Budgeting Suggestions?

[so lucky]

One of my kids is a real poor money manager. He is self employed, and so doesn't have a steady income. Gets lots of creditor calls, threats, etc. He asked me for advice on how to get his financials straightened out, so I told him a few things to start. He doesn't have a great amount of debt, but it is spread out. I'm wondering if you all have anything I can add to the advice I gave him, which includes:

1: Open and sort your mail everyday, so you don't miss really important info, and get a better handle on how much needs to be paid out this week.
2: Save 10% of any money you get in; put it away in a special account or envelope.
3: Send each creditor something each month, even if it's just $5. Don't ignore them.
4: Put a big calendar for the month on the fridge door, marking down what is due, and who to pay how much.
5: Cut out or down on those few unnecessary daily expenses like that big gulp. And maybe put the smoking on a time schedule, rather than trying to quit cold turkey (again).
6: Keep money communication open with significant other, working together, encouraging each other.

He has said he likes Dave Ramsay's advice, but he doesn't think it applies if you don't know how much money will be coming in. I haven't read him. I have encouraged him to try to find a different line of work, but his self confidence is at an all time low, so the chances of him wowing an employer are pretty slim.

Suggestions?

 

[AMKuska]

Heh, my husband was in debt when I met him and still is a terrible money manager. We have two accounts, a bills account he has zero access to, and a "public" account which he promptly spends up within a week/week and a half. He then oogles the savings for the last half a week and usually ends up in a head lock at least once until the money hungriness fades and he realizes he doesn't actually need gems for his little online game.

This is how we manage it. We do still have some debt. A car payment and a mortgage, but all the little bills that murder us are gone. Does he have a wife or something who could take the reins?

 

[Nyboy]

Been there done that, you have good suggestions. Might want to look at interest rate on credit cards. Some are as high as 23% some as low as 6% there can be a big differance

 

[ninnymary]

Many years ago, we had a small debt. According to Susie Orman, you are to pay the card with the lowest amount as soon as you can by making larger payments and smaller payments on cards/debt that have higher balances. Once you pay that card off go on to the next lowest ones and so forth. That is what we did and it worked for us. Now the only debt we have is our home which we should pay off in 5 more years.

Mary

 

[so lucky]

It really feels great to get that mortgage paid off, Mary.
I have heard that about the credit card debts/ other debts, to pay off the smallest first. There is probably a lot of psychology in that--getting something paid off!
Nyboy, this young man's credit is such that I doubt that he could get a low interest credit card if his life depended on it.
I tried to convince him to pay the credit cards in full every month, but apparently there were emergencies. If he only realized how much he is paying in interest and penalties every year, I think he would be more careful.

 

[seedcorn]

All sounds like good advice. Some really good people have no money management skills and never will have-my son is dating a girl from a family like this. Trust me, we have had several open conversations about what that means for him and (once married) his family.

First thing is get credit cards paid off. If he hasn't, dispose of the cards now-no more credit of any kind.
Agree, send some money to all non-credit card people he owes money to.
Pay off the highest interest rate cards first. If a bank would loan him the money, take loan, pay them off, and never, never have another credit card again. Debit card, yes.

Whatever you do, DO NOT HELP HIM OUT OF HIS DEBT. Make sure kids have food, clothes but let him go without.

 

[Nyboy]

I only use American Express now, I have to pay full amount of charges I make every month. A good shoe sale no longer sends me into a blind charging spree.

 

[so lucky]

@seedcorn, I don't plan to help him out of his debt. I even told him "I could just give you enough money to pay off all your creditors, but I don't think it would do any good. You still wouldn't know how to manage your money, and you would be in debt again soon." He agreed that this would not be a solution.
The kids always act like they are starving, but I know he has food in the house. Besides, they get two meals a day at school, thanks to the powers that be. But yes, I do try to keep an eye on their safety and wellbeing.

 

[seedcorn]

Just because they get food at school doesn't mean they eat it. I'm amazed how picky people are.

I'm lunch buddy at school (BB/BS program) and I see all the wasted food.

 

[Nyboy]

Seed can you take the wasted food home for your chickens?