If Finances are Tight, Here’s What to Pay First
June 10, 2021
If you are having financial difficulties, it may become challenging to pay all of your monthly bills. While everyone’s financial situation is different, here are general guidelines for how to prioritize payments.
The first bills you should pay are for essentials: grocery, child care, and medicine. Look for opportunities to save money at the grocery store by buying items on sale.
Next, try to keep current on your mortgage or rent payments. If you are not able to make these payments, this could result in loss of your home and more stress. Contact your lender or landlord before you miss a payment to let them know your situation.
Maintaining your mortgage or rent payments makes little sense if you don’t have heat, water or power. To help pay these bills, you may need to reduce or eliminate other costs, such as house phones, cable TV, streaming services, or gym memberships.
Also, look for ways to reduce electricity and heating and cooling costs. These could include keeping the temperature a little warmer in the summer and cooler in the winter, using fans, and keeping curtains closed to keep the sun out of rooms on hot days.
If you need your car to get to work, make sure to pay your car payment right after paying for food, medicine, housing, and basic utilities. If your credit is good, you may be able to refinance your car loan for a lower interest rate, saving you money.
Finally, if you simply don’t have enough money to meet your other monthly obligations, you should contact your creditors to explain the situation and request some assistance. These accounts may include credit card bills, doctor and hospital bills, or other merchant accounts.
Explain that your financial situation is preventing you from making the payments, and you are working towards a solution. You don’t have any collateral tied to these loans, so you are not in danger of losing property, but these creditors do expect to be paid back. Keeping open communication is important.
If you need help getting out of debt, consider working with a nonprofit, reputable debt counseling agency. GreenPath Financial Wellness has debt and credit counselors who are NFCC-certified. They will help you understand your financial situation and create a plan to meet your goals. You can request a free counseling session by visiting greenpath.com.
Tags: Money Management, Budgeting, Tips and Tricks