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Bills You Should Pay First

  • August 1, 2017
  • By: Greenpath Financial Wellness

bills should you pay first1. Food, Medicine and Child Care

The main bills you should pay first are grocery/food, child care, and essential medicine. These items should be your first priority. You should always be a good steward of your money and spend wisely here. Look for opportunities to save money at the grocery store.

2. Housing

bills should you pay first

Keep current on your mortgage or rent payments if you can. A home financed with a mortgage is a secured debt. 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. Failure to pay these obligations could lead to a lot of stress and loss of your home.

3. Utilities

Utilities are another important bill that will affect your credit if they are paid late. Image of electric lights.
Make payments on essential utilities such as heat, water, and electric. Working hard to maintain your mortgage or rent payment makes little sense if you don’t have heat, water or power. Carefully analyze other expenses in this category such as cell phones, house phones, Internet and cable TV. Are these “needs” or “wants”? Could you do without them in a financial crisis? Could you save money on electricity, heating and cooling, or phone bills?

4. Auto

Your car payment may be right behind your utilities if you need transportation to get to work and earn your livelihood. Image of keys and money
If you need your car to get to work, rank your car payment just below food, medicine, housing and basic utilities. Pay your insurance payments too. If you don’t, your creditor may buy insurance for you at your expense. This will be more costly to you. The key here is buying a car that meets your needs and fits within your budget.

5. Child Support

Child support is a court ordered required payment. Image of father and son.
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.

6. Income Taxes

bills should you pay first
You must pay federal and state income taxes that are not automatically deducted from your wages. You must file your federal and state income tax return, even if you cannot afford to pay any balance due. Failure to pay taxes on time can result in penalties and eventually wage garnishments. Some tax planning, and working with a tax professional, could help you save some money on your taxes.

7. Unsecured Debts

bills should you pay first
If you simply don’t have enough money to meet your monthly obligations, you should communicate promptly with your creditors to explain the situation and request some assistance. These accounts may include credit card bills, doctor and hospital bills, or other 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. They will be very persistent to get their payments. And that can be stressful for you.

Figuring out your financial priorities is an essential aspect of money management. If you need help getting out of debt,  consider working with a nonprofit, reputable debt counseling agency. GreenPath debt and credit counselors are NFCC-certified, caring and nonjudgmental. We will help you understand your financial situation and make a plan to meet your goals.