Prioritizing Bill Paying - How to Make a Plan
The Consumer Financial Protection Bureau (CFPB) has some pointers for making a plan for those expenses you need to pay.
Getting in control of your bill paying when there isn't enough money for everything is worse than just juggling bills. You need to have a plan to get through this pandemic crisis so you have a few less problems to keep you awake at night.
Fortunately, some government help for consumers is a relief--Governor Laura Kelly has ordered no evictions, foreclosures or utility shut-offs for a few months. Unemployment compensation will be boosted by additional pay per week and the Kansas Labor Department is working hard to meet the demand by easing some requirements.
Many landlords, banks and loan companies are working to accommodate their tenants and customers. And many other businesses will waive late fees or penalties for consumers.
The advice below from the CFPB will help you in planning what is most important to address now. Feeling more in control will be worth the time it takes to plan.
Making a short-term plan can help you identify the consequences of failing to pay certain bills.
This can help you prioritize your expenses if you just can’t pay everything.
You’re responsible for paying all of your expenses on time. If you miss payments now, you’ll have to make them up in the future. But when you don’t have enough money to cover your needs and obligations, you may have to make a short-term plan to get through the month.
Sometimes your plan may involve paying some bills late or missing a bill. When bill collectors are calling or you’re trying to decide which of your obligations to pay first, it can sometimes just seem easiest to pay the “squeakiest wheel”—but this might not be the best approach.
Sometimes you may need to ignore the squeaky wheel for a short time while you pay for necessities and build a plan for repayment.
What to do
- Read through the list of expenses. Identify what you need to pay to protect your housing and income, keep your insurance, and meet any court-ordered obligations.
- Prioritize your bills.
A step further
Don’t ignore bills you can’t pay. If you must miss a payment, call the person or company you owe the money to and explain that you will miss a payment and the reason for it.
You may wish to contact a certified housing counselor or credit counselor for specialized assistance in building a plan to pay your debts and pay your monthly bills and expenses.
The KLS videos Your Rights in Debt Collection and How to Deal with Debt Collectors describe your rights in debt collection and tips for responding to debt collectors.
For additional information on what debt collectors can and cannot do, visit consumerfinance.gov/consumer-tools/debt-collection/
Prioritizing bills helps you manage issues when you can't pay them on time
1.Read through the items that apply to you and write down the monthly amount of each bill. It's OK to estimate if this amount changes from month to month.
2. If you can’t pay all your bills at once, think about the order you pay them in. Weigh the risks of not paying each one, then number them in the order you want to pay them, based on priority.
The table above is attached in a PDF document below. If you want to download it, you can fill it in online and then print it.
Other good consumer tools are available on the CFPB website. This tool is included in the Bureau of Consumer Financial Protection’s Your Money, Your Goals: A financial empowerment toolkit. The Bureau has prepared this material as a resource for the public.
