Falling behind in making payments is something that happens to millions of people, and it can have devastating consequences, including utility shutoffs, late payment penalties, and dings to your credit score. Even with all the negatives that come from paying past the due date, there are ways to turn it around and prevent late payments in the future. Learn about some of the best strategies for getting caught up and keeping your bills current going forward.
Keep Calm and Get Organized
Paying your bills late can cause a lot of anxiety, so your first instinct may be to panic. While it’s understandable that late payments are stress-inducing, it’s important to keep a cool head and realize that beating yourself up about it will not change things. Instead, be open to solutions and find ways to get a clear picture of your income and expenses.
Getting your bills in order is the first step to regaining control over your finances. Start by listing each bill, its due date, and whether you are current or behind. For the bills that are already past due, write the amount that it would take to bring your account current. This may seem counterintuitive if money is tight, but it helps to know exactly how much you need to get things back on track. Organizing your bills will also help you see how much your bills amount to monthly so you can compare that with your income and make a budget. Having a solid budget that you can stick to may seem tedious, but it is key to fixing your financial issues.
If you are having difficulty making ends meet, try to prioritize your bills in order of importance. Necessities such as rent or mortgage payments should always come first, followed by utilities. If you have a car payment, it should come next since most people need reliable transportation to get to work and transport their families. Credit card expenses should come after housing and transportation.
By knowing how much you owe and exactly when it’s due, you reduce the chances of paying late and creating more problems for yourself. If you receive electronic bills via e-mail or an online portal, make sure to examine them closely to get your due dates and learn about any late fees you might be subject to. It’s a good idea to log on to your online accounts for each bill to make sure all payments go through successfully. Additionally, when you submit a payment, make sure that you have enough in your account to cover the payment. Keeping a budget will help immensely with making sure you have enough to cover everything.
Communicate with Your Creditors
If you are having trouble making your payments, ignoring the situation won’t make it go away. In fact, the longer you go without making a payment, the worse things will get. When you fall behind and you don’t have the money to pay right away, you can reach out to your creditors to find a solution.
When it comes to contacting creditors, the sooner you can make contact, the better. For example, if you know before the due date that you will not be able to pay, call your credit card company and see if they are willing to grant an extension. If you are already late, it is still a good idea to communicate with your creditor to see if there is anything that can be done. Remember, you are not alone and it doesn’t hurt to ask.
Why is communication with your creditors so important? One, it may prevent your creditors from taking further action, such as a foreclosure, repossession, or reporting a late payment to one of the three major credit bureaus. Next, a lack of communication about late or missed payments can cause your creditor to increase your interest rate and/or assess late fees. Giving your creditors a call will help them understand that you do care about getting caught up, and they will be more likely to work with you on coming up with payment solutions.
Look for Ways to Earn More Income
After organizing your bills and creating a budget, you may find that you simply don’t earn enough income to meet your obligations every month. Rather than give up, finding ways to earn more money can help you get caught up and prevent late payments going forward.
Conventional wisdom may advise you to pick up an extra job, but this might not be feasible. For example, you may already work more than one job or have family or education obligations that make it nearly impossible to add something else to your schedule. If you can fit a part-time job into your schedule, start actively searching.
For those who can’t take on secondary employment, there are some other alternatives to bring in money and get outstanding bills up to date. With remote work and entrepreneurship at an all-time high, there are plenty of income opportunities that can be done from home and on your schedule.
Some of the more popular ways to earn more without a second job include:
- Asking for additional hours or seeking a promotion at your current job
- Changing careers
- Creating items to sell online
- Starting a low-overhead business such as blogging, consulting, or residential cleaning
Stay Focused
No matter how you choose to tackle your past due bills, consistency is the most important. Getting caught up takes planning and focus, so do whatever you can to streamline your budget and put any extra funds toward getting your bills current. Deciding to take on secondary employment or find a side hustle is a big step that may seem overwhelming at first, but doing so may be just what you need to improve your finances. Use the tips outlined here to tackle late payments head-on and set yourself up for a brighter financial future.