Six Smart Ways to Rebuild Your Finances (Even When it Seems That All is Lost)


If you’ve been stuck in a cycle of poor money management, your habits might be finally catching up to you. Finances are a source of stress in everyone’s life—whether you are good at managing money or not. If you’ve hit a point where your poor money management is going to lead to financial ruin, don’t throw in the towel just yet. Yes, it takes discipline to change behavior, however, there are many options for rebuilding your finances before giving up. If you feel that all is lost, read on for a few ideas that will help you rebuild your finances and get on the road to successful money management.


The first and most difficult step in rebuilding your finances is beginning to track your expenses. You can save receipts, monitor your expenditures via online banking, or do a combination of both. Any method works as long as you are thorough, accurate, and honest with yourself. Remember that any amount of money, even if it’s a dollar here or fifty cents there, must be tracked. Some people work best with a hard copy budget on a piece of paper—this helps them see everything clearly, and writing in numbers makes the saving and spending of funds seem more real to them. Others track money better by using the vast digital options that are available to us today. By using online banking systems and budgeting programs, you can see where you stand financially at the click of a button. Whatever method works best for you, get in the habit of sticking to a monthly and weekly budget by monitoring all of your accounts and expenditures.

Saving is a Team Effort

If you aren’t financially responsible for anyone else, it can be fairly easy to manage your finances. However, if you have a spouse or children, things can quickly get complicated—especially when others have access to your accounts. Make a plan with your spouse for saving and spending so that you are both clear on how much can be spent every week. While you might not want to inform your children of your financial struggles, it is okay to explain to them that you are trying to save money and spend it wisely. This is a great opportunity to teach your children good money management skills so that they don’t make any of your same mistakes. Once you have a firm grasp of how much you earn and how much you spend in comparison, you can develop a family plan to reduce spending, increase income, or both. Also, remind yourself that spending less than you earn is a mentality, often a shared mentality that you have to develop more than a task you have to accomplish. Make sure that anyone you are financially responsible for is prepared for a change in mentality, and even change in lifestyle in order to rebuild your finances.

Monthly Payments

When you start to rebuild your finances and change your money management decisions, changes need to be made. Obviously, you are looking for ways to cut corners and save a little more each month, but one of the first places you can start is in your monthly payments. Many payments like utilities or phone bills have to be paid right away or your service will be suspended. However, some payments are more flexible, especially if your finances don’t allow for full payment. Do you really need to buy or lease a new car every four years? Why not wait eight years and buy used? If you are struggling to pay your mortgage, can you downsize? Can you take in a roommate? Take a look at your monthly bills and find areas where you can lower payments for the time being while you rebuild your financial portfolio.

Change Your Direct Deposit Methods

If your weakness in money management lies in misuse of income or spending too much, adopt the habit of paying yourself first. If you pay yourself first (and make it automatic) you won’t be tempted to spend on things you don’t need or can’t afford. Have a small percentage taken out of every paycheck and put it away in an account you can’t easily touch. Before you know it, you will have a few hundred dollars put away. You can easily change the perimeters of your direct deposit, and allotting a portion of your paycheck for a savings account will help you in your efforts to save more and spend less.

Be Wary of Credit Cards

Treat credit cards with caution. Pay off high interest rate debt first and pay down principle every month. Know that credit cards can sink you financially faster than almost anything else and only use them if you can pay them off every month. If you are headed for financial ruin, it is a good idea to swear off credit cards until you are more financially stable. Whether you struggle with making payments on time, or you tend to spend more than you can afford to pay off, avoiding credit cards will help you protect your credit—at least until you can get back on your feet.

Bankruptcy Happens

Don’t be afraid to take drastic measures if you truly feel that your situation is hopeless. Declaring bankruptcy does not make you dishonest, immoral, or irresponsible. It makes you human. Will it take you five or more years to pay off your debt at the current rate you are going? Even if you live a bare-bones lifestyle, will you still spend more than you earn? Do you have virtually no assets you can sell off to pay down debt? If so, bankruptcy may be your best option. It is best to speak to a financial advisor before you start this process to be sure that this is your best option. Make sure you have all of the facts before you do anything drastic.
Whether you have met financial misfortune, or your dire financial state is due to your own lack of money management skills, remember that you always have options. As mentioned, it can be helpful to talk to a financial professional if you are trying to rebuild your finances and get back on the right track. A financial specialist will be aware of your options, and be able to give you pointers to combat your weaknesses in money management. The information for this article was provided by the financial pros at WBLI who specialize in Halifax debt management.


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