Which Bills to Pay When You Cannot Pay Them All
Below is an excerpt from a response by Mary Hunt to a inquirer:
“Here is the rule of thumb: Do not make payments on nonessential bills when you have not paid essential ones, even if your nonessential creditors are breathing down your neck.
Essential bills are those you must pay for the preservation of life: food, rent, medicine, insurance and taxes are good examples. Nonessential debts are financial obligations that will have a lesser and or delayed effect if you withhold payment for a limited time.
I suggest that your Contingency Fund is an essential bill because this is your only hope of reversing your situation and finally getting to the place that you can pay all of your bills.
Once you’ve paid your essential bills, if you have money remaining, move to the nonessentials. Which of those bills if not paid represents the most immediate consequence? Answering that question will help you with your decision.”
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