It’s always best to pay your bills on time. However, there might come a time when you just aren’t able to do that for whatever reason. Maybe you had some type of emergency that month that you weren’t planning for or maybe you’re just not being very good with your budgeting for the month.
Whatever your problem is you need to fix it as that’s very important. You don’t want to fall down this path again. You still have to figure out what to do this month with the bills though. What should you pay first? What bills are smarter to pay first?
As it happens, it’s definitely smarter to pay some bills before others. A lot of the time that’s because of common sense, but sometimes it’s so that you can keep your credit score from taking too much of a hit when you pay late.
So what bills do you need to pay first?
1- First pay your rent or mortgage
It should be pretty obvious that you should pay these bills first. Nobody wants to lose their home. As it happens, this is also usually the biggest bill so some people might want to pay other bills before they get to this one. Don’t fall for that trap!
It would be wiser to pay this off first and deal with everything else later. If you miss a mortgage payment you’re going to take a big hit on your credit score. It might be many months before you have to deal with the risk of foreclosure, but eventually you’ll be at risk for losing your home. Don’t put yourself in this position.
When it comes to rent it should be obvious that you need to pay it on time to keep your place. Every landlord is different, but you can expect a late fee if you don’t pay on time. If you make it a habit you might also be facing an eviction notice. Nobody wants to deal with this type of stress. Do yourself a favor and pay your rent first.
2- Pay your utility bills next
Having a place to live is one thing, you also need water and electricity so you can live comfortably. Make these payments your next priority.
When it comes to some of your other “utility bills” like your cable tv bill, your home phone or wireless bill you need to think long and hard about what is important to you. If you don’t need your internet for work then maybe you can get rid of that bill entirely. What about cable tv? Can you get rid of that and put your money to work elsewhere instead? That might be best.
These days it’s hard to go without a cell phone plan, but maybe you can opt for something cheaper. How much are you paying each month for your cell phone? If you’re paying more than $30 per month then you need to get a plan that is cheaper. This is somewhere that you can cut costs and still get the needed service. It might not be the unlimited plan that you want, but it will get you by.
3- pay your loan payments next (car loans, students loan etc)
Nobody wants to lose their car, but if you’re short on money then you’re going to have to put this one down your list under the other two more important things you need to pay for first. You can always get rid of your car and opt for cheaper transportation.
You don’t want to miss your payment and have them repossess your car. That is never a fun situation and it’ll hurt your credit pretty badly too. For some people a car is a necessity, and if that’s the case then this should be higher on your list. However, you can always get rid of the car and use Uber or some form of public transportation if that’s an option to you.
Whatever you decide to do with the car payment make sure you get on this one. Missed car loan payments will usually be addressed a lot faster than a missed mortgage payment. A lot of that is because of how easy your car is to take back from you versus a house, but it also has to do with other factors like how your car’s value is depreciating while your homes value is usually appreciate.
4- Pay off your credit cards last
This might seem crazy, but your credit cards are the last thing you should be worried about when it comes to all your bills. If you’re short on money and you can’t pay up then this is where you should pay last.
If you miss a credit card payment you’re not going to lose that new TV you bought or those shoes you bought the other day. You can lose your home and you can lose your car. They will turn off your lights and they will turn off your water. Get those things paid first.
I hate to recommend this because it’s such a bad habit, but if you’re short on money you can always pay the minimum amount due for the credit card bill so that you avoid late fees. That will at least save you a bit of money. You’re going to be paying a ton in interest on that credit card bill, but until you get your stuff together this is likely your best approach.
Once you get things in order though you need to pay off this credit card bill as soon as possible! You’re bleeding money if you don’t pay this bill in full each month so do it sooner rather than later.
Don’t forget to ask for help
All of this advice is for if you can’t pay your bills for whatever reason and in what order you should pay them. Really though you don’t want to put yourself into this situation in the first place.
Some things that might help if you’re in trouble is asking your parents for some help. This might feel degrading, but it’s a lot better than getting yourself into more trouble. Don’t make it a habit to ask for money though.
Another solution could be to ask for extensions. I’ve lived in places where my landlord was a little more lenient if I asked for things. I always paid my rent on time, but there was one time where I just forgot to pay the bill. I had the money, but I just forgot. So then I got a late fee under the door.
I had lived there for a few years with on time payments so I went to speak with the landlord and explained that I just forgot and asked if it was ok that he would let me off the hook for the late fee this time. They agreed and I saved $80.
You can do the same if you know you’re going to be late. Try to get ahead of it and let the landlord know that you’re falling behind this month. Ask them for an extension. You never know what they might do to help you unless you ask.