How to Get Back on Track After a Financial Emergency

Red Train on Tracks at Station

Let’s talk about what to do when the emergency hits. We aren’t trying to bum you out, but the fact is, we are all likely to have a financial shock.

What happens when you have to use your emergency fund?

First, pat yourself on the back for having the funds, and then strategize. Using your emergency fund is not a financial death sentence. You saved it so you would be ready when a financial upset occurs. The key here is to stay motivated. Becoming discouraged about using the money you saved for the very thing you planned is like being upset about eating your birthday cake ON YOUR BIRTHDAY! Who does that?

So, if (or when) you use your emergency fund, remember this:

  • How did it feel to have the money to deal with the emergency?
  • What would you have done if you didn’t have the emergency fund?

Then, do this:

  • Start again – if necessary, put “emergency fund” back on your list of financial priorities and set aside money each month to get back to your target.
  • Jumpstart your savings by practicing a stretch goal. Even a small amount will remind you of how you felt when you were building your fund.
  • Just in case: if your emergency need is bigger than your emergency fund and you need a loan, check out your local credit union to see if you qualify for a small dollar loan. You will usually find better interest rates and terms than at other financial institutions.
Saundra Davis

Saundra Davis is a nationally recognized financial coach and educator. Her experience in the U.S. Navy, where she made EVERY money mistake possible, and her twenty years serving community-based organizations led her to the reality that the best way to help people find a path out of poverty is to help them become their OWN financial expert.