What To Do When You Are In A HUGE Financial Mess
I have met a ton of people who are experiencing the harshness of the following two key items:
- No Plan, No Savings, Piles of Debt
- Loss/Reduction of Income
Here is what you can do when faced with this situation.
- Cry. It is OK to be regretful for awhile!
- Take time to prioritize who will get paid and who will not get paid. (Read the post I wrote HERE about priority order.)
- Write out your goals. Make sure they are SMART.
- Prepare a written spending plan (even if you know that it will not balance to Exactly Zero). This will allow you to fully understand your "Go Get This!" number.
- Take ACTION!
There can be a tendency to just focus on #1 and hope for everything to just work itself out. Usually, this is not the case. Recovering from this type of issue is emotional and gut-wrenching, but it requires one to take action.
You CAN recover from the mess!
I posted this on another post on setting priorities, but thought that my question may get lost. Sorry if you’re reading it twice. My question is:
After all the priorities are paid, I have about $350 left a month that doesn’t even come close to covering the $1300 minimum payments on unsecured debt. Any thoughts about taking this $350 and paying on one debt at a time, get it paid off and then move to the next? Spreading $350 over 7 debts will never get me anywhere.
We’ve had some major setbacks that has decreased our income and unsure whether things will improve in the immediate future.
I would make sure I save some of that $350, even if it is a small amount. Without some sort of savings I have no choice but to turn to debt if something happens and I needed money. More debt is the last thing that anyone needs. Keep your head up and keep working on it! You CAN do it!
Have you contacted your creditors? A lot of times, if you call them and explain your situation, you can work out a reduced or deferred payment plan. That way they at least get paid rather than turning it over to a collections agency. Never hurts to ask!
I have talked to some of the creditors. Most want at least half of what we have to pay. With only having $350, spread 7 ways doesn’t go far.
My hope is to do this for awhile until our lives improve and we are making more or have secured debt paid off. I have less than two years left on my truck which will free up $400.