Americans now owe an estimated $14.89-trillion in household debt, the highest it’s reached this century. While credit card balances have dipped significantly, mortgage loans are up in quantity and value. The American dream of homeownership remains a popular goal, but there comes a point and time in your life, where one needs to realize that being late on unpaid bills and amassing mountains of debt can severely impact your future financial goals.
Additionally, for some time now, Americans have been fighting an economic system that puts recent college graduates in an ongoing battle with student loans, and older generations struggling to pay off mortgages or car loans.
If you’re looking to break loose of an economic burden, unpaid bills remain a massive frustration, especially since they can haunt you for years to come. The latest research by CNBC showed that the average American has around $90,460 in debt, with Generation X holding the most in debt, with $140,643, with Baby Boomers coming in second at $97,290 in debt.
A large portion of Americans has been looking to change their lifestyle as a way to lower their cost of living in an ongoing effort to take control of and reduce their debt. With more individuals realizing the severe impact unpaid bills can have on their finances, there are simple and effective ways to catch up with any unpaid accounts.
Here’s a quick look at seven of the simplest ways you can now catch up with unpaid bills in the coming months.
Revisit your Finances
To be able to catch up with your unpaid bills, the first step is to revisit your current financial situation. By doing this, you will be able to calculate what your current expenses are, and where you can perhaps make any drawbacks if possible.
What most people don’t realize is that your personal finances, or perhaps that of your family rests solely on your shoulders. So if you don’t have a proper idea of how to manage money, crunch the numbers, or make monthly payments – you will constantly be in the red.
Start by writing down all the payments you need to make, prioritizing the most important at the top. See where money is being allocated towards, and how you can catch up with any unpaid or payment due bills.
Start to Budget
Lowering the cost of your lifestyle and being able to catch up with those bills you’ve been neglecting won’t happen if you don’t set up a budget for yourself. Not having a budget means you spend your money irregularly on unnecessary purchases.
Getting on a strict budget will help you see where you can save a few extra bucks every month, without having to neglect your payments. Creating a budget makes it easier to realize where money is potentially being wasted, and not effectively managed.
Having a budget is one of the best and most simple ways to quickly catch up with your finances. It also makes a lot more sense to control your money, instead of spending it on things you do not perhaps require or need.
Change your habits
This might not be the easiest out of all the things you can do, but a change in lifestyle or habits can definitely help you save some cash.
That morning coffee you get every day on your commute to work, how much is that costing you per week? Leaving all the lights on when you are not home can crank up your electricity bill. How many packs of cigarettes are you smoking? They’re not just bad for your health, but it can hurt your finances too. Maybe your online shopping is getting a bit out of hand, and you need to make some severe cutbacks?
Our habits and daily routines can influence our finances. Many of us have become so used to the lifestyle we have created, that we haven’t realized it’s also come at a high price. There are slight changes you can make in your habits that can help you save some money.
Take a look at some of the things you do, and how it affects your budget. If you are spending more on a certain activity, item, or service than what your budget can handle, reconsider if it’s entirely necessary to have it around.
Create a Debt Payoff Project
Debt is one of the biggest things that is holding you back right now; it’s also probably why you’re struggling to keep up with all of your monthly bills. Having a debt payoff project, or program you can follow, helps you prioritize a way in which you can quickly and effectively deal with any unnecessary debt you still have.
Look for ways that you can increase repayments, or perhaps cover at least more than what is needed. There are ways in which you can cut back on other items and non-essential services that will help you claim more financial freedom.
Your debt remains the main reason you’re falling behind on your monthly payments, and while it’s not easy to live a debt-free life, it’s a lot easier to get out of it sooner than later.
Lower Utility Costs
As mentioned before, changing small habits or routines can help you save some money, and one of them is lowering your utility costs. Electricity prices have been soaring in recent months, and it is only going to get even worse in the coming year. Lowering your electricity usage, using fewer appliances, switching over to gas, or even installing cost-efficient appliances can all contribute to lower monthly utility bills.
Do you have a habit of leaving the lights on when you’re out during the night or leave charging cables plugged in while you’re at work. There are ways you can decrease your utility usage. It is a small habit that can help you save money.
Cancel Subscriptions and Paid Packages
Subscription plans and paid package deals are one of the many reasons why your monthly budget is not working out. From online streaming services for your television and mobile phone to magazine or clothing subscription packages, you are throwing money away on services you might not regularly use, but still get regularly, and automatically, charged to your bank account or credit card.
When budgeting, these services and paid package deals should be the very last thing you need to find money for, especially if you are well behind on monthly repayments. Having expensive streaming services, or internet package deals, or even a mobile phone contract might not seem like a lot of money at the very time. But over a year or two, that amount accumulates to a lot and can pinch your budget.
Of course, be sensible about what to cancel, and what you should keep – overall when you are looking to make a difference or a change in your spending habits, you should still consider how personal relaxation and well-being will be affected throughout the process.
Learning about personal finance is something not everyone is taught regularly. Educating yourself and reading about how personal finance works can help clear any confusion surrounding the situation.
A lot of the time, people don’t set up a budget, because they don’t know how to. Yet those are often the ones who struggle the most to make repayments on their bills and debt. Being able to know exactly how to work with your finances will help you overall to achieve financial freedom.
There are thousands of online videos, short courses, and guides you can make use of, all for free. The information and knowledge you need to make the right financial decisions are right there on the internet, you just need to learn about it.
Having to limit your lifestyle in order to catch up with unpaid bills is something not a lot of us would quickly commit to. The rising cost of goods and services has not made the situation easier – but all the more necessary.
Consider what’s important to you, and how your monthly income will be able to cover all your expenses, while also being able to save for emergencies.
The most important thing to remember is to educate yourself about personal finances, and of course, stick to a strict budget. Your financial freedom is possible, it just comes with a few lifestyle adjustments, and some proper know-how.
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