We look at ways to stop yourself going into the red if your wages are running out before the end of the month.
Sometimes your washing machine or car breaks down, or your gas bill is higher than you expected. Sometimes you just take your eye off the ball financially. Whatever the cause, it’s very easy to find yourself with almost nothing left in the bank and a long way to go until payday.
If you find yourself in this situation, it’s best not put your head in the sand and pretend it isn’t happening. You can easily find yourself hit with bank charges, overdraft fees and more, leaving you struggling even harder the following month. It’s far more sensible to take emergency action instead.
Work out where you are
Start by looking at your finances and working out how much money you have left, remembering to take into account any bills or other payments that will come out before payday. Once you know exactly where you stand, make a short-term emergency budget, sticking only to the essentials.
How to cut right back
If it’s only for a few days, you can make some big cutbacks without feeling too restricted.
Draw up a list of what’s really needed, such as transportation costs, school costs, and so on. Stick to this list.
Use what you already have: food in the fridge and freezer, DVDs and recorded films, gift vouchers, reward points on loyalty cards and so on.
Switch to cash. Take out only what you can afford and leave the cards at home so you aren’t tempted to spend. Once it’s gone, don’t take out more.
Look for freebies like events to go to, library books to read (take them back on time), or free samples.
Cancel or postpone social arrangements if you can’t afford them.
Say no gently but firmly to kids or partners who ask you to pay for anything unnecessary.
If anyone owes you money, ask them to repay some or all of it.
Make some extra cash
If there’s a weekend in between now and payday, you could sell some of your unwanted belongings at a car-boot sale. You’ll have to pay for a pitch and your petrol, but after that the cash is yours – provided you aren’t tempted to buy anything from neighbouring stalls.
You could ask around friends and family to see whether anyone would pay you for doing some dog-walking, babysitting, gardening or decorating.
Avoid the debt trap
If you’ve already gone into the red it may be tempting to carry on spending as usual, and run up an overdraft or put your household expenses on to a credit card. This may work if it’s a small, manageable amount that you can pay off in a few days.
But to prevent small debts snowballing into something much larger, stick to minimising your outgoings and increasing your income, and make sure you have a household budget in place for the following month.
Borrowing from a relative or close friend may be a possibility, and it’s rare to be charged interest, but it can put a strain on relationships if repayments aren’t made as promised.
Back in control again
Once you’ve regained control of your finances, try to build up more of an emergency fund in an instant-access savings account. Even if you can only spare a few pounds each month it all adds up, and it can guard against being hit with overdraft charges.
We all know that feeling when a week before payday you're already out of cash, and often it's the little things that add up and sting us. With our cost calculator tool you can get an idea of how much you might be spending on bits and bobs.
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