How to Pay Your Bills When You’re Broke

November 7, 2013

Pay Your BillsWhat happens when you’re broke, but you have bills to pay? This is a difficult situation faced by thousands of people each day. Figuring out what to do when you’re out of money and can’t pay your bills can be very stressful and unpleasant.

Late fees start to pile up, and, in some cases, you might be in danger of losing an asset that you want (or need) to keep. When you’re in a tough situation like that, it’s important to step back and pay attention to your options.

Paying your bills when you don’t have enough money requires that you think through the situation, and communicate with your creditors. Here are some things to keep in mind as you decide what to do when you’re out of money.

Prioritize Your Bill Payments

Your first step is to prioritize your bill payments. What’s the most important item on your list? If you need to keep the heat on, that’s a bill you should pay. If you need the car to get to work, you don’t want to jeopardize your income, so you need to pay on the loan in order to avoid having the car repossessed.

Think about which bills are likely to have the biggest impact on your situation. It’s true that late fees can pile up quickly when you miss credit card payments, but it’s also true that credit card debt is often more negotiable than mortgage debt – and you don’t usually lose your home if you default on credit card debt.

Another consideration is what you can do without. Do you really need cable TV? What about that magazine subscription? The gym membership? Expensive cell phone plan? Go through your obligations and figure out if you can cut some of them out. Dropping some of your bills can help you find money to pay the most important items.

Take an honest look at your budget, and then cut out the items that are unnecessary. Recognize which bills are truly the most important, and make sure those are paid. It might be uncomfortable, but one thing that can help is to show your prioritized list of bills to someone with an objective perspective and see if they notice anything that might need a second look.

Communicate with Your Creditors

Negotiate Creditors

It’s vital that you keep the lines of communication open with your creditors. If you have lost your job, or if you have suffered a financial setback of some other kind, you need to let those you owe money to know immediately.

In many cases, if you contact your creditors quickly, and show that you want to work something out, it’s possible to get the help you need.

Student loan payments can sometimes be deferred during times of hardship. In some cases, you might be able to get a mortgage modification to help you with your situation. Many credit card issuers will negotiate a new payment plan with you. Utility companies can point you to agencies and programs that help those facing financial hardship pay their bills. In some cases, if you can prove financial hardship, service providers will waive early termination fees.

Just ignoring the bills can lead to bigger problems later. If you communicate, though, there is a chance you can have your payments temporarily reduced, or have some of your payments deferred until later.

You might not be able to get a mortgage modification, but if your utility payments are reduced and your student loan payments are deferred, it might free up some money to help you make a more important payment.

Save vs. Earn

You can increase the availability of money to pay bills by either cutting unnecessary expenses or earning more money – or by doing both. Your first step is to cut expenses. You should already be on this path if you have looked over your bills and determined which are the most important.

Prioritize the rest of your regular spending. Cut the least important expenses from your budget, and use the money saved to pay your obligations. Look for ways to reduce your spending, whether you are being more energy efficient at home, or whether you are brown-bagging it to save money on lunch at work. Find ways to cut back, and then use the money to pay your bills.

Finding Extra Money to Pay Your Bills

Find Money

If your current situation means that you don’t have enough money to pay your bills, you need to see what you can do to bring in more money to cover them. You can do odd jobs, get another part-time job, or start a side business.

It’s also possible to start selling off some of your stuff. You can sell online, or hold a yard sale. I know it’s more of an extreme move but if you own your home it might make sense to sell and downsize if you don’t anticipate your income growing to cover your expenses anytime soon. Do what you can to raise more money, and try to develop more income so that you can afford to pay your bills.

In addition to earning more, you can also look for outside help to pay your bills. The local food pantry can provide you with staples that reduce your need to buy groceries. With the money you save on groceries, you can pay some of your bills. There are also community programs that can help you pay your utility bills, and help you find extra work to earn money.

If you belong to a church you can also turn to your local congregation for help. Many faith-based organizations have programs that can help you get necessities for less – or free – and that can help you pay your bills. Your family might also be able to help you by watching your children for free while you work to earn more money, or by helping you with groceries and other expenses.

Bottom Line

If you find yourself with less than enough money to pay your bills you’re not alone, many people have found themselves in the same difficult situation. Although things may seem bleak there are options and resources available.

Prioritize your bills and your spending so that the most important obligations are met first. Look for help, including talking to your creditors about your options. Then, cut expenses and earn more money. Once you improve your situation, remember to build an emergency fund, give back, and try to follow these money rules to try and avoid the same problem in the future.

What tips or tricks have you used to pay down your bills when you found yourself without enough money to cover them all? Leave a comment!

This article was originally published June 28th, 2012.


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Miranda writes about personal finance almost every day. An experienced freelance writer, she's covered your money online and in print from every angle and is always looking for new ones.

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5 Responses to How to Pay Your Bills When You’re Broke

  • Tonia

    I was laid off from my job June, 2012 and my husband died October, 2012. My rent is due tomorrow 4-5-13 (The last day) My car payment is due (4-7-12). What can I do I have no money!

  • Kyle O

    Not only do you have to prioritize your spending but also your mental health. It’s hard to really cut back when you have been living a certain way for a long time. You have to take a step back and really “live in your truth” as Suze Orman would say. You can’t let your EGO get in the way of what is really best for your finances. Once you do that you will feel good about getting rid of the debt and living on less

  • Victoria @LendNotBorrow

    Great tips. Priortizing and cutting back on the unnecessaries or SUPER important!!

  • Bryan

    It’s interesting because Joan at has a really great article ( she wrote about regarding her journey to paying off huge credit card debts.

  • Crystal @ Prairie Ecothrifter

    I just helped my very broke friend create her first ever budget. We concentrated on prioritizing and figuring out a plan of attack for an emergency fund AND debt payoff. We’ll see how it turns out. 🙂