What To Do When You Are Completely Broke: 7 Key Actions To Take

What to do when you are completely broke?

Realizing you really are totally broke doesn’t always happen slowly.

Sometimes it slams into you like a medicine ball into your gut.

It can be a sudden realization in the middle of the night or at the end of a phone call because you just got laid off with no notice and no payment.

When you realize just exactly how bad your financial situation is, your first temptation is likely to be to see if you can get credit or borrow extra money.

A loan, even a short term, high interest loan is appealing right now.

So you can cover your existing expenses while you think about how you are going to fix it.

Taking out another credit card, borrowing extra money doesn’t fix things though, it just makes things worse.

You might well have to do one of these things in the near future but not right now.

Right now you need to think different, to be different, to do differently because more of the same isn’t going to help you survive being broke today.

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It’s natural to panic when you have your lightbulb moment and realize how bad your financial situation is.

But panicking for anything longer than 5 minutes is not what to do when your bank account is emptying fast.

You are no help to yourself when you give in to the panic and bury your head in the sand.

You need to do the opposite. You need to take action.

But first, it will help if you take a few deep breaths.

Try to calm your mind. A calm mind can help you to think clearly and make a plan.

Completely Broke what to do? – 7 Key Actions

1. Accept Responsibility For Where You Are

Life throws us curve balls on a regular basis so in theory we should all be prepared for when they happen.

It’s a good idea have plans and back up plans such that we don’t get to the point of wondering what to do because you are now flat broke.

Real life isn’t like that though is it?

You might know curve balls are going to happen but you have other priorities going on, so planning for the worst gets put off to another day.

Until that day comes.

Your money is your responsibility so if you are absolutely broke then unfortunately that is also your responsibility.

Sure, life might have been unkind but only you can get yourself out of the place you find yourself.

Understanding and accepting that you are responsible for where you are right now is important.

Blaming others for your predicament stops you from taking responsibility for both where you are at and what you need to do.

Others may have contributed to your financial situation, but it’s you that can get you out of it.

young couple holding their heads in their hands with bank statements on table to signify what to do when you are completely broke

2. Start Doing

What to do when you are flat broke?

Start doing, that’s what.

Knowing you are flat broke is one thing, doing something about it is quite another.

There are always things you can do when you’re broke to make a difference to your situation.

They may not resolve it quickly but doing nothing is not an option.

Being proactive is often half the battle.

Get focused on getting yourself out of this hole helps you see things in a different light.

Tell yourself you will take action every day to make your money situation better.

3. Get Radical

Being in debt and being completely and utterly broke are two very different things in my book.

Being in debt is not good, you’re paying interest on that debt and it means you’ve spent more money than you actually earn.

But you are still servicing the debt and making ends meet.

Being completely broke means you have run out of options and you cannot take out more debt.

You don’t have enough money to buy groceries or pay your bills and right now you don’t know how you are going to pay them.

This is the point where you need to ignore what everyone else is doing and get radical.

If you are sinking under a large mortgage and just lost your job then the house might need to go.

It’s nice to have your own home but it’s not a necessity.

Don’t do what you think other people think you should do.

You need to work out what is actually going to make a difference to you and your finances.

Cutting cable isn’t going to make the difference between being broke and not.

You need to consider every area of your life.

From food to housing to transport to home décor to kids activities.

Basically everything that you ever spend money on needs to be considered in a new light.

Do you need to spend money on it right now or in the future?

Related Reading: How To Radically (And Successfully) Cut Your Expenses

4. Redefine Necessities

In order to survive being broke during this time you are going to need to change how you view many things in your life.

Necessities need to stop being necessities.

What is a necessity when you have enough money to pay all your bills, is often not a necessity when you are broke.

Otherwise you are going to be constantly repeating to yourself: ‘why am i broke?’

I know you know the conversation around needs vs wants.

And I am pretty sure what you consider are needs is not the same as when you got your first job and moved out of your parents’ house.

We all expand the list of our needs (necessities) as we earn more until we have many needs and few wants.

Tough times require you to make the switch back to few needs and many wants.

With wants not being bought at all right now.

Your necessities are pretty simple:

  1. Warmth
  2. Shelter
  3. Food

Going to the extreme end of necessities:

  • Food can be as basic as noodles
  • Shelter could be a room in a shared house
  • Warmth could be 5 layers of clothing

The less necessities you need to buy, the less money you need to find to pay for them.

Related Reading: Why Am I Poor When You Are Not? 5 Ways To Stop Being Poor

desktop with calculators pens and pencils, dollar bills and bank statements

5. Get Communicating

As a society we dislike talking about money. Seriously, there are people who don’t know what their partners earn.

Now is not the time to get shy about money conversations.

Now is the time to talk, talk and talk some more.

To your partner, to your family, to the companies you owe money to.

With no money coming in, you are not going to be able to last long without defaulting on bills.

Head off demanding letters by contacting your bill companies and explaining your situation and seeing what help they can offer you.

Sit down and talk to your partner, explain your predicament. Two heads are better than one when dealing with problems.

Related Reading: Debt In Marriage – How You Can Prevent It Ruining Your Relationship

7 steps to Stop Financial Problems in Marriage

6. Do The Math

You need to know what your financial position is, to the last cent.

When you have exact figures of all of your money, debts and responsibilities then you can make a plan of what to pay, who to contact and so on.

Pull out last months bank account and credit card statements, check your bills and list everything out.

Add up all your debts so you have a total figure.

Add up all your regular bills so you know what needs paying.

Don’t forget to add up the irregular bills, those that come out quarterly or annually.

They will come round all too fast so you should include them in your figures.

Related Reading: Sinking Funds For Beginners: What You Need To Know

bank statements and notebooks with pen and keyring house

7. Explore Available Help

One of the things to do when you’re broke is to not keep it a secret.

None of us like to admit we are having problems, especially when it has to do with money.

But when you are absolutely broke you need to reach out for help.

Depending on your circumstances you may be eligible for welfare benefits, benefits from your employer and there may be support available in your local area.

Friends and family can also help you.

Not necessarily with cash but with advice, encouragement and just being there fore you.

Knowing someone is looking out for you makes a real difference to how you view your situation.

There are debt charities that can help you negotiate with credit card and loan companies.

Always use the free debt help available.

For more help on which FREE debt help to choose, visit these websites:

For help in the US click here

For help in the UK click here

Living Below Your Means

Living below your means will allow you to free up the difference between what you spend and what income you have coming in.

This spare money can be put towards debt, building emergency funds back up.

Most people live to their means and beyond, spending money they don’t have – hence their debt.

You need to downsize your budget and your lifestyle.

You should determine that living below your means is your new normal – never to go back to racking up debt.

It’s all about working out what you truly need and sometimes want, and focusing on your bottom line – your budget.

Related Reading: How To Budget Your Money When You Don’t Know How

woman's hands counting out coins from an open black purse

completely broke what to do? Do more

Once you have done these 7 key actions then don’t stop there.

There are plenty more things to do when you’re broke to make a real difference to your life and finances.

The more action you can take, the quicker you move from being absolutely broke to having a plan to get back into the black.

Once you have done these 7 then consider the following actions.

i’m broke and need money fast – make more

There are many ways to make money in addition to a day job or while you are job hunting. You can:

  • Sell parts of your body (blood plasma, long hair)
  • Sell things you have lying around the house
  • Take up a money making hobby
  • Get a 2nd job delivering pizza or a work from home job
  • Offer your services in your local neighborhood

Related Reading: How To Make 300 Dollars Fast: 30 Proven Ways

Monitor Spending Like A Hawk

When spending money every cent should be carefully considered.

Was it truly necessary, could you have bought that item for less somewhere else?

Did you really need to buy that item today?

A penny saved is a penny earned.

The more you save, the less you need to earn or find elsewhere.

Educate Yourself

Education helps you make and have better choices in the future.

Whether you educate yourself about finances, a new career or how to save more money, it all helps.

The Best Personal Finance Books

These are best personal finance books I recommend to anyone who wants to grow their knowledge and take control of their money. Try and buy a used copy - it's good money sense!

Create Goals

You will want to be determined never to be here again.

Your mindset is crucial to your success in getting away from where you are at right now.

Be determined never to get to this point again by creating financial goals to aim for.

Having goals to aim and working on a positive money mindset help you educate yourself and build up a strong defense against a recurrence of this awful time.

Related Reading: 7 Golden Money Rules To Embrace in Life

Why You Need To Be Financially Sound

Do What It Takes Never To Be Here Again

Learn from the pain of this time to promise yourself you will do whatever it takes to never be here again.

You might need to make some hard decisions but make them so that you in the future can benefit from them.

Related Reading: Money Lessons You Need To Know But Didn’t Get Taught

The Best Money Habits To Transform Your Wealth And Happiness

Bigger Emergency Fund

Emergency funds are for times like these.

If you had one but have exhausted it then make it bigger for next time.

3-6 months of expenses is usually enough but perhaps you need to think 6-12 months instead.

woman pouring coins out from red open purse

Pay Off Debts

Repaying debt eats into your income every month.

If you are paying out $500 on an auto loan and credit card debt that is $500 that could be in your pocket.

Alternatively it’s $500 you don’t need to earn if you are not in debt.

Get debt paid off as fast as possible and resolve to remain debt free in the future.

Related Reading: How To Pay Off Debt Fast And Still Have A Life

How To Choose The Best Method To Become Debt Free

Pay Off Your Mortgage

Mortgage payments tend to be one of your biggest expenses. Pay off your mortgage and that is an expense you no longer have.

Related Reading: How To Pay Off Your Mortgage Early (So You Can Be Free)

Reduce Expenses 

The lower your overall expenses are, the less you need to earn.

Or the more you can save.

Fight lifestyle creep and keep expenses lower than they have been in order for you to have more flex in your budget in the future.

Related Reading: How To Cut Monthly Expenses: 35 Ways To Save Money

Share Your Experience

When you have no money you can feel very alone, because everyone around you seemingly has money.

This isn’t the case as many people are carrying debt.

They just haven’t reached the point where you are at. But at some point they will.

Sharing your experience of what to do when you’re completely broke and how you you survived will be incredibly helpful to others.

And it might just stop them from reaching their rock bottom.

black calculator with a fan of different dollar notes to signify what to do when you are completely broke

Completely Broke what to do? Do something!

Being absolutely broke is an awful place to be. And it’s not somewhere anyone would wish upon you.

But here you are and so you need some help. To take action, to know how to survive being broke.

Doing nothing is no longer an option. Doing something is the right thing to do.

All these actions will help you stay in control and make a difference to your money situation.

What to do when broke? Frugal Living Is The Future

Being frugal is all about living below your means and enjoying your life on a smaller budget.

If you embrace frugal living both for right now and for the future you can make a real difference to your financial situation.

To help you start your frugal journey I have created a free 5 Day Frugal Foundations Bootcamp.

Over 5 days you will learn the foundational steps you should take to begin your frugal journey and start saving money.

Come and follow me on Pinterest for more money saving hints and frugal tips!

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Last Updated on 7th August 2023 by Emma

About Emma

I'm here to help you become confident in making the best money decisions for you and your family. Frugal living has changed my life, let me help you change yours.

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