Prioritising your debts: Introduction
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Living the life you want requires certain comforts that, although are often taken for granted, cost money. Your home and its essential supplies, for example, are crucial for maintaining a comfortable standard of living. And you need to eat, travel to work and have some left over for clothes, entertainment and everything else.
Living the good life
It’s not surprising many of us find ourselves falling into debt. Life is expensive. If you are struggling to pay for everything, it’s important to get your priorities straight. Rent first, new shirt second! But when it comes to bills, if you’re not sure which ones to pay first, you need to sort them into two piles: priority and non-priority.
Prioritising your debts
Priority debts and non-priority debts are the terms that identify which bills to pay ASAP and which ones to worry about later.
Priority debts are the ones with the more severe consequences for non-payment. So your priority debts are not necessarily the biggest ones, rather the ones that will cause you additional stress by cutting off your electricity supply or threatening you with eviction.
So you should pay your rent or mortgage payment, gas and electricity, water, council tax, income tax and VAT and any magistrates’ fines before you worry about your credit card bill or personal loan.