Before I committed to getting out of debt, I had months where I robbed Peter to pay Paul.
I didn’t have enough money to pay for all my expenses, so I was inevitably short each month and always playing catch up.
It was so stressful.
If you are in a similar situation right now, you know what I’m talking about. It can be a reoccurring painful experience each month to sit down and know you don’t have the money to cover your bills.
So what do you do when you don’t have the money to cover all your expenses?
How To Manage Your Bills When There’s Not Enough Money To Go Around
I’m sure you’re overwhelmed with all of it, but I’m here to show you how to manage this and get back on track fast!
First, remember that not all bills are equal. Yes, of course, they all need to be paid, but that doesn’t make them all equal to you.
Cover The Basics First
The first step in getting a handle on your bills is to realize that you must prioritize. You need three things covered at all times: food, clothing, and shelter.
Shelter – Always pay your rent or mortgage first. You need a place to sleep, and you don’t want to end up on the street or in a homeless shelter, so make that check out first.
Food – You need to eat so establish a food budget and stick to it. If you don’t like using coupons, I highly suggest you start shopping at Aldi’s. Their prices on almost everything is lower than even your best grocery store with a sale and a combined coupon.
If you’re really struggling, consider finding a local food pantry to help you out until you get back on your feet or ask your church if they have a system in place to help pay for food (my church has this in place and helps it’s members regularly if they are struggling with making their budget stretch).
If you feel too proud, get over it. I placed a food order with my church on more than one occasion when I was desperate and struggling.
You have to get a handle on your money situation and once you’re back on your feet you can give back by making donations to the same pantry that helped you out when you needed it most.
Clothing – I am going to assume most of us have the clothing issue covered. You probably have more clothes in your closet than you could wear so vow to stop shopping and use what you have until it has holes in it and has to be thrown away.
If you need a great budgeting tool to help you get this all down on paper, you can find one in the Free Resource Library.
Or sign up below to get the secret code!
Now that we have the basics covered let’s talk about cutting your costs.
Right now you don’t have the money to cover all your bills so to change that we have to look at where your money is going and start making cuts. You’ve lived above your means for too long.
Make a list of all your bills.
Do you have an expensive cable package? Get rid of it because you can’t afford it.
Do you have your kids in a million activities from dance classes to karate? I’m sorry to say, but you’ll have to cut those too.
You see, when getting out of debt, this is the hardest part – making cuts and decisions that fundamentally change the way your family operates. It has to be done. Of course, I wouldn’t blindside your family. I would hold a family meeting and get input into what’s going to be cut and what will stay.
When it comes to your children, maybe keep them in one activity and ask their grandparents if they would help pay the cost of this extracurricular activity until you’re back on your feet.
No matter how you solve these issues you have to cut.
For the next month, you’re going to track your spending every day to see where else you can make cuts.
Are you going to Dunkin’ Donuts every day before work? You’re probably spending upwards of $35 a week so you can cut that for sure.
Do you notice a regular pattern of Saturday take out? Cut that too; you can’t afford it.
Between the obvious and not so obvious, tracking allows you to see all the money your wasting and places you can chop away.
Develop Your New Budget
Now that you’ve decided where and what to cut from your old budget it’s time to put in place your new budget. Do you have all the areas covered? Did you think of everything?
Often we forget to include common expenses that just seem to slip our minds. Make sure you remember to include all the birthdays, holidays and other items.
Is it adding up any better? Can you make your income stretch all the way?
If not, go back and cut some more.
Often people will say they’ve cut as far as they can, and they still don’t have enough. Rarely this is the case.
Most of the time there are still things on the budget that can go if they are really honest about it, but let’s say for argument’s sake this is the case, and you don’t have any other cuts available. What then?
When all else fails, you can always make more money. Find a second job, do more overtime, start a side business. There are even places online that will pay you to take surveys for money.
Sarah Titus offers ten ways in this article, and they are not impossible to achieve.
Convert to Cash
Only cash will keep you from creating more debt. That’s why I want you to convert to cash once your budget is finalized.
Sit down and look at your budget and decide what you’ll pay in cash and what you won’t. For example, food, gas, trips to Target for laundry detergent should always be paid for in cash.
Well, let’s imagine you’re in Target buying that laundry detergent that’s on sale. You go to the women’s department and out of the corner of your eye, you see this cute little top.
If you’re using cash, you know immediately you don’t have the money to buy it because it’s not a necessity and it’s not in your budget.
Stick to cash and use it when you can.
This Is Hard
Now some of you will whine that this is a lot of work, and it is. Getting out of debt is not for the faint of heart. It takes determination and constant attention to where your money is going. It can be exhausting, but the alternative is worse.
Don’t you want to rid yourself of the stress and worry associated with debt and not being able to cover your expenses each month?
If you do, this is the plan you should follow. And if you do, you will get out of debt and learn a lot about yourself in the process.
MY FAVORITE MONEY-SAVING TOOLS
EBATES: Want to earn cash back when you shop online? Ebates acts as a shopping portal offering coupons and cashback from over 2,000 online stores. I always check on Ebates first whenever I shop online! You can join Ebates for free and get a $10 welcome bonus when you sign up through this link.
DIGIT: Like the idea of saving but need something automatic? Digit is the perfect solution if trying to automate your savings strategy. In essence, what Digit does is use an algorithm to detect spare money and then transfers it to a secure savings account – so you’ll always have something to fall back on. Sign up for free!
GROCERY BUDGET MAKEOVER: Is your grocery budget giving you a serious kick in your families spending plan? Grocery Budget Makeover helped my family slash $6,000 a year from our food bill! Learn more about how Grocery Budget Makeover can help you save money too!