What To Do In A Financial Emergency When You Have No Emergency Fund

Financial Emergency

If you have found yourself in a financially difficult situation and you have no emergency fund to fall back on, there are still a number of things you can do to protect your financial interests. You do not need to despair, you can take action and get the situation under control. In this article, I lay out a number of steps for you to take in both the short term and the long term to help you navigate your finances during this time.

Short Term

First of all, you need to have a short term plan. In the short term, here are some steps you can take:  

  1. Create a written budget. A budget is a cash flow or spending plan. You will need to exactly how much money you have coming in and going out to get through this period.
  2. In your budget, the expenses you need to prioritise are housing, food, electricity, and heat, transport to and from work, and your health. You should not consider putting money towards anything else until these costs are taken care of.
  3. Cut out any luxury or unnecessary spending from your budget. I know this will be difficult but it is temporary.
  4. Trim any fat in your spending. Ring your utility providers to get a better rate. Reduce your food costs by eating at home, meal planning, and food prepping. To get tonnes of info on how to meal plan to save money, sign up to my email list and I’ll send you my 16-page Ultimate Meal Planning Guide for FREE! Again, I don’t want to underestimate how difficult this can be, but it is temporary.
  5. If you are on a rapid debt pay down plan, pause your additional payments for now. Pay only your minimum expected repayments until this storm eases.
  6. Search for ways to bring in extra cash to your household. What skills do you have that you can use to make money? What can you sell around your house?
  7. Do not panic and cash out of your pensions or investments.

Long Term

As the name suggests, your short term plan will only help you in the short term. Next you need to have a long term plan to get this situation under control. There are a number of steps you need to include in your long term recovery plan.

  1. Increase your income. Increasing your income increases your options.  
  2. Get on a rapid debt pay off plan. Debt repayments eat into your income. By paying off your debt as fast as possible, you will be able to keep that income instead of paying your debt payments each month.
  3. Save an emergency fund. An Emergency Fund turns many (not all) emergencies into inconveniences. I have written extensively about emergency funds. Check out these articles here:

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