We all know information is power so why ignore your bills until you are in too deep?  Take a clear honest look at the money pit you are standing in.

I used to plan from paycheck to paycheck, barely making payments.  Sometimes I would delay paying one bill to pay another.  It was a constant juggle and it was really stressing me out.  One night, I was sitting at my kitchen table with a pile of bills, no much food in the fridge and I was late on the rent – again.  My landlord served me notice to vacate and I was just about to be homeless, unless I did some serious organizing – and fast.

balloon-912806_640There were so many overdue bills clamoring for my attention that I didn’t know where to begin. I knew needed to make more money so I had been working extra shifts at work. I was still a couple of weeks away from that paycheck and I’d been too busy to plan.

So here’s what I did.

  1. I listed all the money I had coming in, with the pay dates.
  2. I listed my essential weekly expenses; groceries and gas. No eating out.  I would walk or take the bus if I could.  I would use cash. (Take the Cash Challenge)
  3. I took all of the bills and sorted them into piles for each debt.
  4. Then I listed them, with the regular monthly amount and date due and then the total overdue amounts. I prioritized these bills, with rent coming first, then electricity, car insurance and so on.  Your priorities will be different.  I needed my car to get to work at nights and electricity to cook at home.
  5. I made a separate list of the names and phone numbers of the bill collectors. The next day I called them all and told them I had a plan to first get on track with regular payments and second to make payments on the overdue amounts. 
  6. Looking at the first list, I took enough from the first paycheck to pay rent and essential weekly expenses. I had to eat a lot of rice and beans that first two weeks, but just managed do it.
  7. The plan for the second paycheck was to pay the monthly amount on my debts, plus my essential expenses. The small amount left over was used to pay the overdue amount on the next most important bill in my list. 
  8. This next paycheck was a bit larger, as I had been working extra shifts.
  9. Keeping an eye on the calendar, I looked at that third pay, setting aside enough for rent and essentials, then any amounts left went to pay the overdue amount on the next overdue amount.

You can see how this goes, paying regular monthly bills and chipping away at overdue amounts until they are paid off.

What are your tips for getting out of debts  Comment here.at-1019990_640

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