You did everything right; you created a solid income-based budget and stuck to it. You maintained an emergency fund to deal with unforeseen situations. You paid your bills on time. You had all the right insurance. You kept a separate savings account to help fund your long-term goals. You had everything on track and things still went sideways on you.

This can happen for any of a number of reasons—be it a natural disaster, a terrible accident or a protracted illness. A long-term loss of income can deplete your savings and leave you in a desperate financial situation. This can be especially true for veterans managing the transition from military to civilian life. According to military debt relief experts, the following strategies have the potential to help you recover from this situation—whether you’re in the military or a civilian.

Have Faith in Yourself

If your savings are gone, the first thing you need to do is have confidence in yourself. Getting reset to zero can be very demoralizing, especially when you feel like you did everything you could do to avoid the situation in the first place. Slipping into depression is a normal reaction in such instances. However, allowing depression to debilitate you will only lengthen the amount of time it takes to rebuild.

Sure, it’s easier said than done. But having faith in yourself  makes all the difference in the world. The experts at Psychology Today say, “It’s important to remember not to beat yourself up for the negative self-talk you do, which will make it worse or start new negativity spirals. Instead, learn to become more aware of it, acknowledge it’s there (rather than hating it), and start to question it.”

Rebuilding Your Finances From Scratch

In other words, your original plan was solid, trust yourself and get back to it, without punishing yourself for matters that are beyond your control. To recover, focus on your personal survival first: secure any immediate income and lock down a strict monthly budget for basic needs (food, shelter, utilities). Pause all non-essential spending and explore gig economy work while you gradually rebuild your cushion. You got this!

• Assess Your Financial Reality

Take stock of your remaining resources and identify all essential expenses—such as housing, utilities, groceries, insurance, and minimum debt payments.

• Cut to a “Survival” Budget

Eliminate all non-essential spending immediately. Cancel unused memberships, streaming services, and subscriptions. For ongoing bills, consider contacting service providers to negotiate lower rates, which can save you a significant amount of money annually.

• Maximize Income and Sell Assets

Secure any immediate income to bridge the gap. This could mean taking on gig work or selling unused items like old clothing, kids’ toys and electronics on platforms like Facebook Marketplace or ThredUp to generate quick cash.

• Communicate with Creditors

If you cannot pay your bills or come up with minimum debt payments, be proactive. Reach out to your creditors, lenders, or landlord to request temporary grace periods or adjusted payment plans before a missed payment impacts your credit score.

• Rebuild Gradually

Start small to avoid feeling overwhelmed. Automate consistent transfers—even if just a few dollars a week—from your checking account to your savings account.

Rebuilding from scratch requires a strict cash-flow analysis. Document all of your debts , immediately cut non-essential expenses, and restart your emergency fund. Automating your savings to shift to a “pay yourself first” mindset and restore your financial foundation will make rebuilding easier to accomplish.

While your situation might seem insurmountable, people have been here before you and people will be there after you as well. The keys are to avoid panic, don’t look it as a personal failing and work your plan.