Ask Aunt B

B

Dear Aunt B, If I am in a poor financial situation. What do I do? I am in debt. I don’t make enough money to cover my bills. I keep getting deeper and deeper in the problem. I don’t know how to turn it around. Help!!!

Money Woes Dear Money Woes, As soon as you get some of a handle on this issue, the better it will be for you. It is very stressful to live outside of your means. Debt will never feel good unless you’re a money person that knows how to use debt. I am definitely not that person. I am not really a money person either, but I will do my best to give you a bit of motherly (Aunt B) common sense advice.

Get clear on exactly what your numbers are. What is the total of your debt? What is the total of your income, after all the deductions? Often, early on in our working career, a big mistake can be made. We think we make so much per hour per se and believe that we have all that money to spend. We can forget about the taxes that come directly out of our gross pay. We forget about any deductions that we may have set up to be deducted from our pay. One example might be health insurance premiums.

What is the total of all your bills? What bills are flexible, and what bills are fixed? Your rent is fixed until it is increased or you move. Your utilities bills are flexible and are determined by how much you use those utilities. We all have expenses that are absolutely not necessary. Get totals of everything you spend. It can be interesting to keep track of all the money that you spend for a period of time. I am speaking of all the little things that, as soon as you have spent them, you forget about them. Do you go to Starbucks? Do you go out to eat for lunch and possibly dinner, or God forbid breakfast too? If this is the case, good news, you have a bunch of money you can save every month by just some planning and cooking on your own.

Once you have a clear picture of your finances, does anything jump out to you? Are you in a better or worse state than you at once thought? This is so common because when we are frightened about any situation, we often don’t have a clear picture. My hope for you is that it is not as bad as you first thought. Either way, the only place to start is to know where you are.

There are many programs out there that can give you a plan of action and you should search those out. Many speak very highly of Dave Ramsey. I believe many churches offer his programs. Look for experts to get your exact plan. There is a book, I have spoken of in earlier articles, “Millionaire Mind”. It is by Harv Eker, and I found some interesting ideas in this book.

Basically, do you have enough money to cover your bills? I am speaking of the bills that are not negotiable. If the answer is no, then what are your options? Can you move back to your parents or another family member that can assist you in getting ahead? Can you get a roommate? It can be a great assistance if you can divide your housing costs between yourself and another.

Do you need to get another job or a second job? I realize this is not ideal and hopefully not a long-term solution. It seems to me that there are a substantial number of opportunities in working from home that can be structured around your off hours for a time. Watch for scams in this area. If something seems too good to be true, it probably is. Get suggestions from those in your life that you trust. Look to your people that at least seem to have their finances together.

This will feel so much better when you get a handle on it. That being said, if you don’t get a handle, I promise it will get worse.

Love, Aunt B

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