What To Pay When You Can't Pay Everything
By Terry Rigg
With ever increasing consumer debt more of us are finding
ourselves robbing Peter to pay Paul each month.
We go through our bills and find that the money just
won't stretch far enough to cover all of the bills
and expenses. It's hard to decide who you should pay
when you have one bill that is stamped with "Final
Notice" and you are behind on several of your other bills.
If you don't pay the credit cards you know that you
are going to start getting those harassing phone calls.
If you don't pay the house payment you are looking at
foreclosure. If you don't pay the utilities they will
shut them off. How do you decide?
When you get to this point it's time to get down to
basic survival and work from there.
I have actually talked to people that stated their credit
cards were up to date but their mortgage was two months
behind. This is one of the biggest mistakes we can make
when we don't have the money to pay everything.
Another mistake I see on a regular basis is that some people
pay their bills at the expense of their food budget.
If you have the money to pay some of your bills you have to
start with groceries first and necessary health items.
You can try to save as much as possible on your food but
that money has to be set aside before anything else.
The next bill you must pay is your mortgage or rent. While
credit cards companies will drag out their collection process,
mortgage companies and landlords will start the process of
foreclosure or eviction within just a couple of months.
Your next priority is your utilities. In many cases utility
companies will turn off your utilities if the bill isn't paid
within a few days of receiving the bill.
Once you are sure you have enough to eat and a roof over
your head you can start thinking about your other bills. The
secured loans, like your car payment, should come before your
unsecured loans, like your credit cards.
The reason for this is simple. Creditors that have secured
property will sue or repossess much quicker than the credit
card companies.
If you find yourself in this situation it is a sign that you
need to do something drastic and fast. By not paying all of
your bills each month they are going to add up quickly and
you are going to accumulate a lot of late fees.
The best place to start is to find out exactly where you
stand and what is causing the problem. This is as simple
as listing your income on one side of a piece of paper and
your bills on the other. Total each and subtract your
bills from your income.
Your next step is to develop a budget. You can find a free
and simple budget by visiting The Complete Budget and Bill
Organizer at http://www.homemoneyhelp.com/BBOonline.html
Whether you use my budget system or another it is very
important that you start one as soon as possible. For
those of you that believe a budget is to restrictive,
just the opposite is true. The only way you can get
what you want and know you can afford it is to have a
budget in place.
It is important that you pay all of your bills on time
each month. When you don't have the money to pay everything
it is vital to your survival that you pay the most
important bills first.
Terry Rigg is the author of Living Within Your Means - The Easy
Way http://www.homemoneyhelp.com/ebookadpage.html and editor
of The FREE Budget Stretcher Newsletter and Budget Stretcher
web site http://www.homemoneyhelp.com
He has 25 years of
experience counseling individuals and families concerning their
personal finances.
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