When you can't pay your bills, you feel embarrassed. Because you're embarrassed about the situation, you make poor decisions about dealing with it. Instead of taking steps to correct the situation. You take steps to hide the situation.
That's the worst thing you can do.
Whatever you're going through right now does not define you.
Being late on your bills, unable to pay your bills or facing foreclosure does not describe who you are as a person.
Whatever got you in this situation will not define the rest of your life. You will pull out of this and get this under control. Stop thinking about yourself as a victim and start thinking of yourself as the person who will change their life and never be in this situation again.
If you need encouragement on the three things to tell yourself when you feel like your family doesn't have enough, you can find that here.
What you need to fix this is an action plan. Follow these steps in order and as quickly as you can do them. Aim to have all of these steps done within a week. Don't put them off or feel guilty about them. It is what it is. What's done is in the past and you're working to make things better.
Before you do ANYTHING though, I want you to sign up for the 90 Day Budget Challenge. It walks you through not only how to create a budget, but how to set up the basic routines in your life that will support your efforts to save money. Because transforming your finances is about more than just the budget.
Focus on completing the steps below this week and then start the budget challenge after to make sure we'll never be here again.
You can sign up for the Budget for Beginners Boot Camp class for free by clicking here or entering your email in the box below.
1. Calculate how much extra money you will need to have in order to be able to pay that bill on time.
Grab a piece of paper (or use the free website calendarbudget.com) and write down all of the income that you know will be coming in for the rest of the month. Then write down your expenses including a projected amount for things like groceries and other necessities.
2. Calculate when you would be able to catch up on that bill.
When you live paycheck to paycheck like this, the free budgeting website calendarbudget.com is the best recommendation I can give to sorting out your finances. You can see on an online calendar when you have money coming in and when you have money coming out and project out for as money months as you need.
Add in a “Projected” due date for groceries every week (what you need to spend on groceries) and add it in like a bill. Also, make a projected amount for “home supplies” (things like laundry detergent, toilet paper, deodorant etc.), and if there are other unofficial things you need to pay for (kids field trips etc; add them in as projected amounts.)
Type all of your projected amounts like this so it's easy to see later and delete: XXXfieldtripprojectedXXX. You want to delete that later because it's not an actual withdrawal of your account. It just lets you project out quickly your basic necessities and your income. Using that method, you can tell when your bank account will be back in the clear and you'll be able to pay that bill.
3.Tell your spouse the situation.
Apologize if it's your fault and tell them that you're taking it seriously and will have it fixed as quickly as possible. You need them on your side. It does no good for them to be buying lunches out every day if you can't pay your electric bill. You need them to know the situation so you can work together to fix it.
Accept responsibility and move on. If you're the only one doing the finances right now, schedule in weekly budget meetings so that everyone is on the same page. You need to be doing this together.
4. Determine which bill will be paid late.
- Pay the bills of things that are essential first (house, water, electricity, child care, food and water).
- Call or email the bill company.
- Let them know that you won't be able to make the payment.
5. Ask for help.
Be polite and explain that you are taking this matter extremely seriously. Ask if there is anything they can think of that would help you. Giving you a 15 day grace period, waiving a late fee etc.
6. Look for ways to cut costs quickly.
Try out a spending freeze, look for ways to reduce your grocery budget quickly, cancel cable for a few months or reduce your cell phone plan. Have a few nights of Santa Fe rice and beans or homemade mac n cheese (it's not even a sacrifice- both are delicious!)
Look for fast ways to make money (legally of course!) Sell things in your home on craigslist, Ebay or Facebook yardsale groups. I made $45 in an hour this afternoon by cleaning out a closet and doing just that.
7. Follow up with the company until you can get the bill paid off.
In many situations, a late payment wouldn't be reported to the credit bureau until the payment is over 30 days late so your goal should be to get that payment in before it's 30 days late. While that doesn't guarantee that it won't be reported, it makes your chances of it not being reported much better.
8. Think longer term. What can you do to make sure this never happens again?
Get a working budget.
Sign up for the 90 Day Budget Challenge here. You don't have to do this alone!
You can sign up for the Budget for Beginners Boot Camp class for free by clicking here or entering your email in the box below.
If you tackle those steps as quickly as you can and start working on making better decisions going forward, then you can avoid these situations in the future.
There are two ways that you can handle something like this. You will either hide it and ignore it and continue down this path, or you will meet it head on with fierce grace and let this be the moment that you decide you will never be in this situation again. A situation like this can either break you or build you.
Let this build you.
Have you ever turned a bad situation like this into the best thing that ever happened to you?
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Amy Leonard says
November 15 at 4:29 pmFour years ago, I was in a deep depression – stress overload to the max. Lots of bad dynamics in our life. I stepped down from my good paying job. My husband’s job went to part time unexpectedly. We went through bankruptcy – lost our home. Best thing ever! It strengthened our marriage. We went back to basics. We lived in a rental for two years then we’re able to get back into our own home. We love it. Bigger, better neighborhood, better schools, newer house…. All the while, we prayed and did a lot of that. Good can come from bad. Weathering the storm helps you appreciate the blessings. If you are reading the article and my comment and bills are overwhelming you, hang in there! Times can get better. It takes diligence on your part and faith!
Patty says
March 30 at 11:34 pmAwesome loved your story
Joyce P says
January 24 at 10:13 pmAmen, you are a blessing to so many people out there. Thank you for sharing your blessing!
Anna says
June 12 at 10:50 pmi very rarely go on this site these days but somehow today i did …im so glad i did im going through now exactly what you ‘ve been through and on some level knowing im not alone put a smile on my face .. i havent been able to do in months!!! we too lost our home few years back during the recession and although we’re still renting i can see hope that wasnt there before… thank you!
Anna
The Busy Budgeter says
June 13 at 4:54 pmOh Anna, I’m so glad! That’s so hard. Keep that hope – you’ll get there!
Linda says
March 25 at 10:09 pmLove Love your story and yes you do appreciate the small stuff even more. I’m not a materialist person. I’ve tried not to live beyond my means. Just being able to have food in the refrigerator , electric on have heat , I don’t own a home I rent , if my rent is paid I’m happy.. I’m going thru bankruptcy now and yes good does come after bad. Sometimes going back to basics has always been a good thing for me. My Grandmother and my Dad instilled those values in me , never expect more but always appreciate what we have !!!! You will never be disappointed !!!
Shakirah says
October 31 at 3:13 pmI am currently drowning in bills, debt, & late fees. Thank goodness I was able to find something encouraging and educational. I had to take a pay cut, had death in my family, wage garnishes….feels as if I could never make enough money to survive on my own. I’m overwhelmed. Thank God for testimonials.
The Busy Budgeter says
November 6 at 11:53 amI’ve totally been there, keep your head up!
Norma says
November 25 at 8:36 pmAlina,
I don’t think anyone here will disagree with what you have to say. Just let me say God Bless you! If you’ve never been in a situation where your suggestions are just not possible, you should be truly grateful. Try not to be so judgmental of those of who have.
Jkbsncme says
January 26 at 8:19 pmI agree there are situations were the 1st job offers no flexibility to allow for a 2nd job or 3rd. Or personal requirements dictate that the time you might have had to work another job must be spent taking care of kids or parents. There’s thousands of scenarios that are not so straightforward as get another job.
Carole says
June 14 at 8:03 amExactly. Its so easy to stand in judgement. If one has children or a serious illness, one job, much less 2 or 3 is not a humanly possible. And losing sleep CAN cause very serious long term health issues.
Nora says
March 31 at 12:41 amGreat response. Thank you
April Felton says
May 15 at 11:30 pmAmen!
pam says
June 11 at 6:47 pmamen
Diana says
January 19 at 6:11 amIn my case I’ve done all this but things keep coming up and we keep sinking. Worst yet is my husband doesnt recognize we’re as bad off as we are. With both our paychecks combined it’s still not enough. And yes we are looking for more work with out success because in our case we don’t have the opportunity to just go and get one, legally we can’t do yhat (;)). So we’re stuck and it does get frustrating especially because half of our debt isn’t supposed to be there, they’re hospital bills that the insurance didn’t want to cover and we had full insurance. So….good luck to people who can get out
Dorothy says
October 26 at 8:29 pmCall the hospital and ask them if they can reduce or excuse the bill. I had $40,000. In hospital bills due to an asthma episode twice in one month. They reviewed and excused it all! They used the money from the cigarette tax here in ca. To pay it off.
Jkbsmenc says
January 26 at 7:45 pmAbsolutely! Sometimes these rock bottom situations are blessings in disguise. My fiance and I had stretched our finances to the max in order to pay for new truck. Unfortunately he got in a minor accident, but enough to raise his insurance by $70. Because we were so stretched that was too much. That was literally food. So we decided that $645 payments were too much and we’re not contributing to our lives. We sent the truck back. Technically it was a voluntary surrender and not a repo so there was no dramatic and embarrassing repo experience. We just dropped it off at the original dealers. He borrowed $2000 from my mother’s since we had 0 savings and bought a cheap used car and made arrangements to pay it back 4 months. For the next 4 months our primary diet was spaghetti and chili. Strangely this was the best time in many years because we were from under the burden of the truck. After this experience we made a plan to reduce credit card debt, save money, and plan for a house. Yes, his credit did go down, but not as much as I would have thought. Also having more money to pay off other debts helps improve his score. So the take away from this story is if you face a financial crisis, take a good hard long look at what brought you there and see if it’s time to change course.
The Busy Budgeter says
February 2 at 2:12 pmI LOVE THIS COMMENT! I like to call rock bottom, the perfect place to start climbing up. 🙂
Gemstar says
January 29 at 11:36 pmDiana,
Your comment “Worst yet is my husband doesnt recognize we’re as bad off as we are” is part of your problem. How can your husband help “fix” what he doesn’t recognize as “broke”? When you are married both of you need to be part of the solution as both of you created or are part of the problem. If he does not see the problem he is not helping to find a solution to cut costs, etc.
K J says
February 5 at 5:45 pmYes I not to be late but if you’re in the hospital and you have no disability or income you have no choice but to be late. It’s a lot of stress. Medical bills can eat your lunch and your dinner and cause you to be behind. This happens to me because I am the one that is disabled I had a brain tumor anspine tumor just removed. I actually started a go fund me account to try to help me with my medical bills which doesn’t get very far. I really thought some strangers might would help but they don’t even help not even $10 which of the parking was $30 a day at MD Anderson Cancer Center. All of your advice sounds really good but sometimes you just have to let it go. I actually wrote a book called who moved my lily pad. It was free to publish on Amazon and I wish that it would make it big to help us fight just a little bit of our groceries. check it out. On Kindle for right now I believe if you subscribe it’s free. ShARE IT FOR me.
Trystan says
February 17 at 9:14 amCheck in with your local 211, they’ll have a listing of places that can help with medical bills. A lotta places that help with things like rent and utility assistance will also assist those looking for help with medical bills.
Kathie says
March 27 at 11:55 pmI hope you feel better.Some people have no clue A second or 3rd job is not possible for everyone.
Ashley says
February 11 at 10:02 amThis article is very helpful and is truly powerful because it acknowledges how debilitating the emotional side of this situation can be! It truly does lead to bad decisions, but having someone acknowledge that and provide suggestions is so meaningful. Thank you for this piece.
Trystan says
February 17 at 9:07 amCheck in with your state 211! 211 is a N-11 number like 911 and 411, but they cover all sorts of help lines, they are mainly information and referral for nonprofit services in the state that they cover. When you call them they can tell you about any assistance in your area from things like rent assistance, shelters, utility assistance, tax prep, prenatal care, diapers, school supplies, low cost dental and medical centers, mortgage assistance, cheap child care, furniture, food boxes-you name it, if your area has the service and you qualify for the service you’re looking for, these people are going to be able to walk you through how to get the help you need. As far as I know, the Chicago area is the only area without a 211.
Becky says
March 21 at 10:23 pmThank you, can you offer or point to Places that help when you take on people who end up being dead weight but if u put them out they will be homeless
Tammy says
March 25 at 2:19 pmThank You! The best advise I could hear at the most needed moment.
Krista says
March 25 at 10:15 pmWow you come of very angry and judgemental, whether you mean to or not. Some people live in areas where having one job is,a blessing and getting 2 is impossible. Not everyone has the option to have 2 or 3 jobs just from a childcare standpoint as paying round the clock babysitters would cost more than you would make and it’s also not feasible to never be there for your children nor is it a responsible thing to do. People get into trouble financially usually very quickly from somethibg very small like a day of work missed from being I’ll or a cold sick which when you live paycheck to paycheck 1 day unpaid can be devastating. You should thank God everyday tgat you’ve never been in this situation and pray you never do. But your advice is so off the mark it’s actually ridiculous.
Chaundra says
April 1 at 2:24 pmAlso, call some local churches to see if they have a benevolence fund or know an organization in your area that may be able to help with the one time need. People often donate money to assist neighbors in need.
Nan says
May 29 at 7:49 pmMaybe if you are single with no kids you can do that, but such a tough approach is unrealistic. Because life happens. I was doing great then got rear ended by a truck, police didn’t help me, to make a long story short I lost a great deal of money quickly….and one accident fried everything. I say to everyone money isn’t everything. It can relieve stress and provide a temporary security, but true security only come from God.
Karla Searles says
August 23 at 11:17 pmI started new position, after being unemployed for 3 months. my identity, was stoled,and I just losted my Dad!!!, I was red flag financially, missing my Dad, and starting. New job. So you shouldn’t tell all this bullhocy…what give you the right to tell people what they should and shouldn’t do with the situation.
Pam says
December 15 at 1:29 amGood for you…I agree with YOU
lroy says
February 14 at 5:09 pmI would add putting money aside to have driveway plowed when there is a lot (think eight or more inches) of snow.