The first step to getting your budget on track when you’re behind is to look at your overall financial picture.This means looking at credit cards, checks, utility bills, mortgage payments, automatic bank payments, everything.
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.
Literally, everyone tells you to decrease your spending. Maybe you’ve already cut back as much as you can. But if you haven’t, decreasing your spending is a great way to get your budget back on track if you’re behind on bills.
Step 5: Speak with Creditors to Make a Payment Plan
Even if you can make ends meet by cutting back on your spending and increasing your income, you need to talk with your creditors. They may be willing to work with you to reduce your monthly payments or interest rate.
If you are trying to budget when you are behind on bills, there may come a point where you have to prioritize payments. You’ll need to do this if you cut expenses, increased your income, and talked to your creditors but still can’t catch up.