Organize Money

Organize Money

Financial distress can be caused by many root causes such as: illness, loss of employment, divorce, death, student loans, life changes, temporary disability, overspending, etc. Determining financial stability is important and requires a close look of all aspects of your life. Many families who succumb to financial peril do not realize the severity of their situation until the problems are looking them in the face. Therefore, taking a pro-active role in managing  events and situations around you may help you to prevent and/or alleviate financial distress later on.

STEP 1: ORGANIZE MONEY

The first and most important step in determining your level of financial well-being is to complete a budget. Your budget should give you good view of money coming in and money paid out. The CCMS budget provides all of the necessary tools to help you  examine your budget in an easy, effective manner.

You can download our CCMS budget, complete one online or we can help you complete a budget over the phone.  Please contact a budget counselor at (800) 920-2262.

PREPARING THE MONTHLY BUDGET

There are some points to keep in mind when filling out the budget:

MONTHLY EXPENSES

Secured expenses are expenses that you pay on a monthly basis, typically at the same (FIXED) amount. Secured debts are debts that were extended to you for items that you have to provide collateral and can be repossessed if you fail to make these payments. These items may include a mortgage (escrowed taxes) and car payments. The payment amounts on these items rarely change because, in most cases, the amount of payments have already been established.

Your regular living expenses are expenses that are paid on a monthly basis for (VARIABLE) items. Examples of these expenses are food costs, clothing, gasoline, utilities, insurance, etc. These expenses are more easily adjusted because they typically vary each month.

UNSECURED EXPENSES

After completing your monthly expenses you will need to record your current outstanding unsecured expenses. Unsecured expenses are monies that were extended to you without you having to provide collateral. Unsecured expenses include credit card bills, gas charge cards, department store charge cards, pay day loans and personal loans from finance companies.

When listing your unsecured expenses you should include:

  • The name of the finance company that issued the credit.
  • The current balance on the account.
  • The normal minimum monthly payment on the account.
  • The current Annual Percentage Rate (APR.)
  • The status of the account (current, past due, over limit) and, if necessary, the number of months past due.

[Bonus section]If your account is currently over its credit limit and/or past due, then your minimum payment will be equal to your regular minimum payment plus the over limit amount. For calculation purposes, please record the regular minimum payment on your budget worksheet.

NET MONTHLY INCOME

Net monthly income includes all of your household’s income that is brought home after the deduction of taxes, medical insurance, union dues, 401k payments, garnishment or other items from your paycheck.

THE NEXT STEP

Your completed budget will answer the following critical questions:

  • What are my current total monthly expenses?
  • How much disposable income do I have each month?
  • What is my current expense-to-income ratio?

In many instances, families may not realize the amount of money they spend on specific items until they have completed a budget. Your budget may provide you this nice clear picture.

After organizing your current budget and unsecured debts you should take an realistic view of your money situation to make any needed changes.

After completing your CCMS application and/or CCMS budget worksheet, please continue to the next section of this tutorial:

STEP 2: DISPOSABLE INCOME

If you are unsure of how to organize your finances or if you have questions about budgeting please contact a certified credit counselor at (800) 920-2262. All counseling sessions and personal information are kept strictly confidential. A CCMS counselor will review your current financial situation, answer your questions and provide you with a recommended course of action that fits your needs.

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