When There Is Not Enough Money – $100 Giveaway

by on Dec 17 2012 - 28 Comments

Our last $100 giveaway just wrapped up so it’s time for another one! The prize is $100 cash through Paypal or Amazon gift card (winner’s choice). The theme for this giveaway is a difficult one – When there isn’t enough money at the end of the month.

Let’s face it: most young adults don’t have a lot of money in the bank. The edge that young adults have is their future earnings potential and the fact that they have a long period of time before they hit retirement. Those in their 20s and 30s face different challenges than those in their 40s and 50s. They likely haven’t reached their peak earnings potential, and oftentimes they have a lot of debt whether it’s in the form of student loans, credit cards, mortgages, car loans, or otherwise.

One thing I have noticed about my peers in their 20s is that they generally are willing to work hard and desire things like a home, a decent car, and a family that is provided for. The problem is that my generation has more student debt than any generation before us. If you start with a relatively large student loan payment, tack on rent or a mortgage, health insurance premiums, auto expenses and insurance, cell phone bill, etc. there is a high level of fixed expenses each month right out of the gate. There is little room for error in most cases.

But what about those expenses that come once in a while…and usually are unexpected?

What if you own a home and your furnace breaks? What if you have an unexpected surgery and are faced with a $3,000 bill (and that’s a kind of bill you can expect even if you already have insurance)? What if your car breaks down and requires a $2,000 fix?

While these are not fun situations to be in, the reality is that young adults as a whole have a cash and cash flow problem. Many are just starting their careers or trying to find a job in their field. Others are still trying to figure out what they want to do with their life. Sometimes there simply is not enough money at the end of the month to cover all the monthly bills, life expenses, and unexpected bills.

What can you do?

  • Sell Stuff

    If you have something that you can live without, try selling it. Whether it’s an Xbox or some stuff that’s been sitting in your or your parent’s basement for years, see how much you can make selling those things.

  • Appeal to Friends and Family

    If the situation is dire enough, you can always appeal to your parents, siblings, and others for a short-term loan. Obviously an important point here is to make sure you pay them back asap! I would say paying back friends and family that lend you money should be your top priority; more so than credit card debt or anything else.

  • Appeal to student loan companies

    I know some people who have worked out a plan with the companies/institutions that own their student loan debt so that their monthly expenses are only a certain percentage of income. I have not looked into this personally, but it sounds like a win-win. Especially if you are in a tight spot, making a call to try to work out a deal can be a good idea. One example would be only paying interest this month and having an additional month tacked on.

  • Check out Active Hours

    Active Hours is the sponsor of this giveaway. They are similar to PayDay loans but charge no fees or interest. They operate off of donations or “tips.” They are a startup and relatively new. I would not recommend PayDay loans to anyone, but I think that Active Hours may be a good option if you are really in a bind.

    Please note: I did not receive compensation from Active Hours, though they are the sponsor of the giveaway. I was not required to mention them in the post, but I did because I really do believe their services could be a good option for someone who is in a tough spot.

  • There are other solutions such as working odd jobs for someone and getting the cash immediately, or other side sources of income like babysitting, taking on shifts at a restaurant, and otherwise. Ultimately though, the goal is to get cash quickly and make up the difference so that you can move forward and not be stressed out about not paying your bills.

Make a plan going forward.

Once you fix your cash flow problem this month, start doing some of the things that will set you up for success going forward:

  • Track Your Spending – see if there is anything you are paying for that you could live without

  • Create a Budget – compare your results month-over-month

  • Pursue Side Income – my favorite way to deal with high expenses

Obviously it’s not fun to have to deal with not having enough money, but there is hope! Especially if you are a young adult – you have your entire life ahead of you and many years to plan and work yourself into a better financial situation.

Who’s ready to win $100??? If you want to enter the $100 giveaway, the rafflecopter widget is below. Best of luck!

a Rafflecopter giveaway

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Photo by Charles Williams
 
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28 comments
SavvyScot1
SavvyScot1

Selling stuff has a 2-fold benefit too.. De - cluttering!!

KyleJames1
KyleJames1

Love the sell stuff tip. This was something that worked for me when I was paycheck to paycheck. As a matter of fact, ebay and Craigslist were 2 of my very best friends for about a year and a half!

eemusings
eemusings

I would probably turn to my credit card first. My BF's family has no money and I'm not super close to mine - I know they would help me out but I'd rather not unless it was super dire straits.

CanadianBudgetB
CanadianBudgetB

I'm all about the budget because that is where people will see the numbers they need to see provided they use the budget as intended. Many people have "stuff" lying around that others can make use of and that means $$$. If you can sell stuff to make cash especially if it's been sitting around go for it. We do that all the time. In fact we picked up $60 last month for a pair of shoes that were in our basement for 3 years! 

Veronica @ Pelican on Money
Veronica @ Pelican on Money

I can totally agree with appealing to friends and family first. As long as I have the means of paying back quickly, during those few tough times I always turn to family first. My only advice to anyone going down this path is not to be like my brother (who borrows money from mom never to pay her back).

JordanObinger
JordanObinger

Great insight as usual!  I have definitely been known to walk around my house and throw things on eBay/craigslist! 

RFIndependence
RFIndependence

I wish we'd learn about older folks' mistakes before we repeat them ourselves, but when you are young you think the world is yours to conquer and you know it all...It would have saved me a great deal of time or money to listen once in a while!

moeyshay
moeyshay

I would contact my creditors and make arrangements to keep my accounts in good standing.  I would look over my budget and make changes accordingly -- earn more, limit expenditures.

TacklingOurDebt
TacklingOurDebt

Good post! The one thing that I have seen cause a lot of problems between friends or family members is borrowing money. Even as you say, pay it back right away, it can easily cause grief and has been known to damage many relationships.

OutlierModel
OutlierModel

Good tips.  I think one of the best things you can do is make more money!  Fastest and least painful way to clear up some debts quickly.

DebtRoundUp
DebtRoundUp

Nice tips DC.  The only thing you can do is change your circumstance because others usually won't change it for you.

Eyesonthedollar
Eyesonthedollar

I also am interested to see if something like Active Hours can work. I would avoid Payday loans at all costs. You are right that you have to be very careful about tracking expenses. It is so easy to get a paycheck and spend it all right away, finding yourself broke and wondering where the money went.

Joanna@OurFreakingBudget
Joanna@OurFreakingBudget

Great tips! I especially like the "sell stuff" tip. It's easy to forget that that's an option. I hope if my husband and I ever find ourselves in this situation, we'll be willing to do all we can in our own power first before enlisting the help of family or friends!

MoneyMasterMom
MoneyMasterMom

Nice of you to mention Active Hours.  The concept sounds pretty cool, but I worry that people will take advantage, or become reliant  on the service, and it won't be able to sustain itself.  I do hope that I'm wrong as I REALLY dislike cash advance stores

FrugalRules
FrugalRules

Good post DC. I like how you point out setting out a budget. I think if you run into this situation that it's the perfect time to start looking at a budget once you're out of the woods. It might seem counter-intuitive to some, but I think that is a great time to get working on one.

DC @ Young Adult Money
DC @ Young Adult Money moderator

 @OutlierModel For sure.  It may be tiring working that night shift after working all day, but sometimes you have to do it for a season until you can adjust your situation.

DC @ Young Adult Money
DC @ Young Adult Money moderator

 @Eyesonthedollar I think a big thing with Young Adults is having the money already spent on fixed costs/bills before even getting the paycheck.  Many young adults have huge student loan payments they are responsible for on top of all the regular living expenses.

DC @ Young Adult Money
DC @ Young Adult Money moderator

 @MoneyMasterMom I also question how sustainable it is.  Perhaps if a company just had transparent fees/penalties they could compete with PayDay loans?

DC @ Young Adult Money
DC @ Young Adult Money moderator

 @FrugalRules Thanks John!  Yes, I definitely think the first thing to do is to get out of the situation - find a way to make the dollars add up and pay off those bills.  Setting a budget that takes into consideration your income is essential!