In previous blog posts we advised people to plan rather than panic. Working on a budget, even an imperfect one, is a necessary if not critical first step. This post is about that process. A recent NY Times article had some helpful hints: https://www.nytimes.com/2020/08/03/smarter-living/coronavirus-budget-save-money.html?referringSource=articleShare

We also have budget forms for households on our website, on the Forms page. https://www.nv-njlaw.com/bankruptcy-forms/ From many years of experience helping clients in financial difficulties, here is our advice:

1. Getting started is the hardest part but the problems do not go away by ignoring them. Many people are put off by the task because they do not know exact numbers, but you should give yourself a break: this is normal. Any budget is better than none and gets you started on the road to taking back control of your life.
2. Start with expenses. Budget only those expenses that are necessary living expenses for you and those who live with you. For starters, do not include debt payments except those for necessary housing, transportation such as car loans etc. Your budget should show you the cost of keeping a roof over your head, the lights on, food on the table, clothing and personal care (eg haircuts) health care and transportation,  and work-related expenses.
3. Start with the expenses that are the same or pretty much the same each month. If you are not sure, make your best guess.
4. Don’t forget the expenses that only come from time to time, such as car repairs, or out of pocket medical expenses. For these estimate what you need to put aside for a year, and divide that number by 12.
5. Don’t try to come up with a specific bottom line. A good budget does not under-state or over-state the monthly living costs but shows you what you and your family need to live, work and stay healthy.
6. Again, DO NOT list credit cards, personal loans other than mortgage or car loans or lease payments.
7. Add up all the expenses, then figure out how much money is coming into the household each month. For work income, estimate the take home pay per pay period on average. Then multiply that figure by 13/3 if weekly, or 26/12 if bi-weekly. Add these up.
8. Subtract your expenses before credit cards etc and see what is left or how much you are short. If you have money left over, how much do you need to pay each month for credit cards and other debts you left off.

Congratulations, you are on your way to taking the next step, a plan! For that we can help you understand the alternatives. You should at least look at bankruptcy to see what it does or does not do, as you work out other options. We can help you with this and will be happy to do so in a free no-obligation initial consultation.