Which bills should you pay first when you’re strapped for cash?

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When you’re behind on bills and don’t have a lot of money, it can be a frightening experience.

According to a December survey from Magnify Money, 49% of Americans have less than $500 in their accounts, which means they would be completely unprepared for a financial emergency. 

If you find yourself with more expenses than money at the end of the month, you’ll want to know how to best prioritize what you have until more cash comes in!

Read more: Know your rights with debt collectors

Which bills to prioritize when you’re strapped for cash

1. Food and medical expenses

The most important thing when it comes to bills is your health and well-being. After all, if you are in need of medical care, you won’t be able to tackle the other items anyway! Take care of yourself first, then move on to the other priorities.

2. Shelter

The second most important bill is your mortgage or rent. Even if you can’t pay to keep the lights on, having a roof over your head is very important. Be sure to stay current on your rent or mortgage after food and medical. It’s better to get behind on credit cards than default on a mortgage.

3. Utilities

Utilities are the next on the list when it comes to who should get paid first. Electricity, gas and water are things you must not go without! Sometimes, you can negotiate with your service provider and some have programs for those in a low-income category if you find yourself in a tough spot. Call them. There might be a way for them to help you. 

Also, try these steps to lower your monthly bills

4. Transportation

Auto loans are important since they are the mechanism to get you to work! Car loans are the next on the list of who to pay when money is tight. 

If your car has been repossessed, you can’t take a bus and walking isn’t an option, Uber or Lyft might be an option during a low-volume time, since the rides are cheaper during those times. 

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Read more: Uber cuts prices in 100 cities to spur winter demand

5. Child support

Child support is next on the list, since not paying child support could land you in a legal bind! Regardless of the legalities though, your kids should be a priority no matter what is going on in your life. 

6. Taxes 

If you find yourself staring down a tax bill, you’ll want to take on this obligation next after child support. Penalties and interest will accrue for any balance that remains unpaid, and the IRS not a lenient debt collector. 

However, there are some things you can do to extend your payment deadlines. If you find yourself in a tough spot with taxes, here’s what you need to do.

7. Debt with collateral

If you have any debt backed by collateral, pay this off next, since the company supplying the loan will create a lien on whatever collateral you have that is supporting the loan. Otherwise, they will confiscate the collateral. If you don’t have the money for this though, you might have to let go of whatever collateral item is attached to the loan. 

8. Debt with no collateral, such as credit card debt 

Finally, if you still have money left over after paying for the above 7 items, tackle your unsecured debt, such as credit cards. You might want to call your credit card company and see if you can work out a payment plan, or see if they will take a lump sum settlement. 

In addition, see if you can qualify for a hardship DMP, or get help from a legitimate source, such as the National Foundation for Credit Counseling

It’s important to note, not paying anything on your credit card debt can significantly damage your credit card. It’s better to pay something than pay nothing. 

Check out these tips for other ways of tackling your credit card debt. 

How to make extra cash fast 

Got anything to sell? Able to work as a babysitter, pizza delivery driver, or server? When times are financially tough, it’s important to bring in as much money as possible. Try these 5 tips to make some fast cash. 

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Bottom line? When you’re strapped for cash and you’re feeling overwhelmed, take a deep breath, and go through the above steps. Think of ways to earn extra money, and put yourself to work. Staying busy and bringing in extra money will help you not only with your financial obligations, but it will help to keep your head above water. Working as much as possible will keep your mind off your bills and instead help you focus on the solution. You can do it! Take it one step at a time, and resolve to keep moving forward. 

Read more: 3 ways to defeat financial trouble

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