| What would you do if your financial situation | | | | everything you buy. |
| unexpectedly took a dramatic turn for the | | | | - Stick to your plan; if something is not in your |
| worse? If you or your spouse lost a job or you | | | | budget, and you can't afford it, do not buy it. |
| had unexpected medial bills, are you in shape to | | | | When cutting your budget just isn't cutting it |
| handle it? Or would you have to make some | | | | When unforeseen expenses arise, you've cut as |
| tough choices? | | | | much as possible from your variable expenses |
| As distressing as it might be to imagine these | | | | and you still come up short on your budget, you |
| situations, it's far worse to face them without | | | | may need to turn to an expert for help reducing |
| having a financial disaster plan in place. Debt can | | | | or adjusting your fixed expenses. Two possible |
| ruin lives; having an actionable plan in place is vital | | | | options include mortgage or loan modification and |
| to managing and overcoming debt. | | | | debt settlement. |
| Whether you are in debt already or just preparing | | | | - Mortgage/loan modification: Loan modifications |
| for any unforeseen future obstacles, developing a | | | | allow banks to make loan payments more |
| financial emergency plan is essential. To take | | | | affordable for borrowers. Loan modifications can |
| control of your financial situation, your first step is | | | | be temporary or permanent changes to your loan |
| to create a budget. | | | | agreement, and may include changes to interest |
| Developing and managing a budget | | | | rates, loan terms, loan balances or other parts of |
| The first step for any person or family trying to | | | | the agreement. To get a loan modification, call |
| get a handle on debt is to determine how much | | | | your bank and let them know about your financial |
| money is coming in and how much money is | | | | situation. Criteria for loan modification vary from |
| going out by setting a budget. Start by listing your | | | | bank to bank, and there is no way of knowing |
| fixed expenses such as mortgage or rent; utilities; | | | | ahead of time if you'll qualify - you just have to |
| car, loan and credit payments; and insurance | | | | ask. |
| premiums. | | | | - Debt settlement: Debt settlement is an |
| Then list your variable expenses such as food, | | | | effective means of debt reduction. To engage in |
| gas, entertainment, recreation and clothing. A | | | | debt settlement, consumers can hire a lawyer or |
| formal budget spreadsheet can help you clearly | | | | a debt settlement company to act on their behalf. |
| see your fixed expenses and your variable | | | | A lawyer or debt settlement company negotiates |
| expenses, identify necessary expenses and | | | | with creditors to reduce the consumer's overall |
| prioritize the rest. | | | | debts in exchange for an agreement to meet a |
| If you find yourself in a situation where expenses | | | | regular payment schedule. The process can |
| are greater than your income, variable expenses | | | | sometimes lower debts by more than 50 percent |
| are the first things you can assess to immediately | | | | of the balance. Only unsecured debts, such as |
| gain control of your budget. | | | | medical bills and credit card debts, can be handled |
| If you find that sticking with your budget is | | | | through debt settlement. |
| difficult, help make your budget work for you by | | | | Financial disasters are fairly common and unload |
| using these three tips: | | | | enormous amounts of stress on families. |
| - Set aside funds for each expense category, and | | | | Fortunately, you can alleviate the strain, and |
| don't overspend. | | | | minimize the financial impact, simply by being |
| - Keep yourself accountable by writing down | | | | prepared. |