When you're trying to consolidate and pay off your debts, every little bit helps. This means people are often tempted to stop services or skip bills for a few months in order to have more money to pay their debts. But even if you have creditors calling you every morning, don't cut these five expenses:
It takes a few months before a missed utility payment results in your electricity being turned off. Because of this, people sometimes float their utility bills in order to pay off other debts. However, this is a bad idea for multiple reasons, the primary one being that missed utility bills will add additional damage to your credit report.
You also don't want utility companies coming after you in addition to your other creditors, and you certainly don't want your home to lose power or other services. In short: no matter how tight your budget is, don't skip payment on utility bills just because you owe money on other bills.
A lot of people have home security systems that sound alarms in case of an intruder, fire, carbon monoxide or other dangers. It's a popular idea in flush economic times and one of the first expenses to go when people want to pay down debt. Don't turn off your security system, though; it's essential to the safety of your family and your property.
If you don't have enough money to pay your debts, you don't have enough money to replace possessions in the case of theft or fire damage. Consider your home security system an investment in your family's future. There are endless options for security so check out sites like securitychoice.com among many others to learn about affordable, next-generation home security options in your area.
Since smartphone bills are often expensive, people paying down debts quickly elect to cancel their services. However, in addition to incurring early cancellation charges with your cellular provider, losing mobile access means you no longer have the ability to maintain connections while away from your home.
If you are unemployed, having a smartphone is practically a necessity during a job search, as potential employers expect immediate responses to requests for interviews. If you are employed, having a smartphone means you can respond to work emails and other requests at all times. Even though having a smartphone costs you money, it also means you are able to function as a successful professional in today's connected world, and so it is a bill that should never be dropped.
Always pay the minimum on all of your credit cards, even if you are using the snowball method or other fast-acting payment plans. Failing to pay the minimum on your cards results in huge fees in addition to the interest currently building on your credit card debt. It's also yet another ding to your credit score. If you can't afford the monthly minimum payments on all your credit cards, consolidate them to a single card and meet that minimum payment faithfully.
Lastly: no matter what happens, keep paying the mortgage on your house. Banks these days are eager to foreclose and unlikely to allow you grace periods beyond the absolute minimum. If you find yourself completely unable to pay your mortgage, learn more about the foreclosure process and how you can protect yourself. Don't lose your home in the middle of debt repayment; the costs of finding a new place to live and relocating will eat up any progress you've made on your debts.
Although there are many expenses you can cut during debt consolidation, like vacations, shopping and private schools, never cut these five expenses. They're essential to your safety, your survival and your finances.