Budgeting your Income: Which Bills to Pay First

by Guest on September 10, 2012

The average consumer receives multiple monthly bills to pay for services, utilities, credit accounts, and other purchases. Knowing which bills to pay first might be challenging, but it’s certainly good to learn how to prioritize them. Remember, some bills might be for services that you can do without while others could mean losing important things like healthcare coverage, a home, or your car.

In case of a financial emergency, paying the right bills can save you time and money. By learning how to prioritize, you’ll be better prepared for times when money is tight.

Family Needs

Food might be the least of your worries when you have a tight budget, but food and water are a daily necessity. Always save money to pay for groceries. Know which are the food items that you really need or find food alternatives to save money. You can do without gourmet or fast foods, but healthy meals are necessary on a daily basis.

In addition, there are many household items that we constantly need like soap, toilet paper, or toothpaste. Household items have to be purchased regularly to maintain our hygiene and acceptable living conditions. Consider buying household items on promotion or cut down on things like hair gels or perfumes, which you can do without.


Landlords can claim possession of rental homes in courts and evict you. Even if evicted, you will still owe the past due rental money. Make sure you pay your rent to keep your current home.

Utility bills

Living without water, gas or electricity can be hazardous to your health, not to mention finances. If you have elderly family members or kids, having working utilities is necessary. Depending on your state of residency, air conditioning might be needed during hot summer days, as an example. Just make sure to pay your utilities on time to avoid dangerous living conditions and re-connection fees.

Secured Loans

If you have a secured loan like a mortgage, avoid losing your home or other assets by paying on time. By paying your secured loans as scheduled, you also avoid negative records on your credit report. If your finances are tight, contact lenders to seek repayment alternatives based on what you can afford.

If you buy services or items on credit, most debt should be considered a priority to maintain a good credit standing. Consider contacting lenders or service providers to work out ways to manage your bills until your finances are back in shape. Check all options to deal with your essential needs while paying necessary bills first.

Student Loans

Student loans are some of the best and most affordable options to cover education costs. However, if payments are neglected, your paychecks or tax refunds could be collected. Unlike most kinds of debt, student loans are almost impossible to charge-off. If you find yourself without the means to make your payments, contact your lenders to set-up repayment plans that you can manage. Check if you can apply for a forbearance plan with your lender for extra assistance.

Auto Loans

Based on your auto loan terms, even a single missed payment could have your car repossessed. As such, losing your car could affect several aspects of your life like daily commutes or travel needs. Always contact your lender if you are unable to make payments on time to seek solutions to your loan repayment plan.

Income Tax

Penalties could be extensive if you avoid your income tax payments. You could go to jail and/or pay fines for late income tax filings. Even if you are unemployed, your income taxes should be filed to avoid legal issues that could worsen your financial conditions.

Real Estate Taxes

Paying your real estate taxes is necessary to keep a roof over your head. Defaulting on a real estate tax can cause your municipality to levy a tax lien, risking your home ownership. If your finances are short, check local, state, or county property tax deferral options to get assistance with your real estate taxes.

Insurance Premiums

It might be tempting to stop paying insurance premiums when running short on money, but living without insurance could be risky. In the event of an accident or sickness, how would you afford health care-related costs without insurance coverage?

Ultimately, determining your expenses before a financial crisis occurs is the best route to take. Prioritizing your needs up front can help you maintain your budget and save you time in money in both prosperous and tight times.
This article is provided courtesy of Sam Burgoon, marketing and social media executive for CreditSeason.com, a consumer finance website providing information and tools on personal credit services. Follow Credit Season on Twitter and connect on Google+

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