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.

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