So, there’s a question that I’ve received a number of times over the last few weeks and I think it’s such a great question, that it needs to be answered….
“What do you do when you’re so far behind? How to get caught up on bills? Where do you start?”
Okay, so that’s really several questions all in one but nevertheless, this is something that many of us have/are struggling with. When you’re so far behind and it feels like you’re never going to get caught up, what do you do? I mean everything is important; everything has to be paid, so where do you begin?
It’s so tempting during this dark and unstable stage to throw your money at everything because everything is behind but you end up creating more chaos in the end. So where do you start?
Stop Using
If you’re still using a credit card to make purchases while you’re struggling to get caught up on your bills it will be very difficult for you to get and keep caught up. Do your budget and yourself a favor, and stop using your credit cards. You know I’m a fan of the debt-free lifestyle so obviously I think you should never pick up another credit card again, but if that’s not your fancy that’s okay. Just stop using them for now. You are only making things harder on yourself in the end.
Essentials
I am a firm believer that if you can’t afford to put food on the table, your credit card bill isn’t important. I know, that sounds like I’m telling you to never pay your bills, but what I’m saying is you need to prioritize what to pay first.
The best way to do this is by looking at your essentials and determining what of those bills you can pay first to be caught up on. I personally like to start small. Whatever can be paid immediately or close to immediately, I would pay first.
In case you need a refresher on what the essentials are:
Housing
Food
Utilities
These are what is needed for your basic survival and should be taken care of first. If you’re truly struggling to pay your basic needs bills, I encourage you to contact those companies and discuss it with them. Many utility providers and even mortgage companies have options available to you if you find yourself in a time of struggling.
Non-Essentials but Still Important
Next up, are the bills that are non-essential, meaning they are not part of the basic needs of your survival but they are still important. Things like:
Car/Transportation
Clothing
This is where things start to get difficult. I shared in one of my email newsletters that I had to give up one of my cars in a voluntarily repo in order to save my finances. Trust me, this was not an easy decision and it still cost me, but I’m thankful for it. I’m thankful because I was struggling to find a way to pay for a car that I couldn’t afford.
I’m not suggesting that you have your car repoed, I’m simply suggesting that you take an honest look at what you can realistically afford. If your car payment is causing you to struggle to put food on the table every month, it’s time to let the car go. If your car payment is causing you to not be able to make rent or your mortgage on a consistent basis, it’s time for the car to go.
Get rid of the car by selling it, trading it in, or whatever other means necessary and find a better way – get a cheaper car. Borrow a car from a friend (not fun, I know but it’s a means to an end), ride public transportation if available, or ride a bike.
Transportation is important but non-essential to your life. It’s important because it gets you to work and yes, you need to have reliable transportation, but that doesn’t mean that that reliable transportation needs to come with a $450 car payment every month.
Same with clothing – no one wants to nor needs to run around naked so clothing is important to our lives but it’s not essential that we wear the best of the best. Walmart will do just fine and so will Goodwill.
Slash and Slash Some More
I’ve been preaching six ways from Sunday about slashing your expenses every month and I won’t stop now. If you’re behind and truly struggling you have to take a real look at your expenses every month. This means downloading your bank statement from your bank’s online banking and looking at every.single.transaction from the last month. Then figuring out what categories they belong in, then determining how much you spent in those categories total for the month and then asking yourself a hard question…
Do I really need to spend this money every month on ________?
This question is critical to getting you back on your feet. Cable is not important when you can’t afford to pay rent. Super fast Internet is a pointless expense unless you work from home. An iPhone won’t save your car from being repoed.
Do yourself and your budget a favor and take an honest look at your expenses and start making some really hard cuts. You have to. You really have no choice. If you don’t stop doing what you’re doing now, things are only going to get worse. I’ve been there, done that. I can honestly tell you that you don’t want to keep doing this or else you wouldn’t be reading this post. So, start slashing – no excuses.
Places to consider slashing:
Cable
Monthly Subscription Services
Dining Out/Fast Food/Starbucks/Etc.
Gym Membership or Other Memberships
Switch Utility/Insurance Providers (this post has more details on ways to make this work)
Internet
Smart Phone/Data on Your Phone
Vices: Smoking, drinking, gambling, you name it.
Charitable Giving (I know, this one no one likes but there are other ways to give beyond just money. You have to take care of yourself and your family first or else you won’t be able to live like you truly want to.)
Challenge Yourself to a No Spend Month (don’t spend money on anything except your bills, groceries, and transportation – it’s a lot harder than it sounds)
These are just a few of the things that you can consider slashing when you’re attempting to get ahead. Please keep in mind that although this will undoubtedly be difficult for you, this is a means to an end – not the end itself. You won’t have to live forever without cable or internet so long as you take the scary first step to manage your money.
What is your best piece of advice for someone that is currently struggling to get caught up when they are so far behind? Let’s encourage one another! 🙂
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