First step is hardest in making monthly budget

Q: I enjoy reading your column. I hope you can help me figure out a way to set up a monthly budget for myself. Do you have any suggestions for where I should start? I am tired of feeling that my money is not being used wisely. — D.E., via email

A: The first thing you have to do is sit down and write a list of all the expenses that are unavoidable, such as rent/mortgage payment, insurance, car payments, utility bills, food, etc. Then assign a value to each of them. Many are pretty constant amounts. Others, such as food, can be a little more difficult to pin down.

Once you have that added up, compare it to your monthly income and you will see how much money you can choose to spend each month. Once you have this budget, do your best to stick to it.

One trick is to condition yourself not to go to the grocery store hungry. It will encourage you to buy more things than necessary. You can also go to a library or the Internet to find more information on this subject that could help you immensely.

The most difficult thing is getting started. It’s also important to put yourself first. In other words, decide how much to save each payday and put that amount away first.

Q: My husband decided to take out several cash advances on his credit card at the casino. We can’t afford to pay this debt back to the credit card company. We only have an extra $200 a month after bills. What can we do to prevent this from hurting our credit? I am scared of the consequences. — S.R., via email

A: Hurting your credit is the least thing you have to be concerned about. Your husband taking cash advances at the casino indicates that he has a problem controlling himself. That can get you in even more serious trouble.

Contact the credit card company and explain that you have put yourself in a position in which you simply can’t afford its terms. It may well be that the company will reduce your interest rate or spread out your payments for a longer period of time.

The only other thing I can suggest is that you increase your income by finding extra part-time jobs and reducing your expenses, if possible. Sounds to me that your back is right up against the wall, but whatever it takes, you will need to increase your income to fight your way out of this. I wish you well.

If worse comes to worse, there is also Chapter 7 bankruptcy. It’s not a pleasant thought, but it’s one that deserves consideration.

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