Prioritizing Your Budget

If your budget shows you have more expenses than income, there are many ways to get out of trouble. Remember, everyone has different priorities. You will have to make the decisions that are right for you.

What payments should I make first if I don’t have enough money to pay for all my bills?

1. First, pay off your necessary household expenses, such as rent or mortgage, utilities, and food, first. You need to pay your rent or mortgage to ensure you don’t get evicted or have your property foreclosed upon. Think about the health and safety of your family when making these types of decisions.
2. Many utilities, such as the telephone company, electric company, and gas company, have programs to lower your bill if you qualify. If you think you need assistance, contact your utility company.

What should I do if I can pay off my monthly household expenses, but am having trouble paying off my loans?

1. Pay off the loan with the highest interest rate first to save on interest payments.
2. Talk to your creditor. Your creditor may be willing to reduce your payments or change the terms to accommodate your situation. Some creditors might offer extensions, smaller payments over a longer period of time. Some creditors might accept partial payments.
3. Get a debt consolidation loan. Be cautious of this option. If loan fees and interest rates are too high, it may not be the best option for you.
4. Get professional advice. Reputable credit counselors can help you deal with your financial problems. Some organizations charge little or nothing for their services.
5. Be cautious of companies that promise to fix your credit problems right away. Credit repair can be a long process that might take several years.