Broke at End Month? Here's How to Pay Your Bills

This Article is part of our Money254 Partner Series produced in partnership with Timiza Kenya. For more on Money254’s editorial policy, read here.  

It has happened to the best of us. It is the end of the month, and you are struggling to make ends meet. Perhaps you miscalculated your budget, or an unexpected expense threw you off balance, and suddenly, you find yourself short on cash, unable to pay your bills. What do you do? 

This can be a stressful and overwhelming experience, leaving you feeling helpless. 

Fortunately, there are practical and effective strategies you can use to stay afloat, depending on your financial situation. The strategies can range from using your savings and finding creative ways to make extra cash to taking out an affordable short-term loan.

This article will explore five practical steps to pay your bills, from essential expenses to rent, when you are broke.

Dig Into Your Emergency Savings, If You Have Them

If you have savings, especially emergency savings, they should be your first line of defense. After all, emergency funds are money you set aside to help you get through a rough period. But before spending them, you should ensure that the expenditure is an emergency. Otherwise, digging into your rainy funds account to spend on a “want” can cause more trouble ahead.

You will first need to ask yourself why you are broke. If it results from a delayed salary or an unexpected expense such as a car repair or medical bill, it is justified to use your emergency funds to pay your pressing bills. But if you want to spend your savings on something that can wait, such as paying for your streaming subscription, you should take a step back and rethink.

If you end up spending from your savings when you are cash-strapped, ensure that you reimburse your account as soon as possible. This will protect you in case emergencies present themselves later and prevent you from derailing your saving goals.

Budget and Cut Expenses While Prioritising the Essential 

As you wait to get back on your feet, you may need to go into survival mode. This involves making do with what you currently have. Start by examining your budget and spending habits and identify where you can reduce expenses. For instance, you can reduce or eliminate your entertainment budget and use the money to pay for pressing bills like water or electricity.

Prioritising and cutting non-essential costs can free up some money and help you settle the most important bills. This path will also help you avoid digging into your savings or taking debt. The downside is you will only be able to meet the lower ticket expenses - for more significant spending, such as paying rent, and you might have to resort to other ways of raising funds.

Consider Selling Off Unused Items

This process involves decluttering, identifying unwanted items you no longer use, and selling them. They can be books, clothes, old furniture, electronics, or anything with monetary value that you don’t need and can sell. The fastest way to sell things is online, for example, on the Facebook marketplace or classifieds site. Additionally, you can sell to neighbours, friends, or family.

The good thing about this method depends on the amount of unwanted stuff you have; you can raise enough money to pay big-ticket expenses like rent. However, you should be careful not to sell an item you regularly use unless you don’t have other options. Selling something like your couch or laptop could mean you will need to buy replacements later. 

If you have novelty stuff, you don’t want to sell; you should consider renting them out. This can help you raise money without giving up possession of your personal items.

Consider Side or Freelancing Gigs 

One of the best ways to make money when broke is to take up some gigs that will pay instantly or within a short period. Below are three examples of how you can do this.

The first is if you have a car, you can use it to offer taxi services when you are free. You can sign up for platforms such as Uber or Bolt, get on-demand customers, and work on your own time.

The second one is to leverage your skills. Are you a good painter, mason, or a handyperson? You can look for odd jobs that pay at the end of the day. Another way to use your skills is to sell stuff. For instance, if you are a good cook, you can offer to sell homemade food to your coworkers or neighbours. If you are creative, you can create handmade crafts and sell them.

The final option is to try freelancing. If you are good at writing, video-editing, computer programming, or possess any skills you can sell online, freelancing can be a great avenue to make extra cash. The biggest disadvantage of this option is newbies can find it hard to get clients.

Consider a Short-Term, Unsecured, Affordable Personal Loan

As the name suggests, this is a type of emergency personal loan with low costs and short tenure, typically 30 days. They also don’t require collateral to qualify for one. The most common example of this type of loan is a digital loan which you can access using your phone.

If you are cash-strapped and struggling to pay your bills, digital loans can offer an alternative way to access credit easily when you don’t have other options. While you probably can’t pay your rent with a digital loan as a new customer, you may be able to pay for other things, like utilities or groceries, with it and free up your budget to go toward rent and bigger expenses. 

When searching for a short-term loan to help with your bills, it is crucial to consider one with the lowest costs and highest limits. The reason for this is so that you can qualify for higher amounts while keeping the costs down. One lender that offers exactly that in Kenya is the Timiza Digital Loan App.

How Timiza Digital Loan App Can Help You

Timiza is a mobile banking solution offered by Absa Bank Kenya. It is an all-in-one app that enables users to save money and earn interest, pay utilities, buy insurance, and access an affordable digital loan. To access these services, including borrowing money, you will need to register for the service on the Timiza Dgtal Loan App or through *848# USSD.

So what features make Timiza a good option when looking for an affordable personal loan?

• Low Loan Cost: At 7.25% per 30-day loan, Timiza offers one of Kenya's most affordable short-term loans. This means that if you borrow Ksh10,000, you will repay Ksh10,725. However, you should note that if you default, you will be charged a 5% rollover fee on the outstanding balance as a penalty for late repayment.

• High Amounts: Timiza has a loan limit between Ksh1,000 and Ksh150,000, making it one of the highest among digital lenders. Additionally, since they offer multiple features, such as saving and paying bills, you can quickly increase your limits by using Timiza as your everyday driver. Other factors, such as paying the full loan on time and maintaining a good CRB standing, will also increase your limits.

• Flexible Requirements: Timiza has one of the friendliest requirements for digital lenders. Despite being owned and operated by Absa, it is open to everyone. You can apply for a loan without opening an Absa Bank account. You only need to provide your ID Number and phone number. Additionally, you don’t need a six-month active M-PESA account to qualify.

• Fast Disbursement: If you meet the requirements and get approved for a Tmza Digital Loan, you will receive your loan amount almost instantly. One thing to note is that the loan is disbursed to your Timiza wallet, and if you need to transfer it to M-PESA, you will be charged Ksh25 for amounts below Ksh1,000 and Ksh35 for amounts above Ksh1,000. But you have the option of paying other Timiza users directly free of charge. 

WRAPPING UP

While the steps highlighted above will help you find money to pay bills today, you need to know that they are only temporary. If you constantly find yourself in a financial fix every month, you need to look for a long-lasting solution. And the first step to do that is diagnosing your problem. 

For instance, if you have an unhealthy spending habit of eating at high-end restaurants or showing off, you should consider learning to live below your means. If you have high debts forcing you to live paycheck to paycheck, consider debt consolidation or talking to an expert to help you with a debt problem. You should also consider increasing your income by generating passive income or getting a better-paying job.

Finally, consider building an emergency fund. They can come in handy when you are cash-strapped, ensuring you avoid using your savings or resorting to loans.