I hope the title didn’t worry you. We’re doing okay with our finances, saving money, paying down debt, etc. I was just reading this week a wave of news stories that had the same theme: how hard it is to pay bills in these difficult times.

Sometimes hard times hit us and we’re left trying to figure out how to pay our bills. I noticed an increase in readers asking for advice on how to pay their bills when their income drops significantly.

It is a mix of circumstances and poor decisions. While we could go for a long debate on making wise financial decisions, I’d thought it be more practical to post some tips on getting finances under control temporarily.

Prioritize Your Expenses

I was reading accounts where people are using their credit cards to pay their bills! That’s insane. It’s not helping the problem, as many cards have high interest rates and will increase your debt load.

The first step is to prioritize your debts, paying the necessities first.

• Housing: You need a roof over your head. If you have a mortgage, please focus on paying this bill to avoid foreclosure.
• Food: You need food to survive. Cut out all eating out expenses and stick to grocery foods. Eating sandwiches may not be the popular choice, but it’s the smart one.
• Utilities: Electric, phone, and water are important utilities. Cancel your cable bills and make sure you’re not paying too much for phone service. You can call and see if you can qualify for assistance or a special payment plan.
• Car **If you are way over your head with car payments, try selling it to break even. **

Negotiate with Credit Card Companies

Set up a payment plan. If you’re unable to pay the minimum for your credit cards, call them to set up an affordable plan. At the very least, ask them to waive fees and lower your interest rate. Some credit card companies are more willingly to work with you as the economy has hit many families hard. They would rather get some money than no money.

Get the payment plan in writing. It will only add to your headaches if they go back and say they never agreed to the plan.

If they are unwillingly to work with you and bills are mounting, consider transferring to another card with 0% interest. Be care though, as some cards have a fee with transfers. This is a last resort solution, as it’s not getting to the root of the problem, but merely keeping your head above water.

Get a Second Job to Increase Your Income

If you are having extreme difficulty paying your necessities, consider getting a second job, preferably part-time. You don’t want to burn out and lose your main job, but you have to get your finances in gear.These are temporary fixes that can buy you some time to make changes.

While I hope none of my readers have to go through this, the sad reality is it can hit any one of us. We can reduce our chances by reducing debt while we have money. Has anyone been through this? What helped you to survive? Do you have any tips on how to make it work?

Photo Credit:  quaziefoto

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