Anney Zee
Questions and responses
to Financial Concerns


Age 30-40 Household income $30K to $35K,
debt $42K signed Feeling Overwhelmed

Dear Overwhelmed…

This is the second part of the answer to your question:

Your first step was to track the inflow and outflow of money for one month to get an idea where your money goes.

The second step of recovering your economic life is to create a plan to pay off the past. This might seem daunting at first however it gets easier. It really does get easier and you feel sooooo much better when you are at last out from under that huge cloud of debt.

Debt seems like an innocent word. It could be spelled octopus, for the death grip strangle hold debt has on most Americans. The average debt for every adult over 21 in the US is more than $7,000. Did you realize that $300 to $500 every month is going to past for past pleasures? Enough with the general information, let ZeeMoney Doctor focus on your situation.

Your short term debt exceeds your annual income this is not good. Don't feel alone, many others are in the same boat. “Great,” you say, “while drowning in debt, there are many others in similar boats along side. It doesn't help my problem but it makes me feel like I am not the only one struggling with this problem.”

There are many debt services that will help you do this. Frequently you can do it yourself. Here is a way to begin to shift in the way you spend. Last month you tracked your money. Now look at the list. Next take a look at the list of credit cards and their amounts. For most of my clients that involves stopping the spending on non-essentials and putting that money toward paying of the past indulgences.

Take a realistic look at the balance of the income and the out go. List your total income (take home pay, other moneys that you get monthly for example, child support or alimony). Subtract the essential bills, housing, insurance, car payments, etc. What is left is the money you have to spend each month. This needs to cover the gasoline in the car and the groceries and other living expenses. How much do you really need to spend on this?

Next take the remaining amount and look at your credit card debt. Is it possible to pay more than the minimum on at least one of them? Create a plan. Call the credit card companies. Request that they work with you. In exchange for you not using their card until it is paid off they might reduce or even eliminate the monthly interest charges. Make a plan and then just do it.

It does take time, so make your plan livable. Not eating for the next three weeks is NOT the best way to loose weight. Give yourself a bit of spending money each week. Go on a cash plan. Practice saying no to the impulse buying that statistics say gobble up more than 25% of our monthly money. Put most of that toward getting free of the burden of your past spending habits.

Summary: List your monthly necessaries. List your debts. Determine what is possible to change. Call your credit card companies and create agreements that you can live with. Then just do it.

Next month, finding "hidden money" in your life.

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