What to Do When You Miss a Paycheck?

You’ve finally got a handle on your budgeting and then the unexpected happens… your paycheck is late.

If the thought is already sending you into a downward spiral, hold up. 

Yes, missing a paycheck is a less than ideal situation, but you need to have an action plan in place before it happens.

Don’t feel like you have to take out a personal loan or grab your credit card. 

Go through the following steps first to see what makes sense for your individual situation.

  

Look at Your Bank Accounts

Seeing where you stand financially will help you set a plan. No matter how you feel, looking at the numbers gives you an objective picture of what is going on.

• Look at all your bills (including debt) and see what you owe and their due date
• Look at how much money you have in your checking and savings accounts

Once you have those numbers,  you can create an emergency budget to get you through the red.

Tap Into Your Emergency Fund

If you have savings set aside for emergencies, now’s the time to use it. That being said, it’s still a good idea to cut your budget down to the bare necessities just in case. When you start receiving paychecks again, then you can factor in a line item on your budget to replenish your emergency fund.

For those who don’t have emergency funds, now’s not the time to feel shame around it. Take this as a reminder that an emergency fund is there to help you when times are tough. Once your situation is back to normal and you’re receiving a regular paycheck, consider setting aside money in case an emergency happens.

As for how much to aim for, most experts agree that $1,000 is a good amount to strive for. Once you’ve reached that milestone, then aim for more — three to six months of your expenses.

Make Sure The Necessities Are Taken Care Of

Now is the time to focus on the essentials, literally. Right now, your essentials are shelter, food, utilities, and transportation AKA the items you need to ensure you still have a place to live and food on the table. If your last resort is eating at home with your parents for a week, you do what you gotta do.

The last step had you list out all of your bills and debt. Go ahead and include expenses and list them in order of importance. Once you have that, look at your emergency budget to see if you’ve allocated money towards the essentials. If not, adjust your budget accordingly.

Let’s say you have $500 in your savings account. Take a good, hard look at what you need to purchase until the next paycheck comes in.

For example, you tend to buy groceries once a month, but you notice that your pantry is pretty well stocked. Can you get creative and make meals based on what you already have? Or can you buy sale-only grocery items?

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Slash and Burn Unnecessary Items

Remember — this is temporary. Once your paycheck arrives you can get your subscription services (Netflix & Spotify) back if it makes sense. It sucks to think about giving up on things like Netflix and meal delivery kits. However, cutting back will help provide some relief when money is tight.

If there are services you can suspend or cancel temporarily, great. If cancelling them means paying a hefty fine (like many cable subscription packages), see if you can negotiate with the company to see if there’s anything they can do. Charlie can help you with that! Just say “Help me cut my bills” and he’ll lead the way.

Same goes for any necessary expenses. Call up your mortgage or insurance provider and explain your situation. Some companies —  though not all — may help provide some relief by allowing you to defer your payments.

Sell Your Stuff

If cash is really tight, consider selling some of your unwanted items. Go through all your goods to see what you can sell — think baby clothes, designer items, books, CDs and even jewellery. There are plenty of resale or consignment stores that will take those items off your hands and pay you cash right away.

You can also consider selling your time and skills, like giving out flyers or tutor kids in the evenings. There are tons of ways to put a few extra dollars in your pockets. Get creative and you may be surprised and what you’d find!

If you do miss a paycheck, remember that it’s not the end of the world. Breathe, try to relax and look at your financial situation objectively. There are solutions. And if you need to ask for help from friends, family or in the form of a loan, so be it.

This article was originally published at HiCharlie.com.

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