Recently I was asked, “How can I save when I can’t pay my bills.” This was a profound question because I know the struggle of having very little funding and trying to scrimp and save to get by. We often forget, there are millions of people in our country struggling to stay afloat with their day-to-day bills. Yes, these are hard-working people who just can’t seem to get their ledgers in the black.
Some have enough money but spend themselves into a whirlwind of debt. Yet, others do not make enough money and can’t make ends meet. In either situation, life can become stressful, worrisome, and it is difficult to live your best life because bills are always looming in the back of your mind like an unstable tree trunk ready to crash.
My mission at “I Heart Frugal” is to help people live and amazing debt-free life through budgeting and living within their means. This goal may seem impossible for some when faced with mounting bills. As the bills pile high, catching up seems near to impossible. However, I am here to tell you, there is help and you can do something about your financial situation.
There are so many others out there that are sharing your same money problems, but the good news is, there IS something you can do about it. So let’s get real about your finances, admit there is a problem, and focus on the solution: A good budget and money-saving action plan. After you have created your action plan, take some steps to avoid this situation in the future.
This post contains affiliate links. This means if you click a link and make a purchase I I’ll receive a small commission at no cost to you, so thank you!
You are Not Alone
This once top-selling hit, “You are Not Alone” by Michael Jackson rings true in your current personal finances. According to a recent study conducted by Gobankrates.com, 49% of Americans are living paycheck to paycheck.
There are two main types of spenders falling behind:
- You make enough but spend too much
- You do not make enough to pay your bills
There are several reasons you aren’t able to pay your bills:
- an “emergency” ate up your savings
- you do not make enough at your current job
- loaning money when you cannot afford it
- you help everyone else when you cannot afford to
- you do not pay close attention to your finances
- no budget in your life
- You did not factor in cost of living before renting or purchasing a house
- job loss
Know that you are not alone in your current financail situation. I have fallen into one of these categories at one point in my life and I will tell you what I did to pay my bills and not fall behind: I made a strict budget and stuck to it and then I found a Side Hustle!
You Need a Budget
Knowing that you are not the only one in this situation is a comfort; however, now we must find a way to pay your bills. First, you must take a good, hard look at your financial situation, admit there is a problem, and take some accountability.
Have the Talk
This may mean sitting down with your significant other and discussing the finances freely without blame. In this candid conversation, focus on the solution and not the problem. If your money situation is a surprise to your significant other, you may want to give him or her a few days to let it sink in and then come up with your action plan. Allow him or her to process the feelings and then move forward.
Budget Action Plan
Step #1 – Budget
If you are going to tackle your lack of funding, you must first become accountable. Creating a budget will show you exactly how much your bills total and how much you make. You must be able to cover the cost of your needed bills or take drastic action (will be discussed below). A simple budget will do for now. Let’s get started.
Some ideas in creating your budget include the following:
- Spending journal
- Needs vs. Wants list
- Budget Categories of all of your current bills
- Exact figures of how much you are bringing in (Net take home pay)
- Budget Worksheet
I am going to help you with the above. I am first going to direct you to a suggested reading: Budgets 2017. Then I am going to offer you a budget worksheet to help you figure out this situation. You need to allow yourself a good hour to sit quietly with no distractions and figure out your current income and total.
Budget Worksheet (Coming Soon)
Budget Categories: House/rent, Electric, Gas, Water, Car/Transportation, Childcare, Phone, Memberships, Subscriptions, Insurance, Loans, Credit Card Bills (Add anything else you are currently paying for)
Once you finish your budget you will see clearly how much you make and how much you pay out, you can then take a look at where you are falling behind and make a change.
I Have a Budget, Now What?
After you have a budget, if you are not able to pay your bills you have some important, life-changing decisions to make. You need to find a way to bring in more money and cut spending in any “want” area of your budget.
#2 Cut Expenses
If you make enough money to cover your needs, cutting expenses can be a matter of looking at your “wants” group of spending and make some changes. Here are some things you can cut out of your budget to save money:
- gym membership
- extra clothing or trips to the mall
- expensive coffee
- bottle water (use a filter at home)
- food budget (coupon and meal plan)
- gambling and lottery (many people spend up to $300 a year on lottery alone)
- vacations (find free stuff to do in your town or city)
Suggested Reading: Say Goodbye to Impulse Buys
Make some sacrifices for a few years to make the rest of your life better. Remember, this isn’t forever. Once you have paid down your debt and saved for an emergency fund, you will have a little more money to play around with. Nonetheless, you may need to hustle for a few years to get back on track. However, you CAN do this! “Every Journey begins with one small step!” – Lao Tzu
What if I Don’t Make Enough?
Nonetheless, maybe you are not overspending but do not make enough money. In this case, you will need to find some ways to save on expenses and bring in more money. I am going to give you a list of 10 ways to help change your financial situation.
Yet, I am going to warn you, some of these ideas may not be easy, but if you live a very frugal life for just a few years, you can get yourself above water, put money aside for an emergency fund, and get your finances back on track! I promise once you are done, you will be living an amazing, worry-free life because you will have an emergency fund and money in the bank.
Suggested Reading: Suze Orman Quote
#3 – Help Get Your Budget Back on Track
- Cut out any extras (see above)
- Get a Side Hustle (Suggested Reading: Side Hustles: My Ultimate List of 75 Side Hustles to Earn More Money)
- Start selling what you can (use Facebook groups, Garage sale, Poshmark, Mercari, Decluttr, LetGo)
- Return anything that still has tags
- Call companies and ask for a lower rate or payment plan
- Take responsibility
- Pay your needs first and then what you can (House, Water, Electric, Food, Water, Childcare)
#4 Ideas to Save Money
Determine if the amount you have coming in is less than what you are paying for childcare. If this is the case or it is very close, you could potentially stay at home with your kids and side hustle. For example, if you make $700 a month and your childcare is $800 (we actually paid this when I went back to teaching. Childcare is so expensive!) You would be better off staying at home and recouping the cost by finding a side job. You may be able to stay at home if your child care is more than you are making. Then start your side hustle such as babysitting (a playmate for your child) or pet sitting. Babysitting has always been my favorite side hustle throughout the years. Some people would prefer to pet sit. Find something that is easy and simple that you can do.
Is there a way to talk to your landlord and get a reduced rate? It doesn’t hurt to ask. If not, you may need to find a cheaper living alternative. I realize this is much more difficult if you own your home, but you may need to downsize while you are catching up. Is it possible to stay with a relative so you are able to save? Can you take in a boarder to help cover the cost of rent?
Here is a helpful article from the practical penny called Should I Buy or Rent. You may need to reconsider you living situation and find something you can afford.
You may need to sell your house and rent for a few years if this makes more sense in the long run. This would be a better option than losing your house to foreclosure. Also, consider refinancing for a better rate. We did this and our monthly bill was around $400 less and we are paying off our mortgage earlier; however, we did have to put money down for this option. Talk to your bank and they will help you crunch the numbers to see if it makes sense.
Also, consider refinancing for a better rate. We did this and our monthly bill was around $400 less and we are paying off our mortgage earlier; however, we did have to put money down for this option. Talk to your bank and they will help you crunch the numbers to see if it makes sense.
Check to see if you qualify for low-income utility discounts. Call your gas, electric company, and water service.
It does help to shop around. You can usually secure a lower rate with your current company if you found a lower rate elsewhere. If they refuse to lower your rate, it may be time to make the switch to a cheaper company. I have been a loyal member of Progressive for many years and I have shopped around, only to find Progressive is always cheaper for my family and driving situation. I have also been in two car accidents and they were very helpful.
Bye Bye Cable
Okay, so we all love our entertainment! I get it! However, cable is not a “need” and should be moved over to the “want” section of your budget. Nonetheless, you do not have to go without anything. We have Netflix for $10 a month and we never run out of shows to watch, including kid’s shows. The best part is we do not have to watch commercials! You could even split this with a neighbor or family member because you are allowed to add Netflix to six devices. Hulu is also another great option.
Groceries are one of the easiest ways to cut cost! There are so many ways to save on groceries but some of my favorites include the following:
- Meal Planning
- Shopping with a list
- Coupon match ups (Check Krazy Coupon Lady -LOVE her site!)
- Ebates (if ordering groceries online)
- $5 Meal Plan
Suggested Reading: 7 Money-Saving Secrets to Dramatically Slash Your Grocery Bill
# 5 Make More Money
Maybe you checked out my Side Hustle post or maybe you did not, but this section is dedicated to giving you some easy ways to earn more money. Some things I have done myself are babysitting, tutoring, and dog sitting. Other ideas are dog walking, surveys, and mystery shopping.
Also, do you have a special talent? Sell your skill! One example would be music. Can you give music lessons?
Have you checked out Fiverr? This is a site where you can sell your virtual services. Think of your skills and search for people looking for this type of skill.
Best and Easiest Side Hustles to Earn Money Even From Home
- Pet sit
- Grandparent Sit
- Sell on Ebay, Poshmark, Declutter, Letgo, Facebook
- User Tester (Test websites for money)
- Online Surveys (This won’t make your rich, but will help give you a little extra bill money)
- Dog walk
- Mystery Shopping
- Lyft or Uber Driver (Post on this coming soon)
- Clean Houses
Note: My favorite survey company is Pinecone Research. They pay $3 per survey in cash and most surveys only take 15-20 minutes.
For a list of 75 Side Hustles with more links, click here.
Now That You Have a Plan of Action, Avoid Future Distress
In order to continue living your best life, you will need to continue your debt-free life. After implementing an action plan that will work for you, you must stick with it. I know it will get hard and change isn’t always easy, but this could be the factor that CHANGES your life for the better. If you are able to catch up on your bills, start saving and build up and emergency fund to avoid debt in the future. Continue your side hustle as long as you need and look for ways to earn passive income, such as blogging or affiliate marketing. If you can’t dig your way out of debt, you may consider debt management but beware to avoid scams.
Suggested Reading: Secrets to Saving for an Emergency Fund Now!
Suggested Reading: How to Start a Money Making Blog in Five Easy Steps
If Debt Management is the only way to go, beware of debt management scams. Here is a helpful post to help decide if the debt management company is legit: Debt Management Plans
Figuring out your money issues is never easy, but you are not alone. First, create a plan of action and include a budget. Next, find ways to save money. After, find opportunities to add money to your budget. Lastly, stick to your plan so that you can avoid future problems. You can get back on track and start saving, one step at a time!
If you need more budgeting and money-saving tips, sign up for my newsletter below! You can also sign up for my meal planning and menu template freebie!
If you have any questions, please leave me a comment. I would love to hear from you.
Take care – Sarah