If you’re like many adults, you’ve got bills. These tend to be a mix of living expenses, rent/mortgage, credit card debt, car loans, child care or a vast variety of other bills.
Especially at this time of the year, when funds can be particularly tight, how do you pay all those bills??
The honest answer? You might not be able to. Or at least not right away. The key is to make sure you have a plan for paying things and understand the consequences of not paying.
First things first; what bills do you absolutely need to pay? Most likely you need to pay for where you live and food to eat… so let’s make sure those are top of the list. Only you can truly decide what’s most important but I highly recommend actually listing out all your payments and deciding what can be pushed down the list or not.
What payments can be delayed?
There are a few types of loans/bills that can be delayed a bit and allow more of your cash flow to go to your high priority items.
If you have a high credit card balance, you can opt to make just the minimum payment for a while rather than the statement balance. This will incur a cost though. Your credit card interest rate is stated as an annual number; so you need to divide that interest rate by 12 and that number gets multiplied by your average monthly balance. That will give you the interest charge for the month. I do not recommend this strategy for long but it can tide you over until your cash position improves a bit.
If you have a loan with a bank they might have a grace period on payments. This could be your car, student, personal, boat, home equity or other loan. Check with the lender to see what their grace period is for your payment. This may only buy you an extra week before needing to make your payment but sometimes that makes all the difference.
Hopefully at this point you’re thinking, “this was all irrelevant to me because I’ve got plenty of funds on hand for my bills.” If that is the case, then I applaud you! If it’s not the case then I hope you find this information helpful.
If you have any questions or topic suggestions for either small business or basic financial content, please let me know!