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HOW TO GET AHEAD WHEN YOU’RE BEHIND ON BILLS


Have you found yourself wondering how to get ahead when you’ve gotten behind on bills?  I’m sure you’ve been stressing out about how and when you’re going to be able to catch up.  When you’ve gotten behind, it can be very difficult to get caught up, but it’s not impossible.
The main reasons for getting behind are usually because you’re overspending, you aren’t making enough money or both.  When you start on this down hill spiral, sometimes it feels impossible to pull yourself out of it, but it doesn’t have to be this way.  There are some things you can do to begin untangling your finances and get back on track to getting your life back.

STEP #1:  FACING THE UGLY TRUTH

Sometimes, facing the ugly truth about your finances is the hardest part of coming to terms with the reality of your situation.  Ignoring the facts will not make them go away. It’ll just make it worse. The only way you’re going to be able to deal with this problem is to take a deep breath and face it head on.  If you are married, it’s even more important to make sure that your spouse is beside you in taking on this situation.  It’s virtually impossible to go at this alone.  If you are single, it would be a good idea to find someone who you can talk to and hold you accountable.

STEP #2:  ASSESS YOUR SITUATION


You won’t know where to start until you know what your situation really is.  The first step to take is for you to organize your bills.  Make a list of all your creditors, how much you owe each one, how much you’re behind and what the minimum payment is.  Once you see your situation in black and white, you’ll see more clearly how to formulate a plan.

STEP #3:  STOP USING CREDIT

I know, when you’re in a desperate situation, you do what you need to survive, but when you’re in a hole, it is imperative that you stop digging yourself deeper.  In order to turn your situation around, you’ve got to stop using credit.  You can’t make a situation better by continuing to make the same mistakes that got you here in the first place.  Breaking the cycle is the only way to change this situation.

STEP #4:  PRIORITIZE THE BILLS


You need to prioritize what to pay first.  It doesn’t make any sense to be behind on your mortgage/rent, but be current with Mastercard.
The most important bills that have to be paid first, no matter what, are what Dave Ramsey calls the four walls…food, shelter   (including utilities),basic clothing and transportation.  As long as these are covered first, you live to fight another day.
Once you have these expenses taken care of, now you can continue to list the rest of your debts, monthly expenses and variable expenses.  Take each one and categorize it as a want or a need.  Doing this will help you when you set up your budget.  Wants will go to the bottom of the list, while the needs should be listed from most important to least.  When you get caught up with your bills, you’re going to want to take your budget a step further and prioritize your debts. 

STEP #5:  MAKE A BUDGET

A budget is vital for getting your finances on track.  Without one, there’s no way you’ll be able to succeed, financially.  A budget will help you track your expenses and it will help you to tell your money where to go, instead of wondering where it went.

To make a basic budget, start with your total income at the top of the page.  Next, list all of your expenses, as shown above, listing them in prioritized order.  Start subtracting each one from your income.  Doing this will help to calculate the gap between your income and expenses.

STEP #6:  CUT EXPENSES

This is where you need to take a good, hard look at your spending.  When your behind on bills and trying to get caught up, it is important to stop any unnecessary spending.  Stop spending on eating out, going to coffee shops, cut the cable, etc.  You must differentiate between wants and needs.  These changes don’t have to be permanent, but are necessary if you have any hopes of getting ahead of your finances.

STEP #8:  TALK TO CREDITORS

If you’re behind on bills, it would be a good idea to call your creditors to let them know what is going on.  Many times, most will be willing to help you create a payment plan that will suit your situation and will help you get back on track to continue to pay down your debt.
Even if your not behind yet, it may be a good idea to call them, anyway.  Many times, you can get them to lower your payment and/or interest rate or even allow you to skip a month in order to get caught up.  There’s certainly no harm in asking for help.  Just make sure, before you send them any money, that you get any settlements or agreements in writing.  And never, never, never give them access to your bank account.

STEP #9:  INCREASE YOUR INCOME

After you’ve assessed your situation, cut out all unnecessary expenses and find that your ends are still not meeting, it may be necessary to increase your income.  I know that sometimes this can be easier said than done, but it’s all about being resourceful.  If your current job isn’t bringing in enough, you may need to look into getting a better job.
If that’s not possible, then maybe take on another job, in addition to your regular one.  Working two jobs isn’t fun, but it doesn’t have to be a permanent situation.
Another option is to sell stuff.  Go through closets, cabinets and drawers.  We all have extra stuff that we really don’t need.  You might as well make the most of it.  You can sell on Ebay, Craigslist or have a garage sale.

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