What to Do When Your Bills Keep Climbing and Your Income Doesn't

by Maurie Backman | Updated July 25, 2021 - First published on June 9, 2021

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Stuck with the same wage? Here's how to handle things when your bills keep rising.

There's a reason so many employers give out cost-of-living raises. Unlike raises based on performance, cost-of-living raises are uniform raises that companies give employees to help them maintain their buying power in the face of inflation.

The cost of living tends to rise from year to year. For example, you may find that your rent goes up $50 every time your annual lease expires, or that the cost of a monthly transit pass increases by $15 when a new year rolls in. Cost-of-living raises can help ensure that these modest but present increases don't drive you into debt.

But what if you haven't gotten a cost-of-living raise, or any raise for that matter, in quite some time, while your bills have risen? Here are some options to look at.

1. Rework your budget

Your budget may contain many expense categories -- everything from your mortgage payment to your car payment to streaming services. But if your expenses keep rising and your income doesn't follow suit, it may be time to rethink that budget -- and cut out some expenses that aren't technically necessary.

This doesn't mean a $12 monthly streaming service isn't worth paying for when it provides hours of content to keep you entertained on evenings and weekends. But if you pay for three streaming services, you may want to dump one. And if you have a streaming service on top of a cable plan, you may want to cut the cord on your cable plan.

2. Unload or reduce one large expense

There are probably a few expenses in your budget that stick out as the largest, like housing and transportation. If your income won't budge, it may be time to downsize your home or unload your vehicle to slash your spending significantly and buy yourself breathing room.

This route won't work for everyone -- if you live in an expensive city because it's close to your job, for instance, you may not be able to find a less-expensive place. Getting a roommate may be a better bet. And if you live someplace where you can't get around without a car, dumping a vehicle won't work -- in which case trading in a nicer car for a lower-end model may be your best move. The point is to attack the issue by targeting a single expense that eats up a lot of your unchanging income.

3. Look for a side job

If you can't remember the last time you got a raise at work, and your employer has no plans to give you one soon, you may need to create your own raise -- by getting a side job. Clearly, this won't be easy to do if you work long hours already. But if you're having trouble keeping up with your bills and you don't want to deplete your savings to stay current, picking up a few weekend shifts may be the solution.

Keep in mind, too, that side gigs can be flexible. You may have an easier time driving for a rideshare company or pet-sitting when your schedule allows, rather than taking on a gig committing you to working at a preset time every week.

Not getting a raise can set you back. If that's the hand you've been dealt, try redoing your budget, cutting one big expense, or boosting your income with independent work. Doing so could spare you a world of stress -- and prevent you from falling behind on the bills you have to cover.

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