run out of money

What to Do if You Run Out of Money

Posted on 17th January 2017

To “Run out of money” is something that most of us dread. However, research from the Money Charity shows that household debt in the UK now averages at around more than £54,000 per household. This highlights the problems that many of us are facing with consumer credit, as more people are looking for cash because they cannot generate the cash themselves.

If you have found yourself in a situation where you have run out of money to live on, you need to make the following decisions and follow these top tips:

Decide if you are going to let your family know when you run out of money

Your family cares about you and naturally does not want to see you going through hardship. Some people opt not to tell their family about their financial problems while others think that it is better that they tell their financial problems to their family to see where they can help. When you decide to tell your family, make sure that you don’t hold anything back and you tell them the full financial picture so that they can make a decision to help you or not.

Learn the importance of budgeting to avoid cash shortfalls

A cash shortfall is when you have spent more than you have earned. By running out of money, you are essentially spending too much and bringing in too little. You need to have a budget so that you do not go through a cash crunch. A budget will set you free because you will look at the money that you receive and then you can make adjustments to suit you. Many people see budgets as handcuffs that restrict them but it does not have to be like that. You need to budget in order to manage your personal finances. Without budgeting, you cannot create the financial future that you want for yourself.

Don’t take out short term credit if you don’t have income

One thing some people do when they run out of money to live on is that they take on short term credit such as a loan while knowing that they cannot pay it back. This is one of the most financially destructive things that you can do because you will not be able to repay without a job, you will accrue interest and you could find yourself in a debt snowball where the debt just grows and grows. Short term credit facilities are only for people who have jobs that pay them a monthly salary on time, ideally via Direct Credit, so that the repayment for the loan can be taken out on Direct Debit.

Know why you have fallen into a cash shortfall situation

Once the emotion of running out of money has subsided, you need to know why you fell into that situation. The root cause for running out of money tends to be two reasons: You either overspent or you have too many debt repayments to make. Once you have figured out why, you must avoid these mistakes like the plague so that you don’t run out of money again.

Know how to make money go further

Another good idea if you don’t ever want to run out of money again is to learn how to make your cash go further for you. If you need to buy new things, you don’t need to buy them brand new. Look for used items that are cheaper and don’t cost as much money. This way, you will save more money for yourself and you won’t find yourself borrowing money.

If you think you are going to experience cash problems, consider a small loan

For the people who are in full-time employment and have an average credit rating, a small short term loan from £50 is a good way to bridge the gap between money you need and money you don’t have. These loans have higher interest rates than traditional larger loans so make sure you know and understand the interest rates before you take out the loan. Once you have taken it out, you wait until your next payday to repay the loan according to the repayment that the lender has suggested.


Running out of money is something that you need to see ahead of time. Don’t wait until the last minute and panic about it. You should know the exact day that you think you will not have any money, and then work backwards to ensure that you have your finances sorted out properly. The emotional stress and pressure of running out of money has caused some people to harm themselves; it is something that needs to be talked about whether it is with your lender or your family and friends. Never take an extreme decision – always communicate because solutions can always be found to ensure that you don’t run out of money again.

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