You may feel tempted to pay expenses to those who shout loudest; however, you need to prioritize. Rent, electricity, water and food. Without those things you do not have a functioning home, and you will find yourself in deep water for not keeping up with payments. Next, you have to consider the things that enable you to earn a salary, such as your car, travel costs or childcare; including child maintenance payments. All these expenses are absolute necessities, and you will find that out the first time you let your payments lapse. In short – unless an expense can put you out of your home, take food off your table or prevent you from earning money, it is not your first priority.
Now, that is not to say that your other expenses are unimportant. Keeping up all your payments, even if you are only able to pay the minimum, is of huge importance. Your credit cards, loans and other expenses may not be secured loans, however, neglecting them will only serve to perpetuate the cycle of debt. Once you have allocated funds to priority expenses, budget the rest of your cash flow to cover your other expenses. This will provide a template for how to best pool your financial resources. If you are having difficulty finding the cash flow to cover all your expenses, speak to your creditors. They would rather work with you to come to a payment arrangement, than not receive payment at all.
As tempting as it may be, never hide from your debts. Speak to all your creditors, explore the possibilities of reallocating funds and create a budget that is both realistic and workable. When you do prioritize your expenses, consider that money as gone. It is not available for juggling debts or tapping into it in the hope of securing future funds. If you have to seek additional disposable income, then do so; however, never stretch your budget beyond its means.