We all have those friends that always want to head out on the town and spend. Whether it’s taking large vacations or wanting to eat out every week, they just seem to be made out of money. So, how do you tell someone who likes to spend that you are on a strict budget?

My wife and I have friends that like to spend and it’s hard to tell them no when they ask us to tag along. We don’t want to alienate them to the point that they don’t want to see us again. So, I thought it would be beneficial to think of a few ways to handle the situation if it should every arise again. Here are some strategies that I thought might be useful:

Learn to Say “No”

You might think that saying no is an easy concept but it’s not. When that person is standing right in front of you and you are thinking of ruining their plans, it’s hard to just say no.

It’s probably not best to just say “no” and then leave it at that. Try saying something like, “I’d love to do that, but right now we are really trying to watch our spending.” If they don’t understand that then maybe it’s time to find some new friends.

Tell Them Your Financial Goals

If they are still giving you a rough time after you said no, maybe it’s time to tell them your financial goals. If you are trying to get out of debt or saving for a down payment on a home, tell them. It may actually even inspire them to create their own financial goals.

You don’t want to get too personal with your goals though. In other words, don’t tell them that you are $150,000 in debt and just can’t afford to do anything for the next 7 years. That just might scare them off a bit.

Invite Them Over and Control the Situation

This is a strategy my wife and I use. When all else fails, invite the couple over to your place. If you are in your own domain, you can control the expenses a lot better. Cooking a meal for your guests can be a lot cheaper than eating out. Since your guests originally wanted to spend money on going out, have them bring over the drinks. Even those are cheaper when bought at the store vs. a restaurant.

Go to Places or Do Things For Free

Another great solution is to do things with your friends that are free. My wife and I live really close to Washington DC and there are a ton of things to do there for free. Whenever we have relatives or visiting friends in the area, we recommend heading into the city. There are a ton a free museums and monuments to check out. You can pack a picnic lunch and take mass transit.

Here are a few more things you can do with friends for free:

• Hiking and biking
• Picnics
• Volunteering
• Game night
• Pick up a team sport
• Much more!

How do you handle situations where you friends want you to spend but you don’t have the money?

Post by Frugal Dad

That’s a question that a lot of people ask while in debt. Dave Ramsey, possibly the most popular debt counselor, recommends that you stop ALL retirement saving while eliminating debt. He argues that it gives you a huge advantage because you have a lot more money for your debt snowball.

I am a little more liberal when it comes to this rule. I think that it should be based on some other factors as well. For example, our current pile of debt is so large that we will be missing out on 5+ years of retirement saving (the amount of time it’s going to take us to pay off this debt). When you add compound interest into the equation, it means that we would be missing out on a lot more money. Let me give you our situation as an example:

I currently work for the Government and am offered a 5% match for money I put into the Thrift Savings Plan (fancy government word for 401k). That means that for every dollar I put into the plan, they match me 100% up to a 5% of my income. That’s a guaranteed 100% return on my money and I can invest it in any of their funds. However, if I didn’t contribute to the plan, I would miss out on that free money. Plus, I would miss out on 5+ years of compound interest.

Now, I am going to put some numbers to the scenario. Let’s say I start putting 5% of my income (plus the match) into the plan starting today (age 25). By the time I reach age 70, I will have almost $2.5 million in the account assuming an 8% return. Now, if I wait 6 years (best case scenario for debt repayment) and start investing the same amount per year, I will only have $1.7 million in the account. Still not bad, but almost $800,000 less than if I would have started at 25. Here is a graph of this example:

So, as you can see, starting to save for retirement 6 years from now instead of today will cost me about $800,000 in retirement savings by age 70. Am I really going to pay that much more in interest by not stopping my contributions? I don’t think so!

So, I guess the question is, when should you stop contributing to retirement in order to clean up your debts? Should you do it if you can get the debts paid off in 2 years or less? 4 years or less? What is the magic number?

All I can say is, I am not missing out on almost $800,000 in retirement growth to save MAYBE a couple thousand in interest charges.

What are your thoughts on the subject? Can you think of any reasons why I should be STOPPING my contributions?

Post by Frugal Dad

When getting out of debt, there are two things that you can do: increase your income or decrease your expenses. Well, I will be doing both come April.

If you remember back a few posts, I mentioned that my wife and I live in different states during the week. In that post, I also mentioned that I had applied for two positions, one in Baltimore and the other in Washington DC. Well, I got the call yesterday that they want to hire me in Washington. This is big news for us both emotionally and financially.

In terms of our finances, this new job will increase our income by approximately $4,000. I will be doing the same job but since I will now work in Washington, I get a cost-of-living pay increase. Another great thing about the new job is that we will no longer have to pay rent in Pennsylvania. The new job will help us cut our expenses by $4,800!

Since we have been living on less than we make, ALL of these new earnings and savings will be put towards debt. That is an $8,800 new shovel! It will feel great knowing that we will be able to pay things off almost twice as fast.

Oh, remember when I told you why I wasn’t going to sell my car? I’ve been thinking and I may be willing to sell my car when I start this new job. I will be taking the train to work everyday because we live right next to the station. I was thinking that it may be beneficial to buy a cheaper car (with cash) and just drive that the mile to the train station. It will free up an additional $200 a month for debt repayment and eliminate the car debt all together. Not to mention the savings on insurance!

Well, I know there wasn’t any tips in this article, but I thought it would be nice to share with you our financial outlook for the coming months. I think it will make things a lot less stressful in our house and hopefully you will see some larger payoffs at the end of the month!

Have a great weekend!

Post by Frugal Dad

If you’ve read my blog lately, you may have seen that I don’t live with my wife during the week. My current job is approximately 2 hours away. Because of the distance, I have to stay there during the week and then head home on the weekends.

There are many disadvantages of living away from my wife, both emotionally and financially. I won’t really get into the emotional stuff seeing that this is a financial blog. However, I can shed some light on how we handle our finances on a day-to-day basis.

First, let me give you a little insight into the added expenses. In order to stay in PA during the week, I have to pay for housing, groceries, parking, and fuel. All of those together add about $600 to our budget. Those are all in addition to what we already spend in MD. It’s definitely straining, but it’s better than me not working at all. My wife and I have been apart for long periods of time before (I went to TX for grad school) so we are used to being apart. However, it’s not something I want to do for more than a year.

Even though we are apart, we still need to make financial decisions as a team. Marriage is commitment and both partners need to have an equal say. Here is how we do it:

Communication Is Key

Just as the title says, communication is a key part in our financial decision making. We communicate daily about our finances on the phone and via Skype. We are constantly talking about our budget and how much we will have left over to pay down debt. We actually think budgeting is fun and are always looking for ways to save a buck just so we can pay off more debt at the end of the month.

Financial communication is a necessity is every marriage. If one partner is spending away while the other one is committed to getting out of debt, they’re not going to get far. You just need to sit down and talk about your finances. Heck, if my wife and I can do it every night when we are 2 hours away from each other, so can you!

Long Distance Budgeting

Almost all of my adult life, I have been a Quicken kind of guy. It was always easy for me to use and made my finances come together in one simple platform. Well, when we got married, I noticed one major flaw. It was only on my computer and it was really hard for my wife to understand how to use it. So, we made an executive decision to give something else a try. A written budget wasn’t really an option for us as we are more technical people. It would also be a little harder to keep track of being apart. Then came Mvelopes.

Mvelopes is an online based budgeting program that can be accessed anywhere (with an internet connection). Mvelopes is based on the envelope system which we thought was the best budgeting technique for us (and still do). It allows us to check our budget at the same time and discuss the different envelopes and what we spent during the week. It just keeps us on the top of our game. It also keeps us accountable.

Keep a Positive Attitude

It’s easy to get a little depressed when you are away from your spouse for extended periods of time. It’s especially hard for us since we were married only six months ago. However, we continue to be positive about our situation and are trying to get things straightened out. Currently, I have an interview next week for a job in MD working for the same company. If all goes well and I get the job, my income will increase about 10%. It will also eliminate our need for addition expenses such as the rent.

Well, hopefully you will never have to find yourself in my position. It’s tough,  but we are making it work. If you do find yourself in this predicament, hopefully these tips can help you out. These are actually good tips for couples who are living together too. You need all of these to manage your marriage and finances.

Have a great weekend!

Post by Frugal Dad

On my first post here at Frugal Dad, I wrote about our pile of debt and the steps that we are taking to get out of it. In several of the comments, people referred to selling our cars as a way to get a quick start on our debt problems. Well, my wife and I feel like that is a ridiculous move to make on our part. It’s just not feasible. Here are some of the reasons that we think the idea is bogus:

We’re Not Upside Down

Luckily, we are not upside down (having a loan larger than the cars value) on either of our cars. I drive a Chevy Malibu and my wife drives a Ford Focus. When we purchased them, we put a good chuck of money down and that has helped keep us on the right side of the equity.

Our Payments and Interest Rates Are Great

Both of our cars are financed with our credit union and neither are above 7% interest. Our payments total under $450 with mine being $200 and hers is $230. We will also get them paid off in less than 3 years if we only pay the minimum (which isn’t our goal). I can see where you might want to sell your car if you have outrageous payments. That’s just not the case with us.

We Feel Safe In Our Cars

I am guessing that some of you will now tell me to sell my cars and use the equity to buy a couple of “beaters”. Currently, my wife and I feel extremely safe in our cars. Before I purchased my Malibu, I drove a 1995 Ford Escort. That car felt like a big tin can to me and I knew if I were to get in a major accident, I was a goner. Now that I am driving my Malibu (with airbags galore), I feel much better knowing that my car is saver.

My wife drove a 2002 Pontiac Sunfire before her Focus. That thing was just a dangerous car. It rated horribly in Government crash tests. She was actually in an accident several years ago and broke her wrist. I thank God everyday that the other car hit the passenger side, otherwise she may not be around today. One of our main goals in finding her a new car was safety. We found that with the Focus she has today which also has airbags throughout the car.

If we were to sell our cars and buy “beaters”, I think it would add a level of additional stress to our lives and frankly, we just don’t want that.

We Don’t Want the Added Costs of a “Beater”

Over the past few weeks, we have seen many friends put hundreds of dollars into their older model cars. It seems like every other weekend something goes wrong. I think one of our friends just broke their car door handle and then took it to the shop only to find that they needed a new transmission. We just don’t want those surprises while we are getting out of debt. My wife’s car still has a warranty so if anything goes wrong with hers, we will be covered. My car is only 4 years old and I have yet to have any trouble with it (besides wear parts like breaks).

We Have Long Commutes

Several of the comments also talked about just keeping one car and making that work. Well, I am here to tell you that it is impossible. During the week, I live in another state to work. Although it’s only 2 hours away from my wife, I obviously need a car to get back and forth. I just can’t see myself “biking it” either. My wife on the other hand, has about a 30 minute commute to work. Like I said before, it’s just not possible for us to be a one car family. I hope that day will come, but it’s definitely not now.

I know this post wasn’t the most organized. It also wasn’t my best written one. I just really wanted to express my opinion on this matter. You just can’t recommend someone to do something until you know the whole story.

Post by Frugal Dad

When my wife and I decided to get out of debt, we went at it full force. We felt like nothing was going to stop us. However, almost immediately, financial troubles began to pop up. They weren’t necessarily large, but they were putting a damper on our extreme dedication to get things rolling. For example, my car needed new brakes, rotors and registration ($1000). My wife needed a small amount of surgery ($300), etc., etc. It just kept adding up and it felt like we were getting nowhere. After dealing with those setbacks, I’ve thought about some things that we did wrong (and right) in dealing with them. I’ve broken them down into some tips for dealing with financial setbacks.

Don’t Make Excuses

Over the past few months, I’ve realized that I made a lot of excuses for not paying down as much debt as possible. For example, every time we ran out of cash in our grocery envelope, I thought it was OK to just take it from somewhere else (the debt envelope for example). I figured, eh, what’s one month, we will get it rolling next month. That excuse seemed to pop up almost every month. Maybe one month we needed the extra cash for car expenses and the next we needed it for something else. All I can say is, stop making excuses and start getting angry at your debt.

Have a Small Emergency Fund

Everyone knows the importance of emergency funds. They’re there in case you have a financial setback or lose your job. Having a small emergency fund while in debt insures that if you do have a small financial emergency, you won’t have to accumulate more debt to handle it. Our emergency fund is set at $1,000. It’s a simple, round number that we feel comfortable using. You can make yours whatever you feel comfortable using. I think Frugal Dad actually used a $3,000 emergency fund while he was getting out of debt. Before you start paying off your debt, get an emergency fund set up. It will save you a lot of pain in the long run and it will prevent you from adding on to your debt.

Save Elsewhere

Something that we continued to do even when we had financial setbacks was spend elsewhere. I mean, we had $50 in our clothing budget, so we spent it on clothes. Looking back, we should have rolled that $50 into our debt snowball and postponed the enjoyment of clothes shopping for a month. Would we have gone crazy if we didn’t spend that for one month? No way. When you have financial setbacks, find other ways to save money. Maybe you shop at the discount grocery store that month or brown bag it the whole week. Why not pick up some overtime at work or a side job? These small things can make financial setbacks easier to handle.

Refocus and Get Moving Again

Once the setback is in your rear view mirror, it’s time to refocus and get back into gear. After our setbacks, we really started to attack our debt. We managed to pay off our $1,500 Best Buy credit card in 2 months. It just angered us so much knowing that we could have had it already paid off and we would be almost done with another debt. But, things happen and you just deal with them.

Post by Frugal Dad

Let me introduce myself. My name is Chris and I am a twenty-something male married to an amazing twenty-something woman. I work in the health care industry and my wife works in education. We currently live in northern New Jersey and have a combined income right around $90,000. Over the past few years, we have racked up an astonishing amount of debt. Granted, most of the debt is in student loans but that is no excuse for our lack of sound financial discipline.

Here is how our debt breaks down:

• His Car Loan: $7,279.19

• Her Car Loan: $8,673.10

• His Student Loan: $66,070.88

• Her Student Loan: $48,763.88

• Best Buy Credit Card: $1,468.90 (0% until August 2010)

• Family Loan: $16,500 (used to pay off credit cards)

• Personal Loan: $1,922.68

GRAND TOTAL: $150,679 (I updated our debt numbers at the end of October and will be doing it again for November soon)

The car loans are at pretty low rates because they are at our credit union. If I had to guess, I would say that our cars are worth a little bit more than we owe on them. The student loans are also at very good rates. About $40,000 of the loans are private loans. Since general interest rates are low right now, they are too. The personal loan is also at our credit union and it is at 12.9%. That is our highest interest rate on our debt.

The loan that bothers us the most is the family loan. A family member offered to pay off our credit cards as long as we agreed to pay them back. It just makes us feel bad that we owe them this money and we cannot wait to pay it off.

So, there you have it. Our debt story is unique but I can imagine that there are people out there in the same type of position we are. We look forward to giving you an inside look into our struggles with debt and how it affects our lives.

From Frugal Dad: I’m looking forward to Chris’ contributions here. We both agreed the timing was perfect since the Frugal family recently completed our journey out of debt, to highlight another family going through the same challenges. I can’t wait to watch those debt balances fall as Chris and his wife dedicate themselves to a frugal lifestyle. It takes a lot of guts to admit that number, even on a blog, and I know readers will appreciate Chris’ candor.

Post by Frugal Dad

Several weeks ago a young couple visited my office. Their situation wasn’t all that unique.

He’s a teacher and she’s a CPA. Together they take home about $100,000 a year – not too shabby.

They had a little under $10,000 in credit card debt – mostly from their wedding. They also had a $20,000 car loan and $65,000 in student loans. Not the end of the world.

They had about $20,000 they saved since before they were married. I suggested they take $10,000 and get rid of the credit card debt pronto. They agreed to do this.

Up until this point of the story – I liked what I was hearing. After all, they are a young couple with plenty of upside income potential. I wasn’t crazy about the credit card debt they had accumulated but it only came about as a result of the wedding – not a slow creep of living beyond their means on a monthly basis. I wasn’t too concerned.

However, I started to sweat when we went through their monthly expenses.

While they were in deed paying down their debts, they had the option of doing so much faster and weren’t taking advantage of that opportunity.

Instead, they were spending $400 a month on personal trainers and a whopping $1200 a month on dinning out with friends. This $1600 was only the tip of the ice berg. Together we figured they could easily cut a total of $2500 off their monthly spending.

I showed them that once they did that, they’d be completely out of debt (including the student loans) in about 3 years. Then we looked at what their financial life would look like if they continued to save that $2500 a month. The picture looked very rosy.

So why was I sweating it?

Because they didn’t seem all that interested.

They came to me looking for a solution to their debt problems. I showed it to them and they shrugged. I just didn’t get the feeling they were willing to roll up their sleeves and really do the work.

Forgive me, but I think part of it has to do with their youth. They were enjoying life and maybe they figured they could always get out of debt and cut their spending “manyana”.

This was frustrating to me because I know that for many people, “manyana” never comes.

I couldn’t find the right words to get them interested in taking action to get out of debt and on the path to financial freedom.

Was there something I could have said? What would you have said in order to motivate this couple? Is it a case of leading a horse to water and therefore, a lost cause? What’s your take?

Post by Frugal Dad

Photo courtesy of Hey Paul

It is that feeling you get just before your car has crested the top of the roller coaster’s tallest hill. When everything opens up in front of you. When the long, anxiety-filled climb is almost behind you. It’s an exciting time, and oddly enough that euphoric feeling in the pit of your stomach is nearly identical to the one you feel just before sending in your final debt payment.

By the end of November, we will have crested that hill. A hill that has taken us over two years of blood, sweat and tears (well, at least a lot of sweat and tears) to climb. And as the landscape opens up in front of us, our only regret is that we didn’t get on the roller coaster sooner. We wasted nearly a decade when it came to finances. Yes, we accumulated some debt, but we committed no real financial sins. We just didn’t buckle down like we should have.

I’m not going to rehash how we wound up in debt, or the financial mistakes of the past, because I don’t want to miss the view from the top by looking back the entire ride. The point is, we are where we are, and how we got here has been important in shaping our personal finance belief system going forward.

That’s part of living with no regrets. You accept the mistakes you’ve made along the way as learning opportunities, and keep moving forward. So much of our lives is wasted rehashing over and over again the mistakes of the past, rather than living in the present, and planning for the future. Well, a couple years ago we decided enough was enough. We were sick of being in debt, and we wanted out. So we finally got busy making changes and stopped making excuses.

We developed a plan to boost my income. After dabbling in a number of part time job opportunities, and even resorting to mowing lawns on the weekends, I decided to try my hand at writing. Of the few people I shared this idea with, only my wife and my mom didn’t laugh out loud in response. They knew my passion for writing, and believed in me. One of the things I’m proudest of was that Frugal Dad did become a relative success before my mom passed away, so she was able to know that my perseverance paid off. I only wished she had lived to see us cresting the hill.

Getting the blog off the ground wasn’t easy. I had a $0 marketing budget, very little experience in the online world, and no friends or contacts in the field. I started with a brand new domain name, FrugalDad.com, rather than buying an established name with page rank and traffic. I bought a $5 theme, and had one of my new blogging buddies work up a logo (he’s gone on to become very successful at logo/graphics work for other bloggers. Check out his work at LogosforWebsites.com).

For the first year all I did was write an article every single day and comment on as many other blogs as possible. Some nights I stayed awake well past midnight writing the next day’s blog. Other days I woke up at 4:30am to answer emails, comment on other blogs, and try to network with others. It was an all-out guerrilla marketing assault! My plan was simply to out-hustle everyone else, both with my blog and at my full-time job – the two fastest ways I could increase my income short of selling my own plasma (believe me, I considered it).

In addition to boosting our income, we had to get control of the other side of our personal balance sheet. Our expenses were out of control. At the time we had two car payments, a small pile of credit card debt, student loans, and even medical debt left over from the birth of my daughter. We took vacations when we couldn’t afford them. We shopped when we didn’t have money. We were basically living paycheck to paycheck.

We decided to draw a line in the sand. No more increases to the monthly budget. If we signed up for a new membership, we’d have to cancel another one (or two) to offset the new expense. We started clipping coupons, and actually thinking about ways to save money on groceries. We stopped going to movies, and started using our previously underutilized Netflix account. I sold my beloved Chevy Silverado and drove a 19 year-old van. We basically committed ourselves to a frugal lifestyle at a time when living frugal was not yet very popular.

The result of all this hard work? We now find ourselves less than a month from being debt free. My wife and I have a new motto: “Never again.” Never again will we go back to owing money. Never again will we limit our opportunities, and our choices, by being servants to a lender. Never again will we be at the mercy of bankers’ whose whims exerted control over our lives with FICO threats, interest rate spikes and ridiculous practices such as universal default. We plan to make ourselves immune from such policies in the future.

Our hands are in the air. Our eyes are open wide. This is going to be a fun ride!

Post by Frugal Dad

As the old adage goes, when you find yourself in a hole, stop digging – a classic piece of advice to be heeded by those who have found themselves jobless and getting further and further into debt.

Image by Coljay72

The downturn in the global economy has struck hard, and some people are suffering from the brunt of the fall out more than others. Unemployment numbers are at their highest levels since the financial turmoil of the 1980’s, and the situation only seems to be getting worse rather than better. And because lending was totally out of control in recent years, many of those who are now unemployed have access to large sums of money on credit, which they use unwisely with no means to repay their debts. It’s a predicament that could all too easily get out of hand, further compounding the amount of debt owed.

To ensure a bad situation doesn’t get any worse, it’s important for those currently unemployed to nip their bad habits in the bud and set up a good survival strategy so their chances of incurring yet more debt are limited. Here are a few ideas that will help you escape sinking further into debt while looking for work:

1. Devise a Budget

Before you know what you can spend, you have to know what you have available. The only way to do that is to draw up a budget. It doesn’t have to be anything fancy; you could do it on the back of an envelope, if you like. Start by tallying up what money you have available (severance package, spouse’s income, savings, unemployment insurance, etc.) and then divide by six – the amount of months it may take you to find a new job. If your geographic area or industry has been badly hit, you may need to plan for longer. You will then have more of an idea of how much money you have available to spend each month.

Now tally all of your monthly outgoing expenses. Start with the most important ones – your rent or mortgage, food, and utilities. Then move down the list: travel, car expenses, health care and any outstanding loans or credit card debts. Get everything down on paper.

You are left with two numbers: one representing your income and the other your expenses. Provided the income is greater than the expenses, you should be fine, but those who are unemployed will be very unlikely to be in this position. If that’s the case you need closely scrutinize what you do with your money.

2. Make Do With Less

It’s important to take a close look at your spending habits and see what you can do without – at least temporarily, until you’re back in work. Depending on the circumstances, you may have to be quite brutal. It’s time to ask yourself what are necessities and what are luxuries. You may need to forgo the luxuries for awhile.

Do you really need deluxe cable television or satellite TV? Do you need new clothes or Starbuck’s lattes? Probably not. It might require some tough questions to fully determine what you can and can’t afford on your budget, but in the long run you’ll be better off for having made the sacrifice.

3. Look for Additional Sources of Income

While you’re job-hunting it might be useful to think about other ways you can bring in some much-needed cash to keep you going.

• Declutter – now might be the time to sell some of your extra belongings on eBay, or in a garage sale. It will give you something to organize, help clear out some of your cupboards/closets and bring in some cash.
• Consulting – do you have a skill or a knowledge which you can offer on a consulting basis? Can you teach someone else how to do what you do? Would someone pay for your expertise in a certain area?
• Start your own business – is there a business idea you have always wanted to explore but never had the time? Now might be the right time to draw up a business plan and seek funding.
• Rent a room – Do you have a spare room in your house that you could let to help pay the bills?
• Casual jobs – don’t overlook dog walking, babysitting or doing yard work. They will get you out of the house and interacting with people, which is important for developing your network.

4. Fight Depression

It’s natural to feel depressed when you’ve lost your job, especially one you’ve had for a long time, and it’s hard to not take it personally. You must do everything you can to fight the urge to get down in the dumps. It’s all too easy to start charging everything to your credit card in an attempt to cheer yourself up, even though you know it’s the wrong thing to do. Thinking, “Oh, I’ll pay that off when I get a new job.” That will only lead down the slippery slope of debt, and the further you get into debt when unemployed, the longer it will take to get out of the red when you’re back in work.

Acknowledge that you’re experiencing a temporary set-back, adopt a positive attitude and you’ll soon get back on your feet and find another job. It’s important to keep physically active – go for a walk everyday – it doesn’t cost anything, and avoid day-time TV like the plague – it has a tendency to suck people in, keeping them from focusing on what they should be, and that’s finding a new job.

5. Ask for Help

Now is not the time to go it alone. Put your pride aside and ask your friends and family for help – whether it’s emotional support, a loan or a hot meal; their assistance will make a huge difference. There are resources in your community too which can help, whether it’s a food bank, a charity, or job search assistance.

If you’re eligible for government assistance, then be sure you apply for it. You may have to jump through some hoops, but it is better than losing your house or saddling yourself with additional debt.

And, if you’re not going to be able to meet payments on your mortgage or credit cards, then you can’t ignore the problem. You must phone them up and speak to them. Explain your situation and ask for help in finding a solution. Banks and other creditors are much more understanding than you would think. Don’t be tempted to go to debt management agencies, either. They will only charge you to do what the banks will do for free. Creditors just want to get their money back, so will help you devise a repayment plan that suits your budget.

These are trying times. Remember that what doesn’t kill us makes us stronger. Keep your focus on finding a new job and follow these tips to help you meet that goal without falling further into a hole.

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Post by Frugal Dad