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.

  1. Cry.  It is OK to be regretful for awhile!
  2. Take time to prioritize who will get paid and who will not get paid.  (Read the post I wrote HERE about priority order.)
  3. Write out your goals.  Make sure they are SMART.
  4. 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.
  5. 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! 


  1. DebtGirl on February 24, 2009 at 8:42 am

    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.

  2. Daniel on February 24, 2009 at 10:26 am

    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!

  3. Todd Helmkamp on February 25, 2009 at 10:36 am

    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!

  4. DebtGirl on February 25, 2009 at 5:34 pm

    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.

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