How to become Debt Free – Step 5 – Overdue bills

Overdue bills, debt and expenses that are too high are massively overwhelming. This will help.

It is really scary when you have overdue bills and debt – or even just your expenses are higher than you’d like them to be. But it is going to be manageable and you are going to be ok. It will take effort and yes, time. But it’s not impossible and together, we can work at this.

If you missed the first part in the series or want to see an overview of the steps, then this is a great time to check those out.

If you aren’t up to date with your current bills or the amount you’re left with is a negative (aka ‘-‘ sign on the budget template) this is important for you. You need to find ways to cut your current budget or make some more money so you can stay current on your bills (phone, power, etc) as much as possible. This is stopping the debt and stress cycle.

If you are in this position then I have a bit of a guide here that might be useful to helping you get out of the immediate debt you are in.

The next step is to reduce your expenses to find more ways to have money to pay things especially any overdue bills. Hopefully, you’ve already paid attention to step 2 and you’ve reduced your debt as much as you can already.

If you’ve already done this, then the next step is to start looking through your expenses carefully. One by One. This list isn’t exhaustive, it’s just a taster and a starter. Join a community who can throw ideas at you when you are struggling to come up with them yourself.

Power. Can you change to better company (In New Zealand, try www.whatsmynumber.co.nz)? Can you reduce the amount you use in each room? Reduce shower times and hot water used for washing hands? Or hot water for washing clothes? Dry clothes on a line and not the dryer? Dry clothes outside to reduce the amount the heat pump has to heat? Use the fire instead of the heatpump and cut up pallets for a few weeks if you have some nearby you can get free?

Phone. Reduce your plan? Change to a different company? Reduce your mobile plan? Downgrade to cheaper mobile phone and sell on trademe/ebay?

Water. Use less in any way possible. Reuse water for the plants where possible.

Takeaways. Can you make a commitment to stop buying until it’s all paid back? Til you’ve paid $100 back? Only $10 a week on takeaways? One takeaway meal only a week?

Food. Check out frugal kitchen for ideas.

Sky. If you aren’t in a contract, check out a google chromecast and netflix as a replacement option. This will free up a good amount of money and you CAN reconnect when you have enough money to pay your weekly bills again if you feel the need.

Insurances. Do NOT cancel these unless there is literally no other option. Reconsider what you need though, for sure. At a minimum, keep a small contents policy (it covers fire damage so the landlord will go after your insurance company not you in the case of this!) and third party for the car. Check if other companies will be cheaper (don’t move life or health without talking to a broker if you have had new conditions diagnosed since taking it out or some time has passed since getting it).

Car. Travel more carefully (i.e. try to not speed up and stop lots if possible – check out hypermiling for ideas!). Watch fuel stations to get the cheapest fuel price! Travel less km’s wherever possible.

Finally, if you can, find some paper and jot down EVERY purchase you make and how much it was. Doing this can remind you to only spend on the things you NEED versus what you “want”. Take a deep breath too. This is a massive achievement to do all this. Come back to it tomorrow if needed, and the day after if needed too. It’s not easy, but it is so so worth it.

Please note, if it is a struggle to do all this OR the numbers are still not adding up, you need more ideas from someone in person. Please contact a local budgeting advise service such as CAPs or NZ Budget Advisory Federation. They can help so much with overdue bills and debt in a way that you aren’t able to do yourself.

I’ll have more ideas for the budget going up each week over on the Facebook page <3

DISCLAIMER: I am NOT a budget advisor. This advice is to be followed at your own risk and I am merely giving ideas on how you can work it out. I am not qualified and am not liable.

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