Living is expensive. I’ve done it tough in the past, it’s hard.
But I do believe that sometimes when you have little to live on, you really learn to appreciate what you have…. Keeping on top of your bills is so important, not doing so can result in legal action and a black spot on your credit rating! Here are my eight tips on how to keep on top of them, and what to do when you can’t pay them!
Know What Bills Are Coming, And When They are Due
Everyone has received an unexpected bill at some time or rather. And it is usually that bill that throws out your whole budgeting system! So write a list of all your yearly bills, and the month they falls due. Try to avoid too many bills being due in November or December when you need that extra cash for Christmas (in fact, I think setting up a Christmas fund to save throughout the year is a great idea!). If say your car registration is due in November, pay for 6 months instead of 12 so that your bill will fall during the middle of the year instead of close to Christmas. Bills can include things like:
Car & Transportation Expenses:
- Servicing and repairs
- Bus & Train tickets
- Rent or Mortage Repayments
- Phone and Internet Mobile Phones
- Dental, Medical, Medicine
- Hair & Beauty
- Credit Card Repayments
Child Incurred Expenses:
- School expenses
- uniforms and school shoes
- extra-curricular activities
Then start calculating how much all these expenses will cost. It is always good to have an ’emergency’ fund for those unexpected costs. Because unexpected costs do happen – and having that bit of a ‘cushion’ is great to cover it. If you have no emergency fund at the moment, don’t’ despair. Start a direct debit straight into the account, even if it is as little as $10/week – it is a start, and you will be surprised at just how fast that money will accumulate!
Set Up an Automated Direct Debit for Regular Bills
All banks and credit unions these days have the option to set up a ‘recurring payment’. You can set up the amount, how often you want it transferred, and on what day it suits you. This is particularly great for bills like:
- Rent or Mortgage Repayments
- School Fees
If you set it up to all come out on pay day, you know all those bills have been taken care of. That way you won’t get so many scary bills!
Stop Buying Shit You Don’t Need
No more fancy coffee, no more bought sandwiches, no more chocolate frogs for the kids. If you are struggling to pay your bills, these little things add up and are costing you money unnecessarily! Limit gifts to a certain amount, kids don’t need 30 gifts for their birthday or Christmas. In fact, children should understand that sometimes Mum and Dad can’t afford to buy them everything they want. It is a good life lesson – because everyone does it tough now and again – and what won’t kill them will make them stronger.
Make Sure You Aren’t Spending More Than You Are Earning
This is a trap that is so easy to fall into, especially if you regularly add things to the credit card. Because not only do you have to live, you also need to start paying back that money, which means you get into a somewhat ‘circle of doom’ which is very hard to get out!
If you do the sums, and work out you ARE spending more than you are earning, look at your expenses and see what needs to be cut – NOW!!! $50/month might not sound like much – but after a year, you will be in debt $600!
Always Make Sure Your Bills Are Paid On Time
Otherwise you will incur late fees, another cost you don’t need! If you really can’t pay, get on the phone and stay in touch with your creditor. Set up a repayment plan. Don’t ignore it – it won’t go away!
Keep Your Bills Where You Can See Them
Grab a big crocodile clip and keep your bills on the fridge, or above your computer. Put the one due first at the front – and highlight both the amount due – and the date! If you want to be super organised, set up a reminder on your phone so you don’t forget!
Spend Less or Earn More
If you can’t get all your bills paid, there are really only two options. Cut your spending, or earn more to cover the payments.
How to cut spending:
- Cut down your food budget, shop at discount stores and make your meals from scratch.
- Cut out the kids extra-curricular activities until you have more money to spend.
- Do any beauty work at home, let your hair grow long and put it in a pony tail.
- Cut up your credit cards.
- Ask your creditors for better deals, this is easily done with any phone and internet plans!
How to earn more:
- Ask your employer for a pay rise (make sure you deserve it – and give reasons why you do!).
- Get a part time job.
- Sell some of your household items that you don’t require any more.
Desperate Times Call for Desperate Measures
Know the truth about your financial position. There is absolutely no point in putting your head in the sand. Yes it may be scary, yes you might find out that you are in more debt than you realised, but knowledge is power. Once you know where you are, you can start to fix the problem. And yes, desperate times does call for desperate measures! So if you find you are in debt thousands and thousands of dollars, you might have to resort to such things as:
- Move to the country where it is cheaper to live
- Sell your vehicle and start taking public transport