Create a Money Plan in Recovery
Developing good money habits is a priority in recovery, especially in the early stages. Dealing with debt accrued over the years while learning how to manage bills and living expenses is essential to long-term financial stability.
Tackling your entire financial future at once can seem overwhelming. Take it one step at a time.
Figure Out Where You Stand Financially
Get organized and look honestly where you stand financially. It is hard to move forward if you don’t know where you are starting from. Start by making lists of:
Total assets – Know how much income you have. How much (if any) do you have in savings? Do you own a car or house?
Total debts – Who do you own and how much. Include all debts, large and small.
Total monthly bills – What expenses do you have each month? Rent, car payment, groceries, utilities, child support, etc.
Set Your Financial Goals
Once you know where you stand, decide what your goals are. This is different for everyone. Prioritize what is most important to you now. Goals may include:
Start or build a savings. Work towards building an emergency fund.
Know when bills are due each month. Create a calendar with due dates for each bill.
Pay bills on time. Make monthly minimum payments to avoid late fees. Pay more on each bill as you can.
Determine which debts need to be paid off. Prioritize your debts and pay them off as you can.
Make a Plan
Set target dates and timelines for each goal. Be specific. For example:
Save $50 each week until reaching $500 in emergency fund.
Pay $100 each month to $600 credit card bill until it is paid.
Develop a Workable Budget
A budget (spending plan) is key to making sure your goals and plan can happen. A budget will help track your income and expenses and monitor cash flow. To get started:
Track everything you spend – Review bank and credit card statements for a few months to see where your money goes and how much you are spending on food, housing, car, streaming services, restaurants, etc.
Prioritize needs vs. wants – Identify your must have expenses versus those that are nice to have. Your must have expenses need come first.
Review to see where you can reduce spending – Look for things you can cut back on to free up money to put towards paying bills, debt, and increasing savings.
Finalize your budget – Work with your spending plan for a while to see if it is working for you. Adjust as needed.
At Town & Country Federal Credit Union we believe everyone deserves a second chance. If you would like to talk with someone about creating a money plan or have other financial questions you may have, contact us at info@tcfcu.com, or call 800.649.3495.
