It can feel like your whole world is collapsing around you when you’re faced with a bunch of bills and you don’t have the money to pay them. You may not realize it until you have money, but you may have options.
Before you panic, follow these seven steps to find the relief you need.
1. Assess the damage
The first step is to find out Why you don’t have money to pay your bills.
If it’s because you’ve lost your job or your income is too low to cover vital expenses, it’s a real problem (and the tips below should help you find a solution).
But if you’re broke due to spending too much money on entertainment like entertainment, dining, and shopping, that’s a whole other issue. And it’s time to stop the bleeding.
Take a moment to add up all the income you’re making right now. Then add up your main expenses: housing, utilities, groceries, transportation, and minimum debt payments. (Download our free monthly budget chart to help you understand your expenses.)
Do you have enough income to cover the essentials? If so, you can free up enough money in your budget by simply cutting back on non-essential expenses like dining out and shopping (for now). If not, follow these steps…
2. Contact your creditors
The next step is to contact the creditors and explain your situation. Many companies are willing to partner with you if they know you’re in financial trouble. They can:
- Set you up with a payment plan.
- Deferral offer (temporary deferral of payment).
- Extend the term.
- Waive late fees.
- Reduce your interest rate.
Lenders are people too, and many of them have programs to help clients in need. So it’s worth calling and asking about them. The worst thing they can say is no.
Read more: When an account goes into collections and how to avoid it
3. Prioritize your bills
Not all accounts are created equal. Some, like rent and utilities, are more important than others. Make a list of all your bills and prioritize them from most important to least important.
Then write down which ones have to be paid in full each month and which ones have minimum payments that you can cover until you get back on your feet.
Tip MU30: Try to keep up with your debt payments as much as possible. Missing even one payment can lower your credit score, lead to late payments, and make it difficult to find financial backing.
If you have no choice but to miss a payment, let your creditor know ahead of time and let them know what’s going on. As stated in tip no. 1, they can work with you.
Read more: How Credit Works: Understand the Credit Reporting System
4. Explore Public Assistance Programs
If you are struggling to make ends meet, non-profit or government assistance programs may be available to you. These programs can help with things like food, housing, and medical expenses.
For example, you can study:
If you need cash right now, you may need to find ways to get extra cash. Here are some ideas:
Sell your stuff
Selling some things might be a good option. You can have a garage sale, sell items online, or even go through your closet and donate clothes to a thrift store. You’ll be surprised at how much money you can make by getting rid of things you don’t need.
Get a part-time job
If you have at least a few extra hours a week, you can try to get a part-time job or use an app like Uber or DoorDash.
You can use the extra money to pay off your debts or pay your bills. And once your financial situation is under control, you can leave your job and return to your normal life.
Check out the cash dispenser app
There are several apps that offer free cash advances if you need money before your next paycheck. Dave is one example. This will move you up to $250.
Chime SpotMe is another one. But his cash advance works more like overdraft protection when he covers up to $200 in overdraft purchases in your account. chime debit card.
Generally, no interest is charged on cash advances, but you may be charged membership fees for certain applications. And if you’re a new customer, your loan limit can be reduced until you build a solid deposit history with the app.
Read more: The Best Cash Apps to Stretch Your Money Before Payday
Use your credit card
Paying off your credit card in full every month is always the best practice. (Normally I would recommend that you do nothing.)
But in real emergencies, saving up a small balance to cover critical expenses that can’t wait can give you some financial relief.
Just be sure to start with the credit card that has the lowest interest rate first. Then try to pay it off as quickly as possible to avoid accruing interest.
6. Create a budget
Forming healthy financial habits can be difficult when money is tight, but it’s worth the effort. And creating a budget can make all the difference.
At its core, a budget is all about keeping track of your income and expenses so you know where your money is going. You can then make the necessary adjustments to make sure you live within your means.
Read more: How to Budget: A Step-by-Step Guide to Managing Your Money
7. Consider Credit Counseling
If you are having trouble managing money, credit counseling may be a good option. Credit counselors can help you budget, negotiate with creditors, and even consolidate your debts.
But beware: there are plenty of scam, sketchy companies that are just trying to cash in on people’s debts. Do your research ahead of time and make sure you find a company with a solid reputation.
One good option is CareOne debt relief services. (Several people who work for Money Under 30 have used them in the past with good results.)
Read more: 10 things you should know about debt management programs
Summary
Paying bills without money can be an ordeal, but there are a number of resources available to help you get back on track. With a little effort, you can take control of your finances and take steps to improve your future.
Featured Image: Pressmaster/Shutterstock.com
chime disclosure – Chime is a financial technology company, not a bank. Banking services and debit card provided by The Bancorp Bank or Stride Bank, NA; FDIC members.
1Chime cannot guarantee when files will be submitted to the IRS and funds will be available.
^Early access to direct deposit funds depends on the payer