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How to Budget When You are Behind on Bills


Trying to find out how to make ends meet if you’re broke is one of the most difficult things to deal with when it comes to money management. It’s much more difficult to make a budget when you’re behind on payments and don’t know where to begin. Although the core budgeting methods remain the same, your spending and expense breakdown may fluctuate. If you’re behind on your expenses, you’ll need to take a bit more time to examine your situation and accept how terrible things are.

If you’re in this scenario and need to make a financial plan, follow these steps to create a functional budget and get back on track.

Analyze Your Financial Conditions

If you’ve been putting off looking at your circumstances because you’re terrified of realizing how horrible it is, I urge you to overcome that fear. If you don’t know how deep the hole is, you’ll never be able to dig yourself out. Remember that you can’t undo actions made in the past that led to this position, but you can make changes now and in the future. The most essential thing to remember is to keep moving forward rather than going backward.

You must know how much money is entering in vs how much money is leaving your business. If you’re reading this, you’re probably losing more money than you’re bringing in, which is fine. Here are some steps to take to evaluate your present financial status.


The first step is to take a blank piece of paper and write down your monthly earnings. When you get paid, this is the money that shows up in your checking account.

The next step is to make a list of all of your expenses. Every single penny you spend each month should be documented. Cable, utilities, food, gas, and clothing are all possible expenses. Make sure to include all of your bill and debt payments as well. If you have used an online utility bill generator you will easily find them downloaded. Examining your bank statements over the previous two months is the easiest approach to do this. This will provide you with a clear picture of where your money is being spent.

After you’ve made a list of everything, it’s time to categorize everything. The first thing we’ll do is organize your expenses. I’d like you to categorize all of your spendings into the following three groups:

  • DEBT

DEBT: Use this category to keep track of all debts that need to be paid off. Make a list of all of your debts, even if you aren’t actively paying them.

REGULAR MONTHLY BILLS/FIXED EXPENSES: List the bills you have to pay every month in this area. Mortgage, utilities, cable, and cell phone bills, for example, are all possible expenses. These invoices are typically the same amount each month and are due at the same time each month.

VARIABLE EXPENSES: This is just a fancy term for monthly expenses that alter in value. Gas, for example, is a variable cost. Your gas doesn’t have a due date, so you could spend $100 on gas this month but only $50 the next. Do you see how one month’s payment may be low and the next month’s payment may be higher? Food, clothing, house supplies, beauty, and personal health expenses, kid expenses, and entertainment are all examples of variable expenses.

Download my free budget spreadsheet to help you keep track of your costs. This will aid in the organization process as well as the creation of a basic monthly budget.

Add up all of your monthly expenses and remove that amount from your monthly income once you’ve listed all of your income and expenses. For the time being, don’t worry about saving money if you are behind on your expenses. This is something you should consider adding to your budget in the future, but for now, you must concentrate on getting caught up.

Look For Opportunities

Making extra money is the next phase in the process. Many individuals will simply say, “Get another job.” at this point. While obtaining a second job can bring much-needed income, it can also have a negative impact on family interactions. It’s vital to get extra money, but overworking yourself isn’t a good idea. When you’ve struck rock bottom, it’s critical to spend time with your family and have a life where you can do things you enjoy. It’s critical to keep your spirits up and retain a positive outlook throughout the process.

Now is the moment to be on the lookout for ways to supplement your income. There are numerous ways to supplement your income without taking on a second job. It’s all about learning to be resourceful, even if it feels like you’re giving up a lot at first. Here are some ideas for how you might augment your income:

  • I have a surprise task for you if you sell your items. I want you to get up right now and find two objects in your house that you no longer use. Look into how much these products are going for secondhand. Simply checking Craigslist is one method to achieve this. Tonight’s challenge is to come up with two items to sell on the internet. Conduct research, photograph your used products and list them for sale. If you don’t want to use Craigslist, Lifehacker has a great post with some advice on how to sell your items on Amazon.
  • At your current employment, look for greater opportunities. I understand that asking for a raise can be intimidating, but you’ll never know unless you ask.
  • Turn a pastime into a source of income. Do you have a unique skill? Is it possible to transform your painting into a source of income or your knitting into a side hustle? Investing in education opportunities is always a good idea.

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