Monday, March 3, 2014

SOTH Stepping Stones: Reclaiming Control of Finances

by Soraya

Scam victims are often left with their finances is disarray. Most scams are run for money, and many scam victims send large amounts of money before realizing the situation is a scam. Scam victims also tend to neglect their work or school for the scammer, risking jobs, client bases, or academic scholarships. It is also common for scam victims to spend money on their appearance, home, travel, or other things in preparation for the life they think they will soon lead. This may mean that finances need to be completely overhauled and a brand new personal budget might need to be made. Keep in mind that this is just a basic outline. We fully understand that things are not always so simple following a scam, and that often, people lose their entire savings accounts or retirement funds, sometimes even their homes. The following steps are intended only as the beginning of a process of reclaiming your control over your money, and starting to rebuild your funds if at all possible.

Step 1: Write down the amount of money you can count on coming in each month.

This can be heartening or it can be depressing, but it is important to focus in on this amount. No matter what it is, write it down. Even if it's only fifty dollars from the two photos you sell to a web page each month, write that down.

Step 2: Make a list of all the things that absolutely MUST be paid out of this money.

Sometimes this step is the hardest one of all. We often come to think of things we want and like a lot as things that must be paid for, but the basic expenses are:

#1: Rent, mortgage or other housing payment

#2: Electric bill (add a third for gas bill if necessary)

#3: Water bill

#4: Groceries

#5: Transportation costs (bus pass or car upkeep)

#6: Medical expenses

#7: Internet (as a lifeline for many)

#8: Phone (one phone, landline or cell..if only to keep for emergencies)

#9: Television (if free channels do not come in well in your area. This isn't an absolute necessity, but it is an important window on the outside world for many)

#10: Children or elderly parents' additional expenses, if applicable (school supplies, medical supplies not covered by benefits or insurace, etc)

#11: Your other necessary expenses, such as existing credit card debt or loan payments.

Write this list out and note the maximum amount you must spend for each of these items on the sheet. If you have this area paid for outside of the income you can count on, note that next to the item. For example, if you get $300 a month, but you have moved in with your son or daughter and they only ask you to contribute $100 toward the groceries each month, write an x or the work "ok" next to the rest of the household expenses and then write $100 next to the groceries.
As you write this out, you will either notice things falling into place, with your income being more than your expenses, or you will notice gaps. Write down ideas for filling in the gaps, note them with a mark on the paper, and then write them down on a separate list. For example, suppose you know that your food budget is a bit short. You might want to write down "EBT Card?" and then add "EBT Card Application" to your list. If you have credit card bills you absolutely cannot pay, you may want to look into filing bankruptcy.

Step #3: Make your new budget

Write your income on the top of the page, list your individual necessary expenses, noting areas where you may need to fill in gaps, then subtract the amounts. The money left over is your "extra" money.

Step #4: Decide how to manage your extra money

Many people use all or part of this money to begin the process of replenishing their savings account. Others use it to treat themselves. Make another list like the one above, only instead of those bills and expenses that must be paid, write out what you would like to do with your money. It might look like this:

#1: Books

#2: Music:

#3: Movies

#4: Rebuild savings account at Bank of America

#5: Save for trip to Spain

Once this list is written out, allot portions of the extra money to each category. For this step, it might be helpful to find ways to get certain things for free. If you need to read several books each month, you may want to write $0.00 in the slot, and make a rule that you will visit your local library and book exchanges for reading material. Many people also find points programs such as "swagbucks" a good way to get small items such as songs, movies, or a book or two for free. You can even make it a rule that you will ask for bookstore, music service, and/or movie rental gift cards for your holiday gifts from family and friends and use those for these purchases.

Step # 5: Look over your budget as a whole.

This might be heartening, as you realize you can pare down expenses and make it on a limited income. Or it might be terrifying as you realize you have several gaps and most of your "ok" sections are only "ok" because someone else is now paying for them. This does not mean you failed or that you are doomed to always have this as your budget or your life. It is just a portrait of where your finances are right now. Writing it out in a simplified manner is a first step in making the needed changes. It is also a way to regain control. No matter how bad it looks now, you are the one making the decisions about where your money goes once again.

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