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Money
Priorities When In Debt
With ever increasing
consumer debt more of us are finding ourselves
robbing Peter to pay Paul each month.
We go through our bills and find that the money just
won't stretch far enough to cover all of the bills
and expenses. It's hard to decide who you should pay
when you have one bill that is stamped with "Final
Notice" and you are behind on several of your other
bills.
If you don't pay the credit cards you know that you
are going to start getting those harassing phone
calls. If you don't pay the house payment you are
looking at foreclosure. If you don't pay the
utilities they will shut them off. How do you
decide?
When you get to this point it's time to get down to
basic survival and work from there.
I have actually talked to people that stated their
credit cards were up to date but their mortgage was
two months behind. This is one of the biggest
mistakes we can make when we don't have the money to
pay everything.
Another mistake I see on a regular basis is that
some people pay their bills at the expense of their
food budget.
If you have the money to pay some of your bills you
have to start with groceries first and necessary
health items. You can try to save as much as
possible on your food but that money has to be set
aside before anything else.
The next bill you must pay is your mortgage or rent.
While credit cards companies will drag out their
collection process, mortgage companies and landlords
will start the process of foreclosure or eviction
within just a couple of months.
Your next priority is your utilities. In many cases
utility companies will turn off your utilities if
the bill isn't paid within a few days of receiving
the bill.
Once you are sure you have enough to eat and a roof
over your head you can start thinking about your
other bills. The secured loans, like your car
payment, should come before your unsecured loans,
like your credit cards.
The reason for this is simple. Creditors that have
secured property will sue or repossess much quicker
than the credit card companies.
If you find yourself in this situation it is a sign
that you need to do something drastic and fast. By
not paying all of your bills each month they are
going to add up quickly and you are going to
accumulate a lot of late fees.
The best place to start is to find out exactly where
you stand and what is causing the problem. This is
as simple as listing your income on one side of a
piece of paper and your bills on the other. Total
each and subtract your bills from your income.
Your next step is to develop a budget. You can find
a free and simple budget by visiting The Complete
Budget and Bill Organizer at
http://www.homemoneyhelp.com/BBOonline.html
Whether you use my budget system or another it is
very important that you start one as soon as
possible. For those of you that believe a budget is
to restrictive, just the opposite is true. The only
way you can get what you want and know you can
afford it is to have a budget in place.
It is important that you pay all of your bills on
time each month. When you don't have the money to
pay everything it is vital to your survival that you
pay the most important bills first.
About the Author
Terry Rigg is the
author of Living Within Your Means - The Easy
Way
http://www.homemoneyhelp.com/ebookadpage3.html
and editor of the Budget Stretcher web site. To
Subscribe to The FREE Budget Stretcher Newsletter
and receive The Complete Budget and Bill Organizer
absolutely free just visit his home page at
http://www.homemoneyhelp.com
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