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How to Prioritize Your Bills During the COVID-19 Outbreak

The Coronavirus outbreak is all anyone has talked about for the past few weeks. Though it may have hit different people in different ways, it’s perfectly understandable to be a little worried about the future, especially in terms of your financial future.  

The government has passed a few relief packages and standards to help people pay their bills and stay on their feet, but it’s still a good idea to have a plan. Some of your bills might be postponed for a while, but is it a good idea to put off paying them? Here are a few tips to help you prioritize your bills during this time.

Your First Priority: Housing

Experts say your housing bills should be on the top of your list. In a normal environment, failing to pay rent or mortgage payments means you could have your home repossessed or be evicted. The federal government initially issued eviction freezes as early as late March, but these have since lapsed. Since then, many states (including Minnesota) have adopted their own eviction freeze orders to prevent people from being kicked out for missing a payment. This is not, however, an invitation to skip a month or two of your housing payments.

The eviction freeze only protects you from losing your home. You will need to make that payment eventually, and you may end up needing to pay a much larger sum all at once. If you can’t make your rent payments, it is a better idea to talk with your landlord about temporarily lowering your rent or applying for short-term assistance.

Power, Water, and Other Utilities

After your housing bills are paid, you should focus on utilities. Some utility companies have agreed not to disconnect essential services from residents because they miss a payment, but just like housing freezes, this does not mean you don’t have to make the payment, and these may come with costly late fees and accrued penalties.  Each utility company has their own rules set in place, so it's important to familiarize yourself with the companies you use.

Car Payments

Just like utilities, the rules surrounding car payments will vary depending on which company or bank you used to get your auto loan. Missing too many car payments might result in your car getting repossessed. Many auto dealers have offered payment deferrals or have waived late fees. This might be another opportunity to speak with your loan provider or auto dealer to come up with a custom plan.

Student Loans

Federal student loans have been canceled until October 1st, meaning there are no payments required, no late fees applied, and no interest accumulated during the next few months. This is great news for many struggling with student loans. It is still important to familiarize yourself with your loans. Many private loan companies have not suspended payments, but are willing to work with you if you are unable to pay.

Other Types of Debt

Other types of debt, including back taxes, medical bills, and credit card balances are ones that might be easier to delay, if funds are short. It’s important to understand your circumstances with each company and what they expect from you over the next few months.

It’s never a good idea to ignore your bills, no matter what hardship you are facing. They always come back to you, and usually with more fees and penalties, making them much harder to pay. If you are having trouble paying your bills, contact your landlord, service provider, or loan agent to see if there are any options. Everyone is adapting and making accommodations for COVID-19. Of course, you can always talk to the experts at Falcon National Bank – we’re here to help you weather these uncertain times.