HOME: Rent or Mortgage, Utilities (Phone, Electricity, Gas), Home maintenance cost and upkeep. 28 - 35 Percent of income.
FOOD: Everything you eat at home or at work. Not dining out. 10 - 20 Percent of income.
TRANSPORTATION: Car Payments, Car Insurance, Gasoline, Maintenance, Subways, Bus Fare, Parking, and etc. 10 - 15 Percent of income.
MEDICAL EXPENSES: Doctor Bills, Dental Bills, Prescriptions, Eyeglasses, Health Club Membership and etc. 3 - 5 Percent of income.
CLOTHING AND PERSONAL CARE: All Clothing Purchases, Shoes, Jewelry, Cosmetics, Toiletries, and Haircuts. 5 - 15 Percent of income.
ENTERTAINMENT/ RECREATION: Movies, Video Rental, Dining Out, Vacations. 5 - 15 Percent of income.
LOAN PAYMENTS: Credit Cards, Other Loans. 10 - 20 Percent of income
MISCELLANEOUS: Other Expenses not covered above, such as education, business expenses, alimony, and etc.
If your housing or credit accounts exceed these limits then it is necessary to make a drastic change. Chances are, they do! It is essential to cut back in areas such as entertainment, clothing and so forth. The obvious area to eliminate would be the entertainment department. Those unnecessary niceties of life like cable TV, movies, sporting events, hobbies, etc.; should be written off and the income from those should be applied to erasing your credit balances. No one likes being deprived of these things but realize in advance that it's only temporary!
What if I can't even make the minimum payments?
If you are unable to make the minimum payments then you must take the appropriate measures. You have to increase your income, by taking an extra job or something of that nature, once again it is only temporary. You should also contact your creditors, and try to work out a payment plan to suit your finances. Many times they will reduce your monthly payments and some will even temporarily discontinue your finance charges. You must contact them and explain your situation.