Part 2

We began Part 1 with the above question, how much debt can we handle? $25,000? $50,000? $100,000?

We then discovered that trying to figure out our monthly expenses wasn’t so easy. What are our necessary monthly expenses? We searched and found two neutral approaches to family household expenses. Neither really helped us in figuring out what most people need in terms of necessary expenses.

A friend gave me the following financial disclosure statement for the family courts that provides a better grasp of what today’s working (and separating) families need to live on.

 [If the expense is an annual one, divide the annual amount by 12 and place the result of that division in the Monthly column.]

This is a much more comprehensive list that includes Child Support, vacations, RRSP’s, and debt payments.

Now, take a deep breath before reading any further. In many respects, the above financial summary overwhelms. The first question that pops into my mind is this. Who has enough money to meet all of these categories? The second question is this. What do you do if you do not have enough money, (enough income) to meet all of these expenditures?

After taking a hard look at our income and all of our obligations, both family expenses, and creditor payments, we may have to make a few adjustments.

The approach I take, as do most credit counsellors and insolvency practitioners, is to narrow the family expenses down to the absolute necessaries. The more basic budget looks something like this.

My approach allows people to see what they can basically afford for the raw basics.

Then we can ask, “How much can you afford for an RRSP? How much money is left over after the very basics of life are met? What do you do if you don’t have any surplus at all?”

If you find yourself struggling to make even the minimum payments on your debt you need professional help! Don’t wait! Call Solutions Credit Counselling at 1(877) 588-9491 or fill out our Debt Consolidation Questionnaire and get your Free Credit Counselling Advice today.