[USER]

Should I start saving my emergency fund 1st and once that’s established start paying all my stuff off. Or should I try to pay what I can now and slowly save for emergency fund. I can’t meet minimums even with 2nd job.

[Victoria]

To be blunt, based on your post only – At this time your credit rating has probably gone down and you might be in danger of your credit cards being terminated and your car repossessed. As you are behind on paying stuff you should list all accounts – note those that are behind, amount behind, when next will be due. As well as all income and funds you are spending on things that can be cut, reduced, eliminated, like any restaurant order including a coffee.

Call each of those accounts that are late – see if you can make payment arrangements with them, do not even try to use any credit cards – cash only for all absolutely necessary purchases.

Call any other regular bills that you have and see if they have budget payments, lower cost to you options. AFTER you clear up any and all outstanding and current debts — then review your accounts, expenses and set aside an amount each payday, or weekly, monthly amount to put into an interest-bearing checking or savings account for an emergency fund that you do not touch unless it is an emergency and then add extra funds to each amount being saved until the fund is reimbursed plus the lost interest.

The goal is to have at least 3 months of savings equal to actual 3 months of current expenses. But ideally you should have 6 months, and funds after that invested in a ROTH IRA.

[Marina]

First and foremost, keep a roof over your head.

Second, whatever you do, don’t let your car get repoed. Not only does it effect your credit for 7 years, you owe the difference for it even after it is taken and sold. And you probably need transportation.

Lastly, pay your credit cards but call them first and explain your situation.

MOST IMPORTANTLY, do a budget and cut out unnecessary spending.

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[Olivia]

Call your vehicle lender and ask for a few months to be deferred to the end of the loan cycle.

[Kaylee]

Home first, then the car! Credit cards can be sorted out later!

[Jade]

Initially the car payment is most important. I’m assuming you may need it for work. They will repossess cars after 2-3 missed payments.

Then contact the credit card companies and see about lowering interest. Cut up the cards. I would contact them to see if you can work something out before letting the cards go to collections

WOW: Today I paid off my car! I am so happy

[Jen]

First thing is stop using cc. Sell your vehicle use money to buy something you can pay cash for. For myself I would get current bills caught up. Late fees, higher interest rates are fees you don’t need.

Once bills are caught up start saving as much as you can and say no to the cc if you cannot pay off balance every month. Look up Dave Ramsey, he has some practical advice.

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[Tami]

Dear, you are in the middle of an emergency. In my opinion, you have 2 choices. Get a 2nd job and financial counseling or see an attorney about bankruptcy fir a fresh start.

[Denise]

If your credit score drops really low, you’ll never be able to get anything and a car an apartment nothing so call all your creditors get on a payment plan of the absolute minimum you can save your credit and start saving some money wherever you can for your emergency fund but don’t lose your credit and don’t lose your car.

It’s too hard to build it back up and you need it for absolutely everything. They will work with you if you call them even if you pay some thing they can’t put you into collections.

[Laura]

Reduce your costs in any way you can. Housing costs should not exceed 30% of your after tax income including utilities and insurance. Reduce your can insurance and make sure you take care of your car.

Get a roommate, use the food bank or community kitchen, use your local buy nothing group (people even give away hair products and cleaning supplies). Ask for things on buy nothing before you buy anything. Reduce your utilities by turning off lights and quick showers. If you have student loans or owe taxes don’t let them go.

The penalties will sink you. Make a realistic budget. If you under budget you will feel like you can’t do this. You can! When you feel like spending or feel discouraged watch YouTube videos about frugality and minimalism. Go to your library and see what resources they have.

Mine offers 3 different digital streaming services that include tv, movies, music and audiobooks.

You can use their printer, computer, Wi-Fi (download those digital services to watch later), air conditioning, read their books, borrow their movies, go to their concerts and programs and borrow free passes to museums and attractions.

Don’t forget to take a look at: Has anyone ever tinted their own car to save $?

[Sarah]

Ramsay’s snowballs method does work, for debt that is.

Keep 1 K as emergency fund, then start paying your debt from smallest to largest.

This is just to get you into that gazelle intensity/ reworked your habit. When you done with steps 2, honestly its up to you where to invest and what to do. (Given that you have learn the lesson with debt and now managing money more affectively)

[Kim]

I would try to get current with the car payment first, and maybe reach out to them to see if they can work with you. I imagine it will be harder to get to work if they repossess it. I would only put a little bit towards an emergency savings account and work on the other things first.

[Dana]

Pay your car payment and rent/mortgage first. Get your groceries and put aside gas money for the month. I personally would put at least 40 a month for about 6 months in emergency to start if you have no emergency fund because you never know what may happen.

Pay your phone bill also if you have one. Times are very hard, I know. Reach out to your credit cards and see if they will work with you. Once you get behind, it feels impossible to ever catch up.

The interest and the late fees are going to add up but you can make your money go so far. Sending you hugs.

Would you also like to explore: I have decided to buy a new 2023 car.. So,

[Virginia]

Protect the car first, credit card companies can’t repo. If you can’t meet minimums and keep a roof over your head, it’s time to get some help. Talk to a consumer credit counseling service (NOT a loan consolidation company) about getting some help lowering those payments.

You want the .orgs, not the .coms. If you own your home, it may be time to consider bankruptcy. If you’re renting, start with credit counseling.

[Ann]

If you need a car to get to work that is the priority. Unless there is public transportation work on that. Home, Car, car insurance, food and phone is all you need.

[Ann]

You need to get current on all bills before saving money is an option. Cut expenses down to the bare minimum. It will be uncomfortable but you have to spend less than what you make each month. Can you sell your car and buy something with cash or go without? Start decluttering around your house and see what you can sell.

Can you carpool to work and get away with selling your car and not paying for gas? Even paying for grocery delivery would be less than a car payment. Do you have family/friends nearby nearby that could help you out logistically?

Admitting you are having money problems and asking for help can be embarrassing, but so does having your car repoed at work or having your cc declined when getting groceries. Taking responsibility for your finances and an active approach to getting current and out of debt can be liberating. You will know that you can survive and you just mght be able to quit that second job after bills are caught up, debt paid down/off, get some savings and you learn to stick to a budget.

Bankruptcy is also an option but it won’t help to teach you to manage your spending so that you don’t get in this situation again.

[Author]

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