Last week we talked about budgeting and how to do a realistic, before the month begins, budget. This week we'll talk about priorities of where money needs to go.
The very first step is to make sure the basics are covered.
- Food, of course, is the first, because as long as your family eats, you are able to survive and fight your way out of debt. You don't need to be eating fancy things. You need to be couponing and making more food from scratch to keep costs down. Going out to eat should be rare as long as you have debt. Remember, you are sacrificing to win.
- Utilites - You need your house heated and lights on.
- House payment or rent - This sounds so basic, however many people pay other debts before their house payment. They do this because their house is usually a larger payment and they feel like at least they are doing something if they pay the smaller debts. Also, if the smaller debts is a credit card, they tend to scream more if they aren't paid. Don't be bullied, though, make sure your house is a priority.
- Gas for your car - You obviously need to be able to get to work.
- Car payment - Hopefully, you don't have one, but if you do this is where it lies in the priorities. If you owe a large amount of money on your car, consider selling it and getting something cheaper. If you're upside down, you will need to get a loan for the difference of what you owe and what you can sell it for. You'll be better off though, because the amount will be smaller and you'll be able to pay it off much faster.
- Basic clothing - No designer nothing, unless you got it from Goodwill! I know most of us can go a long time without buying much clothing because we have a lot already.
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