You know what to do in a medical emergency, but do you know what to do when faced with a big fat financial crisis?
Dear Mary: After 10 years of marriage and tons of unwise decisions, my husband handed the finances to me to handle. I have never done this before. We have mountains of bills and $900 in the bank. I don’t know where to start. Please help me. I feel like I am drowning. Gladys
Dear Gladys: First you need to separate facts from feelings. There will be a time later to address emotional issues and how to develop financial intimacy in your marriage. But for now pack up your feelings and put them on a shelf. Develop a mindset that you’ve been called in to perform a financial rescue for a complete stranger.
Take a deep breath and write down all of your bills. Include the “bills” for basic food, gasoline and necessary medications, if any, to survive until your next payday. Divide these bills into two lists: Essential and nonessential. An essential expense is a serious obligation that if not paid could produce severe, even life-threatening consequences. Follow this rule to figure out which bills should get paid first:
Do not make payments on nonessential debts or expenses when you have not paid essential ones—even if your nonessential creditors are breathing down your neck.