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.
Dance Around Your House
No really. If you’re not a dancer (but c’mon we know you can move it move it) choose another little activity that will dissipate any nasty emotions.
When you panic, you might make a knee-jerk reaction you’ll regret. Yes, you need money to survive, but if you do something like yelling at your employer or borrow money with a high-interest loan, you may be dealing with those consequences years down the line.
Instead, take a few deep breaths and try to relax. The goal is to look at your situation objectively. Once you feel more in control, move onto the next step.
Look at Your Bank Accounts
Seeing where you stand financially will help you set a plan. No matter how you feel (you got this!), 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 fund 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. Charlie can help you set one up.
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 AKAthe 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 checking 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?
Slash and Burn Unnecessary Items
Remember — this is temporary. Once your paycheck arrives you can get your subscription services 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.
f there are services you can suspend or cancel temporarily, great. If canceling 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 jewelry. 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 offering to mow your neighbors’ lawns, walk some dogs, 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!
Talk to Your Employer
It varies from state to state, but most employers in the U.S. are required to disclose when and how you’ll get paid. Now’s the time to approach your employer to ask what’s going on and when you can expect to receive your next pay. You may also want to contact your state labor agency to find out about your rights. This way, you can keep updated on what’s going on and it might provide some relief.
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.
You’ve got this.