If you listened to each individual lender you would find that what you owe them is the most important thing you need to pay. But what if you need to maximize your reserve because little to no money is coming in?
The first debts you need to pay are the ones that will land you in jail if you don’t pay. Even if you’re on a payment plan you don’t know how long your reserve will last and you may run out of money before you finish paying the debt. So pay it off or at least pay several months of it. Whether you pay it now or later, it doesn’t matter so it’s best to just do it now so you don’t have to worry about it.
The second most important debts are the ones that keep you in a position to find and hold a job. That means your car and car insurance. You’ll also need a phone. I highly recommend TracFone. In some areas you can get a phone with double minutes for life for $30 and then get 400 minutes (200 minute card doubled) for about $40. You now have a private line that only companies you applied for will be calling you on. So if it rings, answer it. 400 minutes is 6 and a half hours of talk time. Plenty of time to set up interviews and do phone interviews.
With your car and a phone all that’s left is an internet connection. If you don’t have Microsoft Office then get OpenOffice which is a free alternative. Use that to write your resume on your cheap as you can get internet connection to send it off to various companies. A lot of companies can get you broadband for about $30 a month. You don’t want a dial up connection because that means you need to pay for phone service on top of the dial up connection.
Next up, pay the minimum on all debts (except the house) with a montly payment. Credit cards, medical bills, loans, etc. If you’re renting, now might be a good time to get out and bum it with a friend or family member for a few months.
Next you have utilties; cable, water, electricity, etc. Cut out the things you don’t need like cable. Cut back usage of the things you do need like water and electricity.
And finally, make your house payment. Unless you’re a lonely friendless sad person, chances are you will manage to find a roof to put over your head if you lose your house. Skip the house payment until you find a job unless you have enough money for all your other bills as well for at least 3 months. Keep the money in a bank account so that if you find a job and the money is still there, you can make up the missed payments. You have a month or two before you’ll have to deal with threats of foreclosure. If you do get to that point you may just have to let it go.
Until you have a job, it’s more important to make sure you have everything you need to find a job and live. A house just isn’t that essential. When you’re jobless it’s a luxery. Try to work with the bank so they know you’re not trying to screw them over. But don’t lose more important things trying to save the house. You’ll just end up losing everything.
