budget when behind on bills

You’re not quite sure how it happened, but you’re behind on bills and you’re not sure what to do exactly.

No matter what you do, there’s no money left at the end of the month and you’re not really sure where it’s gone.

Does that sound familiar? Not to worry – I’ve been in a bad position financially as well, so I know how it feels.

I’ve also gotten myself out of that bad financial place and now have more than enough money to live a truly happy life.

We will look at how to budget when you’re behind on bills. Don’t worry, you can do this!

Ready? Let’s begin:

Write Out Your Fixed Expenses

We are going to start this by figuring out where you’re currently at. We need to figure out what bills and expenses you have, and then work from there.

Firstly, write out your fixed expenses. Fixed expenses are the expenses which don’t tend to change from month to month.

Examples of fixed expenses:

  • Mortgage or rent
  • Gas, electricity
  • Water
  • TV, internet

You can typically find these in your internet banking under the ‘Direct Debit’ section or similar. This is the easiest step, so don’t skip this!

Bare bones budget

Write Out Your Variable Expenses

This one is trickier, because it varies all the time (hence the name!). The key to this is to go back through previous months spending and use that as the figures.

This is really important to do. The reason being is that if you just guess at how much you are spending, you will probably be wrong.

Every time I ask someone to do this they always express shock at how much they have been spending without realising it.

Now it’s important to point out that this exercise is not to make you feel bad about your spending. After all, the spending has already happened and you can’t do anything about it now.

The reason that we are using past spending is because it will help you to create a realistic budget.

Examples of variable expenses include:

  • Food
  • Petrol
  • Kids clubs
  • Sports
  • Pets

Everyone will have a different set of expenses as no 2 households are the same. Just look for the things that you are spending money on that may change from month to month.

Bare bones budget

Write Down Your Debts

I know that this may be the most scary part of all, but you’ve got to do it in order to move forward, otherwise the debts will get bigger and it will be harder.

I get a lot of people ask me for help with their debts over on my Instagram page, and I always tell them to write them out and send it over to me.

I do this for 2 reasons:

  1. So that we can go through it together and make a plan
  2. So that I know they are doing it, and they have a bit of accountability

Do you know what? They always write it out and send it to me! You’re welcome to do the same over on my Instagram or email.

Write Out Your Late Payments

I know, another icky step. But you need to take 100% control and 100% responsibility. Write out the bills that you are late with paying.

This will mean going through any letters that you’ve had through. Opening emails from them. Looking at any texts you’ve had about it – you get the idea.

This includes your debts of course, so make sure you write down any debts that you are behind on paying.

Don’t worry if you are anxious about doing this – it’s totally natural. The most important thing is to take action on these steps and go for it.

You are reading this article for a reason, and hopefully it’s to stop being behind on paying your bills!

Speak To Your Creditors

This is one of the most important things that you need to do, and a lot of people put this off.

Whenever I am guiding someone through what they need to do in order to do something like paying off their debt, there is a lot of resistance at this step.

I know it may be a lot more convenient for you to call when your kids are out of the house, or any another excuse that your brain wants to come up with – but just know that it’s your brain trying to stop you.

The best time to do this is right now. Forget about whatever else you are doing and do it now. It’s in your best interest!

It’s never fun to ring up and speak to someone, but there are so many different options available if you really can’t bring yourself to call, such as email or live chat.

The reason that you want to ring them up is because they can help you out. They don’t want you to default – they want you to pay, even if it’s only a little bit.

Speak to the people who you are behind on paying and explain your situation. They may ask for a copy of your budget which is handy as we’ve done it above!

There’s also another option which could be great for you – going through a debt charity.

Debt charities are great because they will do their best to help you. Some that you can use include:

  • StepChange
  • Citizens Advice
  • Christians Against Poverty

Cut Expenses

It’s really important to note that we don’t want to get into a scarcity mindset when it feels as though everything is going badly and things will never get better.

Things will get better. There’s some work that you need to put in to get there, but you can do it!

I’m not a fan of an extremely frugal lifestyle. I think that spending is perfectly fine as long as you are spending on things that bring you true happiness and you can afford it.

But that being said, you will need to look over your expenses and figure out where you can cut back.

This is because there could be things in your budget which you don’t need, and you could get rid of these or just cut them out temporarily.

Go through your expenses one by one and see what you can do to reduce them. You could shop around for better deals, speak to the companies to reduce them and so on.

Increase Your Income

Nothing will make a bigger change than increasing your income. After all, there’s only so much that you can cut back, but your income potential is limitless.

The budgeting method that I have created has this in mind. It’s The Extra Income Budgeting Method and it’s what I used to pay off my debt and start really loving my life.

I’m a huge advocate for this method!

The way that it works is by using any extra income that you earn for throwing at your debt or your goals.

I found that what I was doing before was trying to cut back my spending. If I wanted to throw more money at debt, it meant going without somewhere else.

Not fun.

When I started looking into ways of earning extra money, all of that extra went towards my debt (and then later on, my goals).

The reason that this is so great, is because you won’t have to touch your normal budget. You won’t have to cut back on anything in order to reach your goals.

There are tons of different ways that you can make extra income, and I recommend having a read through these:

Sign up to my free money making email course!

If you’ve never done anything like this before, there will be a lot of resistance. But all that you need to do is write it on your calendar, and make sure you action it.

Change Your Money Mindset

As just mentioned, there can be a lot of resistance when it comes to trying new things. You may find that you do a lot of self-sabotage on this journey.

It’s ok – in fact, it’s perfectly normal. But you don’t want your worries to win.

There are so many different reasons why we think and feel the way that we do about money. It can be to do with things like:

  • The way we were raised
  • How we saw our parents use money
  • Things that have happened to us
  • Gender
  • Race

That’s not just it though, there are many more reasons. Despite all of the things that may have happened to you in the past, there’s no reason why you can’t have a future filled with hope and good times.

The most important things to tell yourself and remember are:

  • Getting back on track is possible
  • You need to put in some work, but it will be worth it
  • It is possible to earn more money
  • Even if you don’t think you have time, you will make time
  • People have been in worse situations and come through the other side

It all starts with believing that you are able to get out of this situation. You have the means to do so!

It’s my belief that money is a tool to help us create our dream life.

Money isn’t evil, and wanting more money isn’t a bad thing. I’ve lived on a tiny bit of money, and it wasn’t fun. Earning more money changed everything for me, and that’s something that’s important to focus on.

Analyse Your Spending

Something that I always recommend people do when they are first starting to budget, is to track their expenses.

What this means is that every day you will write down everything that you have spent.

There may be some resistance here, but it’s essential that you do this. The reason for doing this is not to make you feel bad about your spending, but tracking it.

When you track your spending, these things happen:

  • You have accountability with yourself
  • You can use the numbers to create a realistic budget
  • You can analyse your spending

Analysing your spending is something to focus on in this section. There’s no point in just writing out the numbers and leaving them on the page.

I want you to go through your spending and look at why you spent your money. Again, this isn’t to make you feel bad. This is so you can make a good plan going forward.

These are the action steps that you need to take to do this:

  1. Track your spending
  2. Pick one day to look at why you spent some money
  3. Sit with yourself and allow your mind to delve deep into this. It’s important to be honest with yourself here and think about the reasons behind the spending

The reason that it’s so important to think about the reasons behind your spending, is because you need to be prepared if you feel like that again.

These are some of the reasons why sometimes we spend when we didn’t mean to:

  • Feeling sad
  • Feeling guilty (especially if you are a mum!)
  • Feeling bored
  • Feeling happy
  • Comparing to others and wanting to buy something to be like them

As you can see, a lot of the triggers behind spending are to do with how we feel. The good thing about this is that we can put things in place to spin this into a positive.

The triggers will still be there that cause us to spend. The trick is to think of other things that you can do instead. For example:

  • Go for a walk or run
  • Pick up your phone and speak to a friend (ideally one who will perk you up!)
  • Create a journal full of positive things that people have said about you that you can refer back to

As always, please send me an email or message on Instagram if you’d like any help, I love to answer your messages!

Was this helpful? Is there anything that I should add to this? Let me know in the comments below!