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Run Out of Money Before Payday? What to Do This Week

Two problems need solving: how to get to payday, and why it keeps happening. Here is a short plan for each, and which quick fixes to be careful with.

If you are reading this a few days before payday with a low balance, start with the first section. If it keeps happening every pay, the second section is the one that matters.

Step zero: find your real number

If the calculator shows a negative figure, the bill priority planner below helps you decide what to contact first.

Part 1: Getting to payday

Work out the real number

Write down your balance, then list everything that will leave your account before payday: direct debits, rent, buy now pay later instalments and card repayments. Subtract those from your balance. What remains is what you have for food, fuel and anything else. Divide it by the days to payday for a daily figure. It is a small number sometimes, but a clear one is easier to work with than a guess.

Protect the essentials first

Rent or mortgage, utilities, food, medication and transport to work come before anything optional. If a payment will not fit, it is better to contact the provider before the due date than to miss it silently.

Ask before you miss a payment

Many utilities, telcos and lenders have hardship teams and will often agree to a short extension or payment plan if you ask before the due date. Have the amount you can pay and the date you will pay it ready. Moneysmart explains how financial hardship requests work.

Look for a short-term source that does not cost more

• Pantries and food relief can cover groceries while you wait for pay.
• If you receive Centrelink payments, ask whether an advance payment applies to you. It is repaid from future payments, so check the details first.
• Family or friends, if you are comfortable asking. Agree on a repayment date.

Be careful with the quick fixes

Payday loans, cash advances and buy now pay later can feel like the only option on a bad day. The risk is that the repayment comes out of next pay, which makes the next gap bigger, not smaller. If you are considering one, read the full cost and repayment dates first, and talk to the National Debt Helpline (1800 007 007) if you are unsure.

What to say when you contact a provider

A short, clear request works better than a long explanation. Something like this is enough: "I am having trouble paying this bill by the due date. I can pay [amount] now and the rest on [date]. Can we arrange that?" Have ready:

• The amount you can pay and when.
• A brief reason, such as a reduced pay or an unexpected cost.
• Your income and main expenses, in case they ask.

Write down who you spoke to, the date and what was agreed. Moneysmart says lenders must consider a hardship request and give reasons if they refuse.

If you are paid on a date that is not the date you need money

Sometimes the problem is not too little, it is the wrong day. Common causes:

• Your pay lands on a Friday, but rent is due on the Wednesday before.
• A public holiday pushes payday back while direct debits still go out.
• You are paid fortnightly, but a bill is charged weekly.

The fix is to move one side. Ask your provider whether you can change the direct debit date, or ask your employer whether pay can be moved. Many providers allow date changes, though not all do.

Cheap ways to stretch food and fuel for a few days

These help in the last few days before payday. They are not a long-term budget plan:

• Plan meals from what is in the pantry and freezer before buying anything.
• Buy staples and cook in bulk.
• Combine car trips and fill up only what you need.
• Check local community pantries or food relief if you need it. Services differ by area.

After payday: three changes that make the next one easier

1. Keep a day of buffer. The next pay should not begin with the last one's shortfall. Even leaving a small amount in the account moves you from spending in arrears to spending in advance.
2. Set aside for the next big bill. Look at your calendar for rego, insurance, school costs or Christmas, and divide by the pays before each. The Christmas and rego calculators show how.
3. Review your subscriptions and renewals. See the subscription audit.

Questions people ask when they are broke before payday

What should I do if I have no money until payday?

Work out what you have and what is due. Protect rent, utilities, food and medication first. Contact any provider whose bill you cannot meet before the due date, and ask about hardship options. Use a food pantry or ask for help if you need it.

Why do I run out of money before payday every fortnight?

Usually one of four reasons: an irregular bill not set aside for, bills bunched before payday, small spending that adds up, or a shortfall. The second half of this page goes through each.

Is it okay to borrow from the next pay?

It can solve this pay at the expense of the next, which can trap you in a cycle. If you consider it, check the cost and the repayment dates first, and talk to the National Debt Helpline.

Part 2: Why it keeps happening

Once you have reached payday, look back at the pay that just ended. The cause is usually one of four things:

1. A big bill you did not set aside for. Rego, insurance, school costs. Fix: divide each by the paydays until it is due and put that aside every pay (see how to budget fortnightly).
2. Bills bunched before payday. Fix: move direct debit dates so they follow payday.
3. Small spending that adds up. Fix: set an amount for the pay and track it in one place, for example in a spreadsheet.
4. A genuine shortfall. If there is nothing to trim and the income is too low, speak to a financial counsellor or look at what support you may be eligible for.

A simple routine for the next pay

1. On payday, list what is due before the next one.
2. Put that money aside first.
3. Estimate essentials for the pay.
4. What is left is what you can spend.

Our guide to a payday budget goes through this routine in order. The free Payday Check or Payday Buffer can do the sums for you, using only the figures you enter.

Free help

The National Debt Helpline offers free, confidential help on 1800 007 007 (Monday to Friday, 9:30am to 4:30pm). If you are in crisis, the best step is to call someone today.

Official sources and further reading

This article provides general information only. It does not take into account your personal objectives, financial situation or needs, and it is not financial advice. Examples use invented figures. Money Detective's tools provide estimates and planning information. Consider your own circumstances, and seek independent advice if you need it, before making financial decisions.