What you'll need to do when your rainy-day fund is gone

I remember a few years back when a guy who lived on our block asked my husband to borrow $5. We didn't really know the guy, but he said he was going through a divorce, had custody of his kids and needed money for the bus to get to work. My husband gave him the money and although I was skeptical of his story, my husband said that if he didn't really need the money he wouldn't have asked. I'm sure he was right. The man never asked my husband for money again, and whenever we saw him and his kids he'd wave and say hello.

I thought of this man recently because he was obviously suffering a financial crisis and felt that swallowing his pride and asking neighbors he barely knew for money was his only option at that point. (We heard later that he had asked another neighbor for money once, too.) If you've used up your rainy day fund (or never had one) you may be feeling desperate like that man. While I don't suggest that you resort to asking strangers for money, you are going to have to make some tough sacrifices.

Keeping a roof over your head, heat in the house, and food on the table should be among your priorities, not paying for expensive cellphone, cable TV, movie rental, and gym plans. I'm always amazed at people who tell me they are having a difficult time financially, but then mention that they just left the hair salon, bought new shoes, or saw the latest action flick at the movies. If you are truly experiencing financial hardship, you will have to make huge sacrifices.