How To Stop Impulse Buying

Shopping can, understandably, provide a thrill. There's something exciting about seeing something you enjoy and being able to purchase it. However, these "surprise" purchases have a tendency to derail budgets and become an unhealthy financial habit. 

Running Out of Emergency Funds? Here's What to Do

2020 was a wild ride, and for many Americans, it was an expensive one, too. Roughly 46 million Americans wiped out their emergency fund during the year, with around 11 percent of adults saying they had to borrow money to cover everyday expenses, like...

2020 was a wild ride, and for many Americans, it was an expensive one, too. Roughly 46 million Americans wiped out their emergency fund during the year, with around 11 percent of adults saying they had to borrow money to cover everyday expenses, like groceries. 

Couple that with the fact that over half of Americans couldn't cover a $1,000 emergency at the beginning of 2020, and it's not hard to believe most of our emergency funds are depleted.  

That's a scary thought, especially when you're facing an expensive emergency right now. It's not going to be easy, but with a plan, you can get through your emergency without your fully-stocked fund. Here are seven ways to keep your household afloat. 

What to Do If Your Emergency Fund Runs Out 

1. Do an honest assessment of your finances. 

First, take a step back and examine your resources. Figure out what assets you have, the total cost of your debts, as well as how your income matches with your expenses. In general, ask yourself these questions: 

      • How much is left in your emergency fund?
      • If you're facing an emergency, how much will it cost you? 
      • How much is your household income?
      • How much are you spending per month on essentials? 
      • How much credit do you have available?
      • What are the minimum payments you have to make on your debts? 
      • What can you sell or borrow against? 

By the end of this assessment, you want to have a clear picture of your finances. Don't settle for vague ideas and imprecise numbers. The more specific you are with your finances, the easier the next steps will be. 

2. Cut your expenses.

Now that you're hyperaware of your financial situation, it's time to get tough on your spending. Prioritize what you need and eliminate "leisure" expenses, such as ordering takeout or binge shopping online. If you want to get really intense, here are a few areas where you cut expenses more. 

      • First, reduce the cost of your essentials, like groceries and insurance. For example, you can cut the snacks from your shopping list, as well as buy generic instead of popular brands. As for car and home insurance: you could be overspending on your rates. Shop around different companies, and you may find a lower rate for the same coverage with a different insurer. 
      • Then, cut all unnecessary recurring expenses, such as streaming and gaming services, grocery delivery apps, higher-than-needed cellphone plans, gym memberships, and other monthly costs. 
      • Pause your retirement savings. Though you definitely want to revamp retirement contributions later, for now, put that money toward something more urgent.
      • Finally, if you have loans and/or credit cards, see if you can consolidate debt and lower your monthly payments. Make sure you pay attention to interest rates so that you are not surprised in the long run.

When you're less strapped for cash, you can pick these things back up. But for now, you have to do everything you can to get back on your feet. And that means cutting the fluff from your budget.

3. Get a side hustle or find a new job.  

If you need money, what should you do? Easy. Make more money. Ask your current employer if extra shifts or overtime are available, then put in a few extra hours to get some more cash.  

Or try a side gig: if you like arts and crafts, make cool things and sell them on Etsy. Or if you're handy see if you can offer your services to your neighbors, HOA, or landlord. Need help finding a side gig? No problem. Use the free Income Helper on Thinkflow to see what's near you.

4. Reach out to lenders. 

If times are really tough, don't disappear on your lenders. Most of the time, if you tell them what's going on, they'll work with you to ensure you're not overwhelmed with debt. Many will even help you enroll in hardship programs, which, if you're accepted, may lower interest rates, waive fees, and extend credit limits for a set amount of time. 

5. Start selling or downsizing. 

Look around you—there's bound to be something you can sell. Maybe you have too many shoes, tools, or books, or maybe you have exercise equipment you've never used. Put that stuff on Craigslist or eBay and make some extra cash. 

6. Triage your bills. 

What happens if you don't have enough to pay all your bills? 

If you can't pay all your bills, you must decide which bills you absolutely have to pay and which you can afford to skip. In general, you should focus on paying the mortgage or rent and keeping the power on. But sometimes utility companies will let you skip a few payments without leaving you in the dark. So, again, reach out to your lenders, landlord, and utility providers and see what hardship assistance they offer. 

7. Don't dip into retirement accounts … unless you have to. 

When you're strapped for cash, you'll feel tempted to tap into your retirement accounts. Resist this as long you can: early withdrawals on retirement accounts such as 401(k) and IRAs come with steep penalties and you'll have to pay income taxes on whatever you withdraw. Then there's the opportunity cost—the money you withdraw won't grow, which means you'll lose out on thousands of dollars in compound interest. 

That being said, if the emergency is severe enough—your family is at risk of being homeless, for instance, or health issues are threatening their lives—withdraw what you need. 

Feeling strapped for cash? 

Running out of emergency funds is super tough, and it can take a lot of planning and expense cutting to get back on your feet. If you need some help planning, Thinkflow has your back. We'll help you find side gigs to supplement your income or a new job that pays higher than your current one. Try Thinkflow today for free and let's start rebuilding your emergency fund.


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