Get Current On Your Bills

Getting Started Guide Step 5

Feb 16, 2011 | WRITTEN BY CHRIS RUSSELL

Have you ever heard the expression "behind the eightball"? It means you're at a disadvantage. If you are behind on your monthly bills and have collectors barking at you, you are behind the eightball in terms of starting your total money makeover. Before you begin Baby Step 1 and get your starter emergency fund of $1,000 (which we'll talk about in our next email), get current on your bills.

Being current means you are up to date on all your monthly bills and have balanced your budget. You no longer have too much month left at the end of the money. You have taken care of your obligations and have a firm financial footing. Once you have that, you can get traction and start saving and paying down your debt.

Also, it's a morale boost to know that you are current. You owe people but are making payments on time. You have enough to get through the month. Now it's time to kick it up a notch. You are about to have more than enough, because you are going to save some money, pay off the credit cards, and never allow them or those jerk collectors into your life again.

One of the keys to getting caught up is to stick to the basics. When your belly and your gas tank are full, the mortgage and utilities are paid, and there are clothes in your closet, you've got the basics covered. Most everyone can pay for just food, utilities, rent, clothing and transportation. When you live bare bones like that for a little while, you free up a ton of money to put toward your bills.

Hear the order of attack straight from Dave.

Getting caught up usually doesn't take long. If you have a minimum credit card payment of $75 a month and you're three months behind, that's $225. But if you cut the cable for a few months, work out at home instead of paying for a gym membership, and bring your lunch to work as opposed to eating out, can you save up the money to get current? You betcha!

As Dave says here, it's about focus and prioritization.

Living small time like that sounds brutal, right? Well, it's not fun, but remember two things. First, it's necessary so you can catch up. Second, the more you sacrifice today, the faster you can get out of debt. It's not forever, and your intensity level determines how long you do it. Work an extra job, sell some stuff, and do whatever you can to free up money to put toward your overdue bills. If you can only send a small amount to each collector who’s after you, then use the pro rata plan.

At this point, you're building serious momentum toward freedom. Hopefully you've signed up for a 7-day free trial at My Total Money Makeover (or even become a member!). You've set some goals, found some good information in the community forums, and plugged in numbers for an initial budget and your debt snowball. The debt snowball tool will help you most once you're current on your bills. That is your roadmap for all debts–never again will you have to guess where your money is going.

Reader Comments (5)

Thank you, this gives me hope. I'm looking forward to living in abundance. Also, I appreciate ho very "Art of War" this is. That is my love language (if there is such a thing!) Cheers EM
Member at 4:20 PM, April 21 2011
tHANKS DAVE I WAS ALWAYS BEHIND TIL I TOOK FPU COURSE AND NOW I AM STRTAING TO TREAD WATER AND HOPE TO HAVE AT LEAST 3 STEPS DONE BY NEXT SUMMER
Member at 7:59 PM, August 30 2012
Just getting started, slightly overwhelmed but cautiously optimistic! I'm paying double on my 3 credit cards to eliminate them and hanging on for dear life. I'm determined!
Member at 6:58 PM, April 22 2013
For the first time ever in our lives together, my husband and I are excited about money! We smile and have tears of joy as we work through the steps of financial peace. I have been praying for financial instruction and God has answered my prayers with this program. Praise God and thank you Dave for your faithfulness to The Lord. God Bless you all.
Member at 10:00 AM, February 26 2014
this program has changed my perspective. all my working life I always thought " theres more where that came from" then I was laid off at the age of 61, after 3 years of unemployment all my / our savings ws gone and my husband and I signed up for social security . we had over 22000 in debt and the house payment.that was in January 2014. we are now(3/24/2014) finished refinancing the house, have paid off 4 credit cards without adding new debt by "consolidation" shortened the length of the Mortgage from 21 years to 14, decreased the interest rate by 2% , and looking at a debt free date of 15 months. we are both working "little jobs" , and have put all that money on the debt snowball. now we have a plan, now we have a hope. this works even if you are 67 and 63... this plan just goes to show God is good, and its never too late for God to work on your behalf. We have always tithed but we were truly ignorant of strategy . This Program has been the instrument God has used to Bless us. Thank You Dave Ramsey , God Bless You and your Team and Praise God.
Member at 8:10 AM, March 24 2014

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