Many individuals today are facing the loss of a job, the loss of hours, or a decrease in the amount of pay they are taking home. This can make paying all of the monthly bills difficult, if not impossible, causing stress and heartache for the individuals affected. When facing a monetary shortfall, spending priorities must be established for every aspect of your life, including your monthly bills.
Your Top Priority
When facing a financial shortfall and unable to pay all of your monthly expenses, providing necessities for your family should always be your top priority. Many creditors and debt collectors may not see the situation this way and may threaten legal action if they are not paid promptly. Providing the basics that your family needs to survive is much more important than your credit score, so pay for these necessities before you spend the rest of your money paying your bills.
Housing Expenses
Your next spending priority should be your housing related expenses, such as rent or mortgage payments, real estate taxes, and insurance premiums. It is very important that you continue to have a place to live while you are trying to figure out your financial situation and missing these payments could cause you to lose your home. Condo fees and lot payments for mobile homes are also very important real estate related payments that should not be missed.
Utility Bills
Having heat in the winter and electricity to power your stove are also very important for a simple quality of life and not having these things can make living in your home very difficult. Utility payments for gas, water, and electricity should be the next payments made with the money that you have available. All of the hard work and energy you put into earning enough to make your housing payment will be for nothing if the home is unlivable due to a lack of utilities.
Transportation Expenses
In many areas of the country, having reliable transportation is essential to being able to earn money to pay your bills. If bus service is available, be sure to allocate enough money to be able to pay for the service to transport you to work or other necessary locations. If a car is your main mode of transportation, be sure to stay current on your car payments and insurance payments so that you will be able to drive legally and not have your vehicle repossessed.
Low Priority Debt Obligations
Many of the debts that involve debt collectors making harassing phone calls are actually low priority debts that should be paid when the above expenses have been taken care of. Credit card payments, open merchant accounts, and fees owed to professionals should be considered low priority debt because non-payment of these debts will not quickly result in a loss of your quality of life.
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