Tips to Rebuild Savings after a Change in Income

  • September 22, 2021
  • By: Greenpath Financial Wellness

How can I rebuild my savings after an unexpected change in income?

“Ask the Financial Expert” is a GreenPath series assisting readers with the pressing financial questions of everyday life. In each article, Jeffrey Avalero, a Financial Wellness Expert with GreenPath since 2006, uses his strong passion for helping others as well as strong financial education and effective money management tools to help make a difference in people’s lives. 

Q:  Due to tough economic times, I recently had to accept a salary cut. I had to use up my savings to cover my mortgage payments and other bills. What steps do you recommend to rebuild my savings, particularly if I took a salary cut?

A:  If only life always worked out as we planned. But sometimes job changes, dips in the economy, and unforeseen emergencies happen and take a bite out of our previously running-smoothly budget plans. As you know and experienced, having an emergency savings is a crucial component to having and maintaining a healthy budget — and it can get you through the tough times. Simple budgeting plan guidelines can assist in creating a strong emergency savings.

To rebuild, it is essential that you ask yourself some frank questions. Anytime you have a financial change it’s important to sit down and re-evaluate the household income and expenses. Ask yourself:

  • What amount were you saving before this financial change? Were you putting away 5 percent or 10 percent of the monthly income? You may have to adjust that amount to ensure you can still maintain your core bills each month.
  • Are there any extra expenses that can be reduced – cable, subscription programs or other non-essentials.
  • Would getting a part time job to supplement the income be worth exploring?

The most important thing to do is make a plan. Don’t get discouraged. You’ve made it through a setback and it’s impossible to rebuild your savings overnight. It takes time to get back on track, but making a realistic plan that you can stick with is the first step.


Whatever your financial situation, take our 3-minute assessment and we’ll work with you to create personalized steps for moving forward.


These tips can help keep you moving forward:

  • Pay yourself first each paycheck. Paying yourself first doesn’t mean that you reward yourself first. Sure, it’s fun to treat yourself to a new outfit or movie now and then. But these should not take priority over your bills. It can be $25 or $200 — whatever fits your budget — but make sure you put money into savings each paycheck.
  • Direct depositing a portion of your payment into a savings account can help. Just set it up and forget it. You can also use these automatic savings strategies to make putting away that extra money easy.
  • Treat your savings like a priority bill. Don’t wait until your other bills have been paid. If you wait, you may spend your extra money before you put it into savings.
  • Set your savings goal to 10 percent of your net income. If you can’t do that percentage right away, that’s fine, every little bit helps. But make it your ultimate goal. If you are able to save more than 10% of your net income, that is even better.
  • Contribute small additional amounts when you can. When there are times during the year where you receive extra money, put it in your savings. For example, put your tax refund or a year-end bonus into your savings account.

Right now, it may seem like a daunting task to rebuild your savings account after a setback. But you can do it with careful planning and persistence.

GreenPath is Here for You

For personalized one-on-one assistance, GreenPath Financial Wellness counselors are available to help you achieve financial health.

Let’s work together to look at your spending habits, and create a plan to pay off your credit card debt.

It’s free, confidential and no pressure!

Talk with an Expert