What to Pay First When You Have Too Many Bills

by Robert Vaux ; Updated July 27, 2017

When times are tough, people may have difficulty paying all their bills, and while it's important to make ends meet every month, sometimes you need to prioritize. You can plan for such circumstances even when money is plentiful by identifying your various bills and assigning an order with which you pay them. Like anything else, it takes a little practice, but it makes things easier when your bank account starts to pinch and you have to choose between less-than-ideal options.

Focus on Necessities

The basics should always take top priority when deciding which bills to pay. That means food and vital medical expenses first, followed by housing. (If you don't keep up with mortgage or rental payments, you could lose your home.) Utilities such as gas and electric bills come third after that. Once those necessities are secured, then you can look at your other bills and assign priorities to them.

Medium Priorities Come Next

After the basics, the next steps on the bill payment list are those which are important, but not pressing. They include car payments (especially if you need your car to drive to work), income tax payments, child support payments and student loans. They also include incidental bills connected with such payments, such as car insurance and gasoline. Though these debts don't eclipse the need for the basics, they can cause serious problems if left unpaid, including loss of a job and significant lateness penalties.

Prioritize The Remainder

Low priority bills include credit card debts, attorney fees, hospital bills and bills owed to professional merchants. Such unsecured debts must be paid, to be sure, but they cause little damage in the short term and can provide some wiggle room during months when cash is a little tight. When prioritizing such bills, focus on those with the highest interest rates first, and do your best to pay them down before turning to those with lower interest rates. It will save you money in the long run.

Drop Frivolities

When working to make ends meet, it pays to take a long, hard look at your finances and cut any expenditures which aren't absolutely necessary. That can be hard sometimes, especially if you're used to a given creature comfort, but it helps keep your debts from spiraling out of control. Frivolities include magazine subscriptions, movie or video game purchases, buying clothes which you don't need, even the TV or cable bill. If you find yourself with more bills to pay than cash to pay them every month, drop those expenses first, then turn your attention to more important bills.