Bills can be a thorny issue, just like the cactus in the photo. There are times when there are more bills than money, especially if your hours have been cut back at work. This is when it is necessary to prioritize your bills. 

 The first priority is both food and medicine. You have to be strong and healthy in order to keep working. Both categories can be managed rather inexpensively.

•       For food: try generic brands, use coupons in conjunction with a sale, actively rebate, shop at cheaper places than the grocery store, pay cash and put the essentials in the shopping cart first.

•       For medicine: Call the doctor's office and request the $4 generic equivalent of your medication. If none is available, then request to be changed to a medicine that is on the generic list. Why pay $100 when $4 will get the job done?

 The second priority is to pay yourself. Nearly everyone has times of illness or injury when we are not able to work. Although some people have a few days of sick leave each year, tripping and falling on icy steps or being in a car accident can put you out of work for several weeks. Prepare for these times by setting aside a few dollars each payday.

Housing is the third priority. If you are having difficulty making the rent payment, read your lease to see if you are allowed to break it with 2 months notice. If so, before giving notice, look for a cheaper place to live. Or, if the apartment building where you are renting has a large number of vacancies, request that your lease be renegotiated to a lower rent. Many landlords would rather collect less rent than no rent at all. 

Utilities are next on the list. Arrange for budget billing for the electricity, especially if you have electric heat in the winter. Budget billing means that you will pay the same amount of money every month for a year. The amount is adjusted once a year to reflect your current usage. This will free up extra money for other uses.

Transportation is the fifth item to prioritize in your bills. If you live near a bus route, and your employer is within a reasonable walking distance of a bus route, then sell the second car and reap the savings. If you only have one car, tell the insurance agent that you ride the bus and get the discount on your policy. Bus passes are sold at a discount if you buy a one-week or one-month pass. 

 The next bills to be paid are creditors who have secured their loans with your personal property (this is different from real estate). This could be your car, furniture, major appliances, etc. A repossession will not release you from the debt. If anything, you will end up owing even more money due to the added fees and court costs.

The bottom priority of bills to be paid are the unsecured creditors. This includes credit cards, hospital bills, and loans without collateral. Since these creditors do not have collateral, they are more willing to work with you to reduce or freeze late payment fees and interest fees. However, be aware that in some states they can go after your savings and checking accounts without even notifying you.

Cancel direct deposit and go to a cash-based system if you cannot afford to pay all of your bills right now. Many grocery stores will cash your paycheck for free. Some other places will cash for free or may charge a small fee. This is much better than having your bank accounts cleaned out by your creditors. Send them $5 a month to avoid a claim of non-payment.

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