Like it or not, sometimes our budgets just get into trouble. Sure, we do what we can, when we can, but sometimes, no matter what we do, it’s just not enough to help prevent massive budget failure and a complete breakdown of our finances. Have you ever had that happen to you? Where you can’t pay all of your bills on time? I remember facing this situation when my husband and I were first married and we didn’t have a clue about how to handle our finances! Ideally, we should all have an emergency fund set aside for just this reason, but for some, saving $1,000, let alone 3-6 months of expenses is just not feasible. If you don’t have an emergency, fund, you’ll need to go into budget rescue mode until your finances are straightened out.
What to do when you can’t pay your bills.
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When you first go into budget rescue mode, you’ll need to shut down any expenses that you absolutely don’t need. Dave Ramsey says to concentrate on your 4 walls, which are:
If you can’t afford to pay your basic living expenses, you can’t afford anything “extra” like renting a Redbox movie or your Netflix, or any type of eating out (even if it’s just fast food) or even clothing (make do with what you have). While you’re in budget rescue mode, you will only be focusing on your needs. It’s very easy to confuse a “want” for a “need” these days!
Sit down and figure out what your family’s basic needs are. Then take your budget down to the very basics and keep it there. You’ll need to stay in this necessities only mode for as long as it takes your budget to come back from being shattered.
Sometimes you even have to do drastic things like selling your car for a loss to get out from under a huge car payment!
If you find yourself in a situation where you absolutely just do not have the money to pay all of your bills, you have no other choice except to find another way. Things like selling items you don’t use everyday and taking a second job are a fantastic way to help yourself. For places to sell items, check out Facebook buy/sell groups for your area, Craigslist (always be safe when using Craigslist) and even Ebay if you don’t mind shipping. Check out this post for some creative ways to make a little extra money.
Sometimes you have to swallow your pride and ask for help. SNAP can help with food as well as going to your local food pantry. Not having to spend all your food budget will give you a little extra to hopefully get caught up. If you can’t pay your heating bill contact your utility company and ask if they have a program that could help you out. Some do have one time assistance or at the very least they can refer you to organization in your area that might be able to help.
ModestNeeds.Org is a charitable organization that might be able to help you (although it’s not a quick fix since people donate to you).
Whatever you do, DO NOT TAKE A PAYDAY LOAN! It will only ultimately put you in more of a mess than you already are in. Find another way!
As you start to bring in extra money, start paying your bills. Even if you can’t pay them all at once, pay something on them. It’s always better to show them that you’re making an effort instead of just ignoring things. As time goes on, eventually you’ll get caught up.
After your income is back to normal, don’t immediately jump right back into spending like you used to. Instead, slowly add your wants back in as you build your emergency fund, but keep in mind that building your emergency savings should come before your wants so that you build up enough of a buffer just in case you ever find yourself in this situation again.
Before too long, with enough planning and saving, you’ll be able to pay your bills and be out of budget rescue mode. Plus you’ll have a nice, steady savings account to fall back on should you ever need it!