By: Sarah J. Crouch

The first step in establishing any kind of new financial existence for yourself is to make sure that you know where you are right now.

I know.  This sounds basic.  And you probably have a one word answer for the “How are my finances now question?”


This may or may not be true.  I have lost track of the number of times I have told my clients that they should have money left at the end of the month and been called an insane person.  So I say, well let’s look at the bank statement and when I am done taking out all of the absolutely unnecessary expenses, my clients are a little surprised by how much money they have arguably thrown into a pit and set fire too.

So here is where we start:

Get out your online bank account or bank statements and make a chart with four columns on a piece of paper.

Income    Expenses    Luxuries      DEBT

(I know…I know…you don’t have any luxuries in your life…we will get to that.  I swear I am not an insane person.)

Now, take a look at your bank statement and under each of those headlines put in the pertinent information.  Under income, put all of your income in there, don’t forget to account for regular expense checks.  Under expenses put actual expenses only.  I am talking about Utility Bills, Mortgage, Groceries (don’t include trips to Target where you also bought a scarf or jeans).  I don’t want to see trips to McDonalds or Dunkin at lunchtime.  Only actual necessary expenses.

Now, under luxuries, put the trips to Dunkin, McDonalds, Starbucks (GUILTY), the scarves at Target (SUPER GUILTY), and all the little extras that we all spend money and don’t think about.  I want you to put every single one of these that you spent money on in the last month in that column and add it up.  Scary right?  How high is that number?  I know when I did this for myself it came to about 150 bucks, and I am fairly good about the fast food.  I don’t eat much of it….now Starbucks and Target…that is another story.  My assistant figured out that between her and her son she was spending about 250 bucks  a month on fast food.  We all do it.  We are all guilty, you are not a bad person for having a high number here, this problem sneaks up on the best of us.

Now let’s take a look at the debt column.  Are these balances on the rise, are they revolving but you aren’t making a dent?  Are you having trouble keeping up with the mortgage?  Medical bills?   Is the whole situation a giant house of cards that will fall as soon as you have a kid need to stay home sick from school?

Now, here is the fun part.

Take this chart and make an appointment with a financial professional, an accountant, a financial planner, a bankruptcy attorney, for a consultation with someone that can help you.  Someone with a license, a degree, and a pile of happy clients, not your brother who does his taxes with H&R Block every year and seems to be good at math or your sister that filed bankruptcy a few years ago and knows everything about it.  Instead, discreetly ask around to see if anyone knows one someone that has helped them with financial issues.  You will be shocked by how many of your family, friends, and colleagues have been in my office.

I see a lot of new clients this time of year.  People walk into my office and say, “I just can’t do it anymore” or “I don’t even know where to start”.  We go over their income, expenses, debt, and general financial issues and decide how best to attack this problem.

Sometimes the answer is a bankruptcy case.  Sometimes it is just the best way out.  I say this because a lot of people think that bankruptcy should be a last resort.  I disagree.  I wish more people came to before it was the only way out, back when it is the best way out.  This means I am not racing a garnishment to the courthouse door.  We are on the offensive in a financial situation instead of playing defense.

I say to my clients all the time, “If I could wave my magic wand and make all of these credit card and medical bills disappear, would you be able to pay your bills?”  99.9% of the time the answer to that question is “YES.”  If that is how you would answer that question, bankruptcy might be the BEST solution and not the ONLY solution.  This is an important distinction when you are assessing your situation as a whole.

Other times, more careful budgeting and watching that luxury column is the best solution.  Sometimes, thinking about a second part time job is the best solution.

This is what assessing the situation gets you too.  It gets you to a starting point.  DO NOT SKIP THIS STEP.  It is mission critical.

So you have your starting point, now what?  What is the plan?  Time to set goals and put together a budget!

Next time:  Setting A Goal and Making a Budget


Interested in how we can help you file bankruptcy or assess your financial existence?  Give our office a call at 732-302-9600 or fill out our online consultation form and we will call you!

It is that time of year.  We are all making resolutions to be fitter, lose weight, save more money, be happier, the works.

We are all making promises to ourselves.  This is great.  It’s wonderful when people resolve to improve themselves.  Better yet, this is the only time of year that we seek a plan.  EVEN BETTER.  Without a plan a goal is just an idea.  If you don’t have a plan for how to get there, it is going to be difficult if not impossible.

So I’m here to help with your financial goals.  You want to get out of debt, save more money, maybe get solvent in such a serious way that you can afford a new splurge.  Awesome!  But how do you do it?  Where do you start?

I say you start from the beginning, a very good place to start.  So I present to you the New Year, New Financial You blog series!  I am going to post articles throughout the month of January on how to start cleaning up your finances,  how to set a goal, stay on budget, save, deal with obstacles and knowing when you get to splurge and when to walk away.  These are incredibly valuable skills that will take time, discipline and patience to develop — just like your weight loss and fitness resolution.

Even better, I am going to do them along with you to show you how to make them work!  As it turns out, bankruptcy attorneys have budgets too!  I will share savings tools, web and mobile applications I love and hate and programs I use in my home to stay on task and on budget.  I will share what works, what doesn’t, and how to adjust things to make them work based on my own experience in using these tools.

We will talk a lot about timing because, to be perfectly honest, I feel that timing is everything, particularly for pre and post bankruptcy clients.  For example, certain savings tools are great post bankruptcy when your goal is to save but not so great prior to a bankruptcy when the goal is different.

Currently the plan for the articles will go as follows:

Assessing the Status Quo

Setting Your Goal

Budgets, Budgets, Budgets

Tools for Saving

Dealing with Financial Obstacles

When to Spend for Fun!

Requests for additional topics are welcome, diversions from this subject will happen!  I am more often than not inspired by what I hear in the courtroom, from colleagues, from clients, and things I see in social media.

So here we go.  New Year, New You, Happier Savings Balance.

Happy New Year!!!!


Bankruptcy can be tough.  But it can also teach hard lessons.  Like how a budget an emergency savings is mission critical.

Maybe you had those and your bankruptcy had nothing to do with them.  You had a budget and your emergency savings wasn’t enough for an extended job loss.  Stuff happens.  That is why we are here.  You can skip this post and come back for the next one.

But for those of you who do need some help;


First – Know when you need to ask for help.  If you have no clue even where to start or what to do, call a professional!!!!  I promise you that you won’t regret the fee for getting set up with one of these folks if you have no clue where to start.

LearnVest offers an inexpensive 1 on 1 with a certified financial planner that will help you rebuild following a bankruptcy case.  A good accountant or a local financial planner is an option too but they can be cashy.  My experience is millenials (I am one so I can say it) prefer LearnVest, everyone else seems to prefer brick or mortar.  Do what works for you.

So let’s say you don’t think you need help.  Ok.  Here is my budgeting set up.

1.  Establish how much money you net each month.

2.  Establish your monthly bills.

3.  Establish your non-monthly bills.  These are things like car repairs, taxes, veterinary bills, etc.  I am perpetually forgetting that I have to pay flood insurance annually.  I was really proud of myself for having remembered and budgeted that this year.  Ask my husband, I won’t shut up about it.

4. Figure out what you are ACTUALLY spending on everything else.

This is a big one.  I am bolding this because it is sooooo big.  You must do this.  You must get out your bank statement and your credit card statement and see what you actually spend. is great for this if you want the computer to do the work for you.  This is not a skippable step.  If you do not do this part or do it and are NOT honest about it your budget will fail.  Big time.

Nobody knows how much they spend at Dunkin each month.  I repeat nobody.  I only just found out.  I am a little upset with myself about it.  I, of all people, should know better.

The easiest way to cut back on unnecessary expenses is to know where it is going.

So you have aggregated all this information.  What now?

Start an emergency savings account and a non-monthly savings account.  You can do them at your current bank or establish a high yield savings account.  Either is fine.  I like distance between me and my savings because I have no will power so I use a high yield online account that I have to really work to take money out of.  Whole days of delay.  It works for me.  Forces me to question what I am doing.

Ok so let’s look at your numbers.

Remember there is no magic number for how much you should save.  I have heard it all.  You should save 10%, 15%, 7% and it goes on and on and on and on. Do what works for you.  If that is 2%, do 2%, just do it.  The only rule I care about is the six month rule.  You should have six months of net salary set aside as an emergency fund.   This may feel like a lot.  I know it does. So bite it off a little at a time. Think of it as first, I am going to save one month, then two, than three.  Slowly but surely you will get there.  Treat this like a monthly fixed bill.  When you establish how much to put in, set an automatic deduction and forget about it.

Do the same thing with non-monthly.  Take that non-monthly number from above, divide by 12 and set the automatic deduction.

Bills – Pay them.  See if you can make cuts or decreases.  I know a lot of people cutting the cord with cable.  I have thought about it.  I have a toddler, so TV isn’t a thing that happens in our house.  When my contract is up, we are bailing out on cable.  It is an easy cut to make in our house.  I am sure there is an easy cut in your house.  Find it, cut it.

So now you are left with the leftover funds.  This is the money you are allowed to spend on groceries, etc.  Not a lot left for Dunkin runs right?  Here is the thing.  I love an iced coffee and a donut as much as anyone and I see nothing wrong with getting it once a week, but that five times a week you are doing (don’t pretend you aren’t)…that amounts to 64 bucks a month.  That’s right.  65 DOLLARS.  Multiply that by 12 and you are spending $775.00 a year on coffee.  My friends…that is a half of a Caribbean vacation.  And that is JUST your Dunkin habit.  I am betting there is a WHOLE VACATION in your misc spending that you could be cashing in?   (Also, how good is that swimsuit going to look when you have skipped the donuts and fast food for a whole year?)

Do you want to go to the Bahamas or eat another donut? 

I vote for the beach.  I printed a picture of a palm tree and taped above my computer today while I drank the last iced coffee I will have for a full week.


Interested in how we can help you get on the other side of a tough financial situation?  Give us a call at 732-302-9600 or fill out our online consultation form and we will call you!

So you have sat down and figured out what the status of your financial existence is.  GREAT!  Now we know where you are starting but where are you going?  Every point A needs to have a point B.

So step 2:  Set a Goal

What is your goal?  What are you working towards?

I like small goals first in a first timer situation.  This goal should be two things:  1)Specific; and 2) Shorter in Time Frame.

An Example:

Goal 1 – I want to save a million dollars for retirement in 30 years.  BAD FIRST GOAL

Goal 2 – I want to save at least $25.00 per paycheck for retirement for the next three months.  GREAT FIRST GOAL.

Your goal doesn’t have to be something as major as saving for retirement.  My personal favorite is to stay on budget for two weeks.  Just two weeks.  You will be shocked at how difficult this goal can be for a first timer.  This goal does two things, doesn’t set you up for failure and gives you a good idea of any nasty habits you may have that need broken.  Which will segway you into  my other favorite goal is kicking a habit.  Give yourself two weeks to either kick a habit or come up with a suitable substitution/accommodation.

A great example from my own existence.  When I did my two week budget challenge (and during the bank account review),  I realized I spend too much at Starbucks. So I look for a solution that still lets me have my fancy caffeine fix. I downloaded the app on my phone, loaded a gift card with 20 bucks and said to myself, this is how much I am allowed to spend at Starbucks for the two week period.  When I run out I am cut off.  I will not feed the beast.  Lo and Behold, I was out after a week because I was still going too much (and buying cookies…bad for the budget and the waistline…ugh…).  So a new plan on the second two week round, I bought a private stash of fun K Cups, stashed in my desk (10 bucks on amazon about once a month) and cut my budget for Starbucks back to 15 bucks.  Tried again in the next two weeks and STAYED ON BUDGET.  These little tweeks needed to make your goal can only be made if you are giving yourself a small goal that is short in duration to start out with.

Once you have achieved a smaller goal, build on that progress.  If your goal was to stay on budget two weeks, maybe next time make it three weeks, than a month, than three months.  Before you know it what was once a goal will just be something you do instinctively.

On setting more than one goal:

If you can handle it do it, if you are still working on your first goal and struggling DON’T.

If you want to manage multiple goals, I like goals that work to achieve the same end.  So let’s say you are like me and you need to drop a few pounds and do a better job of staying on budget.  This works together nicely.  I put myself on a more liberal grocery budget and a very strict eating out budget.  This will help me curb that spending we all do on fast food which is good for my waistline and my wallet.  These goals are ultimately working to the same end.  This makes it twice as nice when you achieve the goal (plus think of all the money you will save for new jeans!)

Which leads me to my next topic for next time:  Creating and Following A Budget!


Think you need bankruptcy advice to get to your goal.  Give us a call at 732-302-9600 or fill out

our online consultation form and we will call you!