Plonkee, spinning off a Simple Dollar post, contemplates her most and least important billsand asks, “If you order your bills from most important to least important, could you get rid of the one on the bottom of the list?”
Interesting exercise! After thinking about it, here’s what I’ve come up with. Some items tie for various places, because they’re of equal importance (or lack thereof). Some are automatically engorged from my paycheck, so I have no immediate choice in the matter.
From least to most important:
11.
newspapers, magazines
clothing
misc. junk
I can do without these, at least for a while. I have enough clothing to last for a year or more; none of us needs junk; and while I would miss my magazines and the newspaper, they’re strictly luxury items.
10.
yard man
Though I couldn’t begin to do all the yardwork around this house by myself, the world would not end if it were let go for several months. The yard is xeriscaped, so it won’t soon be waist-high in weeds. And besides, so many houses in my neighborhood are showing signs of blight, a neglected yard would not be noticed.
9.
whole life insurance policy
This policy is 30 years old. If I default on the payments now, the insurance part will go away, but I still can collect about $23,500 in cash value.
8.
long-term care insurance
This policy bets that I will need nursing care before I die. While that probably is so, if I quit paying the policy remains in force to a limited extent, and so it would still defray nursing-home costs to some extent. Given a choice between a long-term bet and groceries, I’ll take groceries.
7.
dental insurance
house repairs
homeowner’s insurance
My teeth are pretty good and require only routine care. At least temporarily, I’d be willing to do without the dental insurance. However, the cost is only about eight bucks a month, and so things would have to be very extreme for me to forego it.
House repairs are more urgent than yard care. Matters that have to do with safety or livability would need attention. But things like paint or a cracked window could be neglected without much harm.
Carrying homeowner’s insurance is tantamount to buying air. You make a bet that something bad will happen and that when it does you can’t afford to pay repairs out of pocket. While that may come to pass, people who don’t live in the path of natural disasters rarely experience catastrophic property loss. I probably could forego the home insurance for a time.
6.
gasoline
In a city where all amenities, including grocery stores, are miles apart, a car is an important tool. However, my age gets me a senior citizen pass on the buses to the tune of 50 cents a ride, and so in theory I could, if forced to it, commute to work, shopping, and doctors on our weak excuse for public transit. This would be extremely difficult and time-consuming, and I’d give up other things first.
5.
groceries
You’ve gotta eat. But you don’t gotta eat quite as high off the hog as I do. Food is my one consistent self-indulgence. With no risk to my health, I could cut my bill in half by eating cheaper food; foregoing wine, beer, and good coffee; and cooking frugally.
4.
car registration
property tax
Now we’re in the realm of costs that can’t be ignored. If I don’t pay my car registration, the state will rescind my registration and my car insurance will be canceled. It’s against the law in Arizona to drive without insurance or without registration. If I got in an accident before the police caught me, levied huge fines, and confiscated my car, I would be hugely liable.
Nonpayment of county property tax results in confiscation of the property and eviction from your home.
3.
electric
gas
water
phone
In our climate, you can’t get by during the summer without power. A person my age would die of heat exhaustion in 115-degree heat. Water also is crucial to survival here.
2.
second mortgage
The Renovation Loan is actually a 30-year fixed-rate second mortgage on my house. Although payments are small, if I default, my house could be confiscated. This needs to be paid.
1.
health insurance
In America, you can’t get health care without insurance. Well…you can, but a) it’s not easy; b) you won’t get it when you need it; and c) it won’t be adequate. You don’t want to gamble with this one.
So, could I get rid of my least important bill? No problem! I could probably dispense with my three least important bills (items 9 through 11) without much distress. About the time you arrive at level 7, things start to get ambiguous. The top five items are indispensable. What, then, would be my minimum level of expense if I stayed in my house and maintained my job?
If I dispense with my car and ride the bus everywhere, the monthly nonfood bills would be as follows:
$175/month: property tax
$225: electric
$ 24: natural gas
$120: water
$ 87: phone
$170: second mortgage
$ 26: health insurance
$ 30: bus rides, approx.
$857
Phoenix being a city whose designers noted everything that Los Angeles got wrong and then deliberately did that, living here with no car is not very practical. Keeping my nine-year-old car would make the rock-bottom monthly tab, before groceries, look like this:
$ 241/month: car insurance, property tax
$ 225: electric
$ 24: natural gas
$ 120: water
$ 87: phone
$ 170: second mortgage
$ 26: health insurance
$ 200:gasoline
$1093
But this assumes I would keep my job and that my employer maintains its extremely cheap EPO health plan. Obviously, I would not be in straits that required me to cut routine expenses unless I were unemployed. In that case, my health insurance would rise to about $500 a month, for a truncated monthly outlay of $1,593, almost twice my current routine monthly costs. Or a mere $1,357, without the car’s fuel bill.
Whoa! In other words, unemployment—the only circumstance that would require me to prioritize my expenses with an eye to lopping off the least crucial ones—could force me to cut the most important item on my list. Now there’s a thought!