What to do When You Are Behind on Bills - Pennies into Pearls (2024)

How can you start taking control of your finances if you are behind on bills? Where do you start?

If this is you, I’m betting that you are feeling completely hopeless and don’t realize what an amazing future you can actually have for your family!

The process of getting on top of your bills is actually not that complicated at all. Today I am going to show you step by step what you need to do to take control and get on top of your bills.

Doing this is going to open your eyes to your potential for reaching some seriously amazing goals for your family!

Related articles:

• Budget Strategies from a Real Life Pearl
• How to Afford Your Dream Life
• 3 Tips to Paying off Debt!
• Where to Start When Budgeting Feels Hopeless

Feeling Lost?

The steps we are going to chat about today to help you get on top of your bills aren’t too complicated. That’s because the theory behind them is simple. You can totally do this!

But maybe you are getting stuck when it comes to figuring out how to work this strategy in with your bills? How do you fit extra payments into an already really tight budget?

Don’t let these questions paralyze you from progressing towards your freedom!

In my online course 30 Day Family Finance Rescue I teach you how to tackle these obstacles. How to make sure that you are getting your finances set up CUSTOMIZED to your family’s unique financial makeup and life events. The course is currently closed but you can sign up for the waitlist to be notified when it relaunches!

If you have tried to get this figured out before but keep falling off budget and are stuck living paycheck to paycheck, it’s because you are starting in the wrong place!

Your finances don’t start with the numbers! It first starts with your money mentality. Your attitude and habits that you have with your money. Then, you need to figure out what your goals are for your family’s future. This is the fun part! You need to dream big if you want to get anywhere. Finally, you need a financial action plan worked into a goal based budget to insure that you reach the dreams you have for our family!

All of these vital steps are what is covered in 30 Day Family Finance Rescue. You can click here to get more information or to sign up for the waitlist if enrollment is currently not open. The doors for the course are only open a couple times a year, so you do not want to miss your chance to rescue your family finances!

Start a budget

You first need to set a basic budget to give you a clear picture of what you plan to do with your money on a monthly basis. Yes, you are currently behind on bills which means you don’t have enough income to cover everything, but let’s get a plan set in place to take care of for ya!

Don’t stop reading! I know that using the word “budget” is such a red flag for so many people. A budget is NOT a bad word! It’s actually very liberating! It means you get to tell your money what to do.

To get you started just do the basics. What’s your average monthly income? What are your average monthly expenses? How do the two compare? We will talk more in a sec about tracking your spending. Write out the bills and expenses you will pay with each paycheck. If you have uncovered expenses, write a separate list with the amount due for each. Use that as reference as we move forward in this process of getting you on top of your bills.

Track your spending

Every time I suggest this step to our Pearls, she is always surprised at how much money she is unintentionally spending. That means that she swipes her credit or debit card without much thought and all the “small” purchases add up crazy fast.

The good news here is that this habit can be quickly corrected. Now that you have your budget set in place, stick with it! Use strategies like the cash envelope system and meal planning to help.

Use a free online program like mint.com to track your spending for the last three months. What categories can you cut back your spending? You need to find room to create savings so you can put that savings towards getting current on past due bills.

Back to the basics

When working towards worthwhile goals like fighting your way out from living behind on bills, you need to cut back your spending to the basics.

There are just a few essential categories and eliminating all other spending temporarily will drastically increase the amount of money available to go towards past due bills.

A modest shelter (rent/mortgage), food (meal planning), modest transportation (including gas), basic clothing, and utilities. All other spending really is not necessary and can temporarily cut out.

Stop growing your debt

I’m not going to dive too deep on this but you need to stop growing your debt! For goodness sacks, PLEASE stop using those credit cards! If you follow all the other steps in this article you will not have a “need” for those things anymore!

Continuing to grow your debt while trying to get on top of your bills is only going to make you situation worse. You need to become more self reliant in order to create a sustainable life for your family!

Figure out how much you need to get current

How much do you owe on overdue bills? Make a list of the bills you’re behind on and the amount that is past due. Depending on your unique situation, you might have arrangements where there are bills that need to be help at a higher priority.

An example of this might be if you are behind on your mortgage and you are in danger of losing your home. In a case like this, this is the bill you will want to start getting caught up on first.

Otherwise, you can start paying back the bills with the smallest amount due first. Then slash those bills off the list as they get paid in full and you move on to the next.

Get extra income

When you’re behind on bills you will need to find a way to temporarily increase your income. It’s gonna take some hard work. What’s good is that you can do hard things!

There are a few things you can do to create extra cash to put towards your debt.

The first and easiest way to do this is to minimize your expenses. You even might need to get a little drastic on this step. Remember that in order to dig yourself out of debt it is going to take some sacrifices but the good news is that these sacrifices can be temporary. Just until you become more financially self reliant.

So it may be necessary for you to cut back drastically on your spending. Like I mentioned before, there are just a handful of expenses that are truly necessary. Modest housing, transportation, basic clothing, utilities, and food. The money you save from cutting back your spending should all go towards paying off your debt.

You have to go check out our first Pearl Life Chat with Missy! Her and her husband made some major sacrifices in order to get out of debt which is exactly what you are trying to do here.

The next option to get some extra cash fast is to start selling your stuff. Dig deep into your Marie Kondo self and get rid of anything that doesn’t bring you joy and is just taking up space. Sell what you can and use that cash to go towards your debt. Every little bit adds up really fast!

The last option would be to find additional income through a side hustle. I get really excited helping our Pearl Students brainstorm different ideas on how to turn their hobbies into a way to bring in extra income to use towards their family’s goals.

Sure you could go get a job at Target, but with the way the internet is today there are literally a million ways to make money from home doing something that you think is fun! Get creative! Can you teach a skill through an online course? Can you make and sell something? Is there something you recently have been on the search for and can’t find? Maybe you can fill that void!

If you are passionate and willing to put in the hard work, you can make it work!

Call and negotiate

It is important that throughout this entire process you stay in contact with the companies you’re trying to get caught up with. Even if it’s just to let them know that you are working hard to get on top of what you owe them. Keeping a clear line of communication betters your chances for their leniency and patience with you.

See if you can work out a new repayment plan with them or negotiate a smaller interest rate. Maybe there is an option to waive the late fees or hold off on sending you to collections. Bottom line is in most cases they would rather work with you to get their money back than to pay someone else and prolong the process by using a third party.

Remember that you should always be polite and make it clear that you are looking for a reasonable way to get them their money.

Avoid falling behind again

Look back and see what wasn’t working that caused you to fall behind on your bills. What are some scenarios that might have occurred that led to you falling behind. What can you do to avoid that happening again or what can you do now to prepare for when that happens again?

A huge safety net that will help you avoid getting behind on bills again is to build a $1,000 – $2,000 emergency savings. Once you are current on your bills, make this your number one priority.

Take Action

Are you feeling optimistic about your future? Think of how much stress you are going to get rid of once you are no longer behind on bills! I know you are feeling pumped and I want you to keep going with this momentum!

So act on that right now! Don’t crowd your mind with too many things. Start here. Start implementing the steps we just talked about today!

Do you have any questions! I am here to help any way I can. You can leave those questions down in the comments. Don’t forget that for more in depth and customized direction, you can sign up for the waitlist for my online course 30 Day Family Finance Rescue.

Talk to you soon! Xoxo

Brittany