One clarification. You said you are losing the house, and renting, is your primary residence currently in foreclosure?

Understanding what needs to be done is easy. Actually accomplishing it is difficult. I have sat across the table listening to people in tears over their financial situation, only to encounter them at McDonald’s the next day. You have to decide if you are willing to do what it takes to be free financially.

All the advice given so far is good. I would add first that you just need to forget about retirement for the immediate future. It takes 20+ years to save for retirement. This means it is not impossible, but it won’t happen as soon as you expected. You are in the same place financially as someone in their 20′s, you will need to accept that, and then start living like it.

You do not really have a big income problem, and you are not poor. You make about as much money as the national average. If you feel poor, it is because you overspend. You said you have two jobs. Congratulations, that is an excellent first step. However, I would suggest that if possible, your wife get a job. That would be a simple way to increase your income by 50%-60%. I’m assuming you don’t have children at home any more, so that shouldn’t be a problem.

If you need more time (to implement Deacon Bradley’s advice), consider scaling back sleep. Most adults only really need 5-7 hours of sleep to function reasonably well. It may not be fun, but it will spur you on towards greater debt reduction. Don’t eat out under any circumstances. Better to be a little hungry for 6 hours than to pay premium price for prepared food. Also consider adjusting your grocery list. When first married, my wife and I had a grocery budget of $100/month. You have to eat more starches (potatoes, rice, pasta), legumes (split peas, lentils, beans), and veggies, and less meat, milk, cheese, and eggs (usually the most expensive foods). Http://www.drMcDougall.com is an excellent resource for free recipes. Even if you don’t philosophically like the diet, it is nutritionally sufficient and a great way to save money.

Finally, if you used home internet to access this site, consider cancelling (along with cable, any cell phones, and any other monthly bill you can get rid of), and using the public library (I did this when I didn’t have extra money). It’s a little inconvenient, but every little bit helps, and you will have more time.

Break things down into attainable goals. Write them down, and tackle them one at a time. I am debt free, but I have a savings poster (it’s made of regular paper) on my wall to check off as I meet my savings goals each month.

Thanks for the great information. You hit it right on the head and along with the biblical wisdom anyone can turn their situation around.

I would say to T. Collins that even though you are in this situation you still have energy left to do something about it and when you get determined and focused, Providence will help you get out of the situation.

A couple of things to note as well.

1. Work on the habits of spending-This takes consistent improving. Don’t get down if you make a mistake, just get back up and get at it again.

2. While spending less, find ways to increase your income more.

3. READ. This can’t be stressed enough. Even if you don’t have the money for it, with Barne’s and Noble stores, or Borders, everything you need to know to turn this situation around is at your fingertips…for FREE.

Well you might have to pay for the coffee.

Hope that helps,

Matt, keep up the good work. I’m going to make sure to give you a mention on my blog and book mark you in the social area.

More people need a resource like what you have here.

James

T. Collins may feel like it’s too late, but I can assure it’s not! Start doing things now to get your income up. Be reading books to improve yourself. Spend some time identifying potential jobs and make a plan to get there. I highly recommend Dan Miller’s book “48 days to the work you love” to help do these things and be moving towards some money.

From the way it reads, it seems like Mr. Collins is accepting responsibility for his past mistakes and is looking for HELP – not a shot to the gut after a punch in the mouth.

We also don’t know the whole situation here – the recession has wiped out a lot of unsuspecting persons who thought that business would always go on – when left without a business or livelihood we tend to pay more attention. Should he have prepared in the summer for the winter drought? Sure!

But, perhaps we should take Jesus’ approach with the woman caught in adultery who was about to be stoned to death..he told the Pharisees that “he who is without sin cast the first stone”, but he also told the woman to “go and sin no more”.

We’ve all made mistakes – it’s good that Mr. Collins’ is realizing that and now it’s time to help.

Matt did that. Kudos.

I’ll add that if he decides to find a debt counselor, make sure they’re fee-only. As Matt said, finding a trustworthy company is a must — don’t want to run into those guys who try to upsell you.

“Couple our excessive culture with aggressive corporate marketing and our lack of individual personal responsibility and we have ourselves a perfect personal finance storm – and T. Collins is but one of many who suffer.”

Perhaps I could have directed more stinging blame toward T. Collins, but sometimes words of encouragement are more appropriate and constructive.

Also… it is T. Collins fault but is indeed also partially the fault of our culture. If the same person would have grown up in the depression I would wager that their situation would be different. Ultimately culture is but a collection of individuals, but swimming against the current of a creek is much easier than against a raging river.

Um, I appreciate your soft glove approach here, but at the same time, this fellow needs to acknowledge that he has done great wrong, he should feel bad and it is not culture’s fault or society’s problem. He spent more money than he made and he needs to acknowledge his reckless lifestyle.

I think you give great advice here, but perhaps go too far by making him feel like he hasn’t done anything wrong. Just my 2 cents.