We have all been there; despite doing your best to stay on top of the finances, somehow the money doesn’t quite stretch to your next pay check. Maybe an unexpected expense has cropped up that really cannot wait until the end of the month. Or an unpaid invoice messes up your carefully planned budget. Or perhaps it is simply that an error has occured somewhere along the line. Whatever the reason, realising you have a cash flow problem can be very stressful. Here are some top tips on how to tackle it…
Nip Issues in the Bud
First of all, start trying to address the issue as soon as you realise that your money won’t stretch. If you see a shortfall coming and react immediately, you will have more options and less of a problem than if you bury your head in the sand and wait for the inevitable.
Immediately cut back on any unnecessary spending – and evaluate what you actually consider to be necessary to ensure it truly is absolutely essential. Even small budget cuts to groceries shopping for example, or walking whenever possible to save petrol money, could help to narrow that gap significantly.
You should make sure to check if you are eligible for any reduced rates on certain things. If you have any kind of physical disability then a standard rate mobility car can be incredibly useful not only for your quality of life but for making sure that your finances don’t spiral out of control.
Also check you don’t have any non-essential direct debits coming out and cancel any you don’t actually need to pay; for example, subscriptions. Although do be aware of minimum notice periods for any cancellations, or potential charges as per contracts, when doing this – you don’t want to find yourself in a different type of financial difficulty instead!
Raise Some Cash – Fast
Next up, try to raise the shortfall money. There are several ways to potentially do this, depending on how fast you need to raise the cash how much you need. Here are some suggestions:
- Have a clear-out. Sell any secondhand items in good condition that you no longer actually use or need. While sites such as ebay are the obvious first choice for many people, I have personally found that it is actually often quicker and easier to sell on local selling sites via facebook, if your area has one.
- Get some extra temporary work. I know this can be a very tough task, and it depends on how much time you have, but it is sometimes possible! Take on extra shifts at work, or enquire about overtime. If this is not an option, you could try temp agencies or online sites like fiverr. Or look into casual work, such as at local bars. You could also just generally ask around to find out if anyone needs an extra pair of (paid) hands for one-off jobs; you never know, you might be asking at just the right time for someone to offer an ideal opportunity! (Note: Make sure you disclose paid work of course!)
- Exchange gift cards for cash. Do you have any gift cards that you haven’t yet spent? Assuming you can’t spend them on essentials, try selling them on local selling groups, or sites such as Zeek.
And if all else fails…
If you have tried and failed to resolve the issue using the advice above, and anything else you might have thought of, then you may feel that it is time to consider borrowing. One possibility might be to ask friends or family, whereas for others this may not be an option, or you might simply prefer not to go down this route. A payday loan, using a credit card if you have one, or extending your overdraft are other options to explore. If the cash flow crisis is due to an unexpected item replacement, buying it on finance may be another option. It is important to compare fees and rates if you do borrow, in order to find the solution that is right for you. And remember to pay the money back as quickly as possible, and most definitely on time, so that you don’t fall further into debt.
Last But Not Least
Once you have resolved the cash flow issue, try to reflect on what went wrong and take stock of your financial situation. Consider if and how you could try to avoid a cash flow problem happening again in the future. Review your budget and make sure you stick to it. Start a savings account if at all possible; try to put 10% of earnings into it if you can. The more prepared you are for any financial scenario, the less likely you are to get caught out again next time something crops up! (I do realise this is often easier said than done of course!)
*Disclosure: This is a sponsored post.