So they're not magic money cards after all...

It’s the last week of the month. You go to the cash machine to get out a tenner for the evening, maybe to buy some cigarettes or a couple of beers. The machine laughs heartily and spits your card back out at you. Transaction denied. You are officially skint.

It’s very easy to get snarky about people who have found themselves in this situation, but to be honest, we’ve all been there. It’s a horrible feeling, especially at ten o’clock at night when you can’t do anything about it. Worst of all, you’ve got another week to go before you get paid and your food cupboards are empty. What can you do?

I’ve been here a number of times, for various reasons. At university, I didn’t have a steady income, and I spent my loans on CDs and beer. After university, my first job was so low paid that I could just about afford my flat and food. Now, I just spend too much on shiny, shiny objects. I frequently provoke tuts of dismay from my poor, set-upon mother, who still opens my bank statements. But, even so, she understands, because we’ve all been there.

So, without further fanfare, here is the official NotWelshMan’s Guide On What To Do When You Keep Hitting The Wrong End Of Your Overdraft. If you have any other good advice, then don’t forget to leave us a comment and we’ll update the article.

Things you must do immediately

• Talk to your bank. If you go over your agreed overdraft limit, they will charge you money. How much varies from bank to bank, but £10 a day isn’t unheard of, or even £10 every time you spend money. Many banks are open on Saturdays. They might be able to increase your overdraft limit temporarily, or even waive some fees. Think carefully if they offer you a loan – can you afford to pay the fees next month?
   
  Sometimes they can’t do anything. But at least you tried.
   
• Make sure that you aren’t going to die. Get the essentials covered. Get food into the house. Ensure that all the important bills – rent, electricity, gas, water – are paid. Make sure the cat can be fed and that you can afford to get to work.
   
  If you haven’t paid your bills – and you can’t – then bite the bullet and start making calls to your providers. They have the power to stagger your payments, or even to delay them till after payday. Best of all, they will usually be able and willing to help; it’s cheaper for them to have late payments than have to settle up on court.
   
• Take stock of your expenses. If it’s in any way a surprise that you’ve run out of money, then you’re doing it wrong. You know that envelope the bank sends you every month that you bury under the sofa because it frightens you? That’s your bank statement. Read it. It may surprise you.
   
• Stop spending money. That video game you’ve been waiting for? Leave it till next week. Those snake-skin boots with the fluffy rabbit tails in vomit pink? Yeah, they were ugly anyway. That song on iTunes that only costs 79p? It’ll cost over a tenner if you’re over your overdraft limit. Stop. Spending. Money.
   
• Talk to someone. Anyone. Well, not anyone. Don’t tell that homeless guy. He’s not going to give you any pearls of enlightenment on your situation, is he?
   
  Basically, don’t bottle it up. Have a chat with your significant other or your friend or your parents. Maybe they can help. Maybe they can’t, but if you keep quiet your blood pressure will be through the roof by the end of the week. Remember: we’ve all been there. We’re not laughing at you; we’re laughing with you. Mostly.
   

Things you can do to make life instantly easier

• Rethink your food budget. You can live very easily for a week on £10. Consider the following culinary options:
  • Pasta can be found for about 30p, and it’ll go with anything. Literally anything. Cheese, tuna, sausage meat, real meat, beans, ketchup. Back at university, we used to live off ‘pasta stodge’: pasta, beans, tuna, ketchup and whatever-the-fuck-else-you-can-find-in-the-kitchen. You can cook a batch that will last several days for well under £3.
  • Bread. Thin-sliced white bread. Bit of cheap butter, some crappy supermarket jam or peanut butter (or, for actual flavour, both), and suddenly all your lunches are sorted for the week. Buy two loaves, and you’ve fixed breakfast too.
  • Bread also makes for good snack food. Toast it and splash out on some cheap garlic dip and it’s actually better than a bag of Doritos. I do this even when I’m feeling wealthy.
  • Can’t be bothered to cook, or don’t have time, or too stupid to figure out the instructions on the bag of pasta? Nuke stuff. I know what Jamie Oliver says about them, but places such as Tesco and Asda sell microwave meals at relatively low prices: you can find a lot of meals on 4-for-£5 deals. Sure, they taste like spunk and smell like plastic and they’re filled with salt, but at least you won’t go hungry.
  • If something doesn’t fall squarely into the three-meals-a-day category, don’t buy it. Cut down on snacks, be they crisps, chocolates, olives, whatever. That fifty pence you just used to pay for an Aero might be better used to get some cheap tea bags or a bottle of milk.
  • Make sure you eat well. Some of the above tips aren’t exactly good long-term diet options: be sensible and don’t skimp on the essentials!

   

• Choose your shops wisely. This fits in with the above point about food: if you buy your meals at Marks & Spencer or Waitrose, stop it. Stop it now. Tesco, Asda and Morrisons are good. Avoid corner shops, unless you have no other options. Sod supporting your local businesses: you need to support yourself first.
   
• Budget. Look at your available cash – that is, the physical paper and metal you have in your grubby hands right now – and figure out the difference between what you need and what you want.
   
• If you have a credit card that isn’t full, use it. Seriously, you don’t have any problems now. Don’t go mad with it, and remember to pay it off the day after payday – this way, you won’t be charged any interest on your transactions.
   
  Your credit card should be used to pay for food, rent, bills and other essentials. Don’t go out on the lash with it: contrary to popular belief, it’s not free money.
   
• Walk everywhere. Or cycle. If you have a monthly ticket already paid for, then use it, but otherwise avoid public transport. Try to avoid driving your own car at all. In fact, if you’re struggling for cash, maybe you should reconsider whether or not your car really is as important to your life as you think it is.
   
• Don’t go shopping. Not even window shopping. Avoid malls and high streets. Right now, they’re like high class hookers: you can’t afford anything, and they will only make you feel worse.
   
  If you absolutely need something, go to a pound store to buy it: if you can’t find what you want, it probably isn’t essential.
   
• In fact, apply the above tip to your entire social life. If you have the kind of friends who won’t understand that you need a week off the booze, then maybe you should take the opportunity to get a new set of chums: preferably some that don’t charge for their time. This goes double for girlfriends and boyfriends. Be strong and don’t cave in to demands for nights out or suchlike. Remember: payday isn’t that far away.
   
  Hole up in your place of residence. Find a hobby for the week: play video games, read books, write your novel, watch films or the telly, sculpt with lard, download every porn video you can find off the internet, learn a new language; whatever it takes to keep you indoors and away from the cashpoint. This week, the internet is your friend: never before has entertainment and education been so cheap.
   
  If you absolutely must go out, find stuff you can do that won’t cost anything. In London, most museums and galleries have free entry. If you’re out in the sticks – or, better yet, outside the UK, find alternatives. Go look at nature or something.
   

Even lazy bums like me have to cycle to work at the end of the month

Things you can do if you know you’re going to run out of cash next week

• Frankly, if you know you’re going to run out of cash next week, you should have known that you’ve been spending too much money anyway. At this point, the only thing you can do is prepare. Most of the above tips work better if you start in advance. Don’t be tempted to withdraw large swathes of cash to tide you over; this will only have the effect of putting you in debt sooner rather than later.
   
• Probably the best thing you can do is make the necessary calls to your bank and any service providers that you haven’t yet paid this month. Banks are more likely to cut you some slack if you come in before you incur fees, and service providers may not be able to help if they only have a day’s notice.
   

Things you should do to prevent it happening again next month

• Don’t do what I do and get all excited on payday about having money again. I always get tempted to splash out on something shiny when I get paid. However, you need to think in the long term.
   
• Save. If you’ve incurred even a couple of days of bank charges at the end of the previous month, that means that you will have less money the next month. If you couldn’t afford your level of spending last month, then you really can’t afford it again this month. So save some cash. Withdraw £20 and put it in a drawer, and don’t use it until your debit card stops working again.
   
• Along the same lines, start a penny jar. Any loose change you obtain, put it in the jar. Yes, this might not help much – but it really does all add up. And, in that brief phase of the month when you’re loaded, chuck in a couple of pound coins. Keep that going for a few months, and suddenly running out of cash entirely becomes a lot more difficult.
   
• Remember I said to read your bank statements? Well, now you have a chance to do something about them. Do you have any charges coming out of your account that you can lose? Gym memberships, magazine subscriptions, anything like that? Take stock of your life and only pay out for what you need.
   
• Have a quiet month. Make sandwiches, cycle to work, try not to go out too much. Don’t kill off your social life entirely – there’s no point in working if you can’t enjoy yourself at least a little – but take the opportunity to cut back a bit.
   

Long term solutions

• Make yourself a budget, and stick to it. Count up how much you spend on bills and food and travel, and then allocate yourself a bit of money to enjoy yourself with. By breaking down your expenses, you can see more clearly what’s sucking away your cash and make changes accordingly.
   
• Open a savings account or an ISA. Not only will this give you something to fall back on later, it might be a way of paying for that awesome holiday you’ve been saving up for. It will also do wonders for your credit score (see below).
   
• There’s a simple algorithm you can work by:
   
  If MONEY SPENT >= MONEY EARNED then YOU’RE DOING IT WRONG
   
  The point is, you either need to spend according to your means, or you need to increase your means. Have you thought about doing some job hunting? Yes, it’s a bit tedious, but it will mean you’re not out spending money you don’t have, and there’s a possibility you might end up with a better job and / or financial situation.
   
• Give money to charity and get a credit card. I know this seems counter-intuitive, but hear me out. Banks and lenders credit score everyone. This affects everything you do financially in life. Want a loan? You need a good credit score. Better overdraft? Same. Monthly contract for your mobile phone? Ditto. It’s not a central ‘credit rating’, but most lenders use the same criteria.
   
  In layman’s terms, your credit score is a measure of how trustworthy you are with money. A low credit score means that banks don’t think you are likely to pay off debts. Every time you miss a payment or go over your overdraft limit, your credit score drops.
   
  Conversely, every time you make a payment, your score goes up. Only a little bit, but enough to make a difference. This means you can work the system. You know those irritating people who scrounge for charities on high streets? Go talk to one of them and agree to pay the absolute minimum every month (usually about £6 last time I checked). Set up a direct debit for the day after payday and suddenly your credit score is getting a little better every month.
   
  Credit cards are the same. Get a card, use it just a little every month and make sure it’s paid off straight after payday. I know people who only use their credit cards and never their main bank accounts until they settle up (and then they pay off their card in full so they don’t have to pay any interest). Every time you make a payment on time, your credit score goes up.
   
  What’s the point of all this? Well, next time you run out of cash, if you have a good credit score, the banks are likely to go that much easier on you. Credit scores have nothing to do with whether or not you’re a millionaire. They are about reliability. People who have never been in debt typically have very low credit ratings, and often have trouble getting things like mortgages. It’s not a fair system, but that doesn’t mean you shouldn’t make the best of it.
   
  Click here for more information
  Get a report on your credit score (UK only, via Experian)
   

Do not under any circumstances

• Rely on a lottery win. It’s a one in fourteen million chance. Those are not good odds.
• Trust loan sharks and people offering loans in the back of newspapers like The Sun and the Daily Star. Interest rates and hidden charges on these loans are usually sky high, and you will enter a horrible vicious circle when it comes to repayments. If you need a loan, use high street banks and make sure you consider all of your options.
• Become a Freegan just to save money. Dignity is important too.
• Stop enjoying life. Life can be expensive, and you should budget in the ability to have fun. Seriously, it’s really important. If you really can’t afford to do anything once the bills are paid, then you need to take a long, hard look at your situation and work on improving it, and you should probably seek professional financial advice.
• Assume that this article in any way resembles professional financial advice.

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