It’s not a good feeling when the realization hits that you can’t cover all your bills.  Sometimes it’s just a matter of making a mistake in your checkbook and not having as much money as you thought you did, but other times it can be that the income you have just isn’t covering all the bills you have to pay.  When there are no more places you can turn to for help and nobody left to loan you money, you have to face the fact that you’ll need to take action before things get out of control.

The best defense is a good offense.

The ideal situation is that you make your realization before the bills are actually due.  If you are diligent in keeping your financial records up to date then you’re probably less likely to be unable to make your payments to begin with, but sometimes everything just spirals out of control and you can’t keep up.

Here is what you should do when you realize that you won’t be able to cover all your payments during the month:

1. Look to see if there is somewhere you can cut back to come up with the money. If you switched to peanut butter and jelly sandwiches for dinner every night for the next two weeks, would you be able to use the money you would have used on other groceries to pay your bills? No, it’s not appealing to have to scrimp on something as basic as food, but this temporary deprivation may be just what you need to get yourself back on your feet.

2. Call your creditors. Your first instinct is to probably hide from your creditors, so calling them of your own free will may be one of the least appealing tasks you can think of.  Calling your creditors before the payment is late may result in some surprising results.  They may reduce your payment for that month or even allow you to skip it altogether.  The bottom line is this: You have the upper hand if you call before the payment is late.  Once the payment is late you’ll be talking to an entirely different breed of professional, and sometimes they aren’t very benevolent.

3. Sell something. In the era of online auctions, it’s entirely possible for you to sell just about anything in a hurry.  If you need $50 in a week to cover the minimum payment on your Visa, then grab some stuff and start selling.

4. Avoid drastic measures. Payday advance loans and other lenders with absurdly high interest rates prey on people in tight financial situations.  If you waltz into one of these places and get a $200 loan to cover the rest of your bills you’re going to wind up spending about a gazillion dollars in interest (give or take a few dollars) and you’re also going to be tempted to do it again because of how easy it is to get the temporary solution instead of solving the overall problem.

Next month, sit down before you spend a single dime and figure out what you have to do to cover all your bills and still have enough money for your basic necessities.  If it’s apparent that this is going to be a perpetual problem then it’s time to either cut way back on expenses, bring in some other income, or both.

Related posts:

1. Bi-Monthly Credit Card Payments
2. Can you afford to get sick?
3. Trends in Oversharing: Social Payments and Swipely
4. Shedding Debt vs. the Credit Score
5. 7 Ways Students Ruin Their Credit