Recently on our legal forum a user asked, “Everyone around me seems to be doing great: new houses, new cars, new pools. I am struggling to pay my bills. Creditors call me every day and hound me for money I don’t have. I am wondering what bills I should pay first if there is no way I can pay all my bills every month.”
Although the stock market has reached record levels, your story is a familiar one. Even though the media does not publicize it, millions of Americans are not doing well financially. In fact, Fox News reports that household incomes are actually down in the last 4 years by as much as 8.2%. Millions of Americans have also left the workforce, leaving the unemployment rate closer to 14.7% then the much publicized 7.9%. So with this in mind, there are some families who are struggling every day to pay their bills.
Steps to prioritize your bills
So what do you do if you cannot pay all of your bills? You will have to prioritize your debts and expenses. Some of the steps you might need to take are common sense, but it’s worth reviewing.
- Make sure you have money for groceries.
When determining which bills to pay first you need to review what you will need for your survival: food, clothing, and shelter. So let’s take a look at the most important item you need- food. Of course, there are certain steps you can take to reduce your food costs- stop eating out, learn the art of couponing, determine if you qualify for food assistance, and eliminate meat- but if you do not eat, you will not survive.
- Pay your rent or mortgage.
Whether you rent or own your own, failing to pay your rent can have severe consequences. Review the terms of your lease or mortgage. In some states eviction or foreclosure can occur very quickly after you are late with your payment. For this reason, after you have paid for food you need to make sure you set aside enough money each month to pay for your housing expenses.
- Make sure you can purchase your household necessities.
If your rent and food have been purchased, you will need to ensure that you have all other necessary items to care for you and your family. Necessary items can include soap, toothpaste, and toilet paper. Here again there are many ways that you can reduce the costs of these items. Do some comparison shopping, and as mentioned above, learn how to coupon.
- Pay critical bills first.
Finally, you will need to sort your bills and determine which must be paid and which can wait. For example, utility bills can be critical to your survival. Other bills which should be paid to avoid serious consequences can include child support obligations, tax debts, and insurance payments. Then you will need to review other secured asset debts such as car payments. If you still have remaining funds you can pay your unsecured debts such as your telephone bill, credit card bills, cable bills, and subscription services bill.
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