The First Cut is the Deepest

You'll probably hear me say this over and over in this blog.  You MUST face your financial truth.  I'm standing in front of my truth officially as of December.  I consulted a debt management company to help me dig out of the pit of financial hell that I've dug myself into. They are now working with my creditors to pay back my credit debt.  There is no more ducking and dodging the phone calls from bill collectors. No more avoiding opening the bills because of fear of what I already know is the truth - I owe too much damn money to companies.  Essentially, I work for them until it's all paid for.

When you enter into one of these repayment plans you have to document all of your expenses.  Sadly this was the first time, in all of my life of having my own money to spend, that I really accounted for what money came in and what money went out.  I was a little sick to my stomach. How on earth will I find the money to pay these people?

The company I went with to help me fix my mess was Money Management International.  They offer free credit counseling - and that's really the only thing that's free.  This is when you realize that anything of value has a value attached to it somewhere.  After being told is such a delightful way, that I would have these creditors paid off in 36 months, they informed me that there is a $75 application fee and a $40 a month maintenance fee for managing it all.  Honestly, once they got my interest rates lowered, it's still less that I would be paying if I did all of this myself. Add to the fact that I would probably still duck and dodge my creditors to try to seem as though I have money to buy frivolous things for myself such as Chipotle or cocktails.

After making all of these payments, this leaves me with approximately $ 320 per month for gas, groceries, medication, etc.  At first I thought, "How the hell am I going to do this?"  Now, I know how and budgeting has become a buzz word for me. Once you accept things as they are it becomes increasingly easy to live more simply.  If you need to create a budget on your own, there are many online versions available.  Mint.com has a great system that also syncs with your smart phone AND it's free!

While it was scary to take that step and commit to having over $300 a month taken out of my bank account automatically for credit debt (which is utterly ridiculous and I own that). That's not including my student loan payment that is now being repaid in the same manner, to the tune of $512 a month. Then there's the loan payment at $227. It's almost as overwhelming to think about now as it was when I was completing my budget spreadsheet in preparation for my appearance on the Suze Orman Show. ZOINKS!  Over $1000 a month in debt payments! It's painful. Thankfully my car is paid off or I'd be in an even bigger mess!

What steps have you taken to reduce your expenses?

Start a budget with Mint.