When one paycheck runs out before the next one arrives

woman looking into empty wallet

If you find yourself agonizing long and hard over every unexpected expense that comes down the pike, you’re not alone. Approximately half of all American families live paycheck-to-paycheck. That means no emergency savings and no wiggle room. What you earn is what you spend.

Of course, even if you budget each paycheck meticulously, things will go awry. Which raises a major dilemma: what exactly do you do if you’re in between paychecks and the money runs out?

Don’t panic

So there’s no cash available and you don’t get paid until Friday. Okay. Stay calm. It’s a naturally stressful situation, and it’s understandable to feel a little panicked.

The last thing you want to do, however, is make a rash decision. Rash decisions have a tendency to make things worse. So take a breath and let’s a find a way through this.

Review your bills

When are your bills due? Is there anything due before your next paycheck?

Failing to pay your bills on time will very likely result in fees and other penalties that will only make things more difficult going forward. If you have a bill coming due before your next paycheck, reach out and ask about the possibility of an extension. The more you can do to prevent your accounts becoming the delinquent, the better.

Plan ahead

Are there any expenses between now and your next paycheck? Consider all the costs coming up and put them in order of priority. Separate the “wants” from the “needs”. What can be skipped or delayed, and what absolutely cannot be put off until your next paycheck.You may need to make some difficult decisions - understanding your priorities can make those difficult decisions a little easier.

Consider your options

If your cash is temporarily dried up, your next option is usually credit. Do you have a credit card, and if so, how much credit do you have available?

You always have to be careful when using credit in emergency situations. Eventually, you will need to pay those charges off. You don’t want to simply push today’s problems into tomorrow and end up making a worse situation for yourself. It’s best to have a plan for repayment in place as soon as possible. Build it into your budget and do your best to avoid any interest charges if you can.

You might consider using a payday loan. If so, be cautious – payday loans can be disastrous in certain circumstances. The best advice is to never use a payday loan unless you can definitely pay back the entire loan in one cycle. In any event, payday loans have significantly high interest rates and should generally only be used as a last resort.

A better, though sometimes painful alternative may be to borrow money from a friend or relative. If you do need to ask a loved one for money, do your best to set reasonable expectations (when you plan to repay) and follow through. If you face a setback, let them know and make every effort to pay them back as soon as possible.

Being broke is challenging and deeply unpleasant. However, if you’re proactive, organized, and diligent, you can minimize a lot of that unpleasantness and avoid making a bad situation even worse.

Tagged in Inconsistent income, Budget tips

Jesse Campbell is the Content Manager at MMI, focused on creating and delivering valuable educational materials that help families through everyday and extraordinary financial challenges.

  • The Consumer Federation of America (CFA) is an association of nonprofit consumer organizations that was established in 1968 to advance the consumer interest through research, advocacy, and education. Today, nearly 300 of these groups participate in the federation and govern it through their representatives on the organization's Board of Directors.
  • The National Council of Higher Education Resources (NCHER) is the nation’s oldest and largest higher education finance trade association. NCHER’s membership includes state, nonprofit, and for-profit higher education service organizations, including lenders, servicers, guaranty agencies, collection agencies, financial literacy providers, and schools, interested and involved in increasing college access and success. It assists its members in shaping policies governing federal and private student loan and state grant programs on behalf of students, parents, borrowers, and families.

  • Since 2007, the Homeownership Preservation Foundation (HPF) has served as a trusted, neutral source of information for more than eight million homeowners. They are partnered with, and endorsed by, numerous major government agencies, including the U.S. Department of Housing and Urban Development and the Department of the Treasury.

  • The mission of the U.S. Department of Housing and Urban Development (HUD) is to create strong, sustainable, inclusive communities and quality affordable homes for all. HUD works to strengthen the housing market in order to bolster the economy and protect consumers; meet the need for quality affordable rental homes; utilize housing as a platform for improving quality of life; and build inclusive and sustainable communities free from discrimination.

  • The Council on Accreditation (COA) is an international, independent, nonprofit, human service accrediting organization. Their mission is to partner with human service organizations worldwide to improve service delivery outcomes by developing, applying, and promoting accreditation standards.

  • The National Foundation for Credit Counseling® (NFCC®), founded in 1951, is the nation’s largest and longest-serving nonprofit financial counseling organization. The NFCC’s mission is to promote the national agenda for financially responsible behavior, and build capacity for its members to deliver the highest-quality financial education and counseling services.