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  #6  
October 20th, 2013, 10:35 PM
MerinSun MerinSun is offline
Mega Super Mommy
Join Date: Sep 2010
Location: Cincinnati, OH
Posts: 1,834
Just quick budgeting advice:

Sit down and look at all your finances, pull out bills and receipts, get exact figures. Sort it all into two piles: Recurring fixed loans like car payments, student loans, mortgages, rent, etc. Things that are the same amount every single month. The second pile is all your debt that fluctuates, like credit cards, hospital bills (short term payments, less than 6 months), power bill, etc.

Take your total income for the month and deduct all of your fixed debts (from the first category). Now look at the amount you have left. Divide it by three: The first chunk goes into savings. The second chunk into your checking for gasoline, groceries, necessities, etc. The third chunk will be debt relief.

The first things to come out of that debt relief chunk will be the fluctuating debt that is also recurring (power, water, etc). You can change how much you owe by how you use those resources, so this is an excellent opportunity to gauge how much you use and how you can reduce its usage. What is left over is what you can afford to spend paying off your credit cards, hospital bills, etc. If there is too little left over or nothing then you need to first pull money out of your checking account. Note, that means you're currently living outside of your means, especially if you're then having to pull money back out of savings to pay for groceries.

Eventually the goal is that your fluctuating debt will be diminished and then the excess can be applied to your fixed debt, like your car payments. And then as you reduce that debt it will be divided between checking and savings.

It takes a lot of doing but it is worth it.
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