3 steps to take when you have no money

The moment you realise your skirt is tucked into your knickers. The moment you realise something rather unforgiveable has just left your mouth. The moment you realise you’re 100% totally skint. I’m nominating these three as the worst emotions known to man. Realising you’ve got absolutely no money is probably going to be the start of a pretty tough period in your life, but there’s no need to give up. After all, there’s only one place to go from here, and that’s up.

The important thing is to reset your habits now. You’ve got no money, so change your behaviours from scratch. Not tomorrow, not next week, not when you have a bit of spare cash in the bank account. Now is your time to shine. Here are three steps you can take when you realise your life has entered the red.

Step #1: Take stock

Ignorance is a major contributor to financial problems. If you don’t know how much money you have, there’s no way you can budget properly. If you’ve hit rock bottom, then it’s time to sit down and put it all out on the table. Put a pile of bills on one side and tally them up. Write out your sources of income and tally it all together. Work out how you can simultaneously pay off your debts and boost your emergency funds. Set yourself feasible, realistic targets.

A lot of financial problems are an issue of setting your mind to it. I’m not suggesting for a second that it’s an easy thing to fix; your psychology is probably one of the more intractable things about you. But being broke is, to an extent, about your financial psychology and personality. Talking through your goals and setting your mind to them is half the battle.

Step #2: Detox

I’m not talking about cigarettes and alcohol, although if you’re totally skint, you might want to think about cutting them out for the time being. No, I’m talking about detoxing your life. Clean out your entire house, and sell your unwanted clothes and furniture at a garage sale or on eBay. Think about the waste involved in running your household; if you’re running several stereos or computers, think about either storing them or selling them. Close doors in winter and heat one room at a time. If you’ve found yourself totally broke, you may need to reconfigure your lifestyle around some frugality ethics.

Step #3: Widen the girth

At some point, you’ll either have to cut your expenses or increase your income. Neither is easy. As The Simple Dollar states whether you decide to cut expenses or earn more money, you can’t expand your spending to fill the money you have saved.

Every penny you save, you should put towards paying down your debt. You want to make your hard work worthwhile; don’t spend the extra money you’ve found yourself on stuff that you’ll be putting in a Vinnies bin in a couple of weeks.

Hitting rock bottom has it’s own peculiar charm; you get to start again from scratch. Setting up new habits and stripping your life of all the unnecessary possessions and habits definitely has a refreshing feel about it. Get some Zen into your daily existence, and your finances will thank you for it.

What steps did you take when you realized you were totally broke?

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