Sound familiar?  As a credit counselor, I hear it daily. It is tempting to say that in today’s economy we are all stretched to the breaking point and then it only takes one thing to start the downhill slide.  The truth is, in good times and bad we all live up to, and beyond, our incomes. We are basically very optimistic people.  It is always going to be better next week, next month or next year. One of the differences that we see in economic downturns is that we are not just living from paycheck to paycheck but we have already spent our next paycheck, whether by pre-mailing checks, borrowing against paychecks or playing Russian roulette with shut-off dates. Then there are the expenses that we have absolutely no control over such as medical and auto expenses that get us behind.

Playing catch-up is very hard to do. If you are dealing with creditors who penalize you with late and/or over the limit fees, it can quickly become an impossible task.  We live in a society where very little is private.  You can turn on your television and see inside the lives of everyday people on everything from talk shows to the new reality based shows. But, finance is still an area that people are uncomfortable talking about. Ask someone how much they make or how much they owe and the nicest answer you will get is that it is none of your business.  Many couples don’t even discuss their finances. 

There are more divorces over finances than any other single cause. Men tend to have a harder time discussing finances than women. That is because at the bottom of the worry is fear. And a lot of men are not comfortable saying that they are afraid.  So, instead of bringing up issues that are uncomfortable, we fight.  We fight over mismanagement, overspending, under-earning, in-laws, outlaws, anything except the gut wrenching fear that is keeping us awake or staring in our nightmares.  

Our biggest mistakes are made when we feel that we are out of options.  That’s when we float a check, pawn something or pay exorbitant interest for a short term loan.  Even if we accept that there is no other choice at that point, stop and try to think of anything that could have been done a week, two weeks, or a month ago that would have helped prevent this crisis. Now apply those lessons to the future. Do those things now that will make a difference in the next crisis. And optimism aside, there is always another hill to climb.

The first step is to make an accurate budget. This is just an accounting of where the money goes.  You may have to track your money for a while before you are able to do this. Once you know where the money is going then you can decide where you want the money to go.  This has to be a personalized budget, not a generic percentage calculation out of a book. Once you list your expenses you need to prioritize them.  That will give you a little flexibility when things get tight. And be realistic, you cannot go on a diet, stop smoking, stop drinking and start a budget at the same time. Don’t set yourself up to fail.   

Remember this is about choices.  You do not have to justify your choices to anyone but yourself.  You are exchanging eight hours of your life five days a week for the right to choose. Don’t let outside influences take precedence to your long term goals. Sales are made by projecting your future income “you know you’ll be making more money next year”. No you don’t.  Do not spend money that you do not have.   

If you need help with creditors or creating a realistic budget and setting attainable goals for yourself and/or family contact Credit Counseling Advocates, Inc for free counseling.  We are in Van Buren at 927-B East Main,  479-410-1700 or 888-745-4418.