“I Can’t Pay My Bills!” – Prioritizing Your Monthly Bills

a person counting money on their table with calculators, pencils, and paper covering the table as they manage their income and bill payments.

During hard economic times and when money is tight, unforeseen circumstances may prevent you from paying your bills on time. While we all strive to pay all of our bills promptly, sometimes we are forced to choose which payment to make with limited funds on hand.

We’re talking specifically about paying bills here, but naturally, you will need to have enough money set aside to keep everyone in the family fed. That doesn’t mean dining out, of course. Weathering hard financial times means literally tightening your belt. If you’re not sure you’re going to be able to pay all of your bills, stick with beans and ramen noodles until you get your situation under control.

Which bills are most important?

  1. Your house payment or rent. Your first bill paid every month should be the one that keeps a roof over your head. Don’t neglect the house payment or rent. If your situation is so bad that you can’t afford your rent or mortgage, talk to a HUD-certified housing counselor right away to understand what options may be available to you.
  2. Utilities. Your second priority should be your utilities, specifically your water bill, and electricity/gas. There are many assistance programs available to help you with your monthly utility bills. Be proactive and don’t wait until your bill is late. Ask your utility company now what programs are available in your area.
  3. Housing expenses. Any bills related to your home, like insurance, HOA dues, taxes, and the like should be paid to ensure you keep your home. Likewise, any home equity loans you have should be high-priority. Anything that can cause you to lose your home should be addressed before your other bills. The Homeowners Assistance Fund (HAF) helps homeowners impacted by COVID-19 to catch up on their housing expenses, including property taxes. The program varies by state. To learn more, please visit https://www.ncsha.org/homeowner-assistance-fund/ or schedule an appointment with one of our HUD-certified housing counselors.
  4. Work-related expenses. Any bill that preserves your ability to earn a living should be a high priority. This includes your car payment if your vehicle is essential for you to get to work. Your phone bill may also qualify here if you rely on it for work.
  5. Child support. This is an obligation no one should overlook, period. It also preserves your ability to earn a living, because if you don’t pay, you could be arrested. It’s impossible to earn a living from a jail cell.
  6. Taxes. Another expense that can have serious consequences if you fail to pay. You can ask for a payment plan yourself with the IRS, https://www.irs.gov/payments/payment-plans-installment-agreements.
  7. Student loan payments. Because the government backs student loans, they have more power to act against you than typical bill collectors. Ask about applying for a deferment until your financial situation improves.
  8. Phone bill. Many WiFi and cable carriers are bundled with a landline phone carrier; reducing your plan to a lower level creates savings. Make sure you aren’t paying for landline features (unlisted phone number, call-waiting) you don’t need or use (as most consumers use their cell phone as their primary phone), and audit your bill for hidden charges.
  9. Cable/Satellite TV. A lower-priority bill, to be sure, cancel unnecessary premium features until your financial situation changes.
  10. Unsecured debts. This includes credit cards, medical bills, and other types of unsecured debt. These creditors won’t be able to repossess your home or car, and even if they sue, it will take some time before they can extract payment. Stick with paying the bills that have immediate consequences for non-payment. Note: Pay higher interest-rate debts first. Within this category, prioritize your credit cards with the highest rates (a.k.a. The debt avalanche method) and try to get them paid off first.
  11. Collection accounts. No matter what bill collectors tell you, don’t forego paying higher-priority bills to pay a debt collector. Move this priority up only if they sue you and win a judgment in court. Empty threats to sue don’t count.

When financial hardship strikes, you have to get organized right away and look for ways to cut spending. Don’t be shy or ashamed to talk to all of your creditors about your situation; ask for deferments or extensions to give yourself more time to pay. Ask if your creditors can lower your minimum payment, or consider credit counseling to consolidate your debt payments. You can also talk to our credit counselors today for help.


If you need help with credit or debt, or want to learn more about budgeting or personal finance, get started with free, confidential counseling and education right here at Credit.org.

Article written by
Melinda Opperman
Melinda Opperman is an exceptional educator who lives and breathes the creation and implementation of innovative ways to motivate and educate community members and students about financial literacy. Melinda joined credit.org in 2003 and has over two decades of experience in the industry.

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