Most people are one economic downturn or medical emergency away from disaster. A whopping 27% of Americans couldn’t handle $400 of unexpected bills without finding additional income, such as pawning possessions or borrowing money.
If you’re the victim of financial insecurity, you’re caught between a rock and a hard place. As bills begin to pile up, you may have to start making difficult decisions. Do you buy groceries this month or keep the power on?
It’s a question without a satisfying answer. However, intelligent financial strategies and practices could keep your bills accounted for while you look for more income. Here’s how to pay your bills when you’re low on cash.
Create a Long-Term Plan
Financial hardships sometimes serve as a reminder that your previous living situation was untenable. For example, you could be low on cash as a result of excess spending, which suggests you would benefit by sticking to a budget.
The 50/30/20 plan is a quick way to audit your current spending practices. In general, you should budget 50% of your net income on essentials, 30% on discretionary purchases, and 20% on savings. Look through your bank statements and credit card transactions to determine if you’re making enough money for your current living situation.
By keeping this budget in mind, you may realize you’re paying too much for rent and would benefit by moving in with a roommate instead.
But what if you’re experiencing financial hardship through no fault of your own? While economic turmoil and layoffs aren’t your fault, they present an opportunity to reconsider your current line of work.
Take a moment of introspection to build a plan for a solution to your current dilemma and ways to avoid it in the future. For most people who lack the means to pay for their current set of bills, they’ll need to look for new job opportunities or pick up extra shifts if they’re lucky enough to be employed.
If you believe your current career lacks job security, it may be a good idea to consider a career change or work towards a new degree — after you straighten out your bills.
In short, diagnose the cause of your financial shortcomings, decide on a short-term fix, and make long-term plans to prevent future financial complications.
Prioritize Essential Bills
Without enough money to pay all the bills, you’ll need to decide which get paid and which don’t. Groceries, rent, and utilities should be at the top of the list no matter who you are. After all, you need food, shelter, and heat to survive.
After these basic essentials, things get more complicated and vary based on your personal situation. If you rely on a vehicle to get to and from work, or to find work in the near future, it makes sense to prioritize your car payments and insurance.
Near the bottom of your priority list are loan payments for credit cards and student debt. Missing these payments can harm your credit history and eventually lead to wage garnishment, but they aren’t essential to your survival or to getting yourself back on your feet.
Reach Out to Billing Companies
At the end of the day, the companies you owe want to help you pay them back. If you end up destitute, the odds aren’t great they’ll be getting their money back any time soon. To that end, creditors and other billing companies can be surprisingly flexible when you encounter financial difficulties.
But for the best results, you should reach out to them first, before you miss the initial bill payment. Ask these entities if you can set up a payment plan, take advantage of a deferred payment, or find help through federal programs.
If you manage to renegotiate a repayment structure, ask for the new payment terms in writing. This is not only a great reference guide but also ensures you’re protected in case there was a mix-up or confusion about your updated repayment plan later on.
Get a Fast Loan
In unique situations, you may already have a new income stream on the way. It just isn’t here yet. Maybe your new job hasn’t started yet, or you’re waiting for the first payment to arrive.
The best way to pay bills during the interim is to take out a quick payday loan. These types of loans can be approved in a matter of days, keeping your creditors and landlord happy while you await the first paycheck. This is, after all, why they call them payday loans.
To make sure you get a fast loan as soon as possible, read on here.
Seek Outside Help
Too many people avoid charitable assistance in their times of need. Don’t be one of them. Dropping by a food pantry can help you avoid grocery bills for the month and push those savings towards other expenses, such as electricity and water.
But local and federal assistance isn’t your only option. Now’s the time to reach out to friends and family who can help you trim the bills further.
If you can no longer afford your rent or mortgage, consider moving in with your parents or in-laws. It’s not the most comfortable situation, but it’s one of the best ways to save money, avoid interest payments, and get yourself back on your feet as soon as possible.
How to Pay Your Bills With Ease
Almost everyone has trouble paying the bills from time to time. As stressful as the situation may be, you can navigate a course to calmer waters. Create a plan, pick and choose your bills, negotiate with creditors, and take out a loan if you need to buy a few more weeks.
Being broke is uncomfortable, but these financial strategies can keep you housed and fed through the worst of it.
That’s how to pay your bills when you’re low on money. For more personal finance and loan coverage, search our site for content like this.