Can’t keep up with your bills? On average we receive eight to 10 statements per month. Paying them all in a timely manner can be challenging, but keep in mind -- not all bills are created equal.
Here’s how to best navigate your monthly expenses and give your budget some much-needed breathing room.
Prioritize Real Estate Taxes
To begin, paying for the roof over your head should come first and, beyond your rent or mortgage, your real estate taxes ought to be a top priority. Default on this tax and your municipality can issue a tax lien, putting your home on the line. In some cases, low-income seniors and veterans can build breathing room by entering a property tax deferral program through their local county or state.
Address Your Auto Loan
Don’t mess with your auto payments, either. Fall behind and you could face a repossession after just one missed payment, depending on the terms of your loan, and no car means possibly no transportation to work -- yet another problem. If you need help, ask your lender to extend the length of the loan to reduce your monthly statement or ask about refinancing. The average rate on a 4-year auto loan is roughly 3%, according to Bankrate.com.
Auto-pay Student Loans
Next, though we call it “good debt,” your student loan can turn ugly when neglected. Uncle Sam could garnish your wages or offset tax refunds. Unlike other kinds of debt, it’s next to impossible to get rid of a student loan. Build some breathing room by setting up auto payments. Many lenders will give you a 0.25% interest rate discount for automatically paying from a debit account each month. For struggling federal borrowers, there’s also income-based repayment, and in some cases you can also apply for deferment or forbearance. Inquire about payment options with your loan officer.
Change Billing Due Dates
If many of your bills fall on or around the same due date each month, forcing you to live paycheck to paycheck, call the billing departments at your creditors and utility companies and ask for a different due date. Many companies are flexible.
For those who’ve recently lost a job or had their hours cut back at work, you may be able to temporarily lower some monthly bills. For example, cable providers and gyms may give you a break for a few months until you get back on your feet – just so they don’t lose your business altogether. Call and ask, or better yet, walk in and speak to a sales rep in person if you can.
As always, we want to hear from you. What are some ways you’re building breathing room into your budget? Connect with me on Twitter @Farnoosh and use the hash tag #finfit.