Here’s What to Do If You Can’t Pay Your Bills On Time

Not having enough money to pay the bills is an issue we may face from time to time. Life is full of financial ups-and-downs, and after all, we’re all human.

Don’t beat yourself about the situation or get discouraged. Vow to take action. If you don’t make changes, things will stay the same. If you’re in a tough financial spot, here’s what to do when you can’t pay your bills on time, and tips on how to best handle the situation.

1. Don’t Hide From the Facts

Do you know why you can’t pay your bills? Did you overspend, have to make up for an emergency, or was it just human error? Don’t hide from the facts, but instead embrace them head-on. Not dealing with this financial mess can lead to more late fees, higher interest rates, additional interest charges, and even damage your credit report.

Avoiding paying your bills will only make things worse, so make a choice to rectify things right now. You may realize that the situation is not as bleak as you thought, and that there are more options available than you believed.

2. Change Your Financial Momentum

Now that you’re ready to face the facts, start by listing all of your current bills and debts. Pull up your bank account (or bookkeeping software) and review all of your transactions, deposits, and other expenses.

Then ask yourself why you’re in this financial bind. There are usually two causes of a financial emergency:

• Spending too much
• Not making enough

If overspending is the cause, then look for ways to scale back your spending and stop the bleeding until you get back on top. Think outside-the-box and look for creative ways to afford the things you need.

If you’ve cut back your spending as much as you can, look for ways to bring in more money using the skills you already possess. What can you do this week to bring in some extra cash? Go through your house and prep items to sell at a yardsale or on Craigslist. Ask friends and family if they need help with a weekend project. Turn your hobby into a paying gigon the side by using sites like eBay or Etsy.

Figure out the cause of why you can’t pay all of your bills, and take action to change your momentum. It may take a few months for your budget to adjust to the changes, but be patient and know that it will be worth the sacrifice to avoid this situation in the future.

3. Prioritize Your Bills Based on Importance

If you’ve completed steps one and two and still find that you don’t have enough money to pay your bills, it’s time to prioritize which ones get paid based on their level of importance. Obviously you need to pay your utility bills, like water, heat, and electric, as well as paying your landlord and putting food on the table.

Mark any secured debts connected to assets like a mortgage or car as next in the line of importance. If you default on those bills, it’s likely you will lose the roof over your head, or your ability to drive to work to earn a living.

Any other funds leftover after paying these important bills can be put towards other debts and balances owed.

This article first ran on Wisebread.com, a community of bloggers here to help you live large on a small budget. Read more from Wisebread:

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