Kimberly Palmer: Ways to recover from a financial shock and be prepared next time

Financial shocks come in many different forms: An unexpected medical bill, house repair or job loss are among the typical ones. The reasons for financial shocks may be common, but recovering from them can be unexpectedly challenging.

“These things happen once or twice over a financial lifetime,” says Spencer Betts, a certified financial planner and financial consultant with Bickling Financial Services in Lexington, Massachusetts. “They can be pretty big, even for a relatively well-off person.”

To recover from a financial shock and to protect yourself from the impact of one before it happens, consider these guideposts from financial experts:

TURN TO YOUR EMERGENCY FUND OR START ONE

Betts recommends using an emergency fund as a first line of defense against financial shocks. “The general guideline is to have three to six months of your expenses set aside,” he says, adding that the money can be kept in an interest-bearing account so it continues to grow.

If you don’t yet have an emergency fund, then experiencing a financial shock can provide the motivation to start one as soon as you’re able to do so. Barbara O’Neill, author of “Flipping a Switch: Your Guide to Happiness and Financial Security Later in Life,” recommends participating in a savings challenge such as a 30-day, $100 savings goal or trying to save $1,000 by the end of a year to get started.

“You can get a taste of success now that so much has beat you down. You want to turn things around. Starting by saving small amounts at a time can help,” O’Neill says.

TAILOR YOUR SAVINGS TO TYPE OF EMERGENCY

Mary Carlson, president of the Financial Behavior Keynote Group, a...