Financial Advisor | Imamother

amother

Gold

Thu, Jun 30 2016, 2:01 am

Try filling this out first:
https://www.daveramsey.com/everydollar

Here's how you can get on top of a lousy financial situation:

1) Get a clear picture of what's going on (yes this is painful, but necessary). Write down your ongoing monthly expenses, based on previous months - the fixed and the flexible (I.e. electricity is $100-$150 per month; food is $1500-$2000). Write down your debts, per credit card or loan, and your monthly payments. Also write down your monthly income.

If you are in bad shape, you will probably find out that your monthly financial obligations exceed your income. This is unfortunately normal.

2) Go back over your list and categorize and prioritize the expenses:
- Housing (rent, utilities)
- Transportation (car, insurance, gas)
- Debt (minimum payments)
- Household (food, tuition, diapers, cleaning supplies, clothing)

3) Now comes the miracle working part. You are going to shoehorn your expenses into your income. If you are lucky, this will work on the first try.

First of all, try to get those flexible amounts to fixed amounts - much easier to budget for. Your utility bill probably has a "budget pay" option, where you can pay a fixed amount per month and not have the staggering winter or summer bills.

Add that to the cost of your rent/mortgage and you have a "minimum housing" cost.

Do the same with your insurance, breaking it down to a monthly payment even if you usually pay per half-year or year. Add this to your other vehicle costs and you have a "transportation" amount.

If you are very lucky, you could cover housing, transportation, and debt with your income, with a little bit left over (to cover everything else... yeah right!).

Chances are that you can't, though.

So now we go through each bill, one by one, and see what we can do to minimize that expense. Can we start turning off all of the lights, turning up the thermostat of the AC, walking instead of driving to camp? Can we call up the phone company and ask for a discount? Can we switch to cheaper car insurance? Is there (gulp) a cheaper apartment rental?

Yup, that's not a fun part. You might feel like a poor beggar grubbing for pennies. And you might feel hopeless, because if you're in bad shape, it's not going to help that much.

But don't stop there.

Once you have those amounts whittled down to the bare bones, you have a "if I stole food we could survive" amount of money.

(Food is the most flexible cost of all, which is why it doesn't come first. It is REALLY upsetting, but it is possible to make cheap and fairly healthy meals, although it takes more time and can be stressful. However, there is good news:

The idea is to get OUT of debt so that all of those monthly debt payments can go towards living. The sooner the better.)

...to be continued...

amother

Pewter

Thu, Jun 30 2016, 8:02 am

I posted a few weeks ago about my situation- I don't know if any of this pertains to you but maybe it will.
We landed ourselves in major credit card debt and recently started working with a fantastic credit counseling service to get back on our feet. They offered us a debt management program as well as in depth budget counseling to help us create and maintain a doable budget. They're services are free for the initial session, but if you do plan to enroll in their program they charge $5 per account per month. Their website is http://www.consumercredit.com.

If you want more information let me know.

amother

Brunette

Thu, Jun 30 2016, 11:11 am

Does Dave Ramsey assume a reasonably good credit score? Because he talks a lot about paying off debt, but if you own a house already, or have no intention of buying one, why isn't declaring bankruptcy or settlements an option people should be looking at?

and please don't respond about ehrlicheit...the CC companies know what they are doing when they lend people money. Its a business deal. I'm wondering on a practical level.

OP - I bet that if you can put in some numbers, you can get good advice to start with here.

As the other poster said, if your income doesn't cover basic expenses, which is the case for many people, no planner can make that problem go away.

There is an accountant in Baltimore that helps people go through their numbers. Maybe there is someone in your area who does the same. Call your local chessed organization, the people there will be able to tell you who to call and you can stay anonymous.