With the rise of the gig economy and the availability of independent contracting jobs outpacing the availability of employee jobs in some industries, many people are increasingly concerned about income stability.
On one hand, flexible work arrangements are ideal for anyone who wants to decrease time spent commuting to and from work, start a family without losing an income stream, travel and work remotely, or simply work on a schedule more suitable for their lifestyles.
On the other hand, contract jobs can lead to irregular income and require more hustling for work.
Whether you’re an independent contractor, freelancer, or an employee in a company or industry confronted by layoffs, it’s important to plan ahead for worst-case scenarios. If you lose a significant source of income, here’s what you need to do to stay afloat financially.
5 Ways to Stay Afloat When You’re Without a Paycheck
Temporarily Eliminate Discretionary Expenses
The first thing you should do as soon as you realize you will not get paid for two-three+ weeks is getting rid of any non-essential expenses.
This includes TV streaming, dining out, buying alcohol, month-to-month subscriptions (e.g., subscription boxes), and anything else you either don’t need or you can temporarily suspend or cancel without incurring monetary penalties.
If you currently splurge on certain grocery items and don’t need these items for specific health and dietary reasons, then consider downgrading your grocery shopping list until your finances are back on track.
Since many food items are perishable and go bad within a week or two, it’s generally recommended that you avoid paying for groceries with a credit card because the interest you’ll rack up will likely last much longer than those groceries did.
Wondering how you’ll be able to figure which expenses to cut from your budget? Fortunately, there’s a free app for that, Ask Trim.
Start a Side Hustle
Temporarily living without a regular paycheck doesn’t mean you should focus solely on cuts to your budget. Instead, you should balance budgetary adjustments with new income opportunities.
The easiest way to start making money right away is by picking up a side hustle. There’s a brief application process and potentially a background check involved for many side gigs, but there’s no lengthy interviewing process and you can work around your current job’s hours.
Some ideas for side hustles include
- Caring for other people’s pets
- Tutoring K-12 students or coaching college students
- Offering writing or design services on Fiverr
- Delivering food with Postmates or Uber Eats
- Driving for Lyft or Uber
- Charging e-scooters for Bird or Lime
- Taking paid surveys online
Sell Items Online
If you’re too busy to start a side hustle, then there are plenty of other options available to help you stay afloat financially while you’re living without a paycheck.
For instance, you could sell items on Ebay, sell clothing you no longer wear through thredUP or Poshmark, or sell homemade items on Etsy.
Selling items may take more time and effort to earn money than a side hustle would require, but it’s nevertheless a useful strategy for people who need to focus on their other job and make money on the side without leaving your home.
Dip Into Your Savings
Do you have an emergency fund? If so, then going without a paycheck or stable source of income is a reasonable justification for dipping into your savings account, as long as you commit to replenishing the funds at a later date.
Of all the options we’ve covered so far, this is the one you’ll want to avoid as much as possible. Regularly saving money is much harder than anyone can imagine. It takes just one small emergency to make all of your progress disappear.
If you can afford to leave your savings alone while you’re not being paid, then do so. If you’re in danger of missing bill payment deadlines or going hungry, then of course you should withdraw from your savings to protect your credit score and personal health.
Get a New Credit Card
Another option you could consider, but should avoid, if you can, is opening a new line of credit to cover your expenses in the short-term.
Ideally, you would choose a card with a 0% intro APR and low balance transfer fees so you can move your current credit balances onto a card that will rack up substantially less interest while you’re trying to stay afloat financially.
If you don’t already have an emergency savings, then you might also consider taking out a personal loan to cover any bills that you can’t pay for with a credit card.
Final Thoughts on Making Ends Meet Without a Paycheck
Going without a paycheck is tough for anyone, regardless of whether you’re an independent contractor, federal employee in the midst of a government shutdown, or employed in an industry with abnormally high layoff rates.
As you can see however, there are still plenty of options available that don’t involve the same, sky-high interest rates as payday loans, or missing bill payments because you don’t have enough cash to cover the balance due.
Rather than panicking and making irrational decisions when your income stream either runs dry or abruptly stops, explore all possible options to save money and make more money on the side before resorting to credit cards or loans to make ends meet.