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It is not a good feeling when you are behind on your bills. You keep asking yourself, what do I do to catch up? It is stressful trying to make ends meet and you don’t know where the money is going to come from. I have been there and I know the feeling. This can happen to anyone. Imagine that you are already struggling to pay the bills and make ends meet, and your car breaks down. You then use the money that is marked for the car loan to pay to fix the transmission. I am sure many people hate it when emergencies come up but emergencies do happen. This one emergency just put you behind on your bills.
You are not alone, many of us have gone through similar situations.
You were already struggling and now this.
Emergencies that may cost up to $500 will come up, are you prepared to deal with that emergency. Do you have an emergency fund?
What do you do when you are behind on your bills?
Don’t panic so that you will not make any impulsive decisions. Neither is this the time to ignore the bill and act like it does not exist. You have to address the issue headlong.
Our situations may be different, some people just don’t make enough money, while others don’t know how to manage their money.
It may look like the end of the world, but it is not.
You have to be willing to make some changes.
Create a plan to get current on your bills and work your plan.
- What is your financial situation?
You have to figure out what you are bringing in versus what you are spending. Are you spending more than you are making? The best way to know how much you are spending is to look at three months of your bank statement and write down your expenses.
- Make a list of all your bills
Create a spreadsheet or write down all your bills and debts. Who you owe, how much you owe, how much are you behind, and the due date.
If you do not already have a budget, this is a good time to create one. A budget will let you know how you are spending your money. Include in your budget the expenses you wrote down and the due dates. Add up all your expenses and subtract from your income. Make a note of the past due bills and the amount that is due.
- Track your expenses
Have a note pad to write down your expenses. Track your expenses against your budget. For example, if you budgeted $300 for groceries, are you spending $400? There is no point in creating a budget if you are not going to stick with it.
- Reduce your expenses
It is important for you to manager your money when it is limited. Determine the necessary expenses:
If you live in a home or apartment that you cannot afford, it is best to downsize. The thought of leaving your dream home may be scary but remember what you are trying to achieve. This is the best time to cut off unnecessary expenses such as:
- Cell phone
- Gym membership
- Eating out
Look for ways to cut down expenses such as cutting down on your grocery bill by using coupons and Ibotta.
Adopt a frugal lifestyle for the mean time. Do not associate the word frugal with suffering.
- Know your options
Ignoring the fact that you owe a bill does not make that bill disappear. Call the creditor, explain your circumstances, let them know what you can afford to pay. It is important to remember that a person will be answering the phone on the other end. There is a high possibility that that person will be understanding of your situation. Most creditors will be happy that you called and may be willing to waive late fees and penalties. Negotiate with them to get to a solution that you both can agree on.
What is the worst that could happen? You will never know, if you don’t ask.
If you have a creditor that is not willing to work with you, pay them first.
The companies can’t help you if they don’t know your situation.
- Extra income
If you have a budget, already cut expenses and you still do not have enough money to pay your bills, it is time to get extra income. There are so many ways to make money without leaving home. Think of your skill and offer it as a service to those that need it.
Extra side hustle
- Drive for Uber or Lyft
- Take paid surveys
- Freelance Writer
- Virtual Assistant
- Start a blog
- Mow lawns, house sit, babysit, the list is endless
- Sell on eBay
It may seem like the end of the world because you are behind on your bills, but it is not. You are not the first neither will you be the last to be behind on your bills. Once you get current on your bills, avoid repeating the same mistakes. Determine where you are falling short and make the necessary changes. Begin to save for an emergency fund, to prevent the same thing from happening again.
Have you ever been behind on your bills? What tips can you share on how you got back on your feet.
Hi, I’m Ngozi, I work full time during the day blog at night and in my free time. Join me as I write about saving money, side hustle, getting out of debt, and ways to enjoy the simple things in life.