What to Do When You Can't Pay Your Bills on Time
If you can't pay your bills on time, the most important thing to do is to stay calm and develop a plan to get yourself back on track. There are ways to get out of debt without winning the lottery. All it takes is a little bit of patience, developing a plan and staying calm.
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Communicate With Your Creditors
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Communicating with your creditors is extremely important, especially when you can't pay your bills on time. If you ignore your creditors, they'll send your bills to a collection agency, which will drastically hurt your credit report. Believe it or not, creditors are willing to work out payment plans with people that are having trouble paying their bills on time. Instead of waiting for your creditors to call you when they don't receive a payment, call them before the bill is due if you know you're not going to have the money to pay a bill.
Make a Budget
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If you can't pay your bills on time, make a list of your monthly expenses. This will help you identify areas of your budget where you can reduce your expenses. For example, if you're purchasing a $5 cup of coffee at Starbucks every day that adds up to $150 a month, you may be able to cut that luxury item from your daily spending. If you did not write down your budget, you might have never realized how much that seemingly harmless cup of coffee costs you every month. Instead of spending that money on a cup of coffee, use it to pay off your bills.
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Consider Debt Consolidation
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Some people consider taking out debt consolidation loans when they can't pay their bills on time. Debt consolidation loans are loans that are used to pay off all your bills at once. This allows you to make one monthly payment for the debt consolidation loan instead of worrying about paying 10 different creditors. One of the potential benefits of debt consolidation loans is that you'll avoid late fees associated with falling behind on multiple bills. This can also help reduce stress because you only have to keep track of one monthly payment instead of multiple monthly payments.
Look for a Second Job
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The number one reason that most people can't pay their bills on time is because they don't have enough money. Try to look for a part time job on the weekends or at night that you can use to earn some extra money to pay off your bills. If you have a lot of junk laying around in your garage, have a garage sale and use the money to pay off your bills. It's important to look for ways to earn extra cash whenever you can when you're behind on your bills.
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References
- "Bankrate.com"; Don't Ignore Creditors on Debt Collection; Steve Bucci; June 2009
- Balance Financial Fitness Program: How to Communicate With a Creditor
- Federal Trade Commission: Knee Deep in Debt
- "MSN Money"; How to Build Your First Budget; Liz Pulliam Weston; March 2008
- CNNMoney.com: Money 101 Lesson 2: Making a Budget
Resources
- Photo Credit cutting credit card image by Warren Millar from Fotolia.com
