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Whether you know it or not, you are always setting your financial priorities. Some may decide that a new stereo system is more inportant than this month’s electric bill. This may be a little off the wall but it is still setting your priorities.

Anyone wanting to better manage their money would be wise to determine what their financial priorities are and stick to them. Of course, if you see that these priorities will not put food on the table and pay your bills then you will have to rethink your priorities.

Setting your priorities is simple. You just decide what is the most important aspect of your finances and put that item on top. However, if you decide on that stereo over your electric bill, you may find yourself in the dark with no need for a stereo.

There are basic priorities that pertains to everyone. These are simply a matter of survival. Here is a list of the basics:

Water
Food
Shelter

That was a tough one.

What does it take to ensure that our basic needs are met? The main ingredient is a source of income to pay the rent or house payment, pay the utilities, and buy the groceries. This is where you start setting your priorities.

Before you can spend another penny, you have to take care of what you need to survive. Don’t put off the rent or house payment, utilities and don’t skimp on your groceries and necessary health items. If you do you will start experiencing money problems much sooner than you would if you had delayed paying other bills instead.

What’s next? If your source of income happens to come from a job, then I would say your transportation. You have to get back and forth to work so you can afford all of the other stuff. This would include your vehicle payment, gas, insurance and maintenance. If your source of income is not a job then go to the next step.

And Now? Naturally, this would be your other bills. You can even split this category a little further.

First, you have your bills that are secured by property. You should always pay these bills first.

Secondly, your unsecured bills which are probably credit cards.

The reason you should always pay your secured bills first is that it is much more likely that they can take the secured property and probably will unless payment is made. While credit cards companies are notorious for their threats, they very seldom follow through. I’m not saying not to pay them, just that they aren’t as high a priority as your secured bills.

Next would be your savings. I really to hate to list savings as your last priority because having a savings can prevent the use of those dreaded credit cards and help in so many ways. If you have the money to cover all of your other priorities then you should always put savings at the top of the list. However, if you don’t have enough money to cover your bills and expenses then your savings will have to be the first to go.

Just to recap. The below list is an example of what your financial priorities should look like:

1. Groceries and Necessary Health Items

2. Housing (Rent or House Payment)

3. Utilities

4. Transportation

5. Secured Bills

6. Unsecured Bills

7. Savings

Let’s hope that you never get in the position to have to decide which of the above list will have to wait. But if you do, following the above priorities is absolutely necessary to ensure your survival.

Terry Rigg is the author of Living Within Your Means - The Easy Way http://www.homemoneyhelp.com/ebookadpage.html and editor of the Budget Stretcher web site. Join the thousands of subscribers to The FREE Budget Stretcher Newsletter and get great articles, tips, downloads and a lot of Budget Help by visiting his home page at http://www.homemoneyhelp.com

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It is extremely difficult to setup a budget, especially
when you are behind on some of your bills. Even if you
can make your regular bills and expenses fit neatly into
your budget, what can you do if you don’t have the money
to catch up?

I have listed several methods and circumstances below
that may help manage setting up your budget and begin to
pay those overdue bills. Since there are as many
different budgets as there are people that try to set
them up, this list may not be all inclusive. It may,
however, give you some ideas that will fit your
individual problem.

Unless you don’t have any income at all, there are a
couple of things that should never be late. Your rent
or house payment and utilities should be paid first,
even at the expense of other bills. This is simply a
matter of survival.

The first thing you need to do when setting up a budget
is to determine how much actual take home income you
have. Then determine the amount of your normal bills
and expenses. The Complete Budget and Bill Organizer
http://www.homemoneyhelp.com/BBOonline.html explains
this in greater detail and provides forms to put it on
paper.

The below methods assume that you have enough money to
cover your normal bills and expenses but have some
bills that have an amount that is overdue:

When you are setting up your budget and have overdue
bills you need to cut your expenses to the bare bones.
This doesn’t mean going without food. However, there
are many ways to cut back on expenses. You can find
hundreds of them by visiting my Budget Stretcher
Partner sites listed at http://www.homemoneyhelp.com.

You should always make the initial contact to the
company any time you aren’t able to pay a bill on
time. Once you have your budget setup, see if there
is any money left over to start paying the amount that
is behind. If you do have some money left over, when
you contact the company, find out if they will accept
paying a little extra each month, without penalty,
until the overdue amount is paid in full.

Contact a your local Consumer Credit Counseling Service.
You can find them in your phone book. They can assist
you by contacting your creditors and establishing a
payment schedule that will fit your budget.

If your overdue bills are credit cards, consider
transferring your balances to either a credit card you
already have or can obtain. This will do a couple of
things. It will normally lower your monthly payment
and it will eliminate your overdue status. Be extremely
careful doing this. The credit card companies you paid
off will be using every means they have to get you to
use their credit cards again. Cut them up and notify
the company to close the account.

Look for ways to get extra money just for the purpose
of paying your overdue bills. This can be either a
temporary part time job or selling something that you
can do without.

If you own your home and have equity in your property,
you may want to consider a bill consolidation loan.
While this seems like an easy out, many people start
obtaining more debt after they receive the loan since
they have some disposable income. There are pros and
cons to bill consolidation loans and you would be wise
to investigate it thoroughly.

If you have exhausted all of the above options, you may
have to consider one of the below options. You must
remember that filing bankruptcy can stay on your credit
history for up to 10 years and can have a devastating
effect on your future financial plans.

In extreme circumstances, and always as a last resort,
consider filing Chapter 13 bankruptcy protection. This
allows an individual to setup a repayment plan of
between 3 to 5 years to pay off all or part of their
debts. You must have sufficient income to permit a
portion of it to be used toward your repayment schedule.

Another option is Chapter 7 bankruptcy which is the most
commonly filed chapter since it can completely eliminate
all of your debt except the ones you choose to continue
paying. There are exceptions to debts that can be
discharged and to what property is exempt from being
taken by your creditors. You should discuss any bankruptcy
actions with a competent bankruptcy attorney. Only
individual’s may file for chapter 7 or chapter 13 bankruptcy.

Just because you are behind on your bills doesn’t mean
that your bill collectors can do what ever they want to
collect their debt. You have rights under the Fair Debt
Collection Practices Act. It would be a good idea to
visit The Federal Trade Commission’s web site
http://www.ftc.gov/bcp/conline/pubs/credit/fdc.htm to
find out what your legal rights are.

Terry Rigg is the author of Living Within Your Means - The Easy Way http://www.homemoneyhelp.com/ebookadpage.html and editor of the Budget Stretcher web site. Join the thousands of subscribers to The FREE Budget Stretcher Newsletter and get great articles, tips, downloads and a lot of Budget Help by visiting his home page at http://www.homemoneyhelp.com

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How can you decide how much you have for bills and expenses when
your paycheck varies from one payday to the next? That’s a
question a lot of people struggle with.

A few of the occupations that I can think of off hand that could
fall into this category are waitresses or waiters working for
salary and tips, truck drivers that are paid by the mile and
never know how many miles they are going to get, the
self-employed that their business income varies from season to
season, and the list could go on.

Trying to manage your finances with a steady income is hard enough
but when you never know what your paycheck will be seems almost
impossible, but it’s not. It is, however, going to be a little
more tricky.

In my Budget and Bill Organizer I talk about averaging your
expenses like your phone and electric bills that vary from month
to month. The same principle can be used to average your income.

The first step you need to take is to find records of your pay
for as far back as you can. It would be best if you had records
going back for at least 6 months.

Take these records and total the amounts you were paid for the
entire period. Then divide that by the number of months you have
records for. This will give you your average monthly income.

If you don’t have any record of your previous pay you may need to
go to your employer to get the information. If there is no way
to get this information you should start a log of how much you
get paid and use this to develop your budget.

Once you have determined your average monthly income you will
need to develop your budget just as if this was your regular pay.

Here’s where it gets tricky. You aren’t always going make the
amount you have budgeted. The only way to handle this is to
save when you make more than what you have budgeted.

Here’s an example:

You have determined that your monthly budget is $2000 per month;

In January you earn $2500. You will need to put away $500 of
that money so that you can make up for any month that your
income falls below $2000.

This sounds like a simple solution to a complex problem but it
may not be as easy as it sounds unless you accustomed to saving
money. It will take some discipline to make sure that money is
there when you need it.

There could be a bright side to this method. If you are able
to put the extra money away and you have several months that
you make more than your budget you could end up with a sizable
savings account.

When setting up your budget make sure that you don’t
underestimate your bills and expenses. This is one of the
major reasons many budgets fail.

By averaging your income it will prevent the “Feast to Famine”
approach to your spending. It only makes sense to spread your
income out so that you can cover all of your bills and expenses
every month.

Terry Rigg is the author of Living Within Your Means - The Easy Way http://www.homemoneyhelp.com/ebookadpage.html and editor of the Budget Stretcher web site. Join the thousands of subscribers to The FREE Budget Stretcher Newsletter and get great articles, tips, downloads and a lot of Budget Help by visiting his home page at http://www.homemoneyhelp.com

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