships, volunteering, educational courses, online training, certifications, etc. As your resume’s demand value to employers increases, update the level your job search as well. In 2020, jobs requiring non-tech skills of critical thinking, active learning or decision-making pays over $200,000 annually on average.6 Search consistently and frequently for new job opportunities. Interview professionally. Reach out to your current employer about opportunities to grow within the company. Upon locating your new, permanent employment position, you may then focus on stabilizing your finances long-term.

Save Money

While working temporary jobs, develop your resume to further increase earning potential. Effective ways to safely maximize income along with full-time employment include babysitting on the weekends, blogging online, taxi or delivery services, cleaning homes and offices, plowing snow, etc. If your home has an extra bedroom to spare, you may rent the room out to a close friend for additional income. After paying your monthly living expenses, allocate a portion of your increasing income to a high-yield savings account or certificate of deposit (CD). Ally Bank, for example, offers a 1% yield.1 Minimizing monthly and annual costs is integral for saving funds and increasing savings over time.

Multiple strategies exist for minimizing regular costs. Savvy consumers continually shop around for inexpensive products and services. For example, grocery stores offer regular discounts and savings on items when using rewards and loyalty cards. Food pantries, farming, soup kitchens and food rescue provides meals for days or weeks. Eliminate regular expenses of gyms, dry cleaners and beauticians by exercising, steam cleaning and grooming at home. Entertainment costs may be reduced by watching favorite movies or listening to music online. Carpooling and use of public transportation reduces auto-related costs.

Invest in Your Future

As your savings increase, begin investing a portion of savings into your long-term stability and future. Such investments opportunities exponentially increase your total assets accumulated. Investing does not consist only of stock portfolios, bonds, commodities or mutual funds. Merriam-Webster8 defines investing as “to make use of for future benefits or advantages”. Different types of investments yield different types of short-term or long-term returns. Invest in a house, for example, to safeguard your long-term stability into the future. Real estate purchases are typically low-risk, long-term, fixed asset investments. After purchasing this asset, you may either rent out the entire property in the future for income, rent out unused storage space within the property for regular income into the future, borrow equity against the asset value in the future or simply sell the property for profit.

You may also invest in your children. Invest in subsequent or upcoming generations of children, nieces, nephews, godchildren, grandchildren, etc. If the future of your family is stable, then your future is stable. Investments into your children’s education, real estate property purchases, business ventures, among other investments contribute to stabilizing your children future. Again, if your children are stable, then your future is more likely stable as well. As individuals age, the elderly requires day-to-day assistance and care. Family members most effectively and safely house and care for their elderly members. You may also invest directly into your own retirement as well through IRAs, pensions, employer 401ks and other retirement investments.

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Diversify to Grow

Investing will open doors to exponentially increase your asset value over time. Reinvest your income towards consistent growth in asset accumulation. During this final phase of financial recovery after personal setback, you are ready to explore other types of financial and investment opportunities. Diversifying your investment portfolio to include higher-risk types of investments potentially yields higher returns. Such investments include securities and bond trading, mutual funds, derivatives, auctions, lending, wholesale real estate, angel investing, foreign direct investments, etc. Investing is a skill that also develops with time. Be patient. Be diligent. Grow.

You’ve done it! Your journey of financial recovery after severe setback has successfully progressed. As your asset accumulation or investment portfolio continues to grow over time, never forget how or why this journey began in the first place. “Everyone needs someone sometimes.” Someone invested in or contributed to your financial recovery by freely providing time, housing, transportation, food, money and effort to help you get back up on your feet again. This final phase of the journey allows you to repay the kindness that others expressed to you. By donating money, gifts, endowments, awards, clothing, food, information and time to sponsor your prior lifelines, you also become a lifeline to others in need of your support.


As students in a course called ‘Life-101’, we all learn as we grow over time. One person’s season of misfortune and setbacks becomes another person’s learning session of heartfelt life lessons. We testify of God’s kindness during what could have easily become, as Dr. Steenbarger’s article suggests, “the end of it all”. We validate that our setbacks are not at all the end of a rope, but the beginning of a new lifeline for others dealing with personal setbacks as well. As you encounter those individuals facing their own season of setbacks in the future, feel free to pass along these five steps to financial recovery after personal setbacks. From one student to another…


1 Ally Bank. (2020).

2 Cambridge Dictionary. (2020).

3 Carey, Benedict. (2018). Defying Prevention Efforts, Suicide Rates are Climbing across the Nation.

4 Colling, Chris. (2018). ‘Most People Probably would have Stopped’:- 8 Tips on Overcoming even the most Crippling Setbacks.

5 Goodwill. (2020).

6 Hoff, Madison. (2020). The Top 15 Non-Tech Skills You Need to Help Land a High-Paying Job.

7 Kerr, Emma. (2020). How to Pay for College Using Overlooked Strategies.

8 Merriam-Webster. (2020).

9 Salvation Army. (2020).

10 Steenbarger, Brett. (2020). How to Overcome Major Life Setbacks.

This content is accurate and true to the best of the author’s knowledge and is not meant to substitute for formal and individualized advice from a qualified professional.

© 2020 S T Guy

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