Dealing with Tough Times

The past year has been a very difficult one, trying to stay safe and healthy, dealing with income reductions and wondering when we can get back to a normal lifestyle. Maybe you are one of the unfortunate consumers to experience some reduction in income and within the past few months have found a new job or been rehired at your last employer. Maybe your spouse has lost their income and you are both struggling to maintain your home and obligations on one income. You now realize how much debt you may have accumulated? How do you handle this going forward?

Time to create a new budget and plan to move forward. Look at your take home income and make a list of the fixed monthly expenses, mortgage, rent, car payment, utility payments as these would take precedent over any other expenses. Make a list of any other new expenses and make sure you write them down to keep track of them.

Review any automatic payment plans you have setup. Review these payment plans and examine the benefits they provide. Although they may be small, they can add up and you may find you have the same benefits elsewhere, which is duplicative and costly.

It is imperative you pay yourself first, meaning you must put away some income into a savings account after each paycheck and before you start paying your bills. Consequently, you will want to have 3-5 months of living expenses put away in case you lose your job or have a loss of income.

Start making your fixed payments first as you would always want to have your food/shelter protected so you may move forward. Extra monies would then be applied to the remaining debt. Slowly start to pay down the debt, this may take months or even a few years. Pay attention to your current spending as well and stay focused on making your new budget work. It will not be easy, but you can make the effort and get the debt under control.

Consider talking to your creditors and explain your situation or contact a Certified Credit Counselor at Debt Management Credit Counseling Corp., or 866-724-3328, and ask for a free budgeting session and ask how they may be able to help you with your debt issues.