'I lost money and my confidence’: How to reclaim both and move forward

A blur of unemployment, hospital bills and a sea of expenses. For Dubai-based Alina Mollins, life, till recently was a downward spiral of financial chaos.  After her company shut down, she tried her hand at various opportunities, from freelancing to even entrepreneurship. Nothing worked. “I made disastrous decisions and so had to dip into my savings, only because I was just so desperate to make something work,” she says.

The frustration had clouded her ability to think reasonably, she says. So when an unexpected leg injury left her in urgent need of funds, she found herself scraping the bottom of the barrel.  “I had to ask friends for money. That was humiliating,” she says, convinced they were silently judging her for her poor decisions.

It has been several months since she got back on her feet. Slowly, and rather unsteadily, as she says.  The healing is excruciating, notes Mollins. She hopes for a day when she can finally buy something for herself, without a crippling sense of anxiety.

The truth is, financial healing is just as brutal as any other kind of recovery.

Most of us have been there—facing unexpected setbacks like losing a job, dealing with surprise expenses, or navigating medical emergencies. It’s that moment when you’ve dipped into your savings, reworked your budget, and the future feels like an uphill battle. But here’s the thing: as challenging as it feels in the moment, with patience, resilience, and a bit of strategy, the road ahead can start to look a tad brighter.

Navigating the stress surrounding financial setbacks

Financial setbacks rarely stay confined to our wallets, as Anne Jackson, a Dubai-based wellness mentor and life coach says. “These challenges often spill over, affecting our relationships, mental health, and physical wellbeing. The stress can further lead to destructive habits like overeating or impulsive spending, which only deepen the financial strain. Left unchecked, the ripple effects can escalate into anxiety, depression, or even more severe mental health crises,” she says.

Worse, there’s a stigma surrounding financial struggles, that makes these challenges even harder to address. “Money, while central to our lives, remains a taboo topic,” she says. Talking about money can be one of the most uncomfortable conversations—it exposes our vulnerabilities like few other topics do. It becomes about self-worth, security, and how we perceive success or failure.

Dubai-based psychologist Kamala Shirren, explains why:  Money talk often drags us out of the comfort of lighthearted chatter and into the raw, unfiltered realities of life. So, you need to change the narrative, as Jackson says. And that begins with open conversations about finances and taking proactive steps to regain control. Financial setbacks, whether due to job loss or unexpected expenses, can feel overwhelming, but they don’t have to define your future. Rebuilding is possible with a clear plan and the right mindset.

So, how can you go about rebuilding your financial well-being?  UAE psychologists and experienced entrepreneurs have some suggestions.

The road to financial healing

For Gaurav Rustagi, director – Kristal.AI Middle East Limited (KAMEL), who recently launched his own startup, financial healing is more than just money: It’s about healing the trauma associated with an unfortunate monetary incident in a person’s life. “It involves aspects of emotional healing, trauma recovery and then finally moves to a mindset shift that challenges and changes negative and limiting beliefs about money,” he says.

You need to understand what your money wounds are, explains Abdul Malik, Founder and CEO, The Corporate Catalyst. "The healing is about healing shame and difficult emotions around money so people can make conscious, clear, and free financial choices. There are many ways to carry yourself through the financial healing process but it is important that you do it alongside focusing on your recovery plans."

For starters, the journey begins with accepting the difficult reality, as painful as it is. Show yourself a little compassion and understand your own errors. “Dwelling on guilt or regret won’t change the past but can lead to further errors,” explains Jackson.  Instead, remember that financial setbacks happen to almost everyone at some point, whether due to poor decisions or unforeseen circumstances so forgive yourself for your current situation. Being cruel to yourself only fractures your sense of well-being and identity.

Konstantin Koloskov, Dubai-based Russian entrepreneur and co-host of Culture Mapping, a podcast, Rustagi, Jackson and Malik, share several steps on how to rebuild your own sense of self-worth after a financial setback:

Assess the situation honestly

Koloskov says candidly, “I tend to dramatise things, which is not helpful. Therefore, taking a hard, honest look at what went wrong is essential — how bad the situation is, was it poor planning, market changes, or overambition? Reality check allows you to outline the next steps while acting on emotions can worsen everything.”

Avoid knee-jerk reactions

When financial pressures mount, it’s natural to feel desperate for a quick fix. “Resist the urge to take risky financial leaps or spend impulsively in an attempt to recover rapidly,” says Jackson. Instead, pause all unnecessary spending until you have a clear plan in place. Taking deliberate, measured steps will help you regain control faster than reactive decisions ever could.

Make decisions when you’re emotionally ready

Once you’ve assessed your situation and outlined a plan, take stock of your mental and emotional state. Decisions made in moments of stress or exhaustion often lead to mistakes. Pause and act only when you feel clear-headed and confident about your next steps, advises Koloskov.

Take small and deliberate steps

The fear of repeating patterns can be emotionally paralysing. You don’t trust yourself anymore to make the right decision. Yet, the only way to break free from the webs of fear, is to do something. “Take small, calculated steps forward, celebrate wins, and remember that resilience builds over time. Of course, do not forget that learning finance skills is as important as saving for the future, start building wealth as soon as your financials allow you to,” explains Koloskov.

Look after yourself

The worry about money can leave us with sleepless nights. So, when you neglect basic needs like sleep, food and exercise, the situation is further exacerbated. “Avoid unhealthy coping mechanisms, such as overspending or comfort eating, which compound the problem. Prioritise your mental and physical wellbeing as it’s the foundation for effectively managing your finances,” adds Jackson.

Moreover, commit to yourself. A little belief, is what you need. "Be optimistic that you can overcome the situation no matter the obstacles and will get your life back as it was. Belief in yourself, your abilities, determination and perseverance are needed to their fullest potential. Commit to yourself that you will successfully recover," explains Malik.

Seeking support

The weight of financial challenges can feel isolating, but you don’t have to face them alone. Trusted friends, family members, or professional support can provide clarity and guidance.

Slowly, start taking inventory

Once you feel emotionally balanced, it’s time to take a hard look at your financial situation. Make a list of your losses and liabilities. While confronting the numbers may sting, it provides a realistic starting point for rebuilding, so getting everything out in the open is crucial. Clarity replaces the stress of the unknown, giving you a sense of control over the situation.

Creating a new budget

A realistic budget tailored to your current circumstances is essential. Identify areas where you can cut back and allocate funds wisely. Adopting the 50/30/20 rule—spending 50 per cent on needs, 30 per cent on savings, and 20 per cent on wants—can serve as a guide. During challenging times, it’s okay if only the ‘needs’ category is feasible.  Taking these steps not only improves your financial outlook but also reduces stress by restoring a sense of order.

Start setting goals

While short-term goals are critical to stabilising your finances, don’t lose sight of the bigger picture. Setting medium- and long-term financial goals aligned with your values creates a roadmap for future growth. These goals give your efforts direction and purpose, helping you stay motivated. With discipline in the short term and a meaningful vision for the future, you could just be well on your way to financial recovery and personal fulfillment.

'Treat each financial choice as a new opportunity...'

Samuel Ouzan, Assistant Professor, Canadian University Dubai, advises to see financial choice as a chance, free from the weight of past setbacks. Financial healing also means redefining recovery as a purposeful journey, such as aligning financial decisions with values like sustainability or ESG principles. "It often includes stepping away from materialism, finding peace in spirituality, or reconnecting with nature to restore balance and purpose," he explains. Through emotional resilience, clear reframing, and thoughtful action, financial healing provides a path to renewed stability and confidence.

Start by reframing mistakes as learning opportunities rather than failures, recognising that every decision carries uncertainty, often influenced by factors beyond your control. "Behavioural insights like self-compassion and loss aversion emphasise the importance of forgiving past errors and managing the fear of risk. To rebuild trust, begin with small, low-stakes financial decisions to gradually regain confidence," he says.

So, create a realistic plan with clear achievable goals that provide direction and a sense of control Finally, step back from immediate stresses by maintaining perspective and focusing on consistent, thoughtful actions. Each step forward, regardless of the outcome, reinforces progress and builds trust," he says.