Prioritizing Expenses

Tips to help you prioritize monthly expenses

1. Food

Food is the first priority for supporting your household.

2. Medicine

Like food, if a family member needs essential medicine to sustain them then this should be a priority expense.

3. Rent/Mortgage + Associated Costs

Housing costs should be high-priority expenses.  If you own your own home, keep up with your real estate taxes, homeowners insurance and condo fees, as nonpayment of these could lead to foreclosure or eviction.

4. Utilities

After housing costs pay for your utilities so that your home will provide the shelter that it was designed to do.

5. Car Payments + Insurance

Most people need a car in order to get to a job.  If that includes you, prioritize your car payments here.  Most states require car insurance so add this to your expense category.

6. Jon-related Expenses

Expenses related to keeping your job are essential.  In addition to your car payment and insurance, you will also need gasoline to keep your car running.  You may also have expenses related to special uniforms or clothing, tools of the trade, or equipment.  Losing your job will make your financial challenges more complicated.

7. Child Support

Child support is an important obligation because nonpayment could lead to prison time.  Prioritize this expense after food, housing and transportation.

8. Income Taxes

While you have to pay income taxes that don't automatically come out of your paycheck, if your income has taken a hit then you will have a lower tax burden.  Pay only what you need to pay.

9. Telephone Service

Cell phones and land lines are important to maintain but pay these bills after the above categories are taken care of.

10. Secured Loan Payments

Since a secured loan is attached to a collateral such as a household item, these loans should rank slightly above unsecured loans.

11. Unsecured Loan Payments

Unsecured loans like credit cards and student loans do need to be paid, but in a crisis situation these can be put on hold.  Reach out to servicers and tell them what is going on, in the case of student loans they may be able to put your loans in forbearance.