There’s a difference between having a tight budget and being seriously stretched thin for cash. And if you’ve ever experienced the latter, you know that pit in your stomach doesn’t magically dissipate when you try to close your eyes to sleep at night. What can you do to get money fast and get back on your feet again?
It’s time to go into financial survival mode. Here’s a three-step plan to help you focus on the most important things now: preserving the money you still have as much as possible and finding new sources of income, whether you’re out of work or want to earn more money.
Step 1: Take stock and prioritize your spending
Take a deep breath, then take a hard look at your income, expenses, and debt, if you haven’t already. The National Foundation for Credit Counseling has an online budget worksheet to help you tally everything up.
For your debts, separate them by those that are tied to collateral (your house or car loan, for example) and those that are unsecured (credit cards, doctor’s bills, any other loan that doesn’t have a collateral).
Which bills to pay first
When money’s really tight there are some bills you can let slide for a while, and others that you should keep on paying if at all possible. The ones you should pay first are the ones that would affect your family’s health and security the most:
Rent or mortgage payment: In some states, landlords can kick you out if you’re even one day late on rent
Essential utilities: gas, electricity, and water
Child support: If you stop making those payments you risk losing custody rights and could even end up in jail
Income taxes: Never mess with the IRS, even if it means having extra fees to pay on a plan instead of all at once.
Insurance: It’s too risky to go without medical, auto, or home insurance
Car payments: If you get behind, the lender could take your car and your credit score will drop
Any other secured loans
Student loans
Even some of these are negotiable. Most utilities have programs that help services stay up in times of hardship. And if you have a federal student loan, you could have the payments deferred—as long as your loan isn’t in default.
Although it’s not the best tactic, paying just the minimum on your credit cards can help you get by; just make sure you put the cards away and stop using them. Also, if you can qualify for a 0% balance transfer offer, you might be able to reduce your interest payments, but you’ll need to calculate if it’s worth it.
Cut your existing bills
You’ve probably already done this, but just in case, go through your budget and ruthlessly strike out everything else that absolutely isn’t necessary, such as the cable bill, gym memberships, and other non-essentials. (Even internet access might not be necessary, but that depends on your job.) This is your new emergency budget.
Then tighten up that new budget more by calling your bank, credit cards, and service providers to negotiate better rates. These calls can save you a few hundred dollars a year. Just about any kind of bill can be reduced by asking, including auto insurance. Now might be the best time to shop around for better rates.
Step 2: Trim your most expensive spending
Housing
We spend the most on housing, transportation and food, so these are the first categories you should scrutinize to save more on. Although moving might not be an option right now, it’s something to consider down the line. Consider renting out a room of your home, if necessary.
Transportation
Do you really need a car for work or that second car? Using alternate transportation, if it’s available, could save you thousands.
Food
It’s possible to eat well on a few dollars a day, or, if you’re not into extreme couponing, save by creating meal plans from sale flyers and what you have in your pantry. Food banks (a.k.a. food pantries) can help supplement your grocery trips too.
Shop at salvage grocery stores to save more than you would at the supermarket, and if you can’t afford groceries, don’t be afraid to look into food stamps (SNAP) or other government assistance.
Step 3: Find new sources of income or cash
Sell stuff
Selling stuff you don’t need, such as jewelry or old electronics, can give you the wiggle room your family needs while figuring out your next step.
Find temporary work
Be relentless in looking for income. Tap your local unemployment agency for help and consider looking into local temp agencies for access to temporary jobs that run the gamut—from accounting to general labor—that can turn into permanent jobs.
Even small things like babysitting, tutoring, or running errands can help you stay afloat.
Explore loan options
If you need more cash right away, you have several borrowing options. The safest loan is from family or friends, but that depends on how comfortable you are asking them and if they can help. There are risks and hefty fees with other loans, such as taking a loan from your 401(k). Above all, avoid shady payday loans.
Seek government/non-profit assistance
Finally, don’t forget that there are government programs that could help you get back to financial stability, beyond unemployment insurance and food stamps. You can also confidentially contact United Way for help finding assistance or programs that apply to you, including financial planning and help with the job search.
Last resorts
Bankruptcy is an option that can clear you of many debts—but won’t completely solve your problems, so take care when considering it.
When you’re broke and have a household to take care of, sometimes you’ll have to take desperate measures like dumpster diving, selling plasma, and other emergency measures. It’s heartbreaking, but millions of people are simply doing what they have to do to get by. Remember to take care of yourself as best you can during this difficult period.
This article was originally published on 11/14/13 and was updated on 7/22/19 to provide more thorough and current information.