Paying bills with limited funds can be a challenge. If you are short on cash, you may be tempted to skip payments and focus on your necessities. But the best way to carve out a positive financial future is to stay ahead of your bills. Here are three payments never to miss each month:
Mortgage or Secured Loans
Both mortgages and secured loans are tied to your ownership of a home or property. If you don’t pay either of these bills for an extended period of time, you will lose your home. Banks and financial institutions secure your loan against your property to ensure that you are beholden to the bills. There’s a reason why this approach offers you lower interest rates; it is riskier for the individual receiving the loan. Making these payments should be your first priority—losing your home will leave you in a state of flux and also deprive you of the biggest asset in your name.
Most renters or homeowners need to make utility payments on a monthly basis. These bills can include gas, electricity, heat and water. If you miss two or more payments, the utility companies will most likely cut off your access to necessary amenities to keep you and your family safe. Imagine your home without heat in the winter or electricity? Missing utility bill payments can also negatively impact your credit score. Try to be discerning about your use of these amenities, cutting down on your costs as much as possible.
Credit Card Payments
Experts recommend that everyone pay off their credit cards in full at the end of the month. If that goal feels daunting, try to work toward paying your credit card bills on a weekly basis—this approach prevents your costs from snowballing until the end of the month. If you absolutely cannot make your full payment, pay the minimum amount by the due date. As your debt accumulates, credit card companies charge high interest and accompanying late fees. These charges will cost you more in the future. Another concerning byproduct of missing credit card payments is the detrimental effect on your credit score, which can inhibit your ability to find a home or buy a car in the future.
If you are paying bills with limited funds, think about speaking to a financial counselor. Even the most challenging situations are opportunities for financial empowerment—a professional can help you find the best plan for your future.
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Consumer Education Services, Inc. (CESI) is a non-profit service provider of comprehensive personal financial education and solutions for all life stages and for all of life’s milestones. Our goal is enhanced economic security for everyone we serve.
CESI is NOT A LOAN COMPANY