Priorities "Which Path Will You Choose?"

When creating a spending plan, it's important to consider your needs and wants. Needs are items needed for basic survival, such as food, water, shelter, and clothing. Wants are things desired but not necessary for basic survival. Sometimes budgeting requires tough decisions so you can eliminate spending on wants to free up money for needs. Remember, everyone has different priorities. Budgeting forces you to determine your family's financial goals and gives you the framework for accomplishing them.

What Payments Should I Make First If I Don't Have Enough Money to Pay For All My Bills

Ford or Ferrari If you have to make some tough decisions about wants and needs, consider the following questions. Why do you want it? Is it something you really need? Will it help you reach your goal? Could you spend your money in a different way? Is it something you can live without? The answers to these questions might help you figure out what is most important so you can direct your money to your priorities.

Caution:

• First, pay off your necessary household expenses, such as rent or mortgage, utilities, and food. You need to pay your rent or mortgage to ensure you don’t get evicted or have your property foreclosed. Think about the health and safety of your family when making these types of decisions.
• Many utilities, such as telephone, electric, and gas companies, have programs to lower your bill if you qualify. If you think you need assistance, call the customer service number shown on your utility bill.

What Should I Do If I Can Pay Off My Monthly Household Expenses, But Am Having Trouble Paying Off My Loans?

• Pay off the loan with the highest interest rate first to save on interest payments.
• Talk to your creditor (the bank holding the loan, the credit card company, or another company to whom you owe money). Your creditor may be willing to reduce your payments or change the terms to accommodate your situation. Some creditors might offer extensions (smaller payments over a longer period of time). Some creditors might accept partial payments.
• Get a debt consolidation loan, but be cautious of this option. If loan fees and interest rates are too high, it may not be the best option for you.
• Get professional advice. Check out the Resource Guide in Route 4 for information on how to contact a local housing counseling agency that can help you deal with your financial problems. The most reputable organizations charge little or nothing for their services.
• Be cautious of companies that promise to fix your credit problems right away. Credit repair can be a long process that might take several years. Just remember, If it sounds too good to be true it probably is.

Caution: Wants vs. Needs

If you have to make some tough decisions about wants and needs, consider the following questions.

• Why do you want it?
• Is it something you really need?
• Will it help you reach your goal?
• Could you spend your money in a different way?
• The answers to these questions might help you figure out what is most important so you can direct your money to your priorities.