What To Pay When You Can't Pay Everything
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  1. #1
    Founder Sara Noel's Avatar
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    Default What To Pay When You Can't Pay Everything

    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.

    Terry Rigg is the author of Living Within Your Means - The Easy Way http://www.homemoneyhelp.com/ebookadpage.html and editor of the Budget Stretcher web site. Join the thousands of subscribers
    to The FREE Budget Stretcher Newsletter and get great articles,
    tips, downloads and a lot of Budget Help by visiting his home page at http://www.homemoneyhelp.com

  2. #2
    Registered User mommy2many's Avatar
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    Default

    Wonderful advice!

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    Registered User Mamawolf's Avatar
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    Hmmm... Having gone through this myself with a premature baby, I have to disagree with putting food first on your "paying list". I think you should first apply for foodstamps and see what you can get from local food banks. This will help a lot. The more you have for your mortgage the better, trust me. Our priorities were: housing, utilities, secured, then unsecured.

    I was also able to get help with our utilities from the local family action agency, and the red cross, one paid my water and sewer, the other paid my electric bill for one month. So after getting emergency food and personal care supplies from the family action agency, and help with my utilities, it helped a LOT in keeping our home from going into foreclosure!

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    Registered User dolphin's Avatar
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    I liked the article too but also found while we were in survival mode that we had to almost put food last on our list. I guess it just depends on how severe your financial problem is at the time.

    I sure do need these reminders about a budget though. I've not used one is so long, I will have to make myself do it.

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    Things are really desperate at my house now. It seems like we have been in survival mode forever. I had to pay the utility bill today since this was the last day before the electricity was turned off. My mortgage is due right now too. I am saving as much as possible right now and selling things every day to try to make the mortgage as soon as possible. I am on unemployment right now but I do not make much less than when I was working. I want to work and I have been applying to jobs like crazy every day. I may have to ask my Mom for a short term loan so I can pay the mortgage. I do not want to do that. I am looking into some other options as well. Wish me luck.

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    Bev-act faster. don't wait until it gets this desperate. The utilities may work w/ you. Ask people for help as this is a temp. situation. Remember to keep that frame of mind. Don't fall behind if mom can help w/ the mortgage. Use food banks,churches and whatever resourses you can get. 4 walls philosophy is what Dave Ramsey calls what Sara was talking about.

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    here's what I'd do (and this is just me speaking about me and mine) if things got so desperate that bills started falling behind.
    1. first call each debtor and ask for an extension or to see if you can make partical payments (most will or use to work with customers if custome was showing a willingness to make some type of payment) see note;
    2. cut all unnecessary items (cable/satelite, kids memberships, parents membership)
    stop all spending of any sort unless food or dr's.- no eating out, no party's at friends no summer vacations.
    3. park the cars (saves gas and wear n tear if you only use when necessary and make multi-stop's when you do go to town)
    4. if smoke or drink (stop- would you rather light up or have $50 to pay on a bill- )
    5. have a house sale (get rid of =things you have setting around collecting dust)
    6. why if your needing help are you waiting to ask your mom for a loan?
    when my mom found out dh lost his job, the first words out of her mouth was "yall bring them babies here you have a place to stay and I have plenty of food), his parents knew and never once offered any help but that's another story for another day.
    7. like someone else said- visit food pantys, churchs etc for food.


    note: had a car that didn't get a recall notice for the water pump still had 3 yrs to pay on it so we did for 1 1/2 yrs til dh lost his job - we lived off credit cards for a year til he found another job. i called the company who held the title and told them to come get the car- they were rather snarky with me about defaulting on loan and how it would go against credit score (OMG what a lot of bull- ) so I interrupted the man and told him 'listen I'm telling you right now turn your recording device on so you can understand- I AM NOT PAYING ONE MORE PAYMENT ON THIS CAR- the company failed to give us a recall notice so we could fix the wp and now I'm stopping payments PERIOD end of discussion. so it was eventually turned over to collection agency when started hounding us- but they didn't know me (bad for them really) so finally I called and told them 'the keys are in the ignition come get it' the guy was super nice and understanding all he wanted was money all i wanted was the car gone. he offered to settle a $3900 debt for $1200- I adviced him that if I had that money he wouldn't be calling me now harassing me. I was more concerned with keeping a roof over my children's head than about paying off a loan his company bought. so early one morning several mths later I heard the tow truck as it pulled away with the car. the didn't take my birthday, we didn't go to jail, we didn't lose our housing, our kids didn't go hungry and we didn't pay for a car that no longer ran.

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    We are in the middle of refinancing my husbands truck right now. I have two dental insurances and they both paid full credit for the cleanings the kids had done last month so we will be getting a check next week that I can pay for the mortgage with (Thank You God!) The utilities are all paid up (Again, Thank You God!) The other bad news came this morning-I have been getting unemployment but since I had to file for emergency unemployment benefits they have reduced my weekly benefits by $205 a week. But so far almost everything will be caught up by the end of next week. I have been applying for jobs like crazy but nothing yet. I do have my car payment due next week so I will need to sell some things to make that but things seem to be doing much better now. Thank you for all of the advice! We are cutting way back on our food expenses, we are keeping the internet but I am going to call and get our car insurance down to a lower amount. I think the smartest thing I have done is to stop using the CC. I have five to pay off and I am starting to do that immediately. I have always paid way more than the minimum due so that is another good thing. I will keep you updated on how things are going. When we refince my husband's truck we will be saving almost $200 a month so I am anxious to get the process done.

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    ask about freezing the cards temporarily, forgot all about the insurance on cars LOL dh is miffed that since he took me off his insurance in TN a few yrs back-i set up insurance to begin with and when I moved back to al after several mths i filed bankruptcy well according to him (i wont actually repeat what he said ) my bankruptcy affected the mthly premium I do assume that it wasn't his accident (some guy turned in front of him not his fault) nor his 4 speeding tickets had anything to do with the raise- seems recently it was bought by a firm in CA so he thinks that he's be charged CA insurance rates.... told him to drop all but liability since the car is paid off... but NOOOOOOOOOOOOO its good enough for mine but his stillhas to carry full coverage. oh my sorry for the ot mini rant.
    good about it getting better....
    some meal stretchers that are inexpensive (and I'm from the south so they are staples here ) beans-pinto, black, northern, blackeyed peas rice, potatoes - flakes and whole (i almost put down 'real' lol because my dd didn't think potato flakes were real potato's when she was tiny). the beans are excellent source of protein so you don't have to purchase meats often (well unless you want to- ok must stop now i fell like im rambling and my pms medicine is kicking in.)

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    Sounds like my house! My husband works very hard-God Bless him-but he doesn't have realistic expectations about how far money will go! I keep trying to do the math with him. Ok honey, you get paid every two weeks right? Yeah. Ok with those checks we need to make the payments to all the people that expect us to give them money. Yeah. Then you want to get new tools for work, eat really great meals every night, but throw away the food I put into the freezer so we can stretch everything. We are getting better at communicating about what is due and what needs to be done to make those payments. Both of our cars are financed and we need both of them since we both travel for work. I am not working now but I have been offered a job at the end of next month where I will have to travel again. I am in the middle of writing down all my debts so I will really know where I am at. Things are paid up right now but there are more things due next week again. I will be glad when we break this cycle. I have several meals that I fix that taste expensive but are really cheap! I am still waiting for my unemployment check and that has me depressed and anxious. I was also able to pay off a payday loan that I had to take out to make the mortgage a couple months ago. So things are looking up, the refinancing is going really slow so I will need to make another truck payment in a couple of weeks. My Mom asked me how much I still owe on my jeep and I told her $7000. I could practically see the wheels turning in her head at that point. My Mom is a saint among women and I am so lucky to have her. The sooner I can get the jeep paid off the better we will be. My insurance is out of CA too. We had insurance locally and it was costing over $200 a month, the one in CA has saved us $75 a month. Thank you for all the help and suggestions, they really do help me so much! Tuesday was a really bad day, very stressful! Today is much better!

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