Dealing with Financial Drought: A Recovery Plan
You know how it goes. One minute, you have extra money sitting in the bank just waiting for you to play with it. The next, your car needs repaired, or the cat gets sick, or the roof falls in and there's no way you can afford the bills without dipping into savings. Not only has your "fun money" disappeared, but so has some of your emergency fund, general savings fund, or goal-oriented savings fund. And we all know what happens next: more catastrophe, more bills, more dipping in when you meant with all your will to save this month.
Financial drought sucks, but it happens to all of us. Not even the wisest, most frugal person on the 'net can avoid it. What we do when the savings numbers are slipping backwards, however, can determine how much we actually lose during the drought and how quickly we bounce back.
Know what to expect.
All sorts of negative emotions can accompany financial drought. Don't be surprised if you find yourself wondering if it's all your fault, or if you're lying awake at night wondering if you could have seen this coming and how. Your emotions may run particularly close to the surface during and just after a drought, or you may find yourself unable to feel at all. However you respond emotionally, know that you will and that it will go away when things get better. Expecting an emotional fallout of some sort can, rather ironically, help you keep your equilibrium when you're in the middle of the drought. You won't be nearly as tempted to follow them into an unwise choice or to change your financial plan on a whim.
Rather closely related to that point, know that things will get better. Financial drought doesn't last forever. It might seem like it's going to when you're wading through it with the water at your neck, but it doesn't. And knowing that it will end can make all the difference in the world.
Sometimes, an emergency fund isn't enough. I hate to bring up depressing stuff, but it's true. When life throws a really big lemon, not even the most overfunded emergency fund in the world can make lemonade. But you know what? That's ok. Sure, it means taking money from somwhere else, maybe from a goal-oriented savings account, or a general fund, or even a loan. And that sucks. Even this worst-case scenario, however, isn't the end of the world. Are you alive? Check. Relatively hale and whole? Check. Ready to get back on the pony? Well....maybe.
Wherever you find yourself after the bills are paid or the wells are dried up, look around. What's good? What's wretched? What can you change? What will only make things worse if you tinker with it? The answers to these questions will help you figure out where you are. And generally, when we know where we are, the way forward becomes much more clear.
Your goals are still your goals.
Even when you're negatively saving towards whatever it is you want, that thing you want is still your goal, and don't you forget it! It's easy to lose sight of your goals when your finances take a dip for the worst. When you're taking money out of your savings account instead of putting it in, it's so easy to let the doubts wiggle in. It might start with a, "Wow, I guess we won't be able to buy the boat in April," but quickly progresses to, "Maybe we'll never be able to buy the boat," and in the worst cases becomes, "It was silly of me to try and save for a boat." Nip those thoughts in the bud. Your boat (or car, house, horse, roadtrip, cruise, whatever) is worth the time you spend saving, the effort of saving, and the money you save. Just because it may not happen when you wanted it to happen doesn't change that. Knowing that your goals have value can help you stay focused and oriented even when life tries to throw you off.
Not only that, but remembering the value of your goals and staying focused on them can help you bounce back after the crisis. Sure, it sucks to be in the hole with your savings account, but at least you still have one. And there's something out there that you want! Focusing on your desire wil help you save even when it feels hopeless to do so. Because that day where everyone sees you having accomplished your goal? It's out there somewhere, and your saving makes it come quicker.
Take your time.
All of that said, give yourself some space to figure out where you are, where you want to go next, and how to get there. A drought can change a lot of things in your life, not the least of which are your energy, stress levels, relationshps, and general health. An extended, sudden, or particularly intense drought can impact all of these and more for the worse. So give yourself time. Maybe you need to sleep every Saturday afternoon for a month instead of assessing your finances. Or maybe you need a day at the beach, a chance to finish that book you got into before it all started, or a couple of massages. Whatever it is, you have time for it. Let your whole self take a deep breath before you dive back in.
In addition to healing some of the hurts of drought, taking some time can give you a different perspective. It can help you notice that the world isn't out to get you, no one actually seems to hate you, and things look remarkably similar to how they looked before the drought. What a relief!
Get back on the pony.
Whether you decide on a recovery plan or just jump back in to what you were doing before, get started. Maybe your drought has lingering consequences and you can't save like you used to. That's ok; save what you can. Sometimes, a drought shakes us so deeply that we can't bear to risk again. That's ok; do it anyway. The more you follow a plan and get some money back in savings, the more you'll be able to stop expecting the worst. And once you've done that, well, you've overcome the drought.
What sorts of droughts have you faced? How did you overcome them? I'd love to hear your stories in the comments.