There is no worse feeling than being behind on bills. Whether you’re bogged down with student loan payments, a mortgage that is drowning you, or insane credit card bills, there is hope. Before you keep reading, take a big deep breath. No really, do it. Maybe a few deep breaths for good measure!
Today I’m going to help you learn how to budget when you’re already behind on your bills. Because no one deserves to feel the way you’re feeling right now.
This means looking at credit cards, checks, utility bills, mortgage payments, automatic bank payments, everything. Make a list of all the creditors you owe and the amount owed.
Your next job is to categorize your spending. Categorizing your current expenses will help you figure out what you absolutely must pay and where you might be able to cut back. There are 3 major groups to sort your expenses into. Debt, regular bills, and variable expenses.
If you are behind on bills, the goal with your debt should be to pay at least the minimum payment. Obviously, I want to help you get rid of your debt too. But that is for a later day. The first step when you’re already behind on bills is to stop the spiral.
Regular bills might include things like rent, car insurance, phone bill, cable, and so on. Anything that is roughly the same amount every month needs to be accounted for in this category. The more specific you can get, the better.