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How to face the dread of unpaid bills — and make a plan that works

Bills piling up? You're not alone — but there is a way to face your finances head on.
Make a plan to open all of your bills now so you know where you stand — and what you owe.
Make a plan to open all of your bills now so you know where you stand — and what you owe. TODAY Illustration / Getty Images

It isn’t always easy to manage your finances, but the pandemic has brought that challenge to a whole new level. Stephanie Ruhle spent almost four months working with Jeannine Cook, owner of Harriett’s Bookshop in Philadelphia, to get her finances in shape. Cook’s first step: facing her bills. With upwards of 12 million Americans still out of work and many still struggling with pay cuts and increased expenses, Cook is not alone in needing some help.

Losing your job or some of your income can be a huge source of stress, and it's natural to struggle with your responsibilities, Amanda Clayman, a financial therapist and Prudential financial wellness advocate, previously told TODAY. “Job loss can feel like a threat to our stability and survival,” explained. “For some of us, this threat is critical and immediate. Any time we're dealing with multiple stressors, what we have available in terms of time, energy, focus and emotional capacity is going to be spread between them,” she explained.

To deal with this kind of crisis, Ruhle asks you the same question she asked Cook: Are you opening all the bills you have right now? Are you avoiding them?

Here are her three simple steps to face your bills — and make a plan.

1. Get to know what you owe.

Take stock of every single bill you have, Ruhle advised. “I want you in the next week, in the next day, when you go home tonight, I want you to open every single piece of mail you have, every bill you know is there,” she said, and give yourself a deadline. You don’t need to pay them right away, but you do need to know what you owe.

“There are lots of small business owners that say, ‘I’m a creative, I don’t do the finance side,’ but not being a math person doesn’t count” for business owners or individuals, Ruhle told TODAY. “You are the CEO of your life. Whether you’re an individual or a small business owner, you can’t tune out your financial obligations. You need to own them or owe them,” Ruhle said. “You need to manage these things or at least address them. No one is expecting you to pay every single bill.”

2. Ask for help.

Ruhle said to waste no time in calling your creditors. “Starting today or tomorrow every day, I want you to just call everyone you owe and say, ‘Here's my situation. Are you offering any relief? Can I pay a lower minimum? Can I have an extension? And just see what they say,” Ruhle said. Many lenders are being flexible right now, especially if you approach them with a good attitude and a little flexibility.

3. Make a plan — and a budget.

“We're going to start to take those bills and prioritize what we pay first and what we pay next,” Ruhle said. Without knowing where your money needs to go, you can’t pay things off most efficiently. A good rule of thumb is to pay down your highest interest debt first. That will save you more money in the long run.

“Prioritize what you need most,” Ruhle explained. “There are a lot of things we want, there’s only one way to spend your money, and you need to figure out what you need most urgently now.” By prioritizing your purchases, you can make the most of each dollar.