Sometimes your expenses can catch up to you, learn what to do when that happens.
From astronomical utility bills to emergency repairs, unexpected costs can really bite. While budgeting can be easy for most of the year, bouncing back from difficult months can seem like an impossible hill to climb.
If you don’t have an emergency fund, the situation can seem bleak. Take it step-by-step to find ways to tackle the weeks to payday and beyond.
Take a look at your remaining expenses
First things first: you need to know how far away your next paycheck is, and how many scheduled expenses you will need to cover in this time. If payday is three weeks away, the situation will be more serious than a three-day wait. Create an expenses timeline and look for ways to cut back.
Regular direct debits can often be paused, from gym memberships to online subscriptions. You can also look at ways to cut your essential expenses. Limit your travel expenses to the commute and cut food costs by using up freezer supplies. Total up the remaining expenses to calculate the cash you will need to find.
Find creative ways to raise money
Whether you need to raise $50 or $500, it can be difficult to find income outside of your regular wage. You may not have access to overtime, and borrowing from friends or relatives can sometimes put you in an awkward position many would rather avoid.
Selling possessions is a nifty way to raise cash. From clothes to electronics, you may be surprised by how much value is held in your unused possessions. Pawn shops can provide immediate relief when your bank balance hits zero, but they are rarely the best way to maximize your income. Selling items on specialist sites can raise more money if you have a week or two until the big bills are due.
Amazon’s Fulfillment Program is an easy way to box up a large quantity of in-demand items for sale online. If you have a collection of something valuable, this can be a simple way to reach thousands of potential buyers. Social media is another great platform for quick local sales. Seek out local marketplace communities on Facebook and list your pre-loved items.
If you don’t have items to spare or need cash now, you could consider short-term borrowing. The trick to sensible borrowing is to find a lender that allows you to create a repayment plan that suits your lifestyle. Some let you spread the cost over a six-month period to make repayments less strenuous on your bank account.
Work with your creditors
When you find yourself in a tight spot, it can be tempting to shut off from the world. This approach can limit your access to support, making the situation more stressful to manage. If you default on a payment, always contact the person or organization you owe money to as soon as possible – you’ll be surprised how willing many are to help.
Organize your outgoings by their priority status, then research ways to tweak your payment plan. Most large utility providers have schemes to help those in need, or they may be able to provide limited emergency credit for your pay-as-you-go meter. Open communication can reduce stress and prevent the situation from spiraling.
Consider your long-term plans
Once you have organized your expenses, secured additional funding and contacted all creditors, you will need to consider your long-term plans. In some cases, it can take a few months to recover, so you will need to minimize expenses for this period. You could also consider supplementing your regular income with a side business. If this pays off, it could lead to far stronger finances – so you can avoid money worries well into the future.
Written by: Jessica Foreman, freelance writer
