My Dream Card

I have made up the following wish list for my dream card.  I don’t expect to get it free but I would like it to be reasonable:

• Reasonable activation fee of under $20
• No dormancy fees
• Pay some kind of interest on my money
• No fees for purchases
• Reasonable fees for atm withdrawals ($1 or less)
• Free Online Balance Check
• No monthly fees

Is this asking too much?  There are a few cards that come close but none meet all of my requirements so I have been making comparisons.  They are very confusing and the card that might be the best for my spending habits (occasional transactions) might not be best for everyone.  If you plan on using the card several times per month, you might be better off choosing one that has a small monthly fee and free transactions.

Because Walmart has put their money card on sale I thought I would use it as an example. I honestly was somewhat skeptical about the monthly fees but after much research I have found that they are probably the best value.  All transactions are free except atm transactions.  The only way that I have found to get around atm transaction fees is to use your bank card at your own bank and that is not always free.

This is what is posted on Walmart’s cardholder agreement:

In contrast, here are some of the fees from another highly advertised prepaid credit card:
This is the NetSpend Prepaid Card as shown on another website:

Altogether though these fees may be considerably less than you are spending on your current credit card every month.   These fees are subject to change so if you are considering a prepaid credit card make sure that you read the small print and search for the best deal.

If you have any better deals on prepaid cards, I’d love to hear from you.  I am specifically searching for one that pays interest on the available balance.

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Credit card debt is unfortunately a way of life for the average American family. We’re enticed daily with the backwards motto to “buy today, pay eventually”. Many struggle to simply make the minimum monthly payment. For the many moms who are the family bill-payers, here’s some effective and easy ways you can eliminate credit card debt.

First and foremost, pay for your purchases in cash. You can prepare for this in advance, once you are determined to eliminate your debt, by setting aside at least $20 a week or more if possible, to start a petty cash fund. Commit to using your credit cards only in an emergency or a situation that requires a credit card, such as renting a car.

Review charges you consistently make on a monthly basis. These charges may include membership fees, subscriptions, automatic bill payments, gas for your car, prescriptions, sports equipment and uniforms, school tuition or orthodontist appointments. After listing them, determine how much money is to be allocated monthly for each payment. You may need to cancel the non-essentials. You can exercise at home for free; and if you don’t read half of the magazines you’re subscribed to then cancel them. Eliminating gym fees and subscriptions alone could save you hundreds of dollars per month.

One common sense method for moms to eliminate credit card debt is known as the Debt Reduction Pyramid. Basically, it’s a process of determining all debts owed starting with your smallest debt, and then pay off each one fully, working your way down to the largest debt. Predetermine to pay above the minimum payment for credit card debts. Once some of the smaller debts are paid, begin to pay full monthly payments. Continue this process until you successfully pay off all your debts in full.

Moms, a budget may sound too simple and over-rated but it can be the single most important tool for eliminating credit card debt. By creating a personalized budget and strictly adhering to it on a daily basis, you will reap the benefits and see your debt dwindle before your eyes. Remember to place your non-essential expenses at the bottom of the budget’s priority list.

Just by following these simple steps, you are well on your way to eliminating credit card debt. Reconsider those club memberships and pointless magazine subscriptions in order to organize expenses in priority-categories. With a debt as small as $10,000, if you’re only able to make minimum monthly payments it will take you 40 years to pay off that debt.

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According to an article in USA, Today,

Citigroup, meanwhile, has started charging annual fees to card holders who don’t put more than a specific amount on their cards, typically $2,400 a year. Other banks are charging inactivity fees if customers don’t use their credit cards during a specific period of time. You heard that right: You could be spanked for staying out of debt.

These fees are the credit card industry’s response to credit card legislation that will, among other things, restrict credit card issuers’ ability to raise interest rates on existing balances. Credit card issuers are looking for ways to raise income before the new rules take effect in February. During the first quarter, 27% of credit card offers included annual fees, up from 18% a year earlier, according to Synovate Mail Monitor, a credit card direct-mail tracking service.

Other companies are just increasing or adding an annual fee for all credit cards.  USA Today, suggests that you make a decision on whether to keep your card or not by deciding how much you are going to use it and whether you can find a better deal elsewhere.  They suggest finding a credit union as they generally have lower rates and charges for their members.

Has your interest rate or annual fee changed on your credit cards in anticipation of the new legislation?

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He wrote a letter to the court the week after surgery and asked that the date be continued as the clinic appointments are booked several months in advance.  The clerk of the court was not helpful to say the least and the best we could get was that she would show it to the judge.  This means that instead of rescheduling it in advance, they wait until the morning of court and R’s ex has to show up so they can set another date.

The last time they had to reschedule a date, we had an attorney.  The attorney made arrangements with the clerk to reschedule it and told R not to go to court.   The judge issued a warrant for his arrest for not showing up in court.  The sherrif’s department notified him and he turned himself in the next day.  This required us to bond him out.

We went to the clinic with no idea of whether there would be another warrant issued for his arrest when we returned home.  We came home and waited for the police to show up and haul him off.  We looked over our shoulder and waited on pins and needles for two days.  Finally the sheriff delivered a show cause summons for October 27th.   Whew.

While there is no possible way that we could pay her the $50,000 or the $1300 per month that the courts have awarded her, R is trying to pay her something every month.  It’s worse than a credit card debt as the amount due just keeps growing and growing and there is no way we can even begin to whittle it down.

He will go to court on the 27th with really no hope that anything will change.  The court will probably order him to pay another $5000 and give him 3 months to do it.  There is no hope at all that we could pay that much.  When the judge ordered it last time they put him in jail for 4 months or until the $5000 was paid.  A very, very good friend loaned us the money to get him out but we certainly cannot afford to borrow any more and cannot in good conscience accept it when we can’t pay it back.

I am still wondering why the courts awarded this much in spousal support when he was out of work on disability when they were first separated.  In Virginia, spousal support is not supposed to be punative.  It is not meant to be a punishment, it is meant to allow the spouse to continue to live in the same basic lifestyle that they were living.  How can this amount of spousal support be anything but punative when there is no hope of paying it?  How many other men or women are in the same situation?

Even if R could go back to work, the economy is so bad that it would be difficult to find a job.  This area is extremely depressed.  Factories that have been in business for decades are closing their doors.  I know of 3 major area employers who have either closed or layed of a large percentage of their employees in the last month.  This is a rural area and there are very few employers here anyway.

So R’s ex has won the right to be labeled my biggest aching debt.   There is no way to pay it off or even keep up with the monthly payments.  It is one of the few debts that can put you in jail for not paying.  It cannot be discharged by bankruptcy so it is hopeless.

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One thing that struck me was that debt collectors are now starting to accept a budget with a savings plan built in.  One of the biggest reasons why debt management or credit counseling fails is when the person has an emergency of some kind and goes into default on their monthly budget.  I see this as a huge step in the right direction.

But if you take it one step further, you are usually paying most debt management or credit counselors a fee.  If the money that was going to pay them were put into a savings account, this possibly could have been avoided.  If you have the resolve and patience to negotiate with your creditors, you can save money and get your debt under control.

These ten steps to DIY Debt Management give a clear plan on negotiating your own settlement and creating your own budget.  These include a plan to build an emergency fund while paying off your debts.

Take Stock

The first thing that you need to do is figure out what money you have coming in and where that money is going.  At one point in time, I had plenty of money coming in but when it came time to pay the bills, there was never quite enough.  My money was leaking out all over the place.  My biggest problem was not big purchases, it was the little under twenty dollar purchase that were draining my income away without me even realizing it.  It’s easy to stop the big leaks because you tend to think about them and realize that you are spending the money.  However, it is also far easier to justify in your mind those little ones, after all, it’s only ten dollars or twenty dollars.  The problem is that those small purchases add up quickly.  Have you ever wondered what happened to that one hundred dollar bill once you broke it?  Try writing down every penny that you spend for a week.

Find the Leaks

Take a look at what you have written down and put an L by every purchase that you could have easily avoided.  These might be things like impulse purchases, snacks and sodas, toys to reward your children for being good..  Ah, now I have hit on something difficult.  Do you tell your kids when they go with you to the store that you will buy them something if they are good?  I know that I used to bribe mine quite often.   It was usually not a big bribe but it adds up and the kids would break, lose or be bored with the bribe in less than a day.  Make a list of the leaky items and set it aside.

Make a Plan

Make a spending plan or budget.  Make sure that the number one thing on that list is you.  If you are going to have a chance at sticking to a budget, you have got to make an emergency fund/savings account a priority.  You cannot stick to a budget if every time something comes up, you have to fall off the budget wagon and blow your budget.  My biggest mistake in budgeting was not allowing money for entertainment, gifts, Christmas, and emergencies.  I thought that until I paid off my bills, I could go without these things.  Guess what?  It doesn’t work!  It’s like going on a diet and saying that you weren’t going to eat.  Reduce your leaks but don’t try to cut them out entirely.

Write It Down

Write it down in a format that you will be able to send to your creditors. You will use this plan to negotiate a reasonable payment and interest with them.  The plan you will send to them should not be too detailed.  They don’t want to know how many sodas you will be buying during the week so keep your budget or plan categories general.  You will need to include the debt payments as well as household expenses such as electric, telephone and cable.

Leave Room For Flexibility

There are some expenses that are ‘hard expenses’ such as utilities, insurance and rent or mortgage payments.  You have to have a place to live, most of us also require electricity, food and a car to drive to work. These should be listed right under your payment to yourself.  Next would be your miscellaneous expenses, I consider this my flex fund and I gave myself more than I thought I would spend.  If you don’t allow yourself money for these types of things, your plan will fail.  It’s almost guaranteed to fail because unless you are a monk, you are going to have to buy a gift or go to a movie or just get out of the house. This is your leaky fund and all of the items that were listed as leaks are going to come out of this fund.  You will need to make a commitment to spend only the budgeted amount on them.  After your  expenses, you will list your desired debt payments.  I have included a simplified example.

Income             2200

Savings:              200

Mortgage           400

Utilities             100

Insurance              55

Car Payment       255

Misc Expenses   150 (Entertainment, gifts, vacation, leaks, etc)

Groceries             400

Gasoline              100

Medical                 50

Debt 1                 150

Debt 2                 140

Debt 3                 100

Debt 4                 100

Total                      0

Make a Commitment

This is the most important and the most difficult part of DIY debt settlement.  When you are paying someone to manage your debts, you make a commitment to them and some people find it’s easier to keep it when you have someone standing over your shoulder.  If you are going the DIY route, you will need to make a commitment to yourself, your spouse, your parents, or your kids.  If you are married, living with someone then they need to be a part of the plan and make their own commitment.   Make it for a specific period of time or a specific goal.  You are going to need to make a commitment to your creditors anyway for a period of time but my suggestion to you is to make a commitment to yourself to stick to this budget for a month before you call your creditors.  When you start calling them, you will want to be able to pay the agreed upon amount right away.

Give your plan a month’s trial and then sit down and tweak it.  Are you still leaking?  Are they legitimate leaks or did gasoline cost you more than you expected?  Were your medical costs higher than you expected?   If you allotted a reasonable amount for your misc and medical expenses and you came in under it for the month, I would not lower them.  Put the money into savings, because Christmas is coming and no matter what religion you are, there are going to be certain months when expenses are higher than normal.

Call Your Creditors

I have found that it is usually best to call your creditors and tell them that you are unable to make your current payments and that you want to work out a plan that will enable you to do this.  Offer to send them your budget.   In today’s economy, most of them will work with you.  It might take a few phone calls to get someone who will negotiate but keep trying.  Write down every call you make, who you talked to and what the outcome of the call was.

If you don’t get anywhere, write them a letter and include your budget along with your plan to pay them off.  Wait two weeks and call again.  Ask to speak to someone with the authority to negotiate a settlement and budget plan.  There is certainly someone there who can do it.  Remember when you are negotiating with them that most debt management plans fail so their job is to get as much money as fast as they can.  Your job is to negotiate a plan that allows you to pay them back successfully and live at the same time.  Essentially, you both have the same goal: getting your debts paid off.

Revise, Revise, Revise

Every month is going to be a little bit different.  Some months you are going to have more expenses than others.  You may get a raise or your electric bill may go up.  A budget is not written in stone.  If your electric bill goes up, you are going to have to find the money in your budget to pay it.  This means that you have to do one of two things, reduce an expense somewhere else or increase your income.  The easiest place to reduce is your misc expenses.  These are things that are not usually a necessity and you can live without them for a month or so.  This is the second reason that I told you not to skimp on these expenses.  For a short term fix for a budget deficit, you can use the money alloted here to pay the extra expense.  If it is going to be a long term deficit such as your car insurance going up every month, you are going to have to revise your whole budget.  You have been tracking your expenses for at least two months now so you should have a pretty good idea as to where you can reduce.

Do not reduce your debt payments if at all possible.  You have made a commitment to these creditors and you need to honor it.  If you default on your agreement, they will usually revert back to the original terms.  If it is absolutely necessary to reduce those payments, then call the creditors BEFORE your payments are due.  Tell them the circumstances and renegotiate the payments.  Again, since your goal is to pay off your debts, this should be a last resort.

Free Money

There ain’t no such thing as free money!  Don’t fall into this trap when you get a tax return, gift of money, bonus, etc.  This has undone me many times.  Don’t splurge just because the money wasn’t in your budget.  This will undermine you in so many different ways.  It’s like an alcoholic falling off the wagon, once you get in the mindset to spend money freely it is hard to stop with just the extra money.  Focus  on your goals.  Your priority when you set out was to pay off your debts.  Don’t lose focus on that goal.  Pick one debt and send a larger payment to get it that much closer to being paid off or pay off a smaller debt with it and pat yourself on the back.

It is hard to stay focused on paying off your debts.    I have ready many articles that state that budgeting is easy but I am not going to lie to you about it.  It may be easy for some but for me, it was very difficult.  It took almost 50 years for me to figure out that most of the stress in my life came from my debts and my struggle to pay them.  I would get started and do great for a month and then just lose focus on what I was doing.  Then I would feel guilty and just shut it all out. The reason that I started this website was to help me focus on paying off my debts.

Congratulate Yourself

You will notice that I did not say reward yourself.  Too often we associate rewards with spending money.  We get a new job, we celebrate by going out to dinner.  We buy new clothes, we splurge.  That was the old us.   So instead of spending money and undermining all your efforts, take a moment every day to congratulate yourself for your successes.  They may be small successes at first, such as saving five dollars by packing your lunch or combining trips to town but they are still successes.  Feel good about it!

When you get your first savings account statement, take a good look at it.  It will come to be the measure of your success.  Watch it grow.  Nurture it.  If you are putting ten percent of your income into savings, then you will see it grow quickly.  My emergency fund is the biggest reason that I can stick to my budget and it is my biggest reward for doing so.  It gives me security.  It keeps me from feeling so much pressure that I go out and spend just to relieve it.

Draw two jars and put them on the refrigerator or hang them on the wall by your desk.   Put your savings goal at the top of one of them and the total amount of your debts on the other.  Fill the jar every month by the amount you have saved or paid.  Make it visual so you can see the results easily.  Congratulate yourself for every small step.

Your creditors are not going to congratulate you.  Your bank probably won’t congratulate you for saving money.  You are the one who is going to have to find ways to stay motivated to do it.    If you want to share your successes or your struggles, feel free to leave a comment.  No one understands how difficult it can be better than me and quite a few of the people who read these articles.  I am always happy to celebrate a success or share in a struggle.

Take Heart

It gets easier.  The first few months are the hardest.  If you can stick to your plan for a couple of months, you will find that the whole process gets easier each month after that.   You will find the things that motivate you to continue whether it’s watching your emergency fund grow or watching your debts shrink.  You will find that there is less stress in your life and that you have more time and energy to enjoy living it.

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When I had a job, I automatically had money put into a 401(k) plan.  It was thoughtless savings and when I left that job or fell on hard times, I ransacked the account, paid the penalties and counted my blessings.  If I had only known then, what I know now.

I watch my children, young and old, making the same mistakes that I made.  If they don’t have money, they spend it anyway.  When they do have money, they spend it like there is no tomorrow.  I cringe when I see the way that they spend money.  Don’t get me wrong, most of them are grown and have the right to buy what they want and live the way they want but I feel like I should have taught them better.

These few things took me 52 years to learn.  I wish that I could teach them to my children, it would make such a difference in their lives.

#1 – Save, Save, Save

Kids, I can’t tell you how long it took me to learn this lesson.  Save a small percentage of your money and protect it from yourself like a mother protects her nest.  When times are good, saving is comparatively easy and while it’s easy to save, it is also easy to rob that savings because it was so easy to accumulate it.  When times are hard and you can still manage to save a little, your savings are harder to come by and will give you security.   You will also value whatever small amount you can save.   It’s hard to remember that times might not always be good and you might need that savings at some point in your life.  So when times are good, save as much as you can; when times are bad, save as much as you can and remember when you dip into that savings for something that you might need it more tomorrow than you do today.

#2 – Debt Has Eternal Life

Most of the things that you buy today will have no value in 5 years.  That new phone or new car or new tv will not be worth a tenth in 5 years.  Quite a few of them will have no value in a year.  Yes, they are cool today but you will get bored with it quickly and want a newer model.  If you go into debt for it, you will probably still be paying for it long after it is gone.   Save credit for a house and a car as they are probably the only things that will outlast the payment. Even after paying your debt off, it lives on in your credit report.  If you have a 5 year loan, it will stay on your credit report for 12 years.

#3 -Learn About Money

No one teaches you about money.  There is no class in school that teaches basic finance much less about saving and investing your money.  You are pretty much on your own when it comes to budgeting, investing, saving and planning.  There are tons of good books out there that you can read about finance.  Take the time to learn about it.   Investing is fascinating and it was a total mystery to me until a few years ago.  I am still not sure I totally understand all the facets of it.  If you don’t know what a zero based budget is, find out.  You may not want to do it but at least learn about the choices you are making.

#4 – Don’t Put All Your Eggs In One Basket

What led to my own financial troubles was relying on the equity in my house to be the biggest part of my financial plan.  The unthinkable happened, real estate values dropped like a stone and I lost all that equity.  In six months, equity of over $100,000 dropped to $0.  I wish now that I had invested some of that in other things so that I might have had a chance to save some of it.  If you invest your savings in one thing such as the stock market, and it falls, you can lose it all.  Diversify.  Keep some in a savings account, some in CDs, some in stocks, etc.

#5 – Budgets Are Not Evil

A budget does not mean that you can’t spend money on what you want.  It is simple a decision making process to determine where you really want to spend money and how much money you will have to spend.  It is a process that allows you to prioritize your spending so that you have money to spend on the things that are important to you.  It gives you the security of knowing what you have, what you owe and what you will be getting.  Budgets aren’t set in stone, you can change them easily.

#6 – Credit Cards ARE EVIL

The single most devastating thing that you can do to your finances is buy things with a credit card.  Almost all credit cards charge ridiculously high interest rates even the best charge more than you would pay at a bank.  If you pay the minimum payment, you will be primarily  be paying the interest charge and you will pay it forever.  If you are late, most credit cards will not only charge you a late fee but raise your interest rate.  It is extremely difficult to pay off the balance especially when your budget is tight.

#7 – Emergency Fund

A credit card is not an emergency fund.  You need to have some amount of money in a savings account in case of an emergency.  Hopefully, you will have enough in it to support you for a couple months if you have no other income.  At the very worst, you should have enough in it to get you and your stuff home.  It is not easy to have the discipline to save an emergency fund but the more you save, the easier it gets.

#8 – Financial Freedom or Financial Peace

I don’t know if I will ever have financial freedom but I will have financial peace.  There will come a time in my life when I know that I have enough money to live on in the worst case.  Every dollar that I put in savings gives me more security and less worry.  To me, financial freedom would be the freedom to be able to follow my dreams and to have the money to do so.  I doubt at this point in my life, I will reach that but there is no reason why you can’t.

#9 – The Best Thing You Can Do For Your Marriage

Developing a financial plan and having an emergency fund is the best thing you can do for your marriage.  Agreeing on a financial plan, determining your financial goals and relieving the financial stress will do more for your marriage than any counselor in the world.   I have listened to all of you and your biggest marital problems are financial.  You and your spouse need to sit down and reach agreement on what is important to each of you and find a meeting point.  Once you have developed your financial goals, develop a plan to reach them and then stick to it.  This will help your marriage more than any other thing that you can do.

#10 – Teach Your Children

Do what I say, not what I did.  Once you have taken the time to figure out what to do with the money you have and  don’t have, teach it to your children.  Teach them about saving, help them to develop a habit of savings, let them see how their money can grow.   Teach them about budgeting.  Let them plan how they are going spend their money and let them suffer the consequences of not following their plan.  It is a hard lesson but it’s easier when you are there to help them.  Once they have learned about budgeting and planning, teach them about credit.   Teach them everything you know and it still won’t be enough.

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It’s quite an impressive listing of financial blogs.  Stop by and take a look maybe you are there too.

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by seanrefer

I wrote a post yesterday on Shawn Michael’s financial issues and thought I would follow up with a To Do list to get him back on the right financial track.  These are mostly things that all of us should do but as you will see a few are just for Shawn.

1. Ditch the cowboy! There are some things that one just shouldn’t do for money.  You still have to go home at night and look yourself in the eye.  Making more money is certainly one solution for financial troubles but one wouldn’t recommend prostitution, bank robbery, mugging or drug sales or throwing fights. Maybe you can design a new Tshirt that says:  “Ditch the Cowboy” with a bucking horse and LBJ in the dust.
2. Start an emergency fund.  Even if you make millions of dollars, you still need to have enough in liquid funds to pay for a few months of living expenses.  For the average person, the recommended starter emergency fund is $1000, in your case, you might want to work on $100,000.
3. Reduce your expenses. Keep track of your expenses and living costs for a few weeks and look for ways to cut out the fat.  It may not be as sensational as groveling at LBJ’s feet but it will keep your head above water.
4. Once you have  an emergency fund, start putting money into your retirement fund.  Let’s face it in your profession, your career could end at any time and it’s best to be prepared.
5. Invest wisely in things which you are familiar.  Maybe you should think about investing in body building equipment, medical equipment, pharmaceuticals, or even a health club.
6. Pay off your debts.  Make a concerted effort to pay off all consumer debt such as credit cards, personal loans, etc.  Once the consumer debt is done, start working on the mortgages.  Interest will eat your budget up!
7. Pay cash!! Pay cash for things or don’t buy them.  If you don’t have cash enough to pay for it, you probably don’t need it.

Following these steps will have your budget in the black in no time at all.

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Managing your budget is not child’s play but making it a game might take the fear out of the word budget.  The following is a game that I developed that can be played for a day, a week or a month.  You earn points by making smart financial decisions.  You can play it alone or with your family members.

The object of the game is to earn points by making smart financial choices.  Points are based on the decisions themselves not the amount of money so this game can even be played with children on an allowance.  If playing alone, you will need to set a point goal such as 250  points.  If playing with family members, designate a period of time and the person with the most points wins the game.  Players can also lose points by making unsound financial decisions.

To play, keep track of what you earn and what you spend during the designated time period.

Strategy Points

10 points can be earned by:

• Writing down your planned expenses
• Making a list of debts
• Writing down your expected income
• Marking each expense as Necessity or Perk
• Marking each expense as Static, Reduce or Eliminate
• Writing down a way to increase income
• Writing down a way to decrease an expense
• Determine what your living expenses are for the designated time period. (Living expenses include housing(mortgage, rent, utilities), food, transportation and medical expense.)

Finance Points

25 points can be earned by:

• Putting 10% of all income into savings.
• Actual Decrease in an expense from planned.
• Actual Increase in income from planned.
• Reduction of each expense marked perk.

50 points can be earned by:

• Elimination of expense.
• Putting the same amount of money in savings as your living expenses for time period.
• Earning income from a new source.
• Making an extra payment on a debt.

Points are lost by:

25 Points

• Spending money on anything not listed on your planned expenses.
• Decrease in income.
• Spending more than 15% of your income on expenses marked Perk

50 Points

• Buying anything on credit.
• Taking money out of savings.

At the end of the time period, total up points earned and subtract points lost.  The player with the highest total points wins the game.

Have fun!  I’d love to hear comments, feedback and suggestions on playing the game or any additional ways to earn or lose points.

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1. Go Shopping!  I know it makes you feel better to go out and spend a little money but really, if you can’t pay your bills perhaps you could spend that money sending them all a smaller than minimum payment.
2. Go Out To Dinner!  Yup, this is right up there with shopping.  Eating makes you feel better but it doesn’t help get the bills paid.  Stay home and plan a yard sale.  Sell all the things that you bought on previous shopping trips.
3. Write Bad Checks.  Some people seem to think that it’s better to just put the check in the mail and PRAY that the money gets to the bank first.  Don’t Do It!  Chances are pretty good that the check will hit the bank before your deposit does and returned check charges are a huge drain on your finances.
4. Ignore them! I have known and have been one of those people who think that if you ignore them, they will go away.  They won’t and it’s in your best interest to try to negotiate with your creditors before they get to the point of no return.  If your behind in your bills with your original creditors (and they have not been placed with a collection agency) then you should take their phone calls and tell them your situation.  Try to work out a payment plan that you can afford and follow it up with a letter stating the payment you can afford.  Most creditors will work with you to some extent.
5. Pay bills with a credit card.  You are compounding your problem and eventually you will not be able to pay your credit card payments either.
   
   
6. Borrow from your 401(k) to pay bills.  Although you will get a lower interest rate from your 401(k), it costs you more in the long run because of the loss of interest, dividends or capital gains.  If you leave your employer for any reason before you pay the loan off, you must repay the loan immediately or it is considered an early withdrawal subject to tax and penalties.
7. Refinance with a “Too Good To Be True Mortgage”. Yup, they are still out there and if the payments or interest rates sound too good to be true, they probably are.  Be sure to ask your lender how much your payments can go up, not just the interest rate but the payment amount in the worst case scenario.  It might also be a better choice to look into a second mortgage with a fixed interest rate.  Even though the interest rate might be higher, the length of the loan will likely be shorter and you will save money on interest over the life of the loan.
8. Don’t threaten your creditors with bankruptcy unless you are truly considering it.  This may cause them to accelerate their collection attempts and it really does not make them want to help you.
   
   
9. Don’t hide it from your family.  Your family should be your emotional support if not your financial support.  You need to tell your family so that you can work together to reduce expenses and/or increase income.  You cannot correct the family budget by yourself, it will take the coordinated effort of everyone.  Remember that you didn’t get into this fix by yourself.
10. Don’t forget that with a little effort things will get better.  It’s really easy when you are drowning in the debt hole to forget to look up.  Even in the worst of situations there is always an end in sight and a way out.  Take a minute out of every day to find the things to be thankful for and it will help to keep the trials in your life in perspective.

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