How to Rebuild Finances After a Tough Year.

How to Rebuild Finances After a Tough Year

A lot can happen in one year — excellent endeavours and success, but sometimes, a curveball. Like many people, you may have experienced some financial setbacks this past year. Maybe you lost your job, had to cut back on hours, or incurred an unexpected expense, and are now asking “How can I quickly rebuild my finances?”. It has been an extremely challenging year for many people and many of us don’t know where to start when it comes to repairing our finances. When you’ve hit rock bottom, not knowing what steps to take to improve your financial situation can be daunting. Whatever the case may be, it’s important to get back on track. Read on to learn more about personal finance management, including how to create a budget and cut unnecessary monthly expenses.

Creating a Personal Budget (That You Will Follow Through and Through)

The first step to rebuilding your finances is creating a budget. How do you create a personal budget? Here are the steps: 

  1. Determine your monthly income. This step is crucial to know how much you have to use every month. 
  2. From there, identify your monthly expenses. Start by listing your financial commitments, followed by your regular expenses such as food, transportation and rent, and expenses on the things you may want, but not need. With this list, expectations are clear when determining the budget.
  3. Once you have all of the above, decide on the budgeting rule you want to follow. A popular one is the 50-30-20 rule, whereby 50% of your money goes into the necessities, 30% goes into your wants, and the other 20% goes into savings and various investments. 

This will help you identify areas where you can cut back on spending and give you a roadmap to follow as you work to rebuild your finances. Alternatively, there are many helpful budgeting tools available online or in financial software programs that can make the process easier. Once you have a budget in place, be sure to review it regularly and make adjustments as needed.

Save More By Cutting On Unnecessary Expenses

One of the best ways to free up some extra money is to reduce unnecessary expenditures. How to effectively cut your unnecessary monthly expenses? Start by taking a close look at your spending habits and see where you can cut back, even by a little bit. Perhaps there are some subscriptions or memberships that you no longer use or need. Maybe you can trade in your expensive coffee habit for a less costly home-brewed option. Little changes like these can add up over time and leave you with more money to put towards rebuilding your finances.

Boost Your Incomes Outside Of Regular Working Hours

If your income is low, boosting it should be one of your top priorities when rebuilding your finances. If you’re currently employed, look for opportunities to earn more money through raises or promotions. You may also want to consider picking some part-time work or taking on freelance gigs in order to boost your income levels. Even if it’s just temporary, bringing in some extra money can help get you back on track financially after a tough year.

There are also creative ways to increase your monthly income, such as content creation on online platforms. This includes live streaming on Twitch and creating reels on Instagram and Tik Tok. Best of all, you can focus on the activities or pastimes that you genuinely enjoy, because when you enjoy what you are doing, your viewers will too, and that’s when they will begin subscribing and contributing to your monthly income!


If you had a tough year financially, don’t despair. There are ways to get your finances back on track. By creating a personal budget, cutting unnecessary expenses and boosting your income with creative ways, you can rebuild your finances and get back on solid ground. The above actions represent common-sense steps to follow that anyone can take. Even if you can only work on one or two of them at once, do so, and then proceed to the next. Set realistic time frames for your goals and stick to them, but don’t be afraid to adjust them if necessary. By the end of any given year, you should have a better idea of what challenges you may face in the next year due to economic factors, but by then it will be too late to prepare. Be proactive in your financial life – plan ahead before challenges occur and you’ll be able to spend your money on something other than paying off interest! So don’t give up – take action and get your finances back in order. Check out our blog for more articles like this.