When the economy gets bad the first things people stop paying for are their insurance, mortgages, and credit cards. However, during an economic downturn these are the three most important things to pay. Sure, you may find that it is more difficult to pay for these than before and that you have to make other sacrifices. That’ s just part of life, however, and something you should learn to deal with. The last thing you want to do is completely ruin your credit and make it difficult to buy a new home or apply for credit in the future. Similarly, you don’t want a sudden death or medical emergency to throw your family into financial ruin. Because of this you should make a budget to figure out how you can afford to pay your insurance, mortgage, and credit cards during the financial crisis.

Insurance

Your health and life insurance is important to keep paying despite the fact that the economy is in a downward spiral. You can change your policy to get more affordable coverage, but never stop paying your premiums. Otherwise, you could be putting yourself at risk for major bills or even the denial of healthcare.

Mortgage

You need a place to live, there’s no doubt about that. If you don’t pay your mortgage then you will eventually have to go through a foreclosure, which is never pretty. That’s the last thing you want to deal with during an economic downturn so you need to find ways to make your mortgage payment. If you have more than you can afford then consider taking in a boarder or selling your home. Both of these options can help you conserve your credit and still have a place to live.

Credit Cards

With your credit cards you can always pay the minimum payment due to simply help you get through the financial crisis and stay on top of your debt. However, you will need to keep in mind that the interest rates will continually add more debt to your credit line and can send it over the limit if you don’t have a buffer there. This is important to keep in mind because if you make a $20 payment and are hit with a $35 over the limit fee you are worse off than before making the payment. While things are rough, pay as much as you can, and when things improve you can start paying more again.

Posted in Home Budget

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