Prioritize your bills

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Prioritize your bills
2 years ago
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Prioritizing your bills is one of the best strategies for staying ahead of your debt and out of bankruptcy court. Daily living expenses are numerous. Adding to these costs the unexpected emergencies, vacations, and impulse purchases that occur sometimes creates a level of debt and bills that are difficult to pay on a timely basis.

Creating a strategy that incorporates prioritizing your bills is a productive measure that can keep an individual on track with his finances. The first rule of thumb is that it is critical to pay these bills in the order of their importance. This doesn't mean the largest bills or the smallest ones. It means the bills that will create the greatest consequences should you neglect to pay them.

Most bills do not need to be paid in full and will only accrue additional charges if you neglect to pay them on time. These are the bills that you should pay after the important ones have been taken care of on time.

Some of the bills that arrive on a monthly basis can lead to far greater consequences than late fees and interest charges especially if you neglect them for an extended period of time. This type of expense needs to be paid in a timely fashion and in the full amount that is due at the time.

Pay off the bills that will create the biggest problems if you don't pay them, starting with your mortgage. If you don't pay your monthly mortgage bill, you could lose your home and wind up on the street. If that happens, then you will probably also destroy your credit score at the same time since you will most likely have a foreclosure on your credit report due to the lack of making mortgage payments.

Installment loans should be paid in the order of their importance. This includes home equity loans and HELOCS or home equity lines of credit. Car loans, furniture loans, and loans for other large items such as furniture, computers, and electronics also need to be paid or the merchandise can be repossessed.

If you don't make your car payments, you could lose your car and wind up taking the bus or walking everywhere that you need to go. While it might not be that much of a hardship to take the bus, you will lose any financial investment that you already have in the car.

Next, you need to worry about the utilities that bring those monthly bills. If you don't pay your gas, oil, or electric bills, you could wind up without any heat in the home or any air conditioning in the summertime. Telephone bills also need to be paid or your service will be cut off.

Credit card bills should obviously be paid. However, not paying one on time won't inflict irreparable damage. You will incur late fees and additional interest charges as well as a lower credit score. However, unless the amount of debt that you amass is astronomical, you are not going to wind up out on the street unless you also forget to pay your mortgage.

Prioritizing your bills should ease your financial situation. Plus, it will eliminate questions about which bills to pay first since you have a plan to fall back on. Incorporate a strategy into the financial aspect of your life and simplify bill payments and debt.
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