Most of us have been there one time or another…you’ve paid your bills and realize that you have no money left until your next payday.
What do you do when you have no money left after paying bills?
Take a closer look at where your money is going and make a decision on how you are spending that money. Assessing, reducing, increasing, and budgeting are all areas that will help you make a choice about your personal finances.
The natural, and understandable reaction to this situation is panic. But I’m here to help you turn that panic into peace. There IS hope.
There are actionable tips that can turn this stressful time around and help you make it through to the other side.
When you feel powerless to change things your first inclination might be to give up. But by taking control of the situation and making a plan you’ll feel hopeful and empowered.
How much money should you have left after paying bills?
This will vary from person to person but a good rule of thumb is to follow the 50/20/30 formula. 50% of your money to expenses, 30% into debt payoff, and 20% into savings.
This is a tough formula to follow when you have no money left after paying bills but it’s a good goal to get to.
The tips in this article will help. 50/30/20 Budget
How do you get rid of bills?
There are two ways to get rid of bills. Pay them off or cancel them.
Bills like credit cards, auto, and student loans, and even your mortgage need to be paid off in order to get rid of the monthly expense. Selling your car would be another way to quickly get rid of the car payment bill.
Canceling those monthly expenses are another way to eliminate a monthly bill.
Making a phone call or going online and notifying the company that you no longer need or want their services will stop those monthly bills from needing to be paid.
What are the bills you need to pay?
You need to pay any bill that has to do with the four walls. Some of these examples are:
- rent or mortgage
Other bills that need to be paid are anything that you have signed a contract or agreement for. Some of these are:
- student loans
- car loans
- credit cards
- medical bills
- IRS or tax bills
6 things to do when you have no money left after paying bills
Read on for six things to do when you have no money left after paying bills AND some tips on how to prevent this from happening again.
If you find your bank account is at a zero with no income until your next payday, the first thing you need to do is assess your current financial situation.
First, count how many days there are between now and your next payday. Next, look at the supplies you currently have.
This could be in the form of food, gift cards or even a full tank of gas. What things can help you make it through the next few weeks?
Last, write down all of the necessary expenses that could possibly come up during this time period. Focus on necessary costs including housing, food, and transportation to work.
Reduce and eliminate expenses
Take a look at your list of possible upcoming expenses. You need to try and eliminate or reduce any expenses that you don’t have money to cover.
Are there any expenses that can be pushed to the next month? Is there any way to reduce them?
Try reducing your interest rate on loans or even credit card debt.
Some necessary expenses and ideas for reducing/eliminating them include:
- Gasoline: use public transit, carpool, get rides with a co-worker, bike to work, telecommute if possible.
- Insurance: If you aren’t driving, call and see if you can suspend your insurance (usually there is a 30 day minimum).
- Oil change/maintenance: Put it off until next month or watch YouTube videos and learn how to do it yourself.
- Look through your pantry, fridge and freezer. Make a meal plan that includes the food you have.
- Make your own staples like bread and tortillas if you have the supplies.
- Stretch meat in your meals by adding filling and inexpensive protein like beans.
- Try to find local food pantries. Many will give you food with no questions asked.
- If you have kids, look into free or reduced lunch programs through your school district.
- Cancel or pause streaming services.
- Borrow movies/books from your local library.
- Look through your phone and Amazon account and cancel any recurring charges for apps or subscriptions.
- Plan at-home date nights and activities using what you have.
- Cut cable tv.
- If you are close to running out of diapers, ask friends if they have any extras their baby doesn’t fit in (that always seems to happen!).
- Many pediatricians offices have formula samples or coupons in their offices. It doesn’t hurt to ask!
- Call or email your favorite diaper/formula companies and ask for coupons.
- If you have children in daycare, see if a friend or family member could temporarily watch them for free or a lower cost until your next payday.
- Learn to make your own baby food. It is simple and quite inexpensive compared to store-bought baby food.
- If you run out of medication, ask your doctor’s office if they have any samples.
- Use apps that help you find prescription discounts like GoodRx.
Increase your income
Once you’ve reduced your expenses as much as possible, think about ways to increase your income to cover this budgeting shortfall.
- Volunteer to work overtime/pick up hours at work
- Look for a flexible side hustle with Lyft, Uber, Ubereats, InstaCart, or Doordash
- Use your talents to make some extra cash. What hobbies or talents can you use to increase your income? Maybe car detailing, window washing, handyman services, babysitting or child care? You could also open an Etsy shop with items you’ve crafted or made.
- Sell things you don’t need around your house on Facebook Marketplace, local classified ads or Craigslist.
- Donate plasma. Some companies will pay up to $700 your first month
Find lost money
Extra money can be found in the craziest places, and now is the time you need to find it!
- Put all of the loose change you can find in your house into a jar(s). Some bank branches have a change machine that will sort and count your coins. Don’t use the machines at a grocery store unless you have to (they take a percentage).
- Look in your cupboards, drawers and wallets for unused gift cards or money.
- Check online in your state’s unclaimed property division.
Tap into your emergency savings account
One of the financial strategies I recommend as a financial coach is creating an emergency fund or savings account.
If you find yourself with no money left after paying bills, and after you’ve done the steps above, now is the time to access those emergency savings.
I suggest being very conservative in your use of emergency funds, as well as mindful that your next goal will be to replenish the emergency savings account to its previous level.
Don’t be afraid to ask for help
You would be hard-pressed to find a person who hasn’t had the experience of having no money left after paying for bills.
Recognizing that it happens and that you have the power to make sure it doesn’t happen again, can help you feel less shame.
While it shouldn’t be a habit, if you find yourself short on money don’t be afraid to reach out to your friends and family for a little bit of help.
There are also organizations that might be able to provide you with temporary assistance.
If you are in the US, you can dial 211 to be connected to local essential community services like rent assistance, utility assistance, and food and clothing banks.
How to make sure it doesn’t happen again
When you find yourself with no money left after paying bills, one of the best things you can do for yourself is to take proactive steps to make sure this doesn’t happen again.
Here are some tips to prevent a future budget shortfall.
- Pinpoint the main cause: What events led up to your deficit? Knowing exactly what happened will help you to address it and prevent it in the future.
- Examine your budget: I recommend a zero-based budget that assigns every dollar in your income a specific job. Using this strategy, you will create sinking funds to address big costs that you know are coming (car emissions, new furnace, etc), as well as emergency savings accounts. Re-examine your money plan and/or recommit to following it more closely so that you don’t find yourself without any money after paying bills. A balance transfer from one card to another might save you a few dollars until you can really tackle that debt.
- Look for slow leaks: Have you ever been camping and gone to sleep on a perfectly plump mattress only to end up on the rocky ground by morning? Slow leaks aren’t always obvious in mattresses or budgets! But sometimes we miss expenditures that are deflating our budget slowly but surely. Look through your credit card/debit card purchases for any expenses that are not figured in. Apps on smart devices and subscriptions on websites like Amazon or Walmart can charge us periodically for services that we might have forgotten about. Look for the “slow leaks” in your budget that are recurring monthly expenses and find a way to eliminate them.
- Adjust sinking funds: If the cause of your budget shortfall was a cost that you CAN anticipate, consider making a new sinking fund or adjusting them accordingly. This will help you save money each paycheck so the next time a big expense happens you won’t end up with a zero balance in your bank account.
- Check your tax withholdings: Read up on tax withholdings and adjust as needed. The IRS has a Tax Withholding Estimator that can help you. Appropriate tax withholdings will mean more money coming in each paycheck and a smaller tax refund next year (which is actually a good thing!). You’ll have money throughout the year when you need it instead of in one big lump sum after income tax refunds.
- Increase your earning power: If you find yourself falling short of your budget often, you might want to consider finding ways to increase your ability to earn money. Are there certifications you can work towards? Could you go back to school or changing your career? Research higher-paying jobs as well as scholarships or loans that can help you achieve your goals.
It is frightening to find yourself with no money left after paying bills.
By following these six simple steps including assessing the situation, reducing/eliminating expenses, increasing your income, finding lost money, tapping into your emergency savings, and asking for help, you can make it until your next payday.
Final thoughts on what to do when all your money goes to bills
Equally as important is taking steps to prevent your budget deficit from happening again.
By pinpointing the cause of your shortfall, examining your budget, stopping budget leaks, creating sinking funds, adjusting tax withholdings, and increasing your earning power, you will be better positioned to stay on budget and have the money you need for all of your expenses.
Consider getting rid of all debt. Credit card balances, student loans, a car payment are all drains on your monthly income.
Paying out those added monthly bills each month lowers your actual monthly income.
Long term goals are important and not owing money to anyone is an important part of financial freedom.
As a financial coach, I recognize that getting to a goal isn’t always easy. But I can promise you that in the end, it will definitely be worth it. As always, if you are interested in having me assess your budget and goals I am here to help! You can set up a one-on-one meeting or try my course.