What if I Can’t Pay My Bills This Month?
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We are living in unprecedented times. Thanks to the fallout of the coronavirus pandemic, a significant number of people find themselves out of work, or working fewer hours at a minimum. This leaves many people asking themselves “What if I can’t pay my bills this month?”
When you need help paying bills ASAP it’s a stressful situation. Regardless of whether you’re directly impacted by COVID-19, or regularly struggle with paying your bills, you want to get back on track quickly.
It may feel impossible, but I promise it’s not. There are ways to manage your bills despite the difficulty. You just need to know where to start.
This guide aims to give you the exact steps to take to begin to get back on solid ground.
What if I Can’t Pay My Bills This Month?
I know the feeling. You believe you can’t pay your bills and want to avoid the situation. Ignoring it won’t help.
I saw this when I was in debt. I ignored creditors, assuming it would just go away. It didn’t. In fact, ignoring the situation made it worse.
It’s critical to communicate when you need assistance paying pills. This helps the creditor, company, or person know what’s going on, and offer ways they may be able to help.
Ignoring the situation often results in additional fees or charges. You want to avoid that, if at all possible.
Even in times like our current climate numerous companies and banks will work with you. The key to getting help is communication.
Prioritize Your Bills
Do you find yourself saying “I can’t pay my bills?” If so, prioritizing your bills will help. Look at everything you spend money on each month, and list those expenses in order of priority.
This is not the time to lie to yourself. Create a realistic list of bills to pay each month so you know what to prioritize.
As Dave Ramsey says, this is the time to cover your “four walls,” which are:
He argues that it’s in that order. Each situation is different, but it’s vital to cover those four areas.
If you’re struggling to pay bills this month, most other items are a luxury, not a necessity.
This even includes paying anything towards debt. Take care of yourself and your family first. Don’t let creditors, scammers, or anyone else convince you otherwise.
If you need help covering your four walls, the coronavirus stimulus checks can help accomplish that.
If you have not received your funds yet and asking yourself “Where is my stimulus money?”, read our guide to learn how to verify the status of your funds.
How to Manage Your Bills
Information is essential when you need help paying bills now. Compiling a list of bills to pay each month is that first step.
After making your list, go through each bill to form a plan for repayment. See if you can get help paying bills so you can determine where to focus.
Here are some common bills and what to do if you can’t pay them this month.
Rent: The Coronavirus Aid, Relief, and Economic Security (CARES) Act does little to help those who need help paying rent. Some cities have enacted protections against eviction.
If you’re struggling with making your rent payment this month, contact your landlord. Ask what they can do for you to get help paying rent.
Even if it’s breaking the payment into several smaller payments, that may give you the breathing room you need to keep a roof over your head.
Read our guide on rent and mortgage relief to learn what assistance may be available to you.
Mortgage: The CARES Act provides a little more assistance for those needing help paying their mortgage. If you fear you can’t make your mortgage payment, contact your loan provider.
Many banks are working with those negatively impacted by the crisis. This Forbes article has an extensive list of banks offering assistance.
Food: You obviously can’t cut out food, but you can be wise about what you buy. Avoid spending on unnecessary items, and focus on staples.
If you’re doing your own shopping, look for cheap grocery stores in your area, like Aldi, to help stretch your budget.
You can even use an app like Ibotta to get cash back on your shopping.
Utilities: Do you need help paying utility bills? Again, contact the provider and let them know of your current situation.
See what plans they offer to help you save money and keep the lights on in your home.
You can also do a quick internet search of options that will let you get help paying electric bills as some local organizations often provide assistance.
Car Payment: Is it possible that you may not pay your car payment this month? If so, contact the lender and apprise them of the situation.
Like mortgages, many banks are working with those negatively impacted by COVID-19. You can consult the list of banks from the Forbes article for contact information.
Credit cards: If you can manage to make the minimum payment, do that. If not, contact the creditor to see what assistance they can offer.
Student loans: As of March 20, the government is suspending federal student loan payments until September 30. However, this does not apply to all federal student loans.
Perkins loan borrowers also receive three months of forbearance, though interest will still accrue.
Additionally, this does not apply to private student loans. If you’re in doubt as to whether or not you qualify, contact your servicer for an answer.
This article from U.S. News does a good job explaining your options.
You can also read our guide on coronavirus and student loans to learn more about what’s available to you as a borrower.
Taxes: Wouldn’t we all love to receive help paying taxes? During the coronavirus pandemic, the government has extended the tax filing deadline to July 15.
If you are due a refund, file your taxes as soon as possible to receive that money.
All other times, always file your taxes by the deadline – even if you owe. If necessary, you can file for an extension to help provide additional time to make a payment.
If you don’t file, the IRS will likely assess fees and penalties.
You may have other monthly bills, like cell phone, cable, and more. If you need help paying bills this month, look for ways to slash those bills.
Things to Avoid if You Need Financial Assistance
If you’re asking yourself “Can I pay my bills this month?” you’re likely facing an emergency. Emergencies cause stress and may lead you to making an unwise decision.
This will only make the situation worse.
Here are a few things to avoid if you need help paying bills.
1. Credit Cards
If you need assistance paying your bills this month, credit cards seem like a justifiable choice. Unfortunately, credit cards are often a mirage in the middle of a financial desert.
The last thing you want to do is accrue debt. There are numerous other ways to get help with bills that are far better than credit cards, especially if you need money now.
Take advantage of those and forget credit cards.
2. Payday Loans
If there’s anything worse than credit cards it’s payday loans. Payday loans market themselves as an easy way to get quick money.
What these lenders hide is that payday loans create a cycle of debt full of egregious fees and penalties. Take advantage of one of the best alternatives to payday loans and you’ll fare far better.
3. Working in Multi-Level Marketing
Multi-level marketing (MLM), or pyramid schemes, paint themselves as a terrific option to get rich quick. Unfortunately, that’s a lie.
Per the Federal Trade Commission, less than one percent of those who join an MLM earn a profit. Often, joining an MLM only leads to debt and frustration.
Reports indicate MLM companies are increasingly targeting those impacted by COVID-19. It’s not worth the hassle, so don’t fall for their promise of riches.
All of the above are even more true if you’ve lost your job. Here’s how to file an unemployment insurance claim to ensure you receive benefits.
How to Stop the Bleeding
If you often look for how to get help paying bills, it’s time to stop the bleeding. You want to keep money from going out as much as you can.
If possible, you want to bring money in and save money. Here are a few ways to do that.
Apply for Unemployment Benefits: This is of particular importance if you lost your job. I know it may feel shameful, but it’s there for a reason.
If you lost your job directly due to coronavirus, you can file for unemployment benefits. Most states have waived the one week waiting period.
The government has also increased payments and timelines to receive assistance. Do a quick internet search for the Department of Labor in your state and visit its website to begin the process.
Find A Way to Make Extra Money: Earning extra income is an excellent choice if you need help paying your bills. There are countless ways to bring extra money into your home, often with little special skills required.
One of the best ways to earn extra money is working for on-demand delivery apps. Here are our favorites:
Each of the above services pay weekly and you can often set your own schedule. If you don’t want to leave the house, here are some of the top ways to earn extra cash from home.
If you apply for unemployment benefits, that may impact your attempts to earn extra money. It’s best to ask when applying what you can earn without reducing your benefits.
Start Cutting Your Bills
Do you often ask yourself “How can I get help paying my bills?” and not know where to start? The first step is to learn how to lower your monthly bills.
Go over each monthly recurring bill and find ways to cut costs. The amounts may seem small, but they all add up.
If you need help negotiating or reducing bills, a service like Trim is a good resource. The service is free to use, though they do retain 40 percent of any savings they win for you.
It seems impossible to budget when money is tight, but when you follow the above it simplifies the process.
How to Avoid This in the Future
It’s impossible to predict an unprecedented situation like we’re currently encountering with the pandemic.
This does make it a unique situation, but if you’re negatively impacted use it as a wakeup call on your finances. When you get back on your feet, develop a plan to avoid a similar situation in the future.
Do two things to accomplish this. First, kill your debt, especially high-interest consumer debt.
If you have credit card debt, work to pay it off as soon as possible. SoFi is a legitimate resource to help if you have multiple cards at a high interest rate.
The lender helps you slash that rate in half or more so you can pay off the debt quicker. SoFi lets you borrow as little as $5,000 to consolidate your debt, or lower rates.
After completing a brief application, SoFi provides your rate which can be as low as 5.99 percent. The lender charges no fees, so you don’t have to spend anything additional out-of-pocket.
Read our review of Sofi personal loans here to learn more about the platform.
Second, start saving money. Most Americans are unable to handle an emergency of $400. If this describes you, look for frugal living ideas to help you save money.
The amount may seem insignificant in the beginning, but it’s the act of saving that matters, not the amount.
Chime Bank is an excellent choice for saving. The bank has no minimum balance requirement for savings accounts.
When you connect it to their debit card, they round up all your purchases and put those amounts in your savings account.
Those are just two of the numerous resources to kill debt and save money. Find what works best for you and start achieving your goals.
It’s scary to need help paying bills. I have faced it and can attest to the roller coaster of emotions you feel.
When we face unknown times like this, it may seem like there are no available avenues for help. That is not the case.
In our current turbulent culture and in normal times alike, there’s almost always ways to find assistance. If you take time to assess your finances and form a plan of attack, you will be well-armed to find solutions.
What do you do when you need help paying monthly bills? How much money do you have in savings? How are you managing through the crisis?
John is the founder of Frugal Rules, a dad, husband and veteran of the financial services industry whose writing has been featured in Forbes, CNBC, Yahoo Finance and more.
Passionate about helping people learn from his mistakes, John shares financial tools and tips to help you enjoy the freedom that comes from living frugally. One of his favorite tools is Personal Capital , which he used to plan for retirement and keep track of his finances in less than 15 minutes each month.
Another one of John's passions is helping people save $80 per month by axing their expensive cable subscriptions and replacing them with more affordable ones, like Hulu with Live TV.
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