Dave Says: Crisis Looming

Dear Dave,

I lost my job a few months ago. My wife works, but she doesn’t make much money, and we also have three kids. I’m still trying to keep up my credit card payments, but next month I know I’ll be late and they’ll start adding fees. In all, I have about $60,000 in debt and that includes payments on a $20,000 car. I don’t know how to handle the situation anymore.

Geraldo

Dear Geraldo,

The first thing you need to do is sell that car. You can’t afford a $20,000 car when you’re $60,000 in debt. And really, the credit cards are the least of your worries. What you need is an overall game plan. You don’t have a debt crisis as much as you have a career crisis.

You need to be delivering pizzas or throwing boxes at UPS tonight! You’ve got to do something to get some money going, even if it’s not on the level of what you were doing before. A thousand or $1,200 a month doesn’t sound like a lot, but it’ll go a long way in keeping the wolf away from the door. And when you’re not working, you need to be pounding the pavement looking for a real job. With a wife and family, you’ve got some big responsibilities, man. There are good jobs out there, but you’ve got to get out and make it happen.

What you’ve been doing is honorable, but right now the credit card companies can wait. They’ll fuss and threaten, but your family needs to come first. Take care of the basics before anything else – food, clothing, shelter, transportation, and utilities. Then, you can take care of the credit sharks with whatever is left!

Dave