Dear Tiff,
I’ve got a lot of bills to pay and I just don’t know how to pay them all. Now I’ve gotten in the habit of avoiding the bills I get in the mail. I know this isn’t sustainable, but seeing how many bills I have without a plan to pay them is making me super anxious. What should I do when I can’t afford to pay my rent, utilities, credit card bills, student loan payments and medical bills—and still feed and clothe myself? Please help!
— Bills, Bills, Bills
Dear Bills,
First off, don’t ignore the problem by not opening mail and avoiding contact with the companies you need to make payments to. Trust me—this’ll only make it worse. As much as you might want to avoid the problem, you need to deal with it directly.
Make a list of who you owe, the amount owed and when the payment is due, and then prioritize the list. Because keeping a roof over your head is probably the most important and urgent issue, I recommend going to your landlord first to discuss a payment plan for your rent. If necessary, you may be able to negotiate a move-out plan to avoid an eviction being added to your credit report.
Then, contact every other company you owe to let them know they’re going to be paid late. They might have options for your situation, like a payment plan, forbearance, or loan restructure. Most creditors would prefer to be paid in part than not at all and many will be willing to work with you on your payments. But you do need to do the work of asking for this. They won’t reach out to you to see if you need help.
Some creditors are much more open to negotiation than you might think. If your medical bills are overwhelming, for example, call up their billing department and ask about their financial assistance options—most hospitals and doctor’s offices have these! If you can pay in cash, or pay a larger lump sum than the minimum payment, they may be willing to reduce the overall bill. Keep in mind that it’s easier to negotiate immediately. Don’t wait until you’re delinquent.
If a company won’t work with you and you still can’t make the full payment, I suggest paying what you can. If you don’t make a payment and avoid communicating with the company, there’s a good chance they will send you to collections or handle the situation by other legal means. This is something you definitely want to avoid. It’ll affect your credit report negatively and could end up costing you more in the end if collection or legal fees are accrued. Even if they say they can’t work out a payment plan with you, most companies will accept your partial payments and continue sending you bills—but once you miss a payment, they are more likely to move forward with legal recourse.
After you’ve tried to work out payment plans with your individual creditors, it’s time to look into other options for assistance. The United Way 2-1-1 Helpline can provide utilities assistance and financial support for housing. Check out their online resources or simply call 2-1-1 to be transferred to a local agency for help seeing what programs you may qualify for. Benefits.gov and USA.gov also provide information about government assistance programs that may be available to you. Many local church and charity organizations are also available to help individuals who need help paying their bills. There is help out there for you; you just have to look for it!
Now, here’s the trickier part: if you can’t pay your bills, this means you’re probably spending more than you are bringing in. As hard as it is, you really need to take a close look at your finances. How much money are you bringing in? Where’s your money going?
Start by seeing where you could cut expenses. I know this isn’t fun, and it isn’t fair, but try looking for cheaper alternatives wherever you can. Is there a cheaper cell phone plan you can sign up for? Can you make more food at home instead of going out? The key here is to consider what you can realistically give up or cut back on, without cutting out those things you need to survive. If eating out is necessary so that you can make it to your job on time, that’s not the thing to cut out of your budget.
If you’re still short after cutting expenses from your budget, look for ways to bring in more money. You could look for a second job during your off hours. Another great option is a side hustle. Try Uber, Postmates or Care.com. These jobs can be done when you have free time or on a more regular basis.
If a side hustle isn’t your thing or a second job isn’t an option, look for items you can sell around your house that you aren’t using. There are tons of apps and websites that bring buyers and sellers together, such as Facebook Marketplace, Letgo, Mercari, Poshmark, eBay—and many, many more!
As you continue to get back on track, continue looking for ways to negotiate future bills, cut expenses, and increase your income.
Good luck!
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Disclaimer: Credit Tips with Tiff provides credit tips and suggestions for you to make the most of your money. Given the quantity of questions we receive daily, we are able to answer onlyselect questions. Your email is not guaranteed a response. We reserve the right to edit and publish questions. If your question is chosen, your identity will remain anonymous. We are not financial experts. If you are in need of specific financial help, please seek the advice of a professional.