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What is a Budget?

Author: Kim Staudenraus

Many cringe when they here the word budget. Some think the only other word that starts with "B" that might generate a worse reaction is the word bankruptcy.

I hope to explain that the word "budget" is not a bad word. It is not a controlling word. It is not a word meaning "you can't have." I hope to explain that the word budget is a way to take back control. A word that means freedom.

Merriam-Webster online defines the word Budget in part as: a plan for the coordination of resources and expenditures, the amount of money that is available for, required for, or assigned to a particular purpose. Basically, it is a plan for saving and spending.

Baby Steps!

Author: Kim Staudenraus

Getting out of debt is no different than overcomming any other struggle or obstical in life. To be successful it helps to take one small step at a time.

Create small goals that lead to the big goal of becoming and living debt free.

I encourage my clients, as Dave Ramsey does, to follow seven baby steps to assist you in becoming debt free.

The baby steps are a good overall map to follow along with:

How To Dig Your Way Out Of Debt

Author: Kim Staudenraus

In 1993 I was $48,000 in debt. I lived in an apartment, paid monthly car payment to the bank, and after expenses, rent, electric, phone, insurance; the rest went to paying on credit cards. I had no savings, and to say I was living paycheck to paycheck was an under statement because at times I was actually paying one credit card with another card. You can imagine, this scenario didn't last long before I was truly drowning in debt.

I was so oblivious about my financial situation; I actually thought that since I was making a pretty good salary, I could buy a house. Needless to say, the bank set me straight on that thought process real quick.

The Pressure of Money Problems and Debt

Author: Kim Staudenraus

This week a tragedy occurred just eye shot from my the building where I work. I was at lunch when I noticed the sky filled with three news helicopters.

A man in his forties, married to his high school sweet heart with two beautiful children ages 10 & 12 shot and killed his wife and kids and then committed suicide. They lived in a beautiful home, in a very up scale community. Had fairly new SUV vehicles parked in the driveway as well as a maid, who unfortunately is the one who found the bodies.

It is something that, sadly occurs all too often somewhere in the country and all indications are that this was a direct result of money problems and overwhelming debt. By all exterior appearances this family was successful and well off. The neighbors said they were very friendly and active in the neighborhood but yet private about their lives.

Is bankruptcy the answer?

Author: Kim Staudenraus

So you have too much month left at the end of your money right?

Many times my clients will ask me if bankruptcy is the answer. They say:

I am in debt, I have tried everything to get out of debt but I still don't have enough money to meet my bills and living expenses.

When I ask, what have you done to get out of debt? I receive a reply similar to this.

I have gotten a consolidation loan to pay off my credit cards and that lowered my monthly payments so I had more money. I still didn't have enough so I started using the credit cards again. When the payments from the credit cards and the consolidation loan were too high, I got took out a second mortgage to pay off the cards and the consolidation loan. That was good for a while, but I had an emergency that I had to charge on a credit card. From there I had more credit card charges and now here I am again, I can't meet the payments on the credit cards and the home equity loan and still pay my bills. So am I bankrupt?

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