8 Things You Must Do When You Can’t Afford Your Monthly Bills

A young multi-ethnic woman is stressed while calculating household expenses stock photo
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With the majority of Americans living paycheck to paycheck and dealing with rising utility expenses, covering monthly bills these days can be a challenge. But what can you do when you really can’t afford these bills?

Let’s look at eight essential moves to make when you’re in this tough and all-too-common situation.

List Every Bill 

Get started on managing monthly expenses by writing down each and every bill you have to pay.

“Start by writing down all your monthly obligations,” said Andrew Latham, CFP, managing editor at SuperMoney. “This includes everything, from your rent or mortgage to that monthly streaming service.”

Once you’ve listed your bills, categorize them. “Divide the list into ‘essentials’ and ‘non-essentials,” Latham said. “Within each category, rank items from most to least important. For instance, within ‘essentials,’ housing might come before your mobile phone bill.”

Evaluate Your Budget 

When was the last time you created a budget? Or when was the last time you reevaluated it? If you’re feeling cornered by the untenable costs of monthly bills, assessing and updating your budget is a key step. 

“The budget is the foundation upon which your financial house is built,” said Joey Ruffalo of J.R. Financial Coaching. “The stronger the budget, the more stable your finances will be.”

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Secure Your ‘Four Walls’ of Necessary Spending 

“Another crucial step when struggling with monthly bills is to prioritize your expenses,” Ruffalo said. “First, secure your ‘four walls’: food, utilities, shelter and transportation. These are non-negotiables and should be the first bills you pay each month.”

Once these costs are covered, you can move the rest of your funds to other expenses in order of importance. “This is where a clear, well-structured budget can be a lifesaver,” Ruffalo said. “It lets you visualize where your money is going and helps cover your most critical costs.” 

Cut Unnecessary Expenditures

If you can’t afford your monthly bills, it’s high time to cut back on the things you really don’t need. Here’s how to go about that, according to Latham:

  1. Review the past three months of spending. “Use bank and credit card statements to see where your money goes.”
  1. Identify non-essential spending. “This includes gym memberships, premium TV packages, daily coffee runs or online shopping sprees.”
  1. Act immediately. “Cancel subscriptions you don’t use, and adopt frugal habits, such as cooking at home or using public transport.”

Reach Out to Creditors for Extensions 

When you get a bill in the mail, it can feel like there’s no room for extensions and that can make you feel like you’ve reached a dead end. But it’s really worthwhile to reach out to creditors and explain your financial hardship. Here’s how to do it:

  1. Gather up all your bills. “Before calling, have a clear picture of your debts,” Latham said. “Collect recent statements or log into online accounts to see current balances and minimum payments.”
  1. Prepare your story. “Be ready to explain your situation. Whether it’s job loss, medical expenses or another reason, being honest and upfront can make creditors more sympathetic.”
  1. Ask specific questions. “These could include, ‘Can I get an extension?’; ‘Can we lower the interest rate temporarily?’ or ‘Is there a hardship plan available?'”
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Negotiate With Service Providers 

You may also try to negotiate with the service providers charging you on a monthly basis. “This can include cable, internet, insurance and even medical bill [providers],” said Jeff Rose, CFP, founder of Good Financial Cents

Negotiating isn’t a lost cause because at the end of the day, you’re a client, and providers want and need you. 

“Many companies value customer retention and are often willing to make adjustments to keep you as a customer,” Rose said. “For example, a Consumer Reports survey found that among people who negotiated their cable or internet bills, a substantial 78% reported receiving a discount or a promotional rate. It definitely pays to ask!”

Increase Your Income

“When you’re struggling to meet your monthly bills, finding ways to increase your income can be a game-changer,” Rose said. “Exploring part-time jobs or freelance work can provide the additional funds needed to cover your expenses. The gig economy is burgeoning and offers a plethora of opportunities across various sectors like transportation, delivery services, and online freelancing. According to Gallup, 36% of U.S. workers are part of the gig economy, highlighting its accessibility and prevalence.”

Get Professional Finance Coaching 

You’re not a failure if you ask for help. In fact, you’re ensuring you can be successful by enlisting guidance.

“Seek advice from a financial coach,” Ruffalo said. “They can offer valuable insights and help guide you toward a more stable financial future.”

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Working with an accredited financial advisor is also strongly recommended.

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