If you find yourself in a financial crisis, you must first and most importantly get a clear picture of your situation. Break out a calculator and gather all your bills and pay stubs: it's time to know what you owe and what resources you have available.
- What is your income? This is probably the easiest place to start. Include all sources of regular household income, including alimony, child support, employment and income from a second job or freelance work. Deduct taxes, retirement contributions and health insurance payments. This is your gross income.
- What are your monthly expenses? Make two lists: the first for essentials like mortgage and car payments, food, utilities, child care and support, alimony, education and health care. Use the second list for credit cards, personal loans and other unsecured loan payments.
- How much do you owe? Be as thorough as possible. Open every bill and past due notice. List the actual amount owed separately from late fees and interest; you may be able to negotiate down these amounts separately. Determine if the loan is secured (home or auto, for example), or unsecured (credit cards); paying the secured loans should be your top priority.
- Your working budget. Deduct your essential living expenses from your gross income. The amount left is what you can use to make unsecured loan payments and pay back other obligations.