How to decide which bills to pay first

Mastering prioritisation could save you time and money.

If times are tight and your budget doesn’t feel like it’s going to stretch that far then being faced with a big wad of bills can be very intimidating. However, there are ways to make sure that you get through financially tough times in tact. One of these is learning the best way to prioritise your bills so that you don’t compromise your standard of living or incur additional costs.

The most important bills – food, childcare, medical

Taking care of your kids, ensuring essential medical treatment is maintained and keeping everyone fed is always going to be the top priority when it comes to bills. If these bills are some of your biggest then look for ways to reduce them to leave room for other costs. For example, could you delay prescriptions for non-urgent medical supplies until you have more cash to spare? There are many ways to reduce food bills too, from going vegetarian for a few days a week, to buying in bulk.

Almost as crucial – a roof over your head

Rent or mortgage payments are another important cost and should be prioritised just behind the more immediate needs of medical, childcare and food. Landlords and mortgage lenders may allow you to fall behind for one month, perhaps even two. However, you would need to be able to clear any arrears after that time and it’s important not to make a habit of making these payments late. So, once you’ve covered the most important bills, make sure you pay your housing costs next.

Utilities are important

Especially during the winter months, the last thing you want is to find your home without heat and/or light. So, prioritise gas and electricity bills when they come through the door. Most utilities suppliers will give you a little wiggle room in terms of late payments and some offer payment plans if you’re really struggling. Other utilities, such as TV and internet, are not quite so essential (unless you need an internet connection to work). So, if you’re really strapped for cash, you might want to consider asking to pause your account or discontinue the service until you can afford it again.

Transport

Train tickets, bus fares and car costs can be pretty crucial if you’re trying to get to work and get children to school. Petrol, car insurance and travel season tickets should be a relatively high priority so that you don’t find yourself without the means to get around. It’s always worth looking at whether there is a cheaper option to reduce transport costs – car pooling or riding a bike could help ensure you have less to pay.

Debts

You can still live your life if debts remain unpaid. However, there will come a point at which action is taken against you that could seriously disrupt your financial future if you don’t make any payments at all. And that’s a sure route to an undesirable situation that can leave you relying on bad credit loans or no credit check loans. So, bills for debt repayment should feature on your list of priority payments for each month. If you’re really struggling then contact your creditors and explain your situation. You may be able to reduce monthly payments, consolidate debts or move to a payment plan that gives you more time to repay.