Behind the Debt Eightball

Personal Finance 4 The People is pleased to team with others who are able to share their expertise in various areas. We hope to combine our efforts to bring a greater financial effort inorder to help you reach YOUR Financial Independence. Today's guest post comes to us from the Karon Powell.

Have you ever opened the mailbox only to find a stack of junk mail and an even bigger stack of bills?  Have you ever felt as if the more money you make the more behind you are?  Are you focusing on paying one large bill and ignoring the small ones that keep growing every month?  If you are then maybe it is time to take a look at the debt hole you are in and start digging your way out.  I know, right now, you are saying good thought but how do I do that? Here are five easy steps to help you get started.

1. Look at the bills

The first and most important step is to open the mail and face the bill monster that’s bearing down on you. Why?  If you are facing a money shortage, like most people in this economy, knowing what bills and due or overdue will benefit you immediately.

  2.  Prioritize 

Once you have opened the envelopes, do not get overwhelmed.  Take a deep breath and sort those bills into piles such as, urgent, longest overdue, small amounts, etc. The most urgent bills should be ones that focus on life necessities such as shelter and utilities. Take care of the urgent matters first.  I get the feeling your next question is going to be: “What happens if there is no money after I’ve paid the necessities?”  Well, we move on to steps three through five.    

3. Cut Expenses  

There are some expenses that disguise themselves as necessities but are really just a drain on your already overstretched budget.  These are items that can and should be eliminated, at least until the past due bills are caught up.  One of these disguised necessities is the cable/satellite bill.  It is time to negotiate, negotiate, negotiate! Call the service provider and get a lower rate. If that fails eliminate that service and get something cheaper or free.  For Television service consider investing in a streaming service like Netflix or Hulu. If you are not a television watcher eliminate the expense altogether and keep connected by using your internet to watch local news to remain informed and in touch.

 4.Consolidate

Some bills can be consolidated or put together.  For instance, that cable satellite bill may be cheaper if it is bundled with internet.  Be prepared to examine the costs carefully and make sure that if it is a limited time offer that you renegotiate before the expiration date.

5.Get Help 

This is probably the hardest step. Getting help means talking to someone about the situation you are in without getting defensive.  It means setting aside pride and moving toward being debt free.  For those in the D.C./Maryland/Virginia area there are a lot of resources available.

Let us take a step back and focus on one of the bills that tend to get out of control fairly quickly, utilities.  You took my advice and opened the mail, paid the mortgage and now there is not enough left to pay the electric bill. What do you do in that instance?  Luckily there are options.  If the bill is less than thirty days overdue call the utility company and ask for an extension on the due date, this may give you the time you need to get another paycheck and pay off the amount due.  Also, contact HEAP or the Home Energy Assistance Program for help paying utility bills.  There are also churches and volunteer organizations that can help with various types of bill payments.

If you need help paying down long overdue bills contact a reputable consumer credit counselor.  These are organizations that can analyze your debt and help negotiate with creditors.  When I say reputable I mean an agency that will not scam you. For help finding a reputable agency contact your local legal aid organization they can usually provide a referral.

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