Melody in Fontana writes:
For the last few years everything we have tried financially does not work. Money seems to just flow through our hands no matter what we do. I make a decent living, however, my husband is currently unemployed after almost 19 years with one company. He is attempting a new career with the Sheriff’s Department but is still going through testing and backgound checks which could take up to another six months or more. I simply cannot put my sights as to why we are continually in financial distress even in good times. We are currently losing our home due to this most recent devestation, however, that is not what puts the fear in me. What does is the fact that even with $40k bonuses from my old employer, we could not keep a dime in our pocket, therefore; I need to know how to change this. What is your take on our situation?
Things are going to work out with your husband’s endeavors with the Sheriff’s Department, quite possibly sooner than you think! It’s still going to be a couple of months before everything is in place, but he should be working sometime in September.
You aren’t necessarily going to lose your house, but with your money situation in its current predicament, letting it go isn’t necessarily the worst idea in the world. It surely isn’t a happy option, but sometimes a major step back is the easiest way to get back on your feet.
This is going to sound a bit insane, but one of the biggest money issues the two of you have is you are used to having it. In some wallets (or hands), debit cards are just as troublesome as credit cards. Much of your financial troubles doesn’t stem from irresponsibility, but there is more than a little inattention going on when it comes to your spending habits.
I would advise both of you to bone up on your economic skills. Each of you is quite capable of making money, good money, but neither of you pay an overwhelming amount of attention to where it all goes. You rather look at it as your “lifestyle,” just everyday spending that everyone does. It would be well-worth taking a financial management class or two, or become involved in a credit counseling course that will raise many red flags and highlight areas where each (or both) of you are unnecessarily spending.
Right now you have financial burdens, but you still may want to consult with a financial planner. Before your husband lost his job, you guys were in a position to be planning for your financial future, but right now your focus needs to be geared more toward survival, which means watching – and stretching – every penny.
Living within your means is no longer the American way. We like to indulge ourselves, abuse the credit we have available, and rely on the “next pay” to cover what we spend today. While it may seem feasible and make perfect sense at the time, and everyone else is existing in pretty much the same manner, it is this way of thinking that gets most of us in trouble – and catches us unprepared when something goes wrong.
Because your situation is so dire at the moment, I really hope you will seek out professional financial guidance. If you can’t, or choose not to, then the two of you need to sit down with a pen and paper and do an honest reality check. Invest the time into making several lists. List your monthly bills – the stuff you have to pay in order to survive – rounding up, not down. List your personal spending, and what your spending money on. Look at where the money flows, and look at how much is going toward what you want, rather than what you need. Make a monthly budget based on what is absolutely necessary, and make a yearly budget that has flexibility to cover the unforeseen financial hiccups we all encounter. Stick to your budgets, and you may find yourself doing things differently in order to bring those numbers down.
Use several banks or accounts if you have to – one for bills, one for gas and vehicle maintenance, and personal EMERGENCY accounts for each of you. Another “must” is a savings account or plan! All of these accounts should be treated like bills, with the designated deposits being made into them, and only using them for the purposes in which they were set up. It takes great restraint not to “borrow” from one account for another purpose, but when you have things set up this way, you have to think through what you are doing, and the potential consequences.
Credit cards and debit cards are convenient. A little too convenient. Most of us have a general idea of the money we’ve spent or what our balances are, but there are times when our mental accounting is way wrong. Many times, when the statements come in it’s already too late.
One of the greatest ways to monitor spending is to revert back to CASH. Use cash at the grocery store, miscellaneous shopping and for fun and entertainment. When you pull fifty bucks out of your wallet, you know you are spending it, at that moment, and know that you now have less money available. It makes you think a little harder before making a purchase. The amazing thing about cash is – once it’s gone, it’s undeniably gone. But, by learning to use cash where you can in your life, it really does help you see where you’ve been needlessly hemorrhaging your dollars away.