Did you know that over 20% of Americans live paycheck-to-paycheck and are constantly in danger of running out of money before their next paycheck? If you have this problem, you are not the only one. But what if you are of the small percentage of Americans with savings but realize it will soon run out? Here are six immediate steps to do when your savings run out.
6 Immediate Steps To Do When Your Savings Run Out
Keep in mind that these steps are just suggestions.
If think that you will imminently run out of money soon, try to contact a financial advisor.
Start a Spending Freeze
One of the first immediate steps to do when your savings run out is to stop spending money. Initiate an immediate spending freeze.
If you are at a time in your life when you are going to be flat broke at any moment, then every new purchase is just digging a deeper debt hole.
And once some people get into a deep enough debt hole, they never get out of it. They get lost in a debt quagmire. In other words, they develop a financial mindset where they believe that the only way to generate income is via debt.
Perhaps you may find yourself in a place where you may need to apply for new credit cards or ask friends and families for a loan. We don’t recommend doing that at this point. If you need to strategize steps to do when your savings run out, the last thing you should do is start generating debt and adversely affecting your credit history.
And you have a lot to learn about financial literacy if you get a credit card to pay debts, bills, or buy things when you know you’re running out of money.
So, immediately start a spending freeze.
Reevaluate Your Current Financial State
OK, so you know for certain your savings are running out sooner than later.
One of the biggest steps to do when your savings run out is to immediately evaluate your current financial state.
You need to sit down and reassess your budget and finances in complete totality so you know what you are working with and how long your dwindling resources will last.
Sit down and get an accurate snapshot of your current financial situation.
If you are employed, calculate how much income is coming into your household every week, month, and for the next few months.
Then look over your budget and expenses. Assess what non-essential expenses you can do without.
If you are gainfully employed and have a steady income, you can then consider getting a credit card or P2P loan based on your ability to pay. And remember that you are already in enough trouble – don’t borrow more money than you can pay back relative to your current income status.
What you are doing here is trying to evaluate what options you have left. Find out if you have any financial options available before making any rash and hasty decisions.
Sell What You Can
One of the most vital steps to do when your savings run out is to inventory your possessions, assess their value, and sell what you can.
There are now online thrift stores, and luxury consignment thrift stores, where you can sell lightly worn clothes for top dollar.
Your local pawn shop will pay top dollar for functioning electronics. Or you can try to sell them yourself on various online auction sites.
Sell your car. Sell your musical instruments. Or sell your jewelry. Do you own any valuable collectibles? Get them appraised and sell them off.
If you know that your savings are rapidly disappearing, now is not the time for material sentimentality.
Now, this may sound easier said than done. But if you have any experience, skill, or capacity to make money via a side gig, now is the time to do it. Every penny counts.
Make one of the immediate steps to do when your savings run out is to make some side cash.
If you are adept at web design or developing computer apps, there is always work online for software designers, digital artists, and web designers.
You can teach online at websites like Udemy. Or you can teach English to schoolchildren in China or South America. There are numerous companies looking for native English speakers to teach children online.
There are websites where you can rent out spare rooms in your house, your house, car, or parking lot.
Assess your personal skills and personal time schedule and decide how you can best leverage your skills and experience into a side income.
Downsize your Life
How can you downsize your life?
If you live in a house, sell your house and car and move into an apartment.
Consider if the apartment you live in is too expensive and find a cheaper one.
Get a roommate or sublet if possible.
Consider every way that you can financially downsize your life.
Contact Your Creditors
Don’t suffer financially in pain. Contact your creditors before your bills and debts are due.
Your landlord, utility, and credit card companies may work with you by considering deferred or partial payment plans.
Come back to what you love! Dollardig.com is the most reliable cashback site on the web. Just sign up, click, shop, and get full cashback!
Allen Francis was an academic advisor, librarian, and college adjunct for many years with no money, no financial literacy, and no responsibility when he had money. To him, the phrase “personal finance,” contains the power that anyone has to grow their own wealth. Allen is an advocate of best personal financial practices including focusing on your needs instead of your wants, asking for help when you need it, saving and investing in your own small business.