Do you have the constant issue of having money run out at the end of the month? Your bills are here to stay, no matter what your cash level is.
But, there is something you can do to help your situation. What you can do is decide on which bills are to be paid without delay and which ones you can put off a little bit longer.
Missing out on certain bills have their repercussions, like lights that won’t turn on in the pitch dark room, or that handset with no tone as you want to make a phone call. On the other end, you will want to save yourself the embarrassment of being told that your credit card is not going through!
If you have a tight cash flow (who doesn’t), you’ll need to be careful on your finance decisions. The most important consideration is that your family must be well
provided for. No matter what your creditors may say, stick to this principle and try to sail through the rough seas.
In the meantime, the following will provide some guidelines on prioritizing your bills and expenses.
1. Essential Family Expenses Come First
Sufficient food supplies and necessary medical fees should precede everything else. Everything else comes second.
2. Pay House Related Bills
Get up to date with your mortgage or rent payments. Whenever possible, make sure your real estate taxes and insurance are paid on time if you are the homeowner, unless they are apportioned into your monthly mortgage payment.
Also, put the priority on your condo fees or mobile home lot payments. People have lost their homes because of failure to clear these payments.
3. Keep Utilities On
I would class utility payments as an essential item. The logic is simple, you may be saving hard to keep up with the mortgage but a house or apartment that has its utility switched off by providers is simply an empty void that serves little functional purpose.
4. Pay the Car Loan
If your car is the primary mode of transportation to get you around, the priority on your car payment would have to be just a notch below those of food, medical expenses, utilities and housing costs.
In fact, it may take even higher priority if your car is necessary to get you to work. And don’t ignore that auto insurance payment too.
When it is not current, more costly collision and theft coverage with less protection may be imposed upon you by your insurance company. In most U.S. states having an automobile liability coverage is a must.
5. Pay Child Support
Again, law does not let you get away with nonpayment of child support. This could result in very serious action, including prison.
6. Clear Your Income Taxes
If outstanding income taxes are not deducted automatically from your wages, then you better pay up. Even in the situation that you are not able to pay any balance due, you should still file your federal income tax return.
Take note, however, that in case a loss of income is due to a change of circumstances, there could be reduction in your tax obligations. Effectively you only pay what is necessary.
7. Any Other Debts
If you can sort out the above 6 bills, start checking what remains outstanding and place priorities on them accordingly.
Good to know
Energy bills can be paid late (In some cases)
It seems like there is a common practice among utility companies, such as water or electric companies, which would only cut off supply when user is at least 2 months behind on the bill.
But don’t take my words for granted, there is no one consistent policy across all utility companies, and companies are fully justified to cut off your service in case of non-payment, no matter the number of times this has happened.
Calling your creditors can help, but not always
You may expect the creditors tend to be sympathetic and a phone call to explain your financial situation might get the extension you wished for. But let me tell you this; doing it one time is effective enough but when resort to this trick over and over, there are no sympathetic ears.
Organize bills into different categories
Bills can be organized in ‘pay now’, ‘can pay next month’ and even ‘can do without it’. For a service, you think you can do without, it may be worthwhile to disconnect the service straight away.
When you do this, be sure that no amount of cajoling is going to get you back to the service, no matter how enticing the proposition is going to be.
Post-dates checks could help
For real desperate customers, a post-dated check could be acceptable by creditors If you get this worked out, the two parties then agree that payment would come by the agreed-upon date of the check.
Some creditors don’t mind to hold the check for a further 30 days. But really it is up to the individual discretion of each company so it may be worth your while to talk to the individual company respectively.
Partial payments don’t always work
Some may assume that a partial payment may just do the trick, but some service providers have no hesitation to terminate whatever service when the bill is not paid in full.
Mortgage is one such example. A partial payment to mortgage suggests that the money can contribute towards principal or interest, but obviously not for both, and that could bring about corresponding withdrawal of your loan.
In addition, a late fee could be imposed as your monthly payment is not paid in full!