Pay These 7 Monthly Expenses Before Paying Down Debt, According to Experts

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If your New Year’s resolution involved paying down your debt then you have likely started thinking about how to achieve this goal. The first step you need to take is to determine just how much debt you have. Understanding your current debt position is imperative to achieving financial stability.

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Once you know what the bottom line is you can start to plan out your budget. Get a firm idea of what you have coming in and going out each month. You should then be able to categorize what is necessary spending (need) and what is discretionary spending (want). These numbers will then help you decide how much disposable income you have to put toward your debt.

Unless someone else is willing to pay your bills, you’ll still need to pay for your necessities before tackling your debt. We asked experts to help us define what we should still be spending money on even if we want to pay down our debt. Here are the seven monthly expenses they said should come first.

Housing Expenses

For most people, housing (rent and mortgage payments) is their largest expense each month. Our experts agree that no matter what this cost should come first.

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“Missing a rent or mortgage payment can result in late fees, penalties, and even eviction or foreclosure. It’s essential to prioritize this expense as a roof over your head is crucial for your well-being,” said Michael Ryan, a financial coach and author of


“Before any other monthly costs can be thought about, the ‘Four Walls,’ or food, utilities, shelter, and transportation, must be taken care of. You have to eat, but you don’t always have to eat in a restaurant, so I gave groceries their own category,” said Steve Rose, vice president at MoneyTransfers.

“And if you want to stretch your dollar even farther, look no further than your grocery bill. Most people tend to go overboard in this area because it’s so simple to do so. If you use coupons, make do with what you have, and begin meal planning, you can save quite a bit of money in a month,” he added.

So while you need to prioritize this cost, there are easy ways to lower it so that more money can go toward your debts.

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“Without reliable transportation, you cannot get to work which threatens your ability to earn the money necessary to pay for your basic needs and even your ability to pay down debt once those needs are met,” said Aisha Taylor, founder/CEO of FNPhenomenal.

Whether it’s your car payment, gas or bus fare, you’ll often need to deal with these costs to generate money. There are ways to cut down — for example, maybe you can work from home occasionally or carpool with someone else.


Michael Ryan also recommends paying utilities before addressing debt since “[t]hese are essential services like electricity, water, and gas. If you fall behind on these payments, you run the risk of having these services disconnected, which can be a significant hardship.”

Tom Koesternen, a chartered financial analyst and consultant with, agreed, “Can you live without power, water, or other domestic necessities? Therefore paying your utility bills every month is invariable. If you avoid paying these bills, you know what will happen. The utility service provider will not think twice before cutting off the supplies. Therefore, your debt repayments can wait, but not your utility payments.”

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A less discussed, but clearly critical expense is taxes. Gabriel Lalonde (CFP, CFEI, BA.), president of MDL Financial Group, said, “Paying taxes is an important financial obligation and should be a priority when it comes to monthly expenses. Taxes are typically owed to the government and can include income taxes on wages, self-employment income, or other sources of taxable income.”

“Failing to pay income taxes can result in penalties and interest charges, as well as a lien being placed on your property. In severe cases, it can also result in wage garnishment or jail time. It is important to stay current on tax obligations to avoid financial penalties and maintain good standing with the government,” he said.

If you’re not able to pay your taxes, it’s important to explore your payment options so that you’re not just avoiding them and creating bigger problems.


“Missing an insurance payment can result in a gap in coverage, putting you at risk in the event of an emergency. Make sure to prioritize insurance payments for health, car, and other essential coverage,” said retired financial planner Michael Ryan.

Monthly Minimum Payments

While you may be focusing on trying to reduce your debt, you cannot ignore your other obligations. “It is important to pay the minimum payment on all credit cards prior to paying down other debts,” said Steve Rose. He added, “This will help you avoid late fees or penalties and keep your debt from spiraling out of control. It is also a good idea to make extra payments when possible.”

Final Thoughts

“Remember, when it comes to debt, it’s important to focus on paying off high-interest debt first, as it will cost you more in the long run,” said Michael Ryan.

“In short,” he said, “paying your essential expenses first is a critical step in getting your debt under control and achieving financial stability. With a clear and focused approach, you can stay afloat and reach your financial goals.”

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