What To Do When You’re Behind On Bills

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Want to know what to do when you’re behind on bills? I’ve been there! Keep reading for some helpful ideas for how to get back on track.

What to do when you're behind on bills and can't catch upThe year was 2009, and I was drowning. Not literally, I was drowning in debt. I was newly married with student loans, credit card debt and my personal favorite, a $25,000 loan for a pickup truck I didn’t need.

I was barely keeping my head above water when I got laid off from my job. Not permanently, but for the winter as there was no work. Deep in debt with no work, it wasn’t long before I realized that I couldn’t make my car payment the next month. I was going to start falling behind on bills and didn’t know what to do. I was in major trouble.

What To Do When You’re Behind On Bills

You may have gone through something similar in your life, where you actually feel like you’re drowning under the burden of debt and payments. I feel you, I’ve been there. It’s possible to get out but it takes some planning and it takes some sacrifice. Keep reading to find out what to do when you’re behind on your bills.

Don’t panic

This is so important. Falling behind on your bills can be incredibly stressful. If you’re like me, your first instinct might be to panic. Instead, take some deep breaths, go for a walk, do some yoga, head to Dairy Queen and get yourself a blizzard or whatever you need to do to calm down.

If you’re going to get out of this situation you need a plan, and it’s much easier to put together a plan when your head is clear. Take as much time as you need to get yourself in the right headspace to start solving the problem.

Itemize your debts

Now it’s time to get a clear picture of where you’re at. Make a list of all of your debts including the interest rates from biggest to smallest. In a separate column, note how much you are behind on the bill, if you are behind. You can do this easily and for free with a simple Google Sheets project.

In order to start fixing the problem, you need to make sure you fully understand it. Add up all of your debts and take down the total so you know exactly how much you owe overall. Now you’re ready to start budgeting.

Get on a budget and reduce expenses

Whether you have a budget or not, at this point, you should take some time and put together a new one. What you’ve been doing up to this point has gotten you into debt and it’s going to take a new plan to get you out. You can put together a simple budget in less than 15 minutes.

Trim out anything that’s unnecessary. Be ruthless. Do you really need your Netflix subscription when you’re having hard time keeping up with your mortgage payment? Here are some great ideas for cutting your budget.

Here are some things that most people can cut from their budget with examples of cost:

  • Cable – $50-100/Mo
  • Data plan for phone – $20-50/Mo
  • Gym membership – $30-100/Mo
  • Netflix – $15/Mo
  • Eating out – $20-100/Mo
  • Magazines and newspapers – $10-40/Mo
  • Kids lessons – $50-200/Mo

You probably feel like there’s nothing left to cut but the reality is, most of us can eliminate some things from out budget. Even if it means parking the car and riding the bus for a few months to save on gas/insurance. You might even be able to sell your car and use Uber/bus to get around until you’re back on your feet. Be ruthless, you’ll thank yourself for it later!

Contact creditors to negotiate reduced payments

Being proactive with your creditors can save you a world of hassle. Generally, creditors will appreciate it if you’re up front with them about your situation, and contact them to work out a payment plan. If you choose to ignore the problem and not reach out, they’re going to send your debt to collections which can ruin your credit and hassle you with endless calls from collections agencies.

It’s a good idea to have a couple of ideas prepared that you can propose to your creditor. If your situation is temporary due to a large unexpected expense, layoff from work or something similar, you might want to propose a reduced or deferred payment for a couple of months until you can get back on track.

I know from experience that this works. When I was in this situation, I called the company holding the loan for my truck and explained the situation to them. I asked what we can do to keep me in my vehicle and keep them happy. They were really helpful and appreciated that I was proactive and up front with them rather than defaulting on my loan. They allowed me to defer two months worth of payments without penalty.

Get a pay raise

Before you start looking into side hustles, evening jobs or anything else, let’s just take a step back. Are you making the most that you possibly can at your current job?

Getting yourself a pay raise is the best way for most people to make more money quickly. Unless you had a raise last week, there’s no harm in asking. Even a $1/hour pay raise will result in an extra $160/month if you’re working 40 hours per week. That can really add up and every little bit helps.

There is a lot that you can do to improve your chance of success when asking for a raise. See this article for some more ideas on that.

Find a hustle

If you’re really struggling to meet your obligations, you’re probably going to have to go a step further and find another source of income. There are a hundred ways to do this, you could take on a simple extra job deliver newspapers or pizza, you could start driving for Uber or Lyft or you could find yourself a money making hobby.

To ensure that you can stick with it, make sure to pick a side hustle that you can make good money with, and that you enjoy. There are literally thousands of ways to make extra money, pick the right one for you.

Stick with it

Difficult financial situations don’t get turned around overnight. You’re going to need to cut your expenses, increase your income and stick with it. Check in every month to see how your progressing. When you’re back on track, you can consider adding back some of the things you cut.

You should consider making debt payments more often. Not only will this help save you interest, but seeing the balance decrease every week rather than every month can really be motivating. Additionally, it gets the money out of your hands so you’re not tempted to spend it on other things.

Celebrate milestones

There’s nothing wrong with treating yourself. Nobody can just work and pay bills forever without getting at least a little bit discouraged. Setting objectives to meet so that you can treat yourself is a great strategy to help keep you motivated. It’s important to celebrate your successes.

Maybe buy yourself a new piece of clothing when you get caught up on payments or take yourself out to dinner or a weekend away. Whatever you enjoy that will help you stay motivated to stick with it for as long as it takes.

Get help

There’s no shame in getting help to get back on track when you’re behind on bills.

Think of a trusted family member, friend or mentor who could help you put together a road map to help you get back on track and achieve your money goals.

It’s not the end of the world

Accept that the situation sucks, but you’re moving forward now and things are only going to get better. You’re probably going to take a hit on your credit score but honestly, when you’re behind on bills you really shouldn’t be borrowing more money anyways.

It’s no fun to be behind on payments. Figuring out how to move forward when you’re behind on bills takes some planning and a lot of sacrifice but you can get back on track.

On the other side of this you’re going to be wiser and more money savvy. Who knows, maybe someday you’ll be able to help somebody else in a similar situation.

Do you have any tips on what to do when you’re behind on bills? Leave them in the comments!

behind on bills and can't catch up

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1 thought on “What To Do When You’re Behind On Bills”

  1. I think the biggest thing that gets overlooked is one of the ones you mentioned: contact your creditors. People think that credit card companies are intractable, but they usually just want to know that you’re going to pay SOMETHING. That’s usually enough to get back on their good side. And with student loans, you can sometimes get a brief forebearance, depending on your situation. It’s important to at least ask what your options are. It’ll also calm some of the panic, I think.

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