3 Easy Tips on How to Bounce Back After Draining Your Savings Account
In April 2015, I was drained mentally, physically and financially. I’d officially fallen out of love with my short-lived career as a news producer. I was burned out from working hectic third-shift hours at low wages. I spent countless hours filling out job applications and enduring first-round interviews, but all of this had amounted to nothing other than feeling more stuck than ever before. I prayed for months that an opportunity would come my way, crying after I got home work until my tear ducts became a desert.
Finally, I got fed up with waiting for a miraculous sign from heaven, and decided that it was time to go — even without my next job lined up. I had gotten to a point in which no amount of money could make my misery worthwhile. From that point forward, my ability to sustain myself on my savings account would become my only hope.
I took the leap. I sat down at my desk and wrote out a three-sentence resignation letter. By my calculations, I would need another two months to figure out my next move and save up enough money to get me through the transition. My letter included a departure date that was 60 days out from my official resignation.
In the subsequent weeks, I made a lot of financial sacrifices and put every penny I could into my savings account. Somehow, I managed to save up $2,300 over the course of those 60 days, which was pretty impressive considering I was 26 years old and had never seen more than $800 in my savings account before. In my younger years, I had always ended up draining my savings account at various points for random “emergencies” that left me scrambling for cash.
On my last day of work, my colleagues threw me a little going away party. They bought me a farewell cake, and some were even generous enough to give me gifts. As we all stood in the production studio eating cake, my coworker turned to me and asked, “So what’s your next move?” I laughed awkwardly and said, “I haven’t made that public just yet. I’ll let you know soon!”
However, the aforementioned “soon” would never come. The truth was that I didn’t have a job lined up, and I was walking away in blind faith.
For the next two months, I “figured things out”. I spent some time traveling up and down the East Coast to catch up with close friends and loved ones, and started working as a freelancer. I was careful not to overspend and made sure that my finances were in order with my roommate. I assured her that even though my job circumstance had changed, I wouldn’t fall behind on rent.
In the first few months following my resignation, my freelancing work had been going well and I was getting a plethora of assignments. A few months later, however, the holidays rolled around and the email requests and phone calls began to dwindle. In retrospect, I realize that I was not nearly as proactive about seeking out work as I should have been. I still needed to learn how to sustain myself in the feast or famine of the gig economy.
Over the next few months, I found ways to make ends meet by taking on side gigs like short-term social media assignments and photography sessions. There were also days when I couldn’t bear the thought of getting out of bed. I was depressed and exhausted, with my body still recovering from the harsh effects of sleep deprivation.
After several difficult months, my savings account contained a grand total of $6.37. How did I get here? I wondered to myself. Life had been hitting me pretty hard, but seeing that number was the sharp gut punch of reality that I needed to step up my game. I had already learned that I was capable of saving up money, but now I needed to learn how to do it as a freelancer, without a consistent paycheck.
I am proud to say that I was able to return my accounts to a stable balance within a year, but it wasn’t easy. I learned some important lessons along the way. Here are are three ways that I bounced back after draining my savings account. If you’re currently struggling to keep your finances in check, these are some important pointers to keep in mind.
Trim the Financial Fat
As I mentioned, I traveled the East Coast for a couple months after resigning from my full-time employer. I was able to do this by implementing cost-saving measures like staying with friends and booking discount airfare, I wasn’t budgeting for the potential of several months of inadequate income following my travel. I was functioning off of the idea that I could quickly make back the money I was spending from freelance work, so my budget still made concessions for unnecessary splurges like takeout orders, new clothes and elaborate holiday gifts.
If I had known that steady work wouldn’t come for another six months, I would have budgeted differently. After a couple months of optimistic budgeting, I had to get serious about my spending habits. I managed to revert back to the basics and made a hard line for myself between “needs” versus “wants”.
I learned a few strategies to get through a period of unemployment or a freelancing dry spell without major long-term consequences. If I know I wouldn’t be able to purchase something with the cash I currently have to my name, then the odds are good that I probably shouldn’t be putting it on plastic either. I recommend taking the time to calculate your monthly income, how much you will realistically be able to save, your current debt, and where that will put you in a month, or six months. Write a list of your expenses and sort them into “needs” and “wants”. You need electricity, but your daily Caramel Macchiato habit must go. Make peace with eliminating the “wants” until you’re back on your feet.
The same goes for leisure expenses. Does your my money situation leave wiggle room for every invitation you get from your friends? It is an important time to set your priorities and stick to them. In the months after leaving my full-time job, I turned down a several bridesmaids requests, girls’ trip invitations and baby showers. Real friends will understand if you can’t afford to show up for every single occasion. Learn the beauty of the word “no”.
Once I got a handle on my spending and implemented my cost-cutting measures, I focused my extra finances on paying off debt. Within a year’s time, I was able to get caught up. Try this simple budget sheet to get started and from there, you can develop your own methods for saving money.
Know When to Ask for Help
When I couldn’t make my rent, I cried for an hour straight. There was no way I could call my parents and admit that I’d messed up. Asking my roommate to cover me for the month just wasn’t an option. A bank loan would have only added a larger financial burden, and I knew it would hurt me in the long run. I sat in my car in the bank parking lot for an hour trying to figure out where I could find money for rent in a legal yet expedited manner.
Finally, I put my pride on the back burner and went through my contacts in search of a friend that I could ask for a loan. When life gets rough, your true friends will reveal themselves. As I looked through the names in my phone, there were a few people I considered calling, only to realize on second thought that they’d be too likely to broadcast my misfortune to other people. That made me eventually realize that they weren’t friends after all.
I finally chose a person to call and she answered on the first ring. To this day, I credit her as my hero. She gave me the money to pay my rent and I paid the money back within a few days. Had it not been for her, my roommate and I would have faced eviction. This reminds me of one of my favorite quotes from the movie Black Panther: “Surround yourself with people you trust”. This saying certainly holds true when you need to borrow money from a friend.
Sometimes life comes at you fast and you can’t always weather the storm alone. The people who have your back are the only ones who are worthy of your love and energy. Prioritize those people, and not only when your funds are low and your debt is high. Make sure that you operate with integrity. Pay back the loan in full as soon as possible, and remember to pay it forward in the future.
Remember that asking for help goes beyond your personal contacts. Be proactive — don’t be afraid to call the bank or service provider to request an extension or payment plan options for your outstanding bills.
Monetize Your Expertise
I made my hobbies into additional revenue streams when I needed to make ends meet, and you can too. Does everyone come to you for advice? That makes you a consultant. Are you a master at copy editing? Then you’re a freelance copy editor. How about your incredible ability to pull together a last-minute event? Become an event planner! The point is, there are probably a number of tasks that you are happy to perform for little to nothing. When you need money, that way of life needs to be put on pause so that you can side hustle your talent and interests into cash.
Do what you can to save money, but remember that savings don’t last forever when you are spending more money than you have coming in. If there is uncertainty surrounding your next paycheck, shift your perspective on money and get crafty about stretching your income before you find yourself in a crisis situation. It may be painful at the time, but it is worth it in the long run. Taking care of your finances is an important part of caring for yourself.
Once you’ve gotten your finances under control and you’re back on your feet, check out this platform to learn about smart investing for women and how to save money on your own terms to build yourself a better future.