Break Free From Your Financial Slump

Financial Advice | Get out of Debt | Financial Stress | Smart Money | Financial Freedom

You’ve hit a financial roadblock.

Maybe it’s the face of crushing debt. Maybe you’re feeling totally out of control when you think about your financial habits. Maybe you’ve experienced job loss or another major setback. Sometimes it can feel like life is kicking us when we’re down.

But listen, friend…whatever happened to get you to this point, don’t despair! I’ve heard from so many readers who reached out because they were in the exact same boat, feeling stressed and completely overwhelmed.


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A few years ago now, I also hit a financial slump. We went through a few major disasters (including a hurricane) that left us stressed and financially strapped. On top of our debt, I was spending money we didn’t have and avoiding the reality of where we were financially. I hid my spending. I would even buy items on sale, then pat myself on the back because I felt like I was saving—items I now realize I didn’t even need.

It felt insurmountable. Going to the store became completely nerve-wracking. I’d get up to the register not knowing if my debit card was going to go through. I would see bills in the mail and I could barely muster up the courage to open them because I didn’t want to know what they said.

Our financial situation kept me up at night. Our marriage became strained under the pressure.

But you know what? It was also a time of great learning and personal growth for me. I learned that digging my way out of a financial slump took time and effort, but it was doable. I found strength I didn’t realize I had. I found strength in my marriage I didn’t know WE had. I learned how to budget and how to make better choices. I found ways to stretch what we had and pay off debt until we could get on our feet.

Eventually and fortunately, we came out the other side and we’re better for it. It was a hard lesson—probably one of the most challenging of my life.

So believe me…there are plenty of ways to get out of a financial slump, no matter what put you there. You can do this! So pull up your bootstraps and get ready—we’re going to find a way to get out of that slump and break free of financial stress!

You have to commit to getting out of a financial slump - commit with your partner to figuring this out

1. Commit

The first step in breaking free is to commit. Decide that the current course of action isn’t working and commit to finding a new one. Just like a diet or a big project, committing to action is actually one of the toughest parts.

Once you’ve committed and decided to change things, you can find a path. It’s that first step out the door that’s the toughest. For inspiration, consider your “why.” WHY do you want to get out of debt? Is it just so collectors will stop calling you? Is it so you can feel more in control of your finances? Think big picture. Are you hoping to retire someday? Do you want to buy a house or do something great as a family?

Focus on your why and commit to it. You have to want it so much that it will fuel you throughout your journey. Find the strongest reason you can. Write it down. Put it on your mirror, on your phone, or in your wallet. Write it in your planner. Remind yourself of your goal.

2. Organize Your Bills & Budget

To break out of a financial slump and make real progress, you’ll need to get organized. Gather up all of your bills and all of the things you might be avoiding. Go through each and write them down. Set up a financial plan and a budget.

If you need help with getting a budget started, please check out this handy budget worksheet. There are also all sorts of helpful budgeting tools in the Living Well Planner. These can help you get in the habit of writing down your spending and staying organized and on top of your finances.

3. Plan to Save Up an Emergency Fund

Create your plan of attack. One of the best ways to start tackling your finances and reversing a slump is to set up an emergency fund. It may seem counterintuitive to wait to pay down your debt while you save up money, but having an emergency fund is like having insurance. No matter what comes your way, you know you’re covered and you don’t have to take on more debt.

An emergency fund is usually between $1000-$2000. This is enough to keep an emergency (like a broken water heater) from derailing your financial progress, but not such a savings cushion that it feels impossible to aim for.

Try to build up an emergency fund as quickly as you can. This might mean selling something, taking on some side jobs, or just finding wiggle room in your budget so you can build up the fund quickly. Once your emergency fund is in place, you’ll be able to start climbing out of the slump.

If you're ready to break free of your financial slump, shop up your cards and commit to getting rid of debt

4. Reverse the Trend: Refuse To Take on More Debt

A slump is a downward trend—a slope that’s hard to climb out of. To work your way back to the surface, you have to figure out a way to reverse the trend. This means refusing to take on more debt.

Whatever you have to do—do it. Cut up your credit cards, put them in the freezer, or hide them from yourself. Do whatever you must to reverse the trend. Some find it helpful to go on a cash-only budget for a while. Others go on a spending freeze.

Turn the financial slump around and start finding ways to fight your way back to a place of financial wellness. Just like healing from an illness, you have to find a way to get yourself healthy and thriving.

5. Downsize

When you’re breaking out of a financial slump, it helps to examine how you got there. For most of us, it stems from living beyond our means. This can be a tough reality to face, but it can also be freeing. Trying to hold onto a house, a car, or a lifestyle we can’t afford is exhausting.

Instead, take a look at what you can realistically afford and find a way to downsize. This might mean trading in your vehicle for one that’s more economical or even relying on public transportation for a while to avoid the cost of extra insurance and repairs. It might also mean eating at home more often, changing that vacation to a staycation, or opting for less expensive activities.

Figure out what’s really important to you—your family, spending time with your kids, reliable transportation to work—and then cut out all the extra “stuff.” Opt for the less flashy, smaller simpler options, and take a break from trying to keep up with the lifestyle you thought you were aiming for.

6. Rethink Your Habits

Do you automatically default to going out to eat after a stressful day? Do you flip on the television and sort through cable programs you aren’t even interested in? We all do it. We pay for things we think we want or need out of habit. We can’t imagine what life might be like without these “extras.”

Fortunately, when we enjoy coffee at home instead of the shop around the corner, work out to a DVD instead of going to a gym, or watch a show on our ROKU instead of cable, we’re often pleasantly surprised. So many things we imagine we “couldn’t live without” we might find we barely miss.

Examine your spending habits. Do you always grab a magazine at the grocery store? Do you have the biggest data plan on your phone just in case? Do you mindfully turn out the lights before you leave a room? We can make all of these little frugal cuts to our habits and hardly even feel it! Sometimes mindless spending habits are just that—mindless habits—so once we identify them, we can easily let them go.

Getting your finances in order takes some time so be patient - it can't happen over night

7. Give Yourself Permission to Give It Time

Chances are, you didn’t develop your financial slump overnight (barring a major emergency or disaster). It probably was a long time coming, right? So why do we expect things to get better immediately?

Getting out of a financial slump takes time. Rebuilding a bad credit score, saving up for retirement, paying off debt—they all take time. It can be discouraging, especially when we’re used to instant gratification (which is what spending and using a credit card can bring). Patience is truly a virtue.

When we step back and think about where we want to be in the next year, the next five years or the next ten, we can get a better handle on our financial picture. You might not be able to pay off your debt overnight, but as you chip away at it, it will become smaller and more manageable. You will start to see progress.

8. Stem the Tide: Reduce Your Debt

Getting out of a financial slump means finding a way to stem the tide of debt and interest. Each month that a payment is skipped or late, we see more fees add up. We see ourselves trailing further and further out to sea.

Stem the tide by picking a debt and concentrating your efforts. You can pay off debt quickly using what financial guru Dave Ramsey calls the “Snowball Method.” To use this method, concentrate your effort on paying off your smallest debt first, then pay minimums on the rest of your debts. From there, you put the entire extra toward the next smallest debt and so forth.

Eventually, your debt payoff will snowball and you’ll be paying off large debts with big monthly payments. This payoff plan is effective because you see immediate progress, so it can be very motivating.

9. Seek Qualified Financial Advice

If you’re struggling to get out of a financial slump, consider visiting an advisor at your local bank or credit union. My husband and I attended Financial Peace University through our church a few years ago—and it was absolutely life-changing. We learned so much about how to manage our finances.

It can be embarrassing to talk to someone about your financial situation, but just like talking to a doctor about an embarrassing medical issue, they’ve seen it all before! Chances are high that your situation isn’t the worst they’ve seen and they’re there to help you find a way to make progress (not to be judgmental).

Many credit unions in particular offer financial counseling. They can help you look at your credit score and advise you on ways you can be working toward your financial goals. If you’re trying to figure it all out, don’t go it alone. Take advantage of this free professional help!

Celebrate small victories - getting out of debt is a battle but a worthy one

10. Celebrate Small Victories

When we forget to celebrate each step of our progress, we rob ourselves of a chance to keep up our motivation. We deserve to feel proud of how far we’ve come on our financial journey, even if it’s just the first step!

Take a moment to pat yourself on the back for identifying that you need to make financial progress. Simply realizing you need to work your way out of a financial slump means you’re doing better than a lot of people around you.

When you start to see your debts ticking down and your finances getting more under control, keep celebrating! Get excited when you pay off a debt. Dance, yelp, or bake yourself some cookies. Do whatever you need to do to celebrate your good work and keep yourself feeling upbeat and motivated to keep the hits coming.

Getting out of a financial slump isn’t easy and it definitely takes work, but you can do it! With a little planning and motivation, you can break out of your slump! Once you do it, I guarantee you’ll look back on your hard work with pride and satisfaction, knowing how far you’ve come.


Financial Advice | Get out of Debt | Financial Stress | Smart Money | Financial Freedom



  1. July 14 at 08:55AM

    Very encouraging advice! In the long journey of paying off debt, I find myself getting into slumps here and there. Reading this has given me renewed energy to tackle my debt once again!

  2. July 14 at 03:42PM

    Thanks for the guidance and encouragement! I especially enjoyed the part about giving yourself permission to give it time. I’ve realized recently that when I try to go from 0 to 60 with any change – financial, fitness, etc. – I get discouraged and give up the first time I step a little off the planned path. Instead, I’ve started making smaller goals. For example, rather than committing to 7 days of exercise a week, I start with 3 days and try to master that for a few weeks before bumping it up to 4. If I can’t meet my goal for a budget category one month, I vow to make the goal or at least get closer to the goal the next month. It’s the same idea as the debt snowball, I suppose – building confidence with smaller victories first!

  3. July 16 at 12:12AM

    My husband and I took Financial Peace a few years ago using the DVD set at home. We had each read Total Money Makeover previously and loved it. But as life goes, things got busy and we’ve let things slide a little bit. We still have a lot of the foundational aspects in place (emergency fund etc) but we’ve let some of the anti-debt beliefs go. I’ve been feeling motivated to re-read TMM lately, and I think this is my push to grab it off the shelf and give it another look! Thanks, Ruth!

  4. July 25 at 01:24PM

    Great advice! It’s all about your mindset. Committing to do it! Don’t get distracted. Staying focused and having a why is key. I’ve been following Dave Ramsey for many years and I swear by him. His principles work if you just do them. We all fall off the wagon, on occasion. The important thing is to get up and keep going.

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