Skating By For a Week When Your Checking Account is Nearly Empty
Posted by jefferson on Jun 27, 2012 in Saving Money | 48 comments
Have you ever popped in to look at your checking account and realized that the balance was flirting dangerously close to zero? Before we started taking budgeting seriously, this type of thing happened to us all of the time. You could just pretend that you didn’t notice and continuing to spend money as normal, but this approach will clearly lead to you being torn a new one by bank fees. This discovery leaves you in a state of “financial limbo” until your next payday. You have no choice but to tighten your belt, avoid spending ALL money for a few days (or even weeks), and somehow find a way to skate by.
This scenario is not unique to folks who are living in complete financial disarray. It can happen to anyone. We actually found ourselves planted firmly in a “broke week” prior to last Friday’s paycheck. This time, the problem wasn’t that we went on a spending frenzy, or had some large unexpected expenses creep up. Instead, I had actually overestimated the amount of money that we could use to repay debts– and hadn’t left enough in the coffers to cover basic expenses like food and gas. We could have raided the emergency fund to help out, but there wasn’t a true “emergency” that justified doing this.
This scenario shouldn’t happen in the future when we finish paying down our balances and finally get some debt relief. But for now, we didn’t panic and calmy responded by shifting our plans and habits a bit. If you find yourself in this low-balance situation, here are some tips to help you get through it.
Scrounge For Dollars
We try to live cash-free as much as possible, but when we do get any coins, we drop them into a bucket in our kitchen. In lean times, this bucket can be raided for gas money, lunch money, and whatever other needs arise. This is also a great opportunity to clean out your car and see if you can find any loose change floating aroud.
Coins alone may not be enough to cover all of your needs, so you should also consider selling a few items to help raise some funds. Everyone has things in their house that they no longer use, and you shouldn’t be afraid to convert those items into cash. E-bay tends to move rather slow, so Craigslist might be a better option for quick fundraising. You can sell anything on craigslist, really, but electronics and baby items tend to fetch good value and lots of interest.
Raid Your Pantry
The biggest variable expense in our lives is our food costs, and at any given time– we have enough groceries in our house to skate by for a week or so. When times get tight, it is a great time to raid the pantry to see what cheap and easy meals you can come up with. For dinner, you could have a “soup night”, as you have to eat those old cans of minestrone at some point, right? This can also be a great opportunity to put the big bag of frozen chicken to good use. For lunch, let the kids have peanut butter and crackers. For breakfast, oatmeal is cheap and easy and makes a great budget food.
You can also combine ingredients that you already have to make new meals. For example; combining a can of tuna, some minute rice, a can of frozen peas, and some cheddar cheese, makes for a delicious meal.
One thing you have to avoid during these periods is eating out. Bring cheap lunches to work, and eat together as a family at home. Your limited budget can get drained in a single night if you can’t avoid making it a restaurant evening.
Work From Home
If you have a job that lets you work from home, lean times are the perfect opportunity to take advantage of that policy. You will save a ton on gas money, you wont be tempted to go out to lunch or hit up the coffee bar, and you can just work in your pajamas all day (which saves on laundry!) Of course, don’t take more WFH days than you work allows, or you may have this privilege taken away in the future.
Last Resort – The Emergency Fund
The scrounging methods above will work well for variable expenses, but if you have a credit card payment due and no money to cover it– you may want to consider raiding your emergency fund. I would be willing to call it an “emergency” if you find yourself in a situation where the bill won’t get paid otherwise, and the banks are about to drop late fees and rate increases on you. Once you do get your next paycheck, you should certainly reimburse your e-fund back to its previous value, so that you are ready for the next emergency.
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I started working from home three years ago and can’t believe the amount of money I’m saving in gas. Of course, I’m also bringing home a much smaller paycheck, but it’s still been a nice trade-off.
AverageJoe recently posted..5 Summer Activities to Create Money Savvy Kids: High School
I don’t think I could handle WFH full time.. even with all of the cost savings.. I am just not nearly as productive with all of the family distractions around. But that is another post for another day..
I have been working at home since April now and it has been HARD. I have two small children and a wife that thinks I’m messing around on Facebook all day! I am finding ways to be more productive and make long trips to Starbucks!
I am *so* glad we’re not at this point anymore. Instead when we live off our pantry for a week it’s because we haven’t had time to go grocery shopping!
nicoleandmaggie recently posted..Equifax sucks: A Rant
Hah.. We have been there too, Nicole & Maggie… Life is pretty crazy these days with all of the kids activities, and there are times where we can’t find a good spot to go out and grab groceries. Usually, running out of milk or bread will force the issue eventually.
We always keep a big buffer but that’s because I’m a huge worry wort. However, when my balance does get below my comfortable point, I definitely buckle down and stay home and eat at home at all costs.
Michelle recently posted..Summer Bucket List
Good for you, Michelle.. You have to be smart about your choices.
I’m glad that we don’t have to freak out about paying bills any longer. Our budgeting method has worked so well over the years that I basically project out the month before it happens (that way I can see if we’d ever come up short in any given week throughout the month).
I remember the days when I always had to worry about over-drafting the checking account but I’m thankful we’ve learned to stay in the black each month!
WorkSaveLive recently posted..3 Ways to Get a Loan Online
We try to do this too Jason, but sometimes unexpected expenses will creep up.
We now have enough of a buffer to protect us from this scenario, but it wasn’t always that way…
I admit that I used to take the easy way out and just transfer some money over from my line of credit. I just wasn’t on top of my spending enough to know if any automatic payments might push me below zero and get that overdraft fee. These days I just make sure to keep a decent amount of cash in my account to prevent that situation.
Modest Money recently posted..Automating Social Media Marketing
We haven’t had any overdraft fees in quite some time, which is a direct result of the financial responsibility that we have been documenting on this website. In the past, those bank fees just destroyed us.
I have a credit card, so that’s how I deal with this. I just pay it back when I get paid next and I always make sure to pay it back in full.
Daisy recently posted..A Few Simple Steps to Build Wealth
I have also the credit card that helps me get over this kind of situations and I keep track of all expenses. Anyway I have 50 days of grace period so I’m not very stressed about paying back.
Gekko recently posted..Who else wants to quit smoking?
In the past, I did turn to credit cards in this situation.. But there were times when the bill would come due, and I just wouldn’t have the funds to cover it. That is how I got into trouble.
Have you ever had a month when you didn’t have enough to cover what your charged?
Jefferson,
I save every coin after I make a cash purchase. They pile up for awhile and if I’m in a position to put them in savings, I do. But every now and then, they help me skate by. I’ll roll as much as $60 every four months.
Great tips!
-Christian L.
Smart Military Money recently posted..Don’t Get Hooked on Military Phishing Scam
We used to really rack up the coinage.. but these days we are mostly electronic (for tracking purposes), which has cut down on our change production dramatically..
LOVE this post. I remember doing this so many times when I first got out of college. I even used to raid my parent’s change jar. What I love most is that you didn’t tell people to use their credit cards
http://www.lbeeandthemoneytree.com
L Bee and the Money Tree recently posted..Four Minutes
Without a doubt, writing this post took me back to college when I pretty much was ALWAYS in this situation.. You learn to get by on very little…
Craigslist is great for selling stuff to get some extra cash. We have definitely been utilizing that website!
Mackenzie recently posted..High School: Not Just For Learning
I love Craigslist and used to sell things regularly on there..
Pretty soon, we will have a bunch of little baby stuff that we can sell.
I make sure to have a good amount in the EF. I haven’t had to deal with a shortfall in a long time. Thanks goodness.
Joe @ Retire By 40 recently posted..The Cost Of Our Summer Vacation
Having a nice and secure EF will definitely cover you in these scenarios.
I’d probably dip into my EF in a situation like this… which I hope to never encounter. A week’s buffer is much too small for me.
Well Heeled Blog recently posted..Honeymoon Spending Summary
The emergency fund should be there to keep you from getting slammed with extraordinary fees.. I think that qualifies as an emergency, personally.
The bucket idea is genius and so helpful when you need money. My father use to have one, and when we didn’t have money for food, he would go down to the store and put them in the “money eater” as my brother and I called it when we were little. I even remember when I was in second grade, I went into the bucket and took out 80 quarters to pay for my 2nd grade yearbook. Honestly, that bucket was a lifesaver more times than I could count.
Cassi recently posted..The Fastest Way to Get Out of Debt
we don’t get to “empty” the bucket as often as we used to, since we have slowed down our use of cash.. but it still has come in handy on multiple occasions!
I’m no stranger to scrounging for dollars or raiding the pantry. I use a zero based budget and live one month ahead. This month that meant that my checking account had $3232 in it on June 1st. I don’t have another paycheck coming in until June 30th and things are starting to get tight (they always do the last few days of the month).
Felicity @ Waist & Wallet recently posted..Scaling Down: Week 6
Nothing wrong with that, Felicity.. I get paid bi-weekly and most of our bills are automated.. There is a “variable” bucket that includes food/gas/anything else..
We have got in trouble in the past, when larger “variables” are thrown into the mix..
We happened into a situation that solves this problem unintentionally. We get paid on the 25th of the month but budget from the 1st to last day. So if we ever run out of money at the end of a month, we already have next month’s money in our checking account so nothing bounces, nothing overdrafts, and we have the rest of the month to figure out how to pay for our overage. We have a slush fund savings account as well so purchases can be covered from that fund if necessary if they were extra-budgetary. So essentially we have a TIME buffer, not a MONEY buffer in our checking account.
Emily @ evolvingPF recently posted..Average Clothes Spending and Pattern
I hear you. Sometimes we have the TIME buffer (my husbands direct deposit mysteriously comes early), but I try not to rely on it. We do have savings that I could transfer into the checking account, but again I try not to – this is a last resort. I really try and force myself to live within the dollars I actually budgeted. It’s all mind games, but it helps us make progress.
Felicity @ Waist & Wallet recently posted..Living on Last Month’s Money
That sounds like it works well for you.. having a slush fund savings account would certainly be a big help.
When I first got out on my own I used to take my checking account dangerously low. I’m pretty lucky I never ended up overdrawing my account. I did that for probably two years before smartening up and making a budget. I haven’t run into this problem for awhile but if I did I would probably use the emergency fund.
Good to hear that your financial house in order to the point where you no longer have to worry about this!
Tough times call for stricter budgeting measures. When the check account says that there’s no money to work with, this is the point where your creativity is surely tested. It’s very painful, but it’s necessary. The upside is that it makes you a much wiser personal money manager, and your children learn from this exercise as well.
Anthony Thompson recently posted..Self Manager – Reasons You Should Celebrate Losing Your Job
Good point, here, Anthony.. It is good to help keep my kids grounded by letting them learn that there are times when you just have to wait..
I always see myself situtiation like that also. I think its never getting any easier either. Maybe someday..
Raiding your own pantry is a great idea. Sometimes I don’t realize how much CRAP we have in there. Using a few things here and there can definitely spice (hah, get it?) things up and trim down the grocery bill. Too bad we don’t like eating canned food and pasta though haha
We actually try to avoid the cans and pasta as well for the most part, but we do have a little stockpile…
Ever since I have been married, I’ve had a little bit of cushion to avoid these type of concerns. I couldn’t live any other way now.
20′s Finances recently posted..What Jobs Do You Avoid?
I try and keep $100 balance in my account in case I mess up somewhere but then again I don’t have a family to take care of. There are times when we eat from the pantry when my mom doesn’t want to overspend.
Minimalist approach is important for all the things you’ve mentioned to live stress free life on a limited income. You guys are doing awesome job of managing your finances.
I did this just last month and had to use emergency funds to cover. I’m just so SICK of that student loan that I was a touch too aggressive with the payback. I’m still recovering, but it does inspire me to hustle more! I hate running out of money before running out of month.
Kathleen @ Frugal Portland recently posted..Grateful Thursday
Every now and then we run out of money in our grocery envelope. I’m amazed at how my wife is able to make it work and somehow magically create meals for our family of seven from food we’ve got in the freezer and pantry. You can make it stretch if you really need to, and are willing to be creative.
Rich@Money Wise Pastor recently posted..How to Put the “Fun” in Funeral Planning so it’s not so Expensive or Overwhelming
Totally feel ya. I’ve tried to stick to the policy of “checking account cushioning” – meaning I pretend like a $200 threshold really means zero. It seems to be working..
Nell @ Housewife Empire recently posted..Ode to Alexa
Scrounging is definitely an art form. When I was a broke college student, I found all kinds of ways to hustle some extra money. I’d cash in on some vacation time or raid the recycling area for beer cans. It’s amazing what you can do if you are focused and willing.
JP @ My Family Finances recently posted..You Should Get an Emergency Fund and Reduce Debt: Top Ten Family Finances Posts #7
I don’t mind the checking account getting close to zero- especially after paying bills and distributing funds to different accounts.
However, if my savings/emergency fund accounts started to dwindle close to nothing, I’d probably start to panic a bit!
Dave @ Debt Black Hole recently posted..Financial Nemesis Update: June 2012 Eating Out Total
I prefer to have a buffer in our checking account at all times, but I admit that our balance can flirt with zero even today, as we are trying to optimize our debt repayment as much as possible.