The Key to Your Financial Success

You're living paycheck to paycheck, wondering how in the world those folks across the street can afford that fancy house, new cars, and the best and newest toys for their kids, right?

Now don't start nagging your wife or husband on their money management skills just yet. It could be that your neighbor is in debt up to his eyeballs, as many are in our country today. With the easy credit available just before the housing bubble burst, there are many families struggling to maintain the lifestyle they had become accustomed to in the last ten years.

But, just like a diet, managing your finances successfully is not rocket science. Start with the basics, you know, those simple practices that you WERE NOT taught in school! Simple addition, people.....paycheck equals a certain amount, expenses come off that figure. Your priorities should always come first and you should create a spending plan (I hate that word, budget) on a yearly basis, and then divide that amount into your pay schedule, I.E. every week, every other week, the first and fifteenth, or however you are paid.

Let's use this example:

Bill and Sally make a NET income of $4000. 00 per month ( this is your take home pay that doesn't always take you home!). Their priorities would be as follows:

Mortgage payment (or rent) - $ 1300.00
Food - $ 500.00
Utilities (electric, gas,
phone, etc) - $ 200.00
Gasoline - $ 200.00
Clothing - $ 100.00
Prescriptions - $ 50.00
Car/home insurance - $ 159.00 (if you pay a yearly amount, divide by 12 months)
Car payment - $ 350.00
Entertainment - $ 200.00
Cable TV / Internet Service - $ 150.00

Which leaves $791.00 a month for everything else (credit cards, medical payments, other loans, etc)

Now these are just some basic priorities you would want to start your spending plan with, however, your priority expenses may include things such as child care, taxes on your home if your mortgage does not impound them for you in your monthly mortgage payment, etc. You would have to adjust for this as you personalize your spending plan.

Now what is the next priority? If you have a debt to the IRS or a secured loan, this would definitely be next!
Credit cards then medical bills would most likely follow. All has to fit in the $991.00 you have left a month to pay these expenses.

Ok, so what if you are already upside down before getting to the bottom of your "bills to be paid" list?

If you are employed, you can seek services from a Credit Counseling agency, most which are non-profit. Just be sure they are registered with your state's financial institutions and are in good standing! They are able to adjust interest rates and make special arrangements with your creditors to fit your income.

If you are not employed, you need to put yourself on what I call the "Nuclear Mindset Spending Plan". Start eliminating those unnecessary bills or at least cut them down, such as your cable TV service, cell phone, or your internet services. ONLY take a weekly stipend from your checking for basics.....food, gasoline, prescriptions.... and leave the rest in your account to be able to pay the mortgage or rent, car payment and insurances and of course, any secured debt . If you are going to be late, don't be an ostrich and hide your head! Call your lending company and ask for a deferment or at least advise them that the payment will be late. Your other bills, such as credit cards and other unsecured debt can wait. Remember, not many creditors are going to sue you if they know there is no paycheck to attach!

Once you are back to work, most of your unsecured creditors will put you on a "hardship repayment plan", to help bring you up to date and eliminate that debt.

But what if you just can't seem to discipline the entire family into going along with your spending plan? There always seems to be those unplanned expenses that creep up on you that send your plan into a tailspin!

You can always seek the services of a daily money manager. They can manage your finances for you and ensure your financial success. The rest of your clan will just have to go along!

In good times and bad times, just stick to the basics. You can only slice an orange so many ways, so don't stress and allow your expenses to cause your health or marriage to fail when you are coming up short. There is help out there.....just make sure the help is trustworthy! There are a lot of scams there too, so you will have to navigate through the shark infested waters to find those people that can truly offer you the right kind of help you need in your personal situation. A call to your local Financial Institutions, your Better Business Bureau or Chamber of Commerce should help you ferret out the help you need!

Happy sailing!