Are you unable to pay your bills on time? There are many reasons this could happen, including a decrease in income. Maybe you have experienced some unexpected out-of-pocket costs. Or you might be drowning in debt. Don’t be discouraged. I am going to tell you how you can create a plan for paying back debt and returning to a positive financial position.
The most important thing to keep in mind is you are not alone when it comes to having trouble paying your bills on time and being in debt. According to the Federal Reserve Bank of New York, the total family debt exceeded $15 trillion in 2021.
Although mortgage balances comprise most of that amount, auto loans accounted for $1.4 trillion, $800 billion was in credit card balances, and $1.5 trillion was debt from student loans. One in three Americans have at least one credit card, and the average credit card balance is $5,315 per household.
There is still time to get caught up on your payments and move forward so you can afford your payments.
6 Steps to take if you are behind on bills
We understand the difficulty of paying bills and feeding mouths. Take a deep breath and consider the following steps so you can catch up on bills and work toward paying them on time!
Step 1: Get organized to pay on time
The first step in catching up on expenses is to understand the full picture of your income and expenses. And that means it is time to get organized. Whether you make a top-notch spreadsheet or you’re a pen and paper type of person, you’ll want to design every invoice carefully.
Once you have determined what you owe, organize your expenses in the order to pay them on time:
Make sure to check your credit card account for automatic withdrawals and debits. I also recommend getting your free credit report to check for any other accounts that may have been forgotten. Being organized is crucial to being on time with payments because it enables you to keep track of what you owe so you can pay on time!
Do you need help with managing your bills? Check out the Clever Girl Finance Debt Categorization worksheet.
Step 2: Evaluate your finances
After listing all of your costs, you then need to compare those charges and expenses. Identify which are necessities versus nonessential. Be straightforward about what is a necessity and what is a luxury.
Now is the time to limit your discretionary expenses.
Take a moment to understand the data in front of you. You may be behind on bills because there are too many bills to pay!
Cutting all unnecessary subscriptions and monthly bills can significantly reduce your expenses.
The average internet cost is $58.49, and the typical cable fee is $217.42.
When you review your expenses, make sure you find ways to cut down on variable expenses such as groceries, power, and gasoline.
Try a 30-day budget challenge to save money.
Step 3: Call your creditors
If paying bills on time is a constant problem, then it is time to get your creditors on the phone. Begin by calling each company and canceling any services you no longer need or want. Numerous organizations enable you to cancel online subscriptions without having to call customer service.
Second, negotiate your bills. Negotiating over prices may appear unusual, but several costs may be lowered. Experts suggest that up to 80% of medical bills contain errors. Pay careful attention to your claims. Don’t waste money. If you don’t know a charge, ask for clarification.
When negotiating with a vendor or obtaining a better deal, it is extremely important to speak with a live customer service specialist. Consider bundling your internet service and cable service together or bundling home and automobile insurance.
Ask for a payment plan if you are behind on bills. If you are late paying your bill, request to be placed on a payment plan. This will lower the risk that your account will go into collections and harm your rating.
Another consideration when refinancing mortgages and car loans is keeping the loan term the same. This will enhance the chance of refinancing at a lower interest rate. If you want to buy or lease a car for at least 30 months, consider refinancing at 2.2% for 30 months. Use a loan rate calculator like Bankrate to compare different loan offers.
It’s uncommon to be penalized for requesting a lower rate or for a better price on a phone plan. The worst that might happen is they say no. I’ve received good results for my car insurance rates, cable TV bill, and magazine subscription. When in doubt, ask for a refund.
Step 4: Comparison shop
Don’t ignore the opportunity to switch phone carriers for a lower price. Try switching prepaid carriers such as Boost Mobile or Mint Mobile to spend less on your bill. My husband switched to Mint Mobile last summer and loves it. MVNOs like Mint offer smartphone plans that compete with major carriers.
They use the same cell towers as a major cell phone carrier, and MVNOs enter into a contract with a mobile service provider to gain access to network services. Mint uses the same towers as T-Mobile.
Using an app like GoodRx enabled me to save money on prescriptions. GoodRx is a comparison website that compares prescription drug prices at thousands of pharmacies. There is no cost, just download the app or visit the website to find coupons, yes coupons, for prescriptions.
Step 5: Earn extra income
We are mostly responsible for paying housing costs, food expenses, utility expenses, and transportation expenses. We must find ways to reduce expenses in those areas. However, reducing prices isn’t always sufficient.
If your expenses continue to pile up but you still have not caught up, consider how to bring in more money.
One of the best ways to make extra money is to request a raise. However, you should ensure you are qualified for the pay raise and compose a review of why you deserve one.
Be sure to highlight your qualifications, your years of experience, and the last time your performance improved. This will help you receive what you are owed!
By clicking on Refine Your Profile, one can search for a better-paying job if a promotion isn’t in the cards. Improve your resume and find a job you love that pays you more as well! Be sure to negotiate your starting salary, so that you don’t overestimate your earnings.
You may be paid more than you think. Take your skills into account and figure out how much you should earn!
Why not sell your old items? You can declutter your home and make fast money at the same time. It’s a win/win situation! You can sell your items online or locally on Facebook Marketplace and Letgo.