You Used to Have Money and Now You’re Broke: How to Adapt to Financial Changes

People come to the path of frugality in a lot of different ways. Regardless of how you get here, you have to learn to adapt to financial changes.

Some make a decision to live more frugally because there’s a Big Goal they want to achieve, like paying off their house, having one parent stay home with the kids, traveling, retiring early, etc.

Others do it because it’s how they’ve always lived – simply, inexpensively,  and out of habit.

Then there are those who are dragged to the path, kicking and screaming like a kidnapping victim because a major change occurred that took them from a state of financial comfort to one of being (at least to them) Flat Broke. Many people found themselves in a major state of financial chaos after the covid pandemic changed the American economy.

This article is about how to adapt to financial changes.

It’s a real adjustment.

If you are accustomed to financial comfort, buying what you want when you want it, dining out regularly, taking vacations, living in a big house, and never giving a second thought to the settings on the thermostat, you’re in for the culture shock of your life.

It’s happened to me, and more than once. I grew up in a well-to-do family. My parents didn’t live lavishly but they also never had a concern about money. I never once heard the phrase “we can’t afford it” growing up. I had dance lessons, piano lessons, tutors for difficult subjects, and lived in a huge house on a huge, well-manicured lot.

To say that adulthood was a shock is putting it mildly. But I adapated, and over the years that followed, got married, got divorced, dealt with real poverty, and clawed my way out of it. I bought a modest little house, an economical little car, stocked up on food, was able to afford one activity per kid, and my life was pretty comfortable.

But then through a series of awful events involving the death of a loved one and the loss of a job, I lost everything I owned – house, car, the whole shebang. I had to start all over again when I was 40.

That was not something I wanted to do.

I raged internally to the Universe, “Dammit, I worked my butt off for the past ten years creating this life and I don’t want to let go of it. I want to still go out for pizza with the kids on Friday night! I want my house back. I want my life back!”

But the Universe paid me little to no attention. I had to adapt. There was simply no option because there was simply no money and at that time, no way to acquire it.

It’s not just about the physical changes.

I’ve written before about the radical, sweeping, and wildly unpopular changes that I made to get my feet back on the ground. You can read about those changes here.

But the biggest change that I had to make wasn’t physical. It was mental. I had to accept that the life I had before was GONE. I could set about building a new life or I could wallow in regret. Those were the options.

Changing your mindset

Sweeping changes may be your only options too.

If you’ve suddenly found yourself navigating the change from bountiful to broke, here’s my advice.

It’s okay to be sad about what you lost.

It would be ridiculous to say that you shouldn’t grieve your former lifestyle, especially initially. Anyone who says otherwise either a) has never experienced such a drastic change in circumstances or b) is far more zen then I’ll ever be even when I’m dead.

There are going to be things you miss and privileges you miss. Your big gorgeous home, your swimming pool, your memberships, getting your nails done, dining out, back-to-school shopping with the kids, extravagant holidays. You don’t just walk away from all that without looking over your shoulder sadly.

This sadness is perfectly natural. It would be more unusual not to feel it. You’re not “feeling sorry for yourself.” You’re feeling grief. But don’t let it take over your life. Give yourself a set amount of time to mourn what you’ve lost, and then begin looking forward at what you’re going to build instead of backward at what you had.

Accept that life is different now.

Now that you’ve allowed yourself a bit of time to say goodbye to your old life, it’s time to say hello to your new life. And how you do this makes all the difference in the world.

If your “hello” is grudging and angry, you will be unhappy. Period. If you’re constantly comparing your new digs to your old place where everything was bigger, better, and more comfortable, you’ll hate where you are now. If you got rid of your luxury car and you’re driving a beater and you’re mad every time you get in the vehicle, you’re going to be miserable.

But if your “hello” is open and you can look at this as a learning experience, even an adventure, you are back on the road to happiness, or at the very least contentment. When you catch yourself making comparisons, try to think of a positive aspect of your current situation to counter it.

For example, if you think, “I miss my 3000 square foot house” then think “It sure is a lot easier and faster to clean my 800 square foot apartment.”  Think about the things that are actually simpler now – perhaps there’s no yardwork to contend with, after school isn’t a frantic rush to take 4 kids to four different activities, the oil change on your new vehicle is a fraction of the price of the one on your old vehicle.

This is your life, at least for now. Embrace it and find the good in it.

Helping your loved ones through it

You’re in control of your own emotions, but you can’t control the emotions of others.  Your family members may be running the gamut of emotions between anger and grief. They may not want any part of your attempt at a positive outlook. I have found this to be especially true of teenagers.

You can’t control their feelings but you can do some things to help them to adapt to financial changes.

Keep things as normal as you can.

You’re obviously working with financial limits but there are some things you can do to retain normalcy.

• If you usually have pizza night on Fridays, do it at home. Make the dough from scratch and let everyone top their own pizzas.
• If you can afford it, keep the most important of your kids’ activities. If you can’t afford it, look for other options like YMCA programs for low income families.
• Keep your home clean, organized, and decorated. Just because you live somewhere less exepensive doesn’t mean that it has to be ugly. Use things from your previous house to create a homey atmosphere.

Be honest.

Communication is essential. You can’t just go through and turn everyone’s world upside-down without discussing it with them. If you have a partner, you need to be on the same page. It’s hard enough to make big changes – and it’s nearly impossible to do so if your partner is not on board, or worse yet, actively working against those changes. You may need to make some compromises.

You also need to explain to your children what’s going on. Don’t scare them to death and make them worried they’re going to be homeless. Just be truthful but keep it appropriate to their maturity level. This article talks about breaking it to your kids that you’re broke.

Just because life is different doesn’t mean that it’s bad.

While the things that made life different for you were probably bad – really bad – it doesn’t mean that your new and different life has to be.

Sometimes these changes are permanent. If that’s the case, you don’t want to spend the rest of your life bitter and angry at the world. You need to find the positive aspects of your new life – it may take some time but you will find them. Look into some of the following philosophies for inspiration.

• Stoicisim
• Minimalism
• Simplicity

Focus on gratitude for the things that you have rather than sadness for the things you don’t. That simple shift in mindset is very powerful in helping you adapt to financial changes.

Sometimes your change in circumstances is short term. (I’m not saying a month, I mean a couple of years or so.) If that’s the case, as you’re rebuilding your life, think critically about the things you add back in. Think about the things with which you were content when times were harder. Can you still be content with those?

While you may want to make some changes, you may find that this period of time was actually a gift that allowed you to narrow your focus on the things that are truly important. That has been true for me.

About Contentment

A lot of folks seek the rush of ecstatic joy and excitement. They want that rush of endorphins all the time, but the more you get it, the more difficult it is to achieve it, just like a synthetic drug.

On the other hand, contentment is a wonderful and sustainable state of mind. You can remain happy and content without constant external input. It’s a lot more peaceful than the ups and downs of endorphin-seeking. Content people rarely get bored and tend to feel more gratitude.

So perhaps when finding your way back, out of the shock of your sudden change in circumstances, you might alter your course. Instead of trying to navigate your way back to the way things were, maybe you’ll want to set your destination as “contentment.”

How have you had to adapt to financial changes?

Have you ever had to deal with a major change in circumstances? If so, how did you deal with it? What tips do you have for others going through the same thing right now.

Let’s talk about it in the comments.