Hey Alex!

Recently I have found myself in a bit of a financial crisis! I’ve always been responsible with money and how I spend it, but a couple months ago I went a little far with unnecessary purchases and now I’m falling behind on my bills. It seems like it is snowballing and I can’t keep up. How do I fix this before it’s too late?

Sincerely,

Broke

Hey Broke!

Been there, done that and I think most people find themselves in this position at some point in their lives.

The first step to digging yourself out of this financial crisis is to acknowledge that it has hit or is hitting crisis level. Avoid the mindset of “oh well, I’ll work on it tomorrow”. You can’t do this with finances because as you are experiencing it becomes a slippery slope and those bills are not going to go away.

Next, prioritize your debts. Which debts are those that provide for your basic needs such as water, shelter and food and which debts can you do without if it comes down to it, such as, gasp! internet service.

Lastly, come up with a plan to get yourself back on top. I would begin by seeing what you could do without for a while that would save you some money on the day to day basis. Do you grab a coffee in the morning? Save some money and make it at home. Do you go out to dinner during the week or grab a quick bite for lunch? Once again save some money and make it at home.

Cut out any unnecessary spending and put the extra cash towards catching up on those bills!

If this isn’t enough to get you back on track, then you will need to look into ways to increase your cash flow. Are there items around the house that could be sold for some extra income? You might even look into picking up more work until you’re caught up. No one wants to work more but if you have put yourself in a situation it is your responsibility to pull yourself back out.

Sincerely,

Alex

You can check out more of Alex’s advice by clicking here : Ask Alex : New Year’s Resolutions

If you enjoy reading Alex’s advice, send in your questions or situations to [email protected]. Each week, Alex will answer a new question or provide some friendly advice on issues we deal with every day. Whether it’s serious, fun, interesting, or you’re just stuck, send in your questions to Ask Alex for a little bit of outside perspective on life.