Tuesday, May 18, 2021
Are you scared, worried, unsure of what to do, frustrated, embarrassed and humiliated because you can't pay your bills and put food on the table?
What happened? Did you lose your job? Maybe you are sick or hurt and can't work. Did an unexpected expense rip your finances to shreds? Maybe you just used those credit cards too much or bought a house that was more than you could really afford.
Whatever the reason you are experiencing Big Money Problems, you have to know that for each and every problem, there is a solution. Notice I didn't say an Easy Solution.
If you have hit on hard times, you are going to work very hard to find and implement that solution. You are going to do things that you don't want to do and give up things you want to keep. Your pride is going to suffer in the process.
But you have to do something to solve the problem. And, quite frankly, most people never think it can happen to them so they aren't prepared. When Big Money Problems hit, they don't have a clue where to start.
There are many actions that you need to take if you find you can't pay all of your bills. Below is a list of the most important:
Sit down and evaluate your current situation.
Take a hard look at all of your expenses to see
where you can cut back.
Your next action would be to determine if there
is anything that you could sell or cash in that may bring in some needed income.
Borrow from your 401k
Now that you have cut your expenses and sold or cashed in what you can, it's time to make a monthly payment plan. If you don't have enough money to cover everything, it is very important that you set your priorities to make sure the most important expenses are covered. Using the below priority list is mandatory if you want to make sure you financial problems don't escalate:
Priority 1 - Food
Priority 2 - Shelter
Priority 3 - Other Necessities
Priority 4 - Important Loans
With any money you may have after covering the above priorities, you can distribute it between your other bills such as credit cards, phone bills, etc.
If you see that you are going to be late on any of your payments, call the creditor immediately. Don't wait for them to call you. Many companies have programs established that can help you by delaying payments or adding them to the end of your contract. Check to see if you have taken out the insurance that covers loss of income. Make sure to do exactly what you agreed to do with your creditors, or let them know why you can't.
Of course, the action that is most important is to start looking for a regular income. If you need a job, then understand that you may have to take one that you really don't like. If you can't pay your bills, then you can't be picky.
When you are late on your payments, you are going to start receiving phone calls from your creditors. Work with them, but don't let them take advantage of you or threaten you. Under federal law, you have rights as a consumer. Please read my article, Your Consumer Rights, to learn your rights.
It's also important that you learn from this experience so that when you are back on your feet, you know what you have to do to keep it from happening again.
If you find yourself experiencing Big Money Problems, get organized, don't let your emotions cloud your judgment, do what you say you are going to do, and be willing to do what it takes to solve the problem. The odds are good that there will be better days ahead.
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