What bills should be paid off first?

Bills, bills, bills. Who hasn't got enough of them? The hits just keep on coming. Bills are a type of debt that needs to be paid. Sometimes we have enough to pay some bills but not all and an even worse scenario of those are bills we can't even afford to pay. Nobody likes doing it but we all have to pay them somehow. Here are some ways to stay sane amongst this eternal onslaught.

I like to classify debts and bills into 2 categories: priority and non-priority.

Priority bills

Some examples of priority bills and debts are:

• rent/mortgage and home secured loans
• utilities (gas, electric, and water)
• tax (council, income)
• court fines
• child support
• government related

These are considered a priority because if you don't pay these bills some very bad things can happen. Not paying your rent/mortgage can lead to evictions. Not paying utilities can get your electricity cut off...no Wi-Fi, can you imagine? Don't pay taxes, or court fines, well that can lead you to prison. Even a simple unpaid parking ticket can give you problems and escalate rather quickly.

Non-priority bills

Failing to pay non-priority bills tend to be less serious but can still result in some pretty bad consequences. These consequences can be court cases, credit impact, and bankruptcy to name a few.

Some examples of non-priority bills and debts are:

• credit cards
• unsecured bank loans
• family/friend loans
• payday loans
• catalogue debt.  

It's important to note that non-priority doesn't mean "ignore", it just simply means they should be paid after the priority bills are settled. We are all different people and some non-priority items for me may be a priority for you or vice versa. In these cases, you should treat them as such.

Take control

Now that you have your bills sorted out you can start prioritizing their payments. Start with your priority bills then when that is under control move on to the non-priority.  Good luck and know that what is most important is that you are organized, focused and persistent on paying off your debt.