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Tips for Prioritizing Bills to Pay When Times Get Tough

April 28, 2020

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When you’re faced with impossible financial circumstances, knowing your options can provide comfort and empowerment. And you only need pen, paper, bank statements, a phone, and patience. Here are a few tips on how to prioritize bills.

Understand Your Finances

To prioritize, you need to know what you’re working with. Balancing the scales is all about making sense of income and expenses. The more knowledge and control you have over your financial resources, the better equipped you are to make smart financial decisions.

Keeping track of every charge in a given month, averaging variable costs, and payments due dates are good places to start. 

Go through your bank statement with a fine-toothed comb. Larger, fixed charges like rent will stand out, but take note of smaller expenses that can add up, like your gym membership or streaming services, too. To estimate variable costs like gas or utilities, take an average of your last 2-3 months of spending.

Once you have a complete picture of your income and expenses, make a timeline. When do you receive income and how often? When are your bills due? 

Prioritizing which bills to pay first is all about seeing what’s most urgent and how much is needed.

Prioritize Expenses for Basic Needs

An emergency budget means one thing: prioritizing what matters most and cutting nearly everything else. Shelter, food, utilities, and healthcare are at the top of that list. 

Next up are services that keep you accountable to your family and job—transportation, your phone, and the internet. After that, look at expenses that can negatively affect your credit if they go unpaid. 

Here’s how you can approach your top three categories as you’re prioritizing which bills to pay first:

Owners are in a better position than renters during tough times. Lenders can foreclose on your home after a period of nonpayment, but it’s a much longer process than being evicted for skipping out on rent.

If you’re struggling to make rent, reach out to your landlord. If you have a strong payment history may find that landlords are willing to accept a few smaller payments or even defer payments.

Needless to say, when prioritizing bills, feeding yourself and your family is at the top of the list. But be honest with yourself on how much you’re spending. Usually shopping for yourself is the best way to save on groceries. Buy store brands, and pair cheap pantry staples like rice, beans, and pasta with seasonal produce.

Like your grocery budget, it’s possible to cut back on utilities when you need to. What can you do if you’re stuck with a big bill, but can’t pay right now. The worst thing to do is ignore it and hope your service will stay on. Like with your housing, it pays (sometimes literally!) to be communicative and honest. If you think you’re going to struggle with an upcoming payment, contact your provider to negotiate a rate or plan. 

Adjust Your Payments

When you’re living on a small budget already and your pay gets reduced further, you may not have convenience spending to reduce. With the strategies below, we’ll focus on what you can do right now to prioritize your bills. 

1. Ask to reduce your services
Shaving off excess on your larger expenses is a great way to reclaim some cash. Mobile and internet providers are great targets. You might be able to save $20 or more on your phone bill simply by dropping your roaming data plan. If you need a longer-term solution to recoup funds, consider downgrading your devices, as well.

2. Shop around for better prices
Being ruthless with your budget also means a lot of reassessing where your money is spent. For providers that generally offer a similar product, like car insurance or the internet, it’s worth it to see what offers are in the market.

3. Change your billing date
Adjusting the day a recurring payment is drafted can make a huge difference in your plan to prioritize your bills. Spreading billing days out can keep you from spending as much money at once, or schedule all your bills to align with your pay schedule can protect you from an overdraft. A simple phone call to your provider should be enough to get you started.

Financial emergencies are always hard. These are tips to help save a few bucks here and there, but they’re not cures for hard times. Every penny counts. 

If you recently lost your job to the impacts of COVID-19, check out what unemployment benefits your state offers.

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Kayla Moses

Kayla Moses

Kayla Moses is a CX designer and freelance writer based in Austin, Texas. Her work spans a variety of industries, including personal finance, business, and real estate. See more of her personal projects and experience at her website:

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