Dollars and Sense: A Blueprint for Prioritizing Bills

In our current economic climate when a majority of Americans are living paycheck-to-paycheck, smart spending is a challenge. You may have to make hard financial decisions about which bills you should pay and which ones you delay. Although everyone’s financial situation is unique, here are suggestions on how to pay bills—specifically which payments to prioritize.

1. Food and Groceries

Ensuring you and your household have enough to eat is a fundamental necessity. Allocate a portion of your budget to cover grocery expenses and utilize any store memberships or coupons that can shave a percentage off your totals.

If you want to learn money management best practices when it comes to bill payment, check out the Aligning Priorities Online CourseAligning Priorities Online Course. This free course can help you prioritize your expenses based on what you value and create a short-term action plan.

The Aligning Priorities Course is valuable for people who:

• Have experienced a sudden change, such as loss of income
• Desire more clarity on their short-term financial plan
• Feel motivated to take action toward a goal, but aren’t quite sure where to start

2. Housing

Mortgage or rent payments should be the top priority to ensure you have a secure place to live. A home financed with a mortgage is a secured debt, and the lender expects timely and consistent payments. If you own your home, real estate taxes and insurance must be paid (these expenses may be included in the monthly mortgage payment). Any condo fees or mobile home lot payments also should be considered a high priority.

Housing Resources

If you need debt plan help or additional resources as you organize your spending, check out these useful tools:

• Budgeting WorksheetBudgeting Worksheet
• CalculatorsCalculators
• Housing ServicesHousing Services

3. Utilities

Essential utilities such as electricity, water, and heating are crucial for your well-being and should be paid to maintain a comfortable living environment. Consider other expenses in this category such as house phones, Internet and cable TV. Can you downgrade your current plans or even suspend service temporarily?

4. Transportation

If you rely on transportation to get to work or essential activities, prioritize car payments, public transportation costs, or other related expenses. Consider more cost-efficient commuting options if the high cost of gas is eating into your budget—can you take public transportation even temporarily and save more?

5. Insurance Premiums

Health insurance, car insurance, and other essential insurance premiums should be maintained to provide financial protection in case of emergencies. While it may seem counterintuitive to pay for something you (likely) won’t need, having a safety net in the event of an accident can save you thousands.

6. Child Support

Child support is a court-ordered payment. Thus, it’s a high priority from a legal and moral standpoint. It’s the court’s job to establish a payment that is fair for both parties. The court also must ensure the well-being of the child. In some states, child support payments are auto deducted from your paycheck.

7. Minimum Debt Payments

If you don’t have enough money to meet your monthly obligations, connect with your creditors to explain the situation and request assistance. These accounts may include credit card bills, medical bills, or merchant accounts. Explain that your financial situation is preventing you from making the payments, and you are working towards a solution. You don’t have any collateral tied to these loans, so you are not in danger of losing property, but these creditors do expect to be paid back.

In navigating these financial responsibilities, we understand that life can present challenges, and we encourage you to reach out for support and explore options that ensure the well-being of your home and peace of mind.