Q: How do I prioritize my bills when I don’t have enough money to pay them all?
A: It’s a great question and one most of us are likely to bump up against at some point in our lives. While every person’s situation is different, there are a few things that make sense for everyone.
1. Put your basic living expenses first. Your safety, security and mental and physical health should come first, so pay your rent or mortgage, make sure you have enough to eat and that any prescriptions or medications you need are covered.
2. Set aside money for transportation to and from work. This one seems pretty obvious, but if you can’t work paying bills may go from difficult to impossible.
3. Take care of child support and other legal settlements — that means student loans, taxes and other enforceable debts like home and auto loans, credit cards and personal loans too. Ignoring these can cause you a world of trouble if you miss payments without attempting to work out arrangements.
4.Talk to your creditors. Human nature makes it hard for us to admit we’re having trouble. And talking with creditors seems ominous. It doesn’t have to be. Many companies offer terms, payment plans, and some might even agree to write off a portion of what you owe depending upon the circumstances. But you’ll never know if you don’t talk with them.
And if you want FREE help setting up a plan unique to your specific financial situation, you can book a session with one of our certified financial coaches here.