By Terry Rigg
There are literally thousands of articles about how you should or should not manage your money. Myself and other well intentioned money saving wizards bombard you with ideas of all that you should be doing. However, if you are behind two payments on your mortgage or rent, credit card debt up to your ears or there is a tow truck waiting outside to repossess your car, not much of what we say really seems to fit your situation.
This article will attempt to give you some guidelines to help you get started no matter what your situation. The steps are fairly simple. Access the Situation, Damage Control, Find a Way and Get on Track are just 4 steps that you will need to take quickly.
Access the Situation
Sit down with a piece of paper and a pencil and find out where you are now. No I'm not talking about a budget yet. Many people never take the time to get a picture of what they have coming in compared to what they have going out. On the left side of the paper put down any income you have. Only consider take home money because this is all that matters to you right now. On the right side of the paper write down all of the bills that you have coming out this month. At the bottom of the paper, put down any bills that are past due with the dollar amount needed to bring them up to date. Now total everything. Then subtract your bills from your income. If there is anything left over after bills, deduct what it will cost you for food and other necessities for the month.
Damage Control
If you are behind on your bills or just don't have enough money left after bills to buy what you need, something has to be done. This is where you have to set priorities. The first step is to eliminate anything you don't absolutely need. Some good examples of this are things like call waiting and other extras on your phone bill, selling that second car unless it is needed to earn income or stop eating out.
Here is a priority list of how you need to spend your money if you are behind:
1. Groceries and necessary health items
2. Mortgage or rent
3. Utilities
4. Other bills such as installment loans or credit cards
Notice that the above list adressess your basic needs, food, water and shelter, first.
Your next step is to call your bill collectors and let them know about your situation. I guarantee hiding from them will only make things worse. Let them know you can't pay them. Most important is to tell them you are working on the situation and will keep them informed. You will be surprised how many will work with you.
If you can't seem to get control of this on your own, consider contacting a free credit counseling service. You can find Consumer Credit Counseling Service at
www.credit.org. They can make arrangements for you to pay them a set amount each month to be distributed to your bill collectors.
Find A Way
The fact is that you need to get your finances in order, if for no other reason than your sanity. You can do one of two things to help with the problem. Increase your income or decrease your spending. While there are several ways to increase your income, they don't necessarily help. Let's take the example of getting a second job. You have extra expenses such as transportation, extra taxes, food, etc. that will cut deep into what you make.
Your best bet is to decrease your spending with this site giving a wide variety of saving ideas.
Get on Track
After you have looked into all of the above, it is time for a budget. The last thing you need is a budget that takes most of your time just to manage. I have developed a simple, easy to use budget system that will take very little of your time. It will also help organize your bill paying. You can find
The Complete Budget and Bill Organizer. This organizer is free. Whether you use my budget or someone elses, you must establish a budget and stick to it.
If you are reading this article, chances are you have a computer. Use it to find other ideas to help you manage your money. Try searching key words like: money saving, budget help and credit help.
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Terry Rigg is the author of
Living Within Your Means - The Easy Way and editor of
The FREE Budget Stretcher Newsletter and Budget Stretcher web site. He has 25 years of experience counseling individuals and families concerning their personal finances.
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