So, you are short on cash. Life happens when you least expect it. It can be a car that needs to be repaired or utility bills that were higher than what you expected. No matter what crisis you are facing, you may be faced with choices on what bills to pay. When your money is tight, here are the top six bills that you simply cannot avoid.
1. Mortgage or Rent
I know it seems like a small thing, but paying your rent or mortgage on time is a big ordeal. See, the bank will report your bill late if you are thirty days beyond the due date. A ding on your credit can hinder you from being able to get a loan later on. If at all possible, don't skip your mortgage payment.
2. Car Payment
You need your car to get you to work, the store, and every place else you go in life. However, you may have a grace period on your loan. Check your contract or monthly statement and see if you can pay the payment up to 20 days later. Many lenders offer this grace period. It's okay to use that grace period once in a while, but you need to make sure you are punctual with your car payment too. Again, they report to the credit bureaus, and you don't want to take a hit to your credit.
3. Credit Cards
Credit cards tend to charge late fees and interest when you are late on a payment. They are another item that reports to the monthly credit bureau. You want to make sure to get your payment in on the due date with a credit card. They are not as lenient as other lenders because they have no collateral. You also want to keep your cards in good standing. Many credit card companies will reduce credit limits or take away available credit when a person is continuously late on their payments. If you depend on your credit cards to pay for gas and groceries, then you certainly don't want to mess up a good system.
Back in the day, you could let utilities slide and not have any consequences. These days, utility companies charge a percentage of the amount you owe in late fees. Your bill can creep up another $20 or so. Utilities include the electric, gas, cable, and phone bills. While these bills do not automatically report to the credit bureau, they will if it rolls into collections. Since you need your electric and other essential services, you probably have no worries. Just be advised, if you allow your bills to go to the point of disconnection, there could be huge reconnection fees that will get you in even more financial trouble.
Insurance is the state law in all but two states in this country. If you drive without insurance, you could face a loss of your license or jail time. So, you don't want to be on life's highway without proper coverage. Another thing to consider is that insurance companies don't give large grace periods. They, typically, will cancel your policy shortly after the payment is due. It may be hard to get out of paying these payments if they do an automatic withdrawal. It can really mess up your checking account if funds are not available.
6. All Bills That Are Automatically Withdrawn From Checking
When you have bills that are automatically withdrawn from your checking account, you need to make sure there are funds available to cover the debt. An overdraft charge can be anywhere from $35-$50 per item. One insufficient fund's charge can cause hundreds of dollars in damage. If you need to cancel an automatic payment, then you need to make sure you take care of it before the due date.
As you can see, it is hard to let any bills slide. There are repercussions from letting even a utility payment wait. The best thing to do is look at other options. Getting a short or long term loan may be the answer. You can use these loans to pay off bills or get you caught up. Perhaps, you can pay off some of your smaller bills to free up more money each month. Whatever the reason for the cash shortage, you need to prevent it from happening again.