How to Give Your Budget (and Yourself) Breathing Room When Paying Bills
These four tips may help you pay your bills on time and still have money left over
About 75 percent of Americans are living paycheck-to-paycheck today, including some who earn six figures. This can make it hard to both pay bills on time and still have money left over. Fortunately, there are some steps that can give you—and your budget—a bit of breathing room when it comes to paying bills.
Even when we make enough to pay our expenses, bills tend to pile up, which can leave us in dire financial straits for a certain period of time. But there are strategies that can help reduce that burden.
- Request Different Due Dates
- Consolidate Debt
- Get a Consistent Cash Flow
- Get Rid of Some Extras
It can sometimes happen that many of your bills come due on or around the same date every month, which can quickly lead to an empty bank account. If this is your situation, contact the billing department at your utility companies and creditors and ask if they will change your due date. This way, you'll be able to spread out your bills so that they will be due when you get paid (or when you have lots of money in the bank).
You can make this request for bills from credit cards to utility and cable bills. Many companies are willing to be flexible, particularly for customers who have never made a late payment.
Got lots of loans and debt? Consolidating your payments into one monthly loan might reduce some of the stress you experience when it's time to pay all the different bills.
If it is possible to do so—and if it makes financial sense in your case due to a lower interest rate—thinking about consolidating all of your debts. When it comes to credit cards, if you open a balance transfer card that has an introductory low-interest (or no-interest) rate, it might ease your interest payments for 12 to 15 months.
As far as multiple student loans, find out about the refinancing options available at both major and small banks. Usually lenders only consolidate private loans with other private loans or federal loans with other federal loans, but it never hurts to ask about all the options.
The CareerBuilder researchers also discovered that, out of the survey participants who either have a minimum wage job now or had one in the past, two-thirds are having trouble making ends meet. Weekly or monthly pay can be unpredictable for these workers. Therefore, unless your employer can provide a consistent advance or you can get on a routine work schedule, it can be almost impossible to plan ahead and forecast how much you'll have in your bank account at a given time (and whether or not that amount can cover your bills).
Fortunately, there are now tools that can help us get our cash flows more consistent. One such tool is the Even app, which uses financial information that you enter to figure out your average paycheck amount, then makes sure that you will get at least that amount every time you get a paycheck as long as you still hold that job. Its Pay Protection feature automatically deposits enough money into your bank account to make up the difference anytime you get paid less than your average.
Where does the money come from to make up the difference? From you. You pay it back (or ahead of time) whenever you earn a paycheck larger than your average, and the money is taken only from that extra amount. In this way, Even makes sure that you always have at least your average amount of pay.
A company representative for Even claims that Pay Protection is free for many people because their employer pays for it. For those whose employer does not, the app costs $3 per week with the amount being withdrawn from your bank account each Friday.
Finally, dig deep into your spending and figure out which small or big expenses can be cut. We often forget about things like this—monthly magazine subscriptions, box-of-the-month memberships, etc.—because they don't actually add much value to our lives. However, when you add up the costs of all of these things, they can take big chunks out of our budgets and stress us out when it's time to pay for the things that actually matter, such as rent, car payments, and student loans.
If you still haven't made any New Year's resolutions, think about following these steps to start the new year off right and get your finances in order.