Setting Financial Priorities During Hard Times

Most of us have experienced times of financial hardship at one time or another. Sometimes it's because of layoffs or reduced working hours. Other times, it's due to large, unexpected expenses. But no matter what the reason, financial difficulties necessitate taking a look at our priorities.

When money is no object, we often spend it on things that we do not really need. We might go out to fancy restaurants every week, buy designer clothes or buy expensive high-tech toys for the kids. But when our disposable income is reduced, we must often give those things up to have enough money to pay the bills and spend on necessities.

Each individual or family will have slightly different priorities. But here are some things that should always be near the top of the list:

* Savings - When funds are limited, it might seem counter-productive to think about savings. But this is actually the time we need to concentrate on savings the most. When there's little wiggle room in the budget, unexpected expenses can be devastating. Keeping a little money out of each paycheck may or may not pay for whatever comes up in full, but it will help.

* Housing - Having a place to live is something most of us take for granted, but when times are tough, keeping up the payments can be difficult. Try to pay the rent or mortgage early if possible, or at least make sure it's paid on time. If you own your home, homeowners insurance must also remain current.

* Transportation - If you live close enough to work to walk or ride your bike there, transportation may not be an issue. Otherwise, it's important to keep enough money to get to work and back so that you don't end up in even worse financial straits. Using public transportation, if possible, is less expensive than driving. If you must drive, try to find someone to carpool with. And don't forget about car insurance and maintenance.

* Heat and electricity - If you live in a climate that experiences cold weather, having heat is a must. Electricity is also important so that you can safely store food and cook. If it comes down to choosing which bills to pay, these must receive very high priority.

* Food - Everyone has to eat to live, so having food is a top priority. But if you're having trouble making ends meet, food pantries and soup kitchens can help. If your income is low enough, you may also qualify for food stamps.

* Health care - Doctor visits are not cheap, especially if you are uninsured. If you find yourself in need of health care but are unable to pay for it, look for free or low-cost clinics in your area. Most use a sliding fee scale that's based on income, and some will allow you to make payments if necessary.

When there's barely enough money to go around, setting priorities is crucial. You may have to cut unnecessary expenses such as cable TV and gym memberships, at least temporarily, to have enough money for necessities. If you still have trouble meeting basic needs, remember that help is available.