What Do You Do When You Get Behind on Bills – How to navigate the situation when you’re in over your head with your bills.
It’s the end of the month and you’ve got a stack of bills waiting to be paid and an empty bank account. And you don’t know what to do when you get behind on bills, but you’re in that very situation.
You might feel like you’re the only one who’s ever fallen behind on bills. That no one else will know what do you do when you get behind on bills.
Believe it or not, you’re not alone.
I hope it brings you a lot of comfort to know that many of the people that I know, myself included, have received a shut-off notice, a bill in collections, a final notice before a bill goes to collections, and some have even received notice of evictions, foreclosures, and repossessions.
You’re not alone. Trust me, you’re not.
Ok, now that you know that it’s not just you, let’s get into the good stuff.
Before we can get into what you should do when you get that shut-off notice, you need to do some self-evaluation. There are 2 types of people who find that they don’t have the money to pay bills:
- People who make enough money but aren’t using it to take care of responsibilities before fun.
- People who don’t make enough money for the monthly payments and bills that they have at the end of the month.
The only way to find out which one you are is to make a budget. Here’s the quick start guide to getting started with your budget.
- Print out 3 months of bank statements.
- Get 3 different pieces of paper with each month written at the top.
- Write down how much you make (paychecks and any other source of income) on each month’s paper.
- Now find all of your bills (rent/mortgage, gas, electric, cable, internet, car payment, etc.) and add them up. Call these “fixed expenses” on each of the papers. These are the expenses that don’t change in a month.
- Find all of the times you spent money on food and make 2 columns: grocery shopping and take out/ restaurants. These are 2 different categories, but they still fall under the “food” umbrella.
- Make a “miscellaneous” column and add up ALL of the other expenses. We’re not concerned with what they are right now, just that they were spent.
- Add up all of your expenses.
- Subtract the total amount of expenses from your income.
(You can download the free Quick Budget Worksheet to spend more time working on your budget:)
So now you have your final number. Do you make more than you spend? What would that number look like if you took out the miscellaneous category or the take-out category? Would it be a lot less?
If you make more than you spend but it’s because going out to eat and miscellaneous spending make up more than half of your overall expenses, then it’s your money management that is causing the issue.
But if you don’t even make enough to cover your fixed expenses, the issue is more than just lack of control.
Related budgeting resources:
- The 6 Bank Accounts that Your Family NEEDS
- How Much Should I Budget for Groceries?
- Take Imperfect Action When Budgeting
- The 2 Biggest Budgeting Lessons to Make Your Budget Stick
- 90+ Budget Categories That You’re Forgetting About
- How to Feed Your Family on a Budget (so You Don’t Feel Poor)
- Living on $17,000, What Our REAL Budget Looked Like
- The Best Budget System When You Can’t Budget
- I HATE My Monthly Budget (And What I Use Instead)
- How to Save Money When You’re Broke
What do you do when you get behind on bills.
Step 1 – Don’t panic.
The shut-off notice doesn’t mean that someone is coming to your house in the middle of January 30 minutes after you open the letter. So there’s no need to panic.
Try to stay calm. When you’re in a panic, you make rash decisions and they often wind up hurting you instead of helping you.
Avoid scammers who prey on your panic.
There are a lot of scams out there and they prey on people who are in a panic and are scared. I got a shut-off notice that claimed to be from our electric company before and it was a scam trying to get me to pay $500 “or else the police will arrive.”
There are also times when someone will call you claiming to be from your utility company demanding that you give them your bank account numbers to pay this bill or else they’re going to have you arrested. This is another scam. It’s also usually a dead giveaway when they can’t provide you with any actual information for your account number, last date of payment, address or even your name.
Related post: Work from Home Scams You Need To Avoid
Step 2 – Stop spending NOW.
If you don’t have the money for your bills, it’s time for a spending freeze. It’s time to make a change in your spending until you can get it under control. This will also make sure that you have the money that you need in order to pay for the bill.
Really dig deep and stop spending. The last thing you need to do is to add to an already bad financial situation. If you keep spending, you’re just going to be digging yourself further and further into debt.
Related post: Ultimate Guide to Surviving a Spending Freeze
Step 3 – Find other [LEGIT] ways to make money quickly.
Another way to dig deep is to get a side hustle that will make you some extra, much-needed money FAST. There are some immediate (like, that day) ones for you to do:
- Sell all of your clutter or extra stuff to consignment stores.
- Sell plasma for $50 for 2 hours or work.
- Go through your recently purchased items and see if you can return some of them that haven’t been used or opened to get a refund.
- Go through your jewelry box and sell all unwanted or unused jewelry (don’t part with heirlooms, though).
There are other ways to make money in the same day, but some of them are “iffy” at best and full-on not ok at the worst. But that’s all up to you.
If you have a few days to get some money together, you can try your hand at some of my favorite side hustles that will pay you within 1-2 weeks of doing the work:
- Bestmark – Secret shopping that you can do both online and in the store. I only do the online/phone call shops and I make $30-60/week! They payout every other week. You can find out more about Bestmark here.
- Usertesting – Test websites and apps from your phone, iPad, and computer. They always pay out $10 per review and you can review 3 or more in a week easily. Each one takes (realistically) 5-10 minutes and they pay out exactly one week after you did the survey. Find out more about Usertesting here.
- VIPKid – If you have a college degree (in anything at all), you can teach kids in China how to speak English. They pay $20 an hour for the work and you get to make a big difference. Ashley tells her story about how she earns with VIPKid here.
There are definitely others as well, but those are my 2 absolute favorites. Especially for a quick payout.
Here are some other side hustles that you might want to consider:
- February Blogging Income Report – $8,317
- Side Hustles That Work: Make Money Freelance Writing
- Side Hustles That Work: Start a Home Daycare
- Side Hustles That Work: Make Money Taking Surveys
- Side Hustles That Work: Pay for Back to School Watching Videos
- Side Hustles That Work: Make It, Sell It!
- Why I HATE Multi-Level Marketing And You Should Too
- 5 Side Hustles That Pay For My Groceries (and More!)
Step 4 – Call the companies where the bills are coming from.
It’s so important to remember that at the other end of the phone, there is another person. If you don’t have a long history of paying your bills late or missing payments altogether, they will likely be very receptive to helping you out.
If you are unable to pay your bills due to an emergency, explain that to them. Tell them that you can send the bill to them as soon as possible, but it won’t make the due date.
You can even ask if they would waive the late fee or hold off sending the bill to collections. The worst thing they can say is “no,” and that’s actually not all that likely. But you never know if you don’t ask!
Related post: The 6 Bank Accounts that Your Family NEEDS
Step 5 – Fess up to the mess-up.
Talk to your spouse or your roommate(s) about the mistake. If the issue is your fault, apologize and say that you’ve done all of the things that you can to make sure that the situation is getting resolved ASAP.
But this is also really important: ask for help if you need it!
Not necessarily monetary help, but if you’re having trouble staying on top of the bills and due dates because of your schedule or workload, ask for help! You’ve taken responsibility for the mistakes for this time, and that’s saying a lot. But if you feel like it will happen again in the future because you’re just too busy or that you can’t remember the due date, it’s time to ask for help.
Related post: 10 Reasons Why You Need An Emergency Fund
Step 6 – Automate.
Now we’ve talked about how to cover this month’s mess-up, but now let’s make sure to avoid it in the future.
There are a few ways that you can make sure that it won’t happen again: you can either live under a rock and never have any expenses ever again, or you can automate your bill paying.
Almost every bill, whether it’s your credit card, mortgage, insurance, or even water, can all be set up for automatic payment. You can do this one of 2 ways:
- Set up automatic bill pay directly from the company who is sending the bill. There are some places that don’t offer this service, but usually, they are small companies or local bills (like water or trash). But really, you should be able to set this up online easily. If not online, then just calling and asking to set it up will do just fine.
- Set up an automatic bill payment from your own bank. Your bank can send out checks directly from them automatically each month. As long as you include the bill’s account number in the memo line, it will be cashed without a problem. You can set this up for each month of the same day, or manually set it up.
This way, you never need to worry about forgetting to pay your bills. You might want to set an alarm on your phone or computer on the day that the bill is going to get mailed from your bank. That way you know to make sure to keep your account prepared for the bill to be taken out.
Step 7 – Avoid a repeat.
It might seem like it’s easier said than done. But this is a very important step. You need to put actions in place so that whether you have a situation where you can’t pay your bills due to an error on your part (like forgetting to send in the bill), or a lack of money to cover the bill in the bank, you can avoid a repeat in the future.
No one is perfect and you’ll likely forget to pay a bill again (I still do sometimes, too!), but it’s important that you take this opportunity as a wake-up call to analyze your finances. What’s going on there? Where are you falling short and how can you change that moving forward?
It’s not always easy knowing what do you do when you get behind on your bills. But know that nothing is ever hopeless!
Missing your bills doesn’t mean that you’re a failure. It means that there is something in your current system that isn’t working for you. Once you know what isn’t working, you can fix it. And once it’s fixed, you won’t need to worry about not having enough money for bills or forgetting to pay them.
I believe in you! You can do it!