If you’ve run out of money and you’re still days or even weeks away from payday, you may be experiencing a personal cash flow crisis. There are still bills to pay, groceries to buy, and you’ve somehow got to cover the cost of commuting each day too.
Running out of funds when you need them most is stressful, embarrassing, and frightening. What you need is a plan when you’re short of money to make sure you make it to payday unscathed. Here are the 6 Cs you need to cope when your cash flow is in crisis:
If you haven’t got a detailed household budget, now is the time to put one together. Find out all the dates of your regular payments for insurances, rent, taxes, subscriptions, and bills. Which ones are due before you are next paid? These are the ones you’ll be short for. Jot down their total.
Next, work out how much cash you need to put food on the table every night. You’ll need an allowance for refreshments while you’re out of the house too. Commit to cooking at home each night between now and payday. This can save you a small fortune in takeouts even if it does cost you a little more in time and energy with food preparations. Remember, bulk buying your items could bring the cost per meal right down. Batch cook for even more savings in your cooking costs.
What is the minimum amount you need to get through this month? Write down that figure. This is your target to achieve. How are you going to get it?
Be candid with the people you’ll be owing money to this month. Let them know you’re having a tough month and would really appreciate a short break from paying. This might reduce that target figure you’re trying to achieve by a little. Of course, if they say you’ll have to catch up later, make sure you’ll be in a position to do that before agreeing.
Have a chat with your HR department. Some employers can arrange pay advances if you take the time to apply for them. And a few employers will even lend you some money. This will be taken out in small installments directly from your pay packet so be wary of agreeing to a lesser income for a few months.
If you have spare time in your life, use it! You could take on more paid hours with your current employer, or even take on some extra temp hours elsewhere. Temporary work is handy. It’s usually arranged through an agency, and they often pay you weekly, so you’ll know cash is coming soon.
Of course, if you haven’t received a pay rise in the last twelve months, now might be a good time to ask for one. You need the cash, and if you’ve proven yourself a worthy employee, state your case. The result of this, of course, won’t be evident until your next pay packet, or even the one after that.
Promotions take time to arrange, but if you’re owed one, don’t be afraid to apply for it. You can promote yourself by applying for more senior positions with a different company. Again, this will take time, and your first pay packet won’t arrive for a little while. But if you know it’s coming, you can put off what you need to today and cover it with your increased income later. Make sure it’s in the bag before making deals like that, though.
Getting fired is one of the worst feelings in the world. It can easily lead to depression, and it can certainly be a cause of a cash flow crisis. If it happens, don’t waste time feeling sorry for yourself.
Get out there applying for new jobs straight away. It’s up to you if you disclose the full reason for leaving. However, owning up to any mistakes shows you’ve learned from them and will be better for you in the long run. Don’t be afraid to set up as a freelancer if you can turn your first client around quickly enough.
Have a good clear out and find all those gadgets, gizmos and old items you don’t use anymore. Selling them doesn’t take long if you hold a garage sale. Alternatively, take a few pictures, write up a useful description and post them on an auction website.
Every little bit helps, so don’t be afraid to list items individually, even if you don’t think they’re worth much. Of course, sometimes, batch sales can generate more interest.
Do your research here. Find out how much similar items have sold for recently and price your items accordingly. This will help you sell more quickly, and should avoid customer disappointment. It will take time to clear out an entire house, but every item can help you reach that all important target figure to survive this month.
Taking out more credit can help you get through the short time. If you’ve already maxed your credit cards and entered your overdraft, you may need to explore other alternatives. Always check the total amount repayable if you need to borrow money to ensure you’re fully aware of your commitment.
Interest will always be chargeable, so you will always pay back a lot more than you borrowed. Factor this new loan into your budget sheet. Check you genuinely can afford the monthly repayments with your current income before signing on the dotted line.
Cuts & Coupons
Frugality may be an ugly word for some, but it can mean the difference between getting into unmanageable debt and living within your means. Cut back on your energy consumption, fuel use, brand buys, and vacations. This could save you money in your very first week of doing it.
Use coupons and discount vouchers to help spare you from ever having to pay full price again. You can reduce your outgoings and that in turn will bring down that ominous target figure you’re trying to achieve this month. Can you reach your cash flow target with these 6 Cs?