Where to START? DEEPLY IN DEBT.?

this is so embarassing, but i need help with my finances. we are earning a pretty decent income to start with, but for some reason we were not able to say NO to all the help asks from us (we're like a Robinhood, using the credit cards "huh!huh!huh!)and now the nightmare is here. We can't keep up with the monthly bills we have and the monthly credit cards payments we need to pay and all our credit cards are maxxed out. i've never behind in my payments except for this month and its way over my head. we've been living a on "cash basis" on all our purchases since we are starting to reduce our debts but its so hard... i don't have anymore money to cover up the patches. I need help on how to "manipulate" our finances. Making ends meet is no longer meeting.. Any advise is appreciated.

Okay, take a deep breath. You will be okay.

As you know, take care of your family first. Saying no is now in your vocabulary. We all have money trouble. It is up to them to bail themselves out and up to you to protect your family. No more playing Santa Clause, okay?It was nice, but now it is time to get your life back. You want to get it so that you have at least 3 months of your salary and of your spouses in the bank. Without that, you are living on the edge. In the meantime...

1. Create a budget. Crunch the numbers. Check out all the cool financial calculators and worksheets available on the net, then manipulate a worksheet to your own needs and get on track.

2. Make a list of all that goes out each month, including groceries, ATM fees, EVERYTHING you all are spending money on. Put your bills in order of priority where you and spouse can easily access them. Open your mail when it comes and call anyone about to report you to a credit bureau and make arrangements quick.

--Call creditors BEFORE you are late on your payment. Embarrassing--maybe--but better than further going into the black hole of debt, yes?
--Then make a budget, for real. What are your goals? Getting out of debt will help you get your life back.
--put ten percent, minimum aside every paycheck before you do anything'
--pay bills the day you get paid or don't touch your paycheck until you have paid your bills.
--you and spouse/partner go over the whole budget together. You pay the bills each week, both of you immediately, before doing anything else.
--once that habit is set and things calm down a little, you can pick a day a week to do it, like Sat. or Sun.

--Compare your income to your expenses by adding up all your monthly expenses and prioritizing them something like this:

1. Mortgage/rent
2. Home insurance/renters insurance
3. Utilities
4. Food
5. Gas to get to work
6. Lunches for work, school

7. Credit cards, store cards, any revolving credit payments
8. Car loans
9. Eating out, social expenditures

3.Then subtract the monthly total from your monthly income and divide it into four or two, depending whether you get paid weekly or bi-weekly. If the balance is negative, then you'll need to get creative. Do not panic. My parents overcame $200,000 of debt on $20,000 income. You can certainly do it if they can.

Little tips: Until you get things under control, do not eat out, stop at convenience stores, or go shopping for fun or do any other non-necessary money spending activities. Stop any silly spending and ship that money to your high-interest debt so you can get your fun life back.

Then figure out how much food you need, gas for work, kids lunch money, etc. Withdraw that money instead of using ATM/Debit. If you are eating out at work, consider making something great on Sunday like pot roast or lasagna so you can pack some lunches during the week. If you are spending money at convenience stores, stop it. Buy your drinks when you go grocery shopping. The savings is huge if you add it up.

Buy a notebook for bills only. They cost less than a dollar. List everyone you owe: Who, How Much, Minimum Payment, balance, Date due, Date paid, Amount paid, etc. When you pay it, keep record of how in the last column (check,cash, visa debit, etc.). Once you pay a bill, remove it from the group of bills for the month wherever you have your mail and file paid bills in either a notebook divided into months with a pocketed divider to hold reciepts or into an envelope labeled by the month that fits in a shoe box so you can save it in an orderly way.

In the house, I got serious about WANT vs. NEED. I got rid of all the junk bills we didn't need like premium cable channels, cell phones, eating out, take-out, etc. When we got caught up, I brought back cable and internet.

I buy my gas for the next week on payday and limit my travels to save on money. I do most of my errands all on the same day to decrease my spending/gas usage.

I got our phone bill on a one-rate plan, decreasing it by 3/4. I rolled our cable, phone, and internet into one bill, reducing all that, freeing up more money to get out of debt with. Like I said, for awhile, I shut off the phone, cable, internet until I got the bills under control and could afford them. Once we got our bills paid down, we could afford some little luxeries again, but within reason. When I consider using credit, I remember that and just say NO.

Hubby and I sit down and plan who is paying what and when every single week. We keep track of it in the bill book. It is time well spent. It helps us both keep our goals in mind and do the right thing. We gloat over the growing savings account (as small as it is).

It takes about 3 years to really get out of debt, but it beats the seven it would take to overcome bankruptcy. Your pride comes back and life stops being so stressful.

How to get rid of the credit card debt:
Start paying off the credit card with the smallest balance first, while making the minimum payment on the others. When you get one paid off, then pay more money to others. Pay as much money as you can to high interest debts to get them gone. Keep them gone. Do not buy on credit, period, and especially not if it is large and unplanned expense.

--I got rid of my car payment and car I was paying on and bought a cheap, used car, leaving hundreds of dollars to pay off the creditors with. It isn't a fashion statement, but I owe nothing on it. That is a couple hundred more dollars I have a month to get out of debt with. I save for my next car now.

--I consolidated my loans into one low payment with very low interest. I make that payment no matter what. If it might be late, I call them and make arrangements so I don't further wreck my credit.

I wish you the very best. I am sure you can build a great future.

In the meantime, if you have a mortgage and have not refinanced at a much lower rate, you may consider doing that and rolling your debt into that. Very quick and easy fix, but if you do it, don't open any more charge accounts. You need no more than two and no more than 10% of your income should be going to that type of debt. Fair enough? Just an option.

It will take you an average of about 3 years to be debt free. You can do it!

Some things we do that help:

1. Buy the Sunday paper and see what grocery deals are where. Make a menu and shop for off the menu. Keeps impulse buying waaay down.

2. Do different activities and avoid being impulsive. Once you open your bills, crunch the numbers and make a plan, stick to it. As you pay things down, money will get freed up and the speed at which your debt disappears will get rapid. You'll like it. Then you may feel old urges coming on. Stick to your plan and recharge your committment. You want to get at least 3 months of you and your spouse's income saved up. Then you will be able to breath. You can begin investing, and make your money make money for you and really get into the life you should be leading. Don't let "WANT" go before NEED. It's worth it. Have fun, live and laugh. These days will soon be behind you.

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