In the Baby Steps program, the Four Walls are the fundamental necessities of your household’s finances. These bills are paid before anything else; before the credit card company, before Sallie Mae, before the medical debts.
The first category of no compromises is food. No matter how much debt you have, you and your family have to eat. Before MasterCard gets paid, your children get to eat. If they are mad about that, too bad! MasterCard and Sallie Mae do not get to force you into hunger.
I worked with a client once who had so many debts that she literally unplugged the fridge to save money to pay the debts. I had to show her why eating is the first priority of all things. Without food, you can’t function, and when you can’t function, you can’t work, and if you can’t work, you can’t get paid, and without pay, there’s no money to pay the debts.
There is no compromise on food!
The second of the Four Walls is your utilities: electricity, water, gas, etc. Your household needs to have lights and running water, and heat/air. If you pay your student loans but don’t have your lights and water on, that doesn’t make your life any easier or more pleasant.
Getting behind on your utility payments will affect your food situation as well. If you have no power, how will your fridge run? If you don’t have the gas lines activated, how will your stove work? Let’s say your work from home or have a side hustle that requires your internet and power to work, what happens then?
There is no compromise on utilities!
The next priority is your rent or mortgage. Once your food and utilities are covered, the next order of business is ensuring that your family will not be evicted or foreclosed. Having your food and utilities covered will be meaningless if your family does not also have a place to sleep at night.
Especially for renters, this is highly critical. Apartment complexes usually have little tolerance for overdue rents, and being behind on even one or two months’ rent can spur them to start eviction proceedings. For homeowners, there may be a bit more flexibility if you contact the lender who has your mortgage, and work with them proactively. Still, the mortgage or rent must be paid.
There is no compromise on housing!
The final component of the Four Walls is transportation. This includes gas and car insurance, and if you have a payment on the car, that as well, to prevent the car from being repossessed. To get to work, most of us need transportation; not everyone lives in an area with a mass transit system that can take them directly to where they need to go.
If you have your car running and clear, you can also use it to drive for Lyft or Uber, or do grocery shopping for Shipt or InstaCart and make some extra income along the way. But if you have no gas or the car is repossessed by the bank, you may be the one having to pay for those services instead of being paid for them.
There is no compromise on transportation!
No matter where you are in the Baby Steps, these Four Walls come first. If there is a job loss or an emergency, these four areas have to be taken care of before anything else.
This isn’t to say you cut off communication with your creditors, that’s the last thing you want to do. Rather, proactively contact them, inform them of the situation, and see how they may be able to work with you so that you can get back to paying them when the crisis has passed over.
And once you’re out of debt and have an emergency fund, it’s far less likely that a major financial obstacle will threaten your Four Walls!