How To Manage Your Money When You Exhaust Your Savings

How To Manage Your Money When You Exhaust Your Savings


The coronavirus pandemic has left millions of people struggling financially. While some may have had an emergency fund to help make ends meet, many likely did not. But even for those who did have money saved, those funds may be nearing depletion. 


With unemployment benefits ending in a few weeks and no other assistance in sight, you might be wondering what you can do to get by. 


If you exhausted your emergency savings account and are unsure what to do next, these tips from certified financial planner Tania Brown may be able to help.


How Much Should You Save For An Emergency Fund?

Conventional wisdom held that you should save between three to six months of living expenses, though it depends on your circumstances. 


You should save for three months if you:


  • Work in a field where you can easily find a similarly-paying job
  • Earn about the same amount of money as your partner


However, you should save for six months if you:


  • Are self-employed
  • Have difficulty finding positions in your field
  • Are the only member of your household with an income


The thought of calculating what you would need — not to mention saving for it — can be daunting. And if you’re unemployed or the sole breadwinner, it can be even more challenging. However, as Brown explains, it’s important to start small and take one step at a time, beginning with a budget.


How To Trim Your Budget When Your Savings Run Out

Even when you have an emergency fund, you should make a habit of regularly checking your budget. But when this money runs out, it’s even more critical because you have to make sure you can cover unexpected expenses now and in the future.


Brown suggests making a “Crisis Budget,” which is the smallest amount of money you need to live on if your income is disrupted. Your Crisis Budget covers food, housing, transportation, and healthcare expenses, which is particularly important during the pandemic.


Start small. Eliminate nonessential expenses such as cable or memberships. Brown also recommends trimming essential costs where possible, including downgrading your mobile plan or talking to your utilities company and lender about hardship programs. 


Extreme cases may require that you move to a more affordable area or sell one of your vehicles. Hopefully, you will never find yourself in this situation. Before things get too bad, negotiate with your various service providers. According to Brown, asking for help is one of the best things you can do if you have debt and no savings.


Get Help From Your Service Providers 

Brown advises that even if you can cover more than the minimum on your monthly debt statements, pay no more than you have to focus on an emergency fund.


After that, contact your various service providers, such as:


  • Utilities
  • Cable 
  • Cell phone
  • Insurance


Tell the agent about your circumstances and ask if they offer hardship programs. If you still aren’t able to lower your expenses enough, call your creditors. Keep in mind that you will still be liable for suspended payments when the deferment or forbearance period ends.


Ask your creditors how they will report the agreement to the three major credit agencies, the duration of the deferment, and repayment conditions. This way, you know what to expect at the end of the break. Make sure you get everything in writing.


Should You Withdraw From Your Retirement Or Investment Accounts?

Brown advises against withdrawing funds from your retirement account, cash-value life insurance plan, or tapping home equity if you don’t have an emergency fund but you can afford to pay your expenses and you don’t have a pressing need. 


When you take an early distribution, you take away money that you will need in the future and take on more debt. While your current situation may be difficult, there is a good chance that it is only temporary. 


Other Ways To Manage Your Money When You Exhaust Your Savings

Brown’s first recommendation is to first supplement your income by leveraging your skills and talents. Although this may be easier said than done, she explained that you need enough faith in yourself to market your skills to those who need them and are willing to pay.


For example, if you have writing chops, read up on copywriting and editing and look for freelance writing jobs. Or, if you know how to build websites, use graphic design programs, or have similar skills, you can look for companies trying to grow their online presence. 


Websites like Upwork and Fiverr are two places where you can find freelance jobs. Facebook business groups are another way to find people who need your skills. If you are spending more time at home, use it to your benefit. Look for free online classes and develop your skills — you may end up finding a whole new career opportunity.


  • Cashay Contributor. “Here’s What to Do When Your Emergency Fund Runs Out.” Cashay, Cashay, 5 Nov. 2020,
Ian Schindler