Before you do anything, make sure these areas are taken care of: Food, Utilities, Mortgage/Rent, Transportation. If you are behind on any of these, then don’t pay ANYTHING else until these BASIC NECESSITIES are current. Here is an outline of a very first, very basic budget, or spending plan:
- Other income
- Car payment
- Car insurance
- Car fuel
If you have money left over, hurray, you can start your journey. If there is no money left over, you may want to ditch an expensive car, try to lower your car insurance, move, get a better job or another job. YOU MUST DO SOMETHING TO CHANGE THIS, YOUR HOUSE IS ON FIRE!! (a saying by DR to drill home the severity of your problem). If you are behind in some of these areas also, negotiate a repayment plan. Other creditors will not be happy, but they can wait. They will threaten you, send nasty letters and whine a lot, but you HAVE to eat, have a dwelling, lights, heat, hot water, and a way to get to a job.
There is hope if you start being mindful and don’t stay stuck. Write down everything you spend money on and you may find something that you forgot about that you don’t need. You have to be brutal and realistic. Most important is that you cannot ignore it and go on being broke. You might want to look for a better or another job. Is there something you can do in your neighborhood to earn extra money? Maybe there is some stuff in your house that you can sell. Is your rent or mortgage more than 25% of your monthly take-home pay? That IS a problem. How much is your car payment? Maybe your car is ‘eating your lunch’, literally. The point here is to get in the game and DO SOMETHING. You can do THIS!