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Are you paying your bills in the wrong order?

You're Paying Your Bills Wrong

Do you pay your monthly bills in the right order? Based on at least one recent study, the odds are you don't.

First the good news: for the first time since 2008, Americans have changed the order in which they pay their bills. A study released this week by TransUnion found that Americans are once again paying their mortgage before they pay their credit card bills. That's good according to financial planners because keeping a roof over your head is probably more important than paying off your latest flat-screen TV or $200 sneakers.

Still, payment patterns vary. People in New York and Los Angeles are giving equal weight to credit card payments and mortgages, but in Chicago, consumers were still paying off their credit cards first.

In spite of the improvement, Americans are still paying off their bills in the wrong order, according to financial planners. That's because the top priority in most American households is still the car payment. Nationwide, the 30-day delinquency rate for auto loans fell to 0.87 percent late last year.

Sure, juggling bills is a balancing act, but ultimately your car is probably less important than your home, the argument goes.

If you feel you can't make a payment for whatever reason, financial planners advise you to be proactive and call the company or bank and ask for an extension. Credit card companies are often the most willing to negotiate a revised payment plan.

Join the discussion

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lsheaffer March 24 2014 at 10:05 AM

I pay my mortage payment with a check, then I charge practically all my other monthly bills - water/sewer, electric, cable TV, cell phone, car insurance, groceries, etc. - on my credit card which gives me airline miles so I get free trips to see my kids in another state. I pay the credit card bill in full every month to avoid any interest charges or penalties.

I do not have car payments - haven't finanaced a car since I was in my 20s. I buy a late model used car for cash and keep it for about five years, that avoids the huge depreciation loss of the first few years and is the least expensive way to own a car.

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IBruzEZ lsheaffer March 24 2014 at 10:16 AM

Great plan.! Also, pay yourself first... savings, 401k, etc... then what's left over is what you have to live on. Only way to retire without living on the streets.

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peachlizard March 24 2014 at 12:13 PM


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lalsb7135 March 24 2014 at 12:14 PM

Why does the current Socio/Political/Economic "climate" dictate that we all need to have somebody telling us what to do?

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fitzenterp March 24 2014 at 12:44 PM

Bills should be paid in order by the due date. File them that way when they arrive in the mail. Never pay a finance charge or late fee. They're like borrowing money at usurious rates and the debt you're trying to pay down will only increase and you'll have nothing to show for the increase. If the mortgage is due on the 1st, it stands to reason that it should be paid first.

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my89300zx fitzenterp March 24 2014 at 12:54 PM

ALL of my bills come due at the beginning of the month. I pay my morgage first. Then everyone else gets their money. Anything can happen, you can be fired or lose your job some other way, your business can be destroyed by something unforeseen in a New York minute, the economy can shift while you are asleep, when you wake your life can be crap. It is only smart to pay the most important things first. However, everyones situation is different.

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zzyxx March 24 2014 at 12:46 PM

basically ..it is use common sense and pay those bills that keep you in the game of life...period.

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churchtk March 24 2014 at 12:46 PM

What's the difference if you pay them all on time anyway. If you can't afford it....don't buy it!!

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skydrill1 churchtk March 24 2014 at 1:07 PM

My thoughts exactly. Pay them all, and pay on time. If you cannot afford something then don't buy it. Very simple.

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Big Bobzilla skydrill1 March 24 2014 at 1:42 PM

I pay mine in full every month. In the event I need to spread a purchase over a couple of months, I use a credit card with an interest rate of 7.15% and never pay less than 3x minium.

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gmsexton March 24 2014 at 12:50 PM

you pay your bills based on need... roof... food... utilities... minus cell phone, internet, cable tv, and car .... if you need a car to get to work.... otherwise dump the car. there i just sumed up the whole article in .... 35 or less words....

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WILLS March 24 2014 at 12:57 PM

Considering that the Fed has int. at near zero and the C.C. companies are at 14+ anyone running unnecessary balances is foolish. Usury at it's best. First get the public with a mortgage mess and than pick up with C.C's. Other items like food,roof and car should be first in line.

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Linda March 24 2014 at 1:11 PM

I pay my bills in the order they come in and online of course

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Big Bobzilla Linda March 24 2014 at 1:36 PM

I back up four days from date due and mark it on the calendar. Then pay electronically. No sense wasting the minuscule interest I receive on my checking account.

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Bangie Big Bobzilla March 24 2014 at 1:54 PM

Each vendor has it's own due date. Schedule repeating payments online for monthly bills that don't change the bottom line month-to-month. Get instant alerts from your bank when the payments go through..this feature will also show current balance on your account. No muss, no fuss.

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rwhug March 24 2014 at 1:12 PM

A person's goal should be to not have debt. Step one is to quit buying what you cannot afford. Step 2 . If you are not satisfied with the amount of money you make, get yourself "retooled" by learning a trade or advance your education. And dont borrow money to do it. How you say? Instead of playing games or texting on those expensive phones you have, search for opportunities (free) on the internet. Scholarships, grants, companies paying for advanced education etc etc... 3. If you dont like something about your life, change it! Just remember nothing happens overnight... make a plan!

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workinglady61 rwhug March 24 2014 at 1:20 PM

You aren't talking to today's young people are you? They have no idea what being frugal or savings means.

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