Cutting Costs

Eviction. No one wants to hear that word, especially when it is being applied to their family. Eviction and financial hardship go hand in hand. Last week we shared a hardship letter template to send with your financial documents to your mortgage holder. In the middle of that letter you’re asked to provide a plan for how you will get back to paying the amount you owe each month. To do that, you need a plan.

1. Sit down with some writing implements (paper/pencil or laptop or phone)
2. Write down all your expenses. If possible look over your bank statement that details where your money went last month.
3. Group the expenses into catagories (example: utilities, housing, clothing, groceries, transportation, internet, cable, health…)
4. Prioritize your expenses using a scale of 1-5 (1 being essential, and 5 being non-essential)
5. Write all your category 1 expenses at the top of a new sheet of paper.
6. Write all your category 2 expenses below the category 1 expenses.
7. Continue the same way until you have all financial expenses listed.
8. When you receive your next paycheck, pay first for the category 1 expenses.
9. Next pay the category 2 expenses.
10. Depending on the income available pay the next highest available expenses, until you are out of income.

During the next couple weeks we’ll look at some cost cutting options for different areas of your budget. But, in order to take control of your finances, you need to know where your money is going, and what the most important expenses you have are.

Interested in more help avoiding your foreclosure? Check out Keisha Joseph's help book.