When money's tight, it's easy to fall into analysis paralysis and choose to ignore incoming bills. Unopened bills pile up, eviction notices, shut-off notices, and endless phone calls from debt collectors cause more stress. The shame of trying to feed a family on little to no money leads to relationship difficulties, medical problems, and an increase in drug or alcohol abuse. When there isn't enough money to cover the bills, when living paycheck to paycheck, poverty feels just a step away. 

Here are steps to manage the money you do have and continue to pay your bills on time.

No Money? Assess the Situation

We know that avoidance doesn't work. You can't ignore a situation and expect it to go away, especially when it comes to debt and money. The first thing that needs to happen is an assessment of the true situation. Take a look at the following:

• How much income are you receiving each month?
• What bills do you owe and when do you owe them?
• Where else are you spending money?
• What are your "must haves" vs your "wants"? 

When prioritizing your spending, you may find that you're spending money in ways that are not efficient for your budget. You may have to learn to make coffee at home, take your lunch to work, repair a few clothing items, and do what you can to keep your old car running or temporarily rely on carpools or public transportation. Also, note that your "must haves" are the things you need to keep yourself and your family safe, warm, and fed. Food, shelter, clothing, and transportation should definitely make the list of "must haves".

What Bills Should You Pay?

During your financial assessment, you may notice that you simply cannot pay all of the bills that you owe. You do, however, still have to eat, live, and get to and from work in order to continue earning money. Once you have decided on your financial priorities, you have already determined which bills you absolutely must pay on time.

Here is a sample prioritized list of bills and what happens if they're not paid on time:

• Rent or mortgage - After 90 - 120 days, an unpaid mortgage could lead to foreclosure proceedings and the loss of your home. Your rental contract should state how soon a landlord would begin eviction after non-payment. It could be as quickly as one late payment.
• Utilities - Utility companies may issue shut-off notices in a little as 30 days past due. 
• Car payments - Auto loan companies can send your unpaid account to collections relatively soon, from 1 to 60 days past due. They could also repossess your vehicle.
• Insurance - Insurance can be canceled within the first month of non-payment. While it may not seem essential, insurance is necessary if there are any vehicular accidents, illnesses or medical emergencies. 

Food is an essential item and should definitely be a priority for the health of yourself and your family (Bonus: Save money on medical bills by staying healthy.) Look at ways to eat frugally including couponing, visiting food pantries, creating meal plans, cooking in large quantities for leftovers, and shopping when your grocer has reduced prices.

If you drive a car, remember to add gas as part of your overall "must have" budget. Consider taking public transportation a few times a week or carpooling with coworkers to split costs or cut down on the cost of gas.

Other bills that you might consider as part of this list are:

• Child support - Unpaid child support can lead to suspended drivers license, wage garnishment or jail.
• Income taxes (if they are not already taken out of your paycheck) - The IRS can garnish wages, seize property or bank accounts if taxes remain unpaid.
• Student loans - Federal student loans are handled differently than private student loans. 30 to 270 days past due and you could see garnished wages or litigation.
• Medical bills - Medical bills could be sent to collections after 60 days past due. Sometimes, the provider will wait to see if or how much insurance will pay before sending you a bill.

As you can see, these are debts that you simply must keep paid, and on time. When you and your family are taken care of because the items on this list are paid, you could begin to feel some relief. 

What About the Bills I Can't Pay?

It may appear that you simply cannot afford what you have been paying on your current bills. You still have options so that collections accounts don't continue to bring both you and your credit score down.

Communicate with Creditors - Start by looking over your current bills and making some phone calls. Can you defer your student loan payments? Will your mortgage company offer options to help reduce payments? Should you sell your house and move into a smaller place? Can you reduce your utility bill in any way? Will your credit card company take minimum payments or negotiate a payment plan? It never hurts to ask and the worst they can say is "no". Not communicating with creditors, especially when in this situation, will only make things worse. 

Track and cut back on expenses- You may have noticed that your cell phone bill is expensive because you pay for a data you never use. You may be paying for cable that you never watch. Learn to cook instead of eating out or when you do eat out, get half your meal to go so you'll have leftovers later. Switch to a bank with no fees. Shop at thrift stores. Visit a library instead of a bookstore. Ask if a local church offers free or reduced babysitting. Do your own car maintenance or fix what's broken in your home. YouTube has great videos for do it yourself-ers. Get creative. There are numerous articles on living frugally. Keep track of what you spend so you know what you can cut.

Earn more money - Is it time to ask for a raise at work? Can you work another part-time job? Do you have items you can sell online or with a garage sale? Can you get a job that pays more? When you really begin the process of looking at your situation differently, you may uncover a talent that you can get paid for. 

Little Wins and Baby Steps

Instead of ignoring the bills and allowing them to overwhelm you, work with your creditors to make your situation more manageable. Taking a hard look at what you owe and your spending habits can be challenging, but in a good way. Getting organized, finding that you actually can afford more than you thought you could, and taking care of your family will feel like a celebratory win. Over time, these small steps will help you build credit and confidence in your financial stability.

As debt collectors, we know that your intention is not to go deeper into debt. Our goal is to get our clients paid and that means that we are willing to work with you, in any way we can, to negotiate payments. If we work together, we can help you dig out of the trenches of debt.