Budget for the Important (Not the Urgent)

When you’re in debt, the sound of the phone ringing cues an instant reaction—dread! You’re afraid it’s another debt collector calling to harass you about your unpaid bill. Hearing from them month after month wipes you out emotionally and financially.

Collectors have done their jobs so well that people in debt think they have to turn all their attention to paying creditors, even at the expense of taking care of household needs. That’s not true, and it’s definitely not right. I worked in the loan and collections sector when I first started out in banking, so I’ve seen this first-hand. These guys are sharks with a phone in their hands.

Bullies in Disguise

Debt collectors want your money. And most collectors will do anything—yes, anything—to get it. They don’t care if you have a roof over your heads or have enough food in the pantry. They are trained (and trained well) to make you angry or scared. Why? Because you’re likely to act on your emotions and do something stupid, like pay them instead of keeping the lights on. And these cubicle con artists will break the law if it means getting money from you. They’ll lie and say they can access your bank account or garnish your wages. They’ll call you late at night. And they’ll call you at work. Sure, there are a few fair and honest collectors—hey, I was one! But some of these guys are ruthless.

Keep Your Budget Plan

Don’t get distracted by these wolves in sheep’s clothing! Keep working on your debt snowball, which means putting your priorities in place. When you create your budget, take care of the Four Walls before you budget anything else. The Four Walls are your basic necessities:

  • Food
  • Shelter and utilities
  • Basic clothing
  • Transportation (within reason)

By maintaining the Four Walls, you stabilize your situation so you can begin to find margin in your budget to attack your debt. You may only be able to make the minimum payment for a while until you get that debt snowball rolling, but that’s okay. Eventually, you’ll be in the place to knock out that debt completely.

Unfortunately, you may have been harassed by creditors for so long that you think you must pay them first. That’s what they want you to believe. The truth is, your needs—and your family’s needs—come first.

Remember, now, I said needs. You don’t need to eat steak every night. You do need to cut out the brand-name clothes, the fancy restaurants, and even the expensive cell phone package. You may even need to sell your car or downsize in order to get out of debt faster. But if you’re behind on your bills, take care of your necessities—your Four Walls—before you budget money for anything else.

I have counseled families who were so ruthlessly badgered by collection agencies that they paid their credit card bills on time, but they couldn’t pay the electric bill! Your family needs to eat. You need to keep the lights on and the house warm. And that debt collector can do without his bonus (yes, they get rewarded for their production) so that you can take care of your needs.

Creditors don’t care about you. They just want your money, and they will use any tactic they can to squeeze every penny out of you. Don’t give in. Focus on the important over the urgent. And that starts with taking care of your Four Walls first.