Help Me – I Have No Money!

by Neal Frankle, CFP ®

“I have no money” means very different things to different people. I recently spoke with a very nice (but frantic) woman who told me she was broke. As a result, she said, she didn’t know what to do. Let me tell you, I’ve received calls like this before and they aren’t fun. But having said that, my experience is that the reality we face is rarely as dire as it seems. Let’s dig in.

Assess the situation

  1. Do you have a roof over your head?
  2. Do you have food on the table?
  3. If so, how long with this situation continue if nothing else changes?

These are the first questions you need to answer if you are plagued by financial fear. The woman I was speaking with had a home and a good chunk of change in the bank.

Her problem was that she was divorced, she was unemployed and needed to find a job. The only money she had to live off of was the settlement she received from her ex. So she had a roof over her head and food on the table. But she couldn’t answer the third question and that’s why she was frantic.

She had no idea what it cost her to live so she didn’t know how long she could afford to live in the house and she also had no way of knowing what she could and could not afford.

Long-time readers probably already know my first recommendation. I strongly encouraged her to find out how much it was costing her to live, on average, each month. I told her that she could use a nifty little program that I use called YNAB (You Need a Budget) or she could use my ‘5 minutes a month to budget mastery”. Either way, she needed information.

What was the root problem?

In this person’s case, the root problem was that she wasn’t earning any recurring income. On top of that, her ex-husband was a very poor business person and was trying to pressure her into allowing him to invest her money.

Potential Solutions

In this person’s case, there were two important courses of action to take. First, I suggested that she not make any investments with her ex. He had demonstrated an inability to make good decisions at this point so it just didn’t make any sense to continue down that path with him.

Next, I asked her to make a list of all her skills and all the people who might need a person with her qualifications. I asked her to get a sense of how much money she could make if she found a job and I asked for a reasonable figure rather than pie-in-the-sky.

The next step for this person to take is to be willing to make less than she spends. That’s right. You read it right. She needs to be willing to take a job that will pay her less than she spends and here’s why.

First, her situation is new and she’s adjusting to raising her son by herself and being on her own. She’s also new to figuring out how to get back into the workforce. If it costs her $6,000 a month to live and she can only earn $4,000 a month that’s fine. True that she’ll be burning through her savings at $2,000 a month but at least she’s working. It’s far better than earning nothing while she’s trying to get some traction. Assuming she has $48,000 in savings (she’s actually got $60,000) she’s got 2 years to figure out how to:

  • Earn more money
  • Spend less
  • A combination of the two


Jane needs to strengthen her financial foundation. The first step is to safeguard her assets by not investing money with her ex-husband. Next, she needs to figure out what it costs her to live. Then, she needs to do some self-inspection to determine all her marketable skills and consider all the professions where she could capitalize on her skills. The next step is to network with influencers to find a good job even if it means earning less than she spends.

Tomorrow, I’ll write the second installment on this piece to help those who have a situation far worse than Jane’s.


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{ 1 comment… read it below or add one }

Olivia September 24, 2012 at 5:36 AM

Good counsel. Thanks for posting. A similar problem was addressed from a slightly different angle in a recent “In the Trenches” blog post.


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