When bills are piling up, it’s important to remember that you’re still in control. While you are ultimately responsible for paying all of your bills on time, there are things you can do if you fall short one month and don’t have enough money to cover everything.
Follow our three easy tips that can help you plan and make the best decisions for your situation.
1. Make a plan
When you’re facing a cash flow emergency, make a list of all of your bills and when they’re due. This step will help you assess your financial obligations.
Consider organizing bills into categories:
- Job or education related expenses, such as transportation to and from work, tools, uniforms, or work-related courses and trainings
- Insurance, such as car insurance, health insurance, or home or renters’ insurance
- Housing related, such as rent, mortgage payments, or utilities
- Other obligations such as credit card bills, loans, medical bills, child support, or childcare
You can also use ourbill calendar to help you get a total picture of your monthly bills and identify the weeks you have the most money due.
If you can’t pay all of your bills at once, think about the order you pay them in. Weigh the risks of falling behind on one or more bill. While not ideal, this may prevent you from losing your car or house, having utilities shut off, or getting into serious default on a loan.
2. Call your creditors
If you have to miss a payment, try calling your creditors first to tell them why. Depending on your situation, ignoring your bills could lead to higher interest rates, damage to your credit score, repossession of your car, or foreclosure. Instead, talk to your creditors and explain your situation. They may be willing to forgive a late fee and to make short-term arrangements. For example, if you are in good standing with your creditors, they may be willing to enter into an affordable repayment plan.
If you find you’re often late with a particular bill, negotiate a due date that better lines up with when you get paid or receive income or benefits. Many creditors may be willing to shift the due date if you ask.
3. Track your spending
We also recommend tracking your spending for a short amount of time, like a month. This practice will help you figure out how you’re spending your money and identify where you might be able to adjust your spending to get ahead of upcoming expenses.
According to consumer marketing research, nine out of ten shoppers report that they frequently buy items not on their shopping lists. When people overspend, they may have to dip into savings or borrow money, sometimes at a high cost, to make up for the difference between what they earn and what they spend. Our budget worksheet and spending tracker tool can help you get started.
FAQs
If you're feeling overwhelmed by unpaid bills, interest, late fees and more, these six steps can help you get back on track.
- Create a list of your bills. ...
- Prioritize missed payments. ...
- Pay bills with the highest interest rates. ...
- Create a budget and track your spending. ...
- Watch out for debt relief scams.
Falling behind on or missing bill payments can lead to late fees, credit score damage, and other negative financial consequences. Federal government programs can help if you're struggling with mortgage or student loan payments.
How to get ahead on bills when you are behind? ›
8 Tips for Catching up on Bills
- Assess Your Situation. ...
- Prioritize Your Bills. ...
- Negotiate Payment Plans With Creditors. ...
- Cut Back on Non-Essential Spending. ...
- Increase Your Income. ...
- Set Up Autopay for Recurring Bills. ...
- Consolidate High-Interest Debt. ...
- Avoid Opening New Lines of Credit.
Nearly all of us have faced a problem with bills we cannot afford to pay: credit card debt, a doctor's bill, or an unpaid student loan. You may have enough income to pay some bills, but not all.
How can I get money if I'm struggling? ›
Facing financial hardship
- Food assistance. ...
- Unemployment benefits. ...
- Welfare benefits or Temporary Assistance for Needy Families (TANF) ...
- Emergency housing assistance. ...
- Rental assistance. ...
- Help with utility bills. ...
- Government home repair assistance programs.
While debt settlement may be worth a lower credit score for some, it may not be for everyone. You should avoid debt settlement if: You can afford your monthly payments. You haven't explored options like debt management and consolidation.
Is the national debt relief program legit? ›
Is National Debt Relief legit? National Debt Relief is an accredited member of the American Association for Debt Resolution (AADR). It has been around since 2009 and has helped over 600,000 individuals reduce their debt. It also has an A+ rating from the BBB (Better Business Bureau).
Can you live on $1000 a month after bills? ›
But it is possible to live well even on a small amount of money. Surviving on $1,000 a month requires careful budgeting, prioritizing essential expenses, and finding ways to save money. Cutting down on housing costs by sharing living spaces or finding affordable options is crucial.
What is the 50 30 20 rule? ›
The 50-30-20 budget rule states that you should spend up to 50% of your after-tax income on needs and obligations that you must have or must do. The remaining half should dedicate 20% to savings, leaving 30% to be spent on things you want but don't necessarily need.
How to budget when you're behind on bills with no money? ›
Budgeting When You're Broke
- Avoid Immediate Disasters. ...
- Review Credit Card Payments and Due Dates. ...
- Prioritizing Bills. ...
- Ignore the 10% Savings Rule, For Now. ...
- Review Your Past Month's Spending. ...
- Negotiate Credit Card Interest Rates. ...
- Eliminate Unnecessary Expenses. ...
- Journal New Budget for One Month.
In addition to using the validation information to follow up with the debt collector, you can use these sample letters to communicate with them:
- I do not owe this debt .
- I need more information about this debt .
- I want the debt collector to stop contacting me .
A person or firm whose liabilities exceed the value of owned assets is termed as insolvent. It is the inabilities of the company or person to pay liabilities as they become due.
What are the three types of debt you never want to have? ›
This could be in the form of a payday loan, credit card, personal loan, etc. In these situations, you spend most of your time, money, and effort paying off the interest and little or no money is going to the principle of the loan.
What happens if you ignore your bills? ›
If you ignore your bills for long enough, experts warn that the debt may be turned over to a collection agency. “Collection agencies are businesses that purchase delinquent debts from creditors and attempt to collect them on behalf of the original creditor,” Schroder explained.
What happens if you have unpaid bills? ›
Collections happen when you've failed to make a certain number of payments, and your issuer or lender sends your account to a collections agency to collect your debt. If you face debt collections, this could appear on your credit report and last for up to 7 years.
What to do when people don't pay their bills? ›
What to do if a customer doesn't pay
- Ask why they aren't paying. ...
- Send an updated invoice. ...
- Demand payment more firmly. ...
- Hire a factoring service. ...
- Talk to a lawyer: Get an attorney involved.
- Consider whether further action is worth it.
You can get a client or customer to pay an unpaid or overdue invoice in the following ways:
- Send a warning email or letter;
- Threaten legal action in a letter of claim;
- Negotiate a payment plan with the debtor;
- Instruct solicitors to correspond with the debtor company;
- Issue a statutory demand; or.
