How to Survive When You Can’t Pay Your Bills
Let’s talk about poverty.
I don’t mean the kind you’re talking about when your friends invite you to go shopping or for a night out and you say, “No, I can’t. I’m poor right now.”
I don’t mean the situation when you’d like to get a nicer car but decide you should just stick to the one you have because you don’t have a few thousand for a down payment.
I don’t mean the scene at the grocery store when you decide to get ground beef instead of steak.
I’m talking about when you have already done the weird mismatched meals from your pantry that are made up of cooked rice, stale crackers, and a can of peaches, and you’ve moved on to wondering what on earth you’re going to feed your kids.
Or when you get an eviction notice for non-payment of rent, a shut-off notice for your utilities, and a repo notice for your car and there’s absolutely nothing you can do about any of those notices because there IS NO MONEY.
If you’ve never been this level of broke, I’m very glad.
I have been this broke. I know that it is soul-destroying when no matter how hard you work, how many part time jobs you squeeze in, and how much you cut, you simply don’t make enough money to survive in the world today. Being part of the working poor is incredibly frustrating and discouraging
It is a sickening feeling when you’re just barely hanging in there and suddenly, an unexpected expense crops up and decimates your tight budget. Maybe your child gets sick and needs a trip to the doctor and some medicine. Perhaps a family member is involved in an accident and can’t work for a few weeks. It could be that your car breaks down and you need it to get back and forth to work because you live too far out in the country for public transit.
As our economy continues to crumble, these are the situations going on in more homes across the country every single day. It’s simple to believe that the people suffering like this are just lazy, or not trying, or are spending frivolously. No one wants to think that these things can occur through no fault of the individual. Why? Because that means these things could also happen to them.
Every time I write about crushing poverty, someone adds the comments section a smug declaration about how people need to get an education, hang on to a job, buy cheaper food…there’s a litany of condescending advice. I’m sure this article will be no exception, and please, if you’re in the situation I’m describing, let the criticism roll off of you.
The advice I have may not be popular, but let’s talk about prioritizing your payments when you can’t pay your bills. I am not promoting irresponsibility here. It’s just math. When you have less money coming in than you have obligated to go out, you will not be able to pay all of your bills. It’s that simple.
First, do a quick audit of your financial situation so you can see where you’re at.
This list of priorities assumes that you have some money coming in, but not enough to meet your obligations. When things improve, you can try to catch up, but for now, you simply have to choose survival. I suggest the following order of payments.
1.) Pay for shelter first
Your number one priority is keeping a roof over your head. That roof may not be the roof of the house you are in now, though, if your circumstances have changed and you can no longer afford it. If you can still manage to pay your rent/mortgage, do so in order to keep your family housed.
If you rent, and your rent is a reasonable price, make this the first payment you make from your limited funds. You really, truly don’t want to be homeless and moving is expensive. Try your best to stay put.
If you own, consider your property taxes and insurance as part of your mortgage, because if you stop paying any of these, your home will be foreclosed on.
If you can’t pay your mortgage, property taxes, and insurance, you have a while before the home gets foreclosed on and you are forced to move out. If this is the case, it’s absolutely essential that you put aside money for the place where you’ll move should you have to leave your home. You’re going to need first, last, and deposits in many cases, particularly since your credit isn’t going to be stellar due to your financial situation. When you are in this situation, it can be difficult to force yourself to save money when so many things are being left unpaid, but if you ever hope to bail yourself out of this situation, you absolutely have to do this.
The laws vary from state to state, (find the specifics for your state here) but basically, this is the timeline:
- When you make the decision to let your house go back to the lender, you will have a month or two before they send you a notice of default.
- From that point, you usually have 3 months before the foreclosure proceedings begin. During those 3 months, you should be saving the money you would normally be putting toward your mortgage.
- At some point, you’ll get a notice to vacate the premises.
- When this happens, you have two options. You can choose to move to a different home, or you can file for bankruptcy, if you feel your situation is such that there is absolutely no way out.
- If you file for bankruptcy, the home can’t be re-sold by the lender for 3 more months, giving you more time to put aside money for your move.
Should we all pay the bills that we have promised to pay? Of course we should. Our word is very important. Remember, though, that the information here is for people who are in a position in which they DO NOT HAVE THE MONEY TO PAY.
So, the bottom line is this: either pay your housing costs or put aside money for future housing as your first expenditure.
2.) Buy food
You have to eat, and so do your children. If you don’t eat, you’ll get sick, and then your situation will be even more dire.
- Stick to simple, wholesome basics and cook from scratch. Beans and rice have fed many a family.
- Tap into your inner southerner and make inexpensive, filling meals like biscuits and gravy.
- Make soup to stretch just a few ingredients to feed a family.
- Save ALL of your leftovers, even the ones on people’s plates. Add them to a container in the freezer and make a soup from that at the end of the week.
- Clean up after the potluck at church. Sometimes you can take home the leftovers.
- Don’t skip meals to stretch your food further. You need your health and your strength to overcome this situation.
- Go to the library and check out a book on local edibles. Go foraging in the park or in nearby wooded areas.
- See if your grocery store sells out-of-date produce for use for animals. There’s often a fair bit you can salvage and add to soups or casseroles. (This is the only way we were able to have vegetables and meat during one particularly painful stretch when my oldest daughter was young.)
In a worst-case scenario, food banks are an option as well.
3.) Pay for essential utilities
You should be cutting your utility usage to the bare minimum and using every trick in the book to keep your bills as low as possible.
If your utilities get shut off, it’s going to be difficult to cook from scratch and you won’t be able to keep leftovers from spoiling. You need the water running from your taps to drink, cook with, and clean. Depending on the climate and the season, heat may be vital as well.
If you can’t ay the entire bill, call the utility companies and try to make payment arrangements. If your utilities are shut off, then you will have a hefty reconnection fee on top of the bill.
Another point to remember is that our culture believes it’s absolutely necessary that all homes be plugged in to the utility system. If you have a work-around, like wood heat and hand pumped well water, and decide that your utilities are not essential, you need to be prepared to face those whose opinions differ. Some cities have condemned homes which are not connected to the grid, and if you have children who are of school age, sometimes a “concerned” teacher or neighbor has been known to report your situation to the child welfare authorities. (Recently an off-grid homeschooling family had their children removed from the home by police.)
4.) Pay for car/work necessities
What must you have in order to keep working? For me, it’s the internet, since I work online. All of my clients contact me via email and the work I do requires that I be able to send it to them and research things online. I live in the country, so driving to the library on a daily basis would cost more than my monthly internet fees. For another person, this necessity might be the cost of public transit or keeping their vehicle on the road so that they can get to work. Choose the least expensive options to keep yourself working, but maintain your job-related necessities.
5.) Pay for anything else
After you’ve paid all of the above, if you have money left over, now is the time to pay your other expenses. These expenses include debt that you’ve incurred, contracts you are involved in (like cell phone plans, etc.) Choose very carefully how you dole out any remaining money.
- Keep one phone going, with the lowest possible payment. This is necessary for work, for your children or their school to contact you in the event of an emergency, and as a contact point for your financial situation. Compare the cost of a cell phone, landline, or VOIP phone. Every family member does not require a phone – you just need one. (I actually did go for a couple of years with no phone at all, but I’m uniquely antisocial and had email by which I could be reached.)
- If it’s at all possible, try to use the snowball method made famous by Dave Ramsey to pay off your debts and bail yourself out of your situation. Being free from debt will allow you to live a much freer life in the future.
- If paying off debt is not possible, try to make the minimum payments.
- If the minimum payments are not possible, you may have to default, at least temporarily, on debts.
- Buy some pantry staples. If you can add some extra rice or cans of tomatoes to the pantry, it will help see you through this tight situation.
- Be relentless in deciding what will be paid and what will not. This is not the time for arguments like, “But it’s our only form of entertainment” or “We deserve this one luxury.” Cut all non-essentials until things improve.
- Focus on the most frugal options possible.
Things will get better
I’ve been down this road. I really get it. It saddens me to see people I love in this situation now.
These books can help. I found them to be life-changing when I was broke, and the lessons have stuck with me throughout my adult life. You may be able to find them at your local library.
Finally, if you are in a situation in which you can’t pay your bills, I’m sorry.
I’m sorry about…
- The embarrassment you feel when you can’t afford to meet someone for coffee
- The sick feeling of seeing the bills pile up on the counter and not being able to do anything about it
- The knot in your stomach every time the phone rings and it’s a 1-800 number that you KNOW is a bill collector
- The stress of knowing you can’t remain in your home
- The fear that someone will say you aren’t taking care of your kids and they’ll be taken away
- The humiliation when people don’t understand and think it’s all your fault
- The hopelessness of watching the bank account empty out the day your pay goes in, and still having a dozen things unpaid
- The overwhelming discouragement of having fees assessed on top of debts you already can’t pay
- The anxiety over what tomorrow will bring
It will get better. You’ll find a way to make it work. You just have to survive while you make it happen. Maybe you will pool your resources with another family, or get a raise, or find a cheaper place. But you will find a way.
Life may not be exactly as it was before, but it will be good again.