“How do I budget if I can’t pay all of my bills?” I’ve been getting that question a lot lately. So, let’s talk about it!
Let’s start with your income. How much income will you be receiving? Include all sources (salary, commission, bonus, unemployment, child support, disability, pension, etc.)
You need to make a plan for how you will spend every dollar you receive.
Always cover your 4 walls first! Your 4 walls are:
🏠 Housing (rent/mortgage, utilities)
🥗 Food
🚗 Transportation (gas, car payment, insurance, immediate repairs/maintenance)
👗 Clothing (basic NEEDS)
Covering your 4 walls should give you peace! You have a roof over your head, the lights are still on, you can feed your family, you can get to work, and your basic clothing needs are met! This is huge!
After you fund these categories make a list of all the other ways you need to spend money. Then prioritize that list. Write a number beside each item. Re-write the list in order of importance. This is called a prioritized spending plan. Meaning if you earn any money above the income you expect to receive you will pay that money towards the list of spending in the order of priority. If you don’t have a plan for additional money received you will end up blowing it! Every dollar needs a job!
If you can’t pay everything on your prioritized spending list you need to contact the creditors that you can’t pay. I know that’s a tough conversation to have, but don’t bury your head in the sand and avoid this conversation! Your creditors expect that some people will not be able to meet their obligations right now. Explain to your creditors that your income has been affected by COVID-19 (or whatever the situation is). Ask your creditors for options.
Consider finding ways to increase your income. Do you have anything you can sell? Can you take a part-time job? During the COVID-19 crisis, MANY companies ARE hiring. Taking a part-time job during this time could help you not only survive financially but thrive during this time.
Have questions? Comment below.
