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home › economic survival tips › Spending › I'm In Over My Head › Prioritze Your Bills

Prioritize your bills

 

The best scenario is that you’ll be able to pay at least the minimum payment due on all of your bills on time. If your income isn’t high enough to make all these payments, prioritize your spending to pay the most important bills first.

Here’s a good rule of thumb of priority order for paying bills:

  1. Insurance: huge medical bills are a common cause of bankruptcy, so it’s important to maintain health insurance coverage, as well as try to stay current with your other insurance, such as life and homeowners insurance.

  2. Rent/mortgage: pay this so you have a home to live in.

  3. Living expenses: be sure you have enough to purchase food for your family.

  4. Auto loans/leases: stay current so you don’t lose your transportation to work.

  5. Utilities: make at least some payment to ensure your power and heat aren’t shut off. If you need assistance paying your utility bills, the Low Income Home Energy Assistance Program can help.

  6. Child care: if you’re behind in payments, your provider could refuse future care. Negotiate a deal so your children can be cared for and you can continue to work.

  7. Credit cards/medical bills/education bills: missing payments on your credit cards will wreak havoc on your credit score, and delinquent medical or student loan bills may be sent to collection agencies.

  8. The extras: if you’re having money struggles, forget about the extras, such as gym memberships and other nonessential activities. Negotiate payment plans to pay back what you owe on the extras, but other categories take precedence.

 

 

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