Most of us have been there at one time or another. You’ve paid your bills and realize 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 decidehow you are spending that money. Assessing, reducing, increasing, and budgeting are all areas that will help you chooseyour finances.
The natural and understandable reaction to this situation is panic. There IS hope. But I’m here to help you turn that panic into peace.
Actionable tips can turn this stressful time around and help you get to the other side.
When you feel powerless to change things, your first inclination might be to give up. But you’ll feel hopeful and empowered by taking control of the situation and making a plan.
How much money should you have left after paying bills?
This theory will vary from person to person, but a good rule of thumb is to follow the 50/20/30 formula: 50% of your money goes into expenses, 30% into debt payoff, and 20% into savings.
This formula is tough to follow when you have no money left after paying bills, but it’s a worthy goal.
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.
Pay off bills like credit cards, auto, student loans, and even your mortgage to avoid monthly expenses. Selling your car would be another way to get rid of the car payment bill quickly. Plus, you reduce the chance of unexpected expenses when the car breaks down.
Canceling those monthly expenses is 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 payment
- food
- utility bills
- transportation
- health insurance
Pay off other bills or financial obligations with which you have signed a contract or agreement. Some of these are:
- student loan payments
- child support
- car loan
- credit card bill (minimum payments or a monthly payment to reduce your balance)
- medical bills
- IRS or tax bills
- payments to service providers such as cell phones or internet
Six 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 preventing this from happening again.
Assess
If your bank account is at zero with no income until your next payday, you must assess your current financial situation first.
First, count the days between now and your next payday. Next, look at the supplies you currently have.
Supplies could be food, gift cards, or a full gas tank. How can things help you make it through the next few weeks?
Last, write down all of the necessary expenses that could come up. Focus on essential 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 costs you don’t have money to cover.
Are there any expenses that you can push 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:
Automobile Expenses
- Gasoline: use public transit, carpool, ride with a co-worker, bike to work, and telecommute.
- 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.
Food Expenses
- Look through your pantry, fridge, and freezer. Make a meal plan that includes the food you have.
- Make your staples like bread and tortillas if you have the supplies.
- Stretch meat in your meals by adding a filling and inexpensive protein like beans.
- Try to find local food pantries. Many will give you food with no questions asked.
- Consider free or reduced lunch programs through your school district if you have kids.
Entertainment Expenses
- Cancel or pause streaming services.
- Borrow movies/books from yourlocal library.
- Look through your phone and Amazon account and cancel any recurring charges for apps or subscriptions.
- You can plan at-home date nights and activities using what you have.
- Cut cable TV.
- Talk to your service provider and see if they have better deals than when you originally signed up.
Child Expenses
- If you are close to running out of diapers, ask friends if they have any extras their baby doesn’t fit in (that always happens!).
- Many pediatrician 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 at a lower cost until your next payday.
- Learn to make your baby food. It is simple and relatively inexpensive compared to store-bought baby food.
Medical Expenses
- 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, consider increasing your income to cover this budget 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 skills 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 crafted or made items.
- 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 for your first month.
Find lost money
You can find extra money in the craziest places, and now is when you need to see it!
- Put all the loose change you can find in your house into a jar(s). Some bank branches have a change machine to sort and count your coins. Please don’t use the machines at a grocery store unless you have to (they take a percentage).
- Look for unused gift cards or money in your cupboards, drawers, and wallets.
- 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 anemergency fund or savings account.
If you find no money left after paying bills and doing the steps above, now is the time to access those emergency savings.
You can use this approach, for example, to pay things to avoid late fees when credit card payments are approaching their due dates and you don’t have the bill payment ready.
I suggest being very conservative in using emergency funds, and it is a good idea to make your next goal 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 has had the experience of having no money left after paying 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, don’t hesitate to contact your friends and family for help if you are short on money.
Some organizations 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.
Look for afinancial coachto help you create a plan or find instructions oncreating a budget.
How to make sure it doesn’t happen again
When you have no money left after paying bills, one of the best things you can do is take proactive steps to ensure this doesn’t happen again.
Here are some tips to prevent a future budget shortfall.
- Pinpoint the leading cause: What events led up to your deficit? The first step to avoid repeating it is knowing exactly what happened. This will help you address it and prevent it from happening again in the long run.
- Examine your budget: I recommend a zero-based budget that assigns every dollar in your income to a specific job. Using this strategy, you will create sinking funds to address high costs you know are coming (car emissions, new furnaces, etc.) and emergency savings accounts. A balance transfer from one card to another might save you a few dollars until you can tackle that debt. Re-examine your money plan and recommend following it more closely so you don’t find yourself without any money after paying bills.
- 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 apparent in mattresses or budgets! But sometimes, we miss expenditures that deflate our budget slowly but surely. You think you have enough money, but suddenly you don’t! Look through your credit card/debit card purchases for any expenses that are not figured out. Apps on smart devices and subscriptions on websites like Amazon or Walmart can charge us periodically for services that we might have forgotten. 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 you CAN anticipate, consider making a new sinking fund or adjusting it accordingly. Sinking funds will help you save money each paycheck, so the next time a considerable expense happens, you won’t have a zero balance in your bank account.
- Check your tax withholdings: Read 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 a good thing!). You’ll have cash when needed throughout the year instead of one big lump sum after income tax refunds.
- Increase your earning power: If you often fall short of your budget, you might want to consider increasing your ability to earn money. Are there certifications you can work towards? Could you go back to school or change your career? Research higher-paying jobs and scholarships or loans to 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
Taking steps to prevent your budget deficit from happening again is equally important.
By pinpointing the cause of your shortfall, examining your budget, stopping budget leaks, creatingsinking 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 your expenses.
Consider getting rid of all debt. Credit card balances, student loans, and car payments drain your monthly income.
Paying out those added monthly bills each month lowers your actual monthly income.
Long-term goals are essential; not owing money to anyone is integral to financial freedom.
As a financial coach, I recognize that getting to a goal isn’t always easy. But I can promise you that it will 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.
