My income is only 80% of my expenses. Is that outrageously high? I have been spending my savings which are?

Question

now exhausted. Do I need to sell my house right away, or get a second job? I cannot get a home equity loan now and I have a substantial amount of other debt. Is there anyway to predict how long I have before I'm bankrupt? Is brankruptcy a possibility if one has an income from a trust?

Answer 1

you need a financial adviser. Like today! At any rate, this is what I would do. Look at all your money coming in vs. going out. Eliminate unnecessary expenditures. For example: cell phones, cable , tanning at the salon, eating meals out,...Consolidate any loans. I wouldn't sell your home just yet. I mean, if your debt and house are the same, maybe. If house is more...you could make a profit after getting out of debt. There really are alot of factors to consider. But definitely INCREASE your cash flow coming in and DECREASE your cash flow going out. Bankruptcy should be your last option. It is a necessary evil, though.

I have had the same problem recently so this is what I did (but didn't want to do): I increased my income tax deductions, I decreased my 401k deduction, I got rid of the "bells and whistles" on my home phone, I ride share, visits to the salon are less frequent, I eat 95% of meals at home now and pack a lunch for work, I buy frequently used items in bulk, I don't drive the car unless I have to, I volunteer for overtime, if I don't need it I don't buy it. These are just a few of the things I have done.

Good luck!

Answer 2

Well, yes, it's outrageously high, assuming you're including your trust income as part of the "income" figure. Not a big surprise that you've run out of savings.

Would make sense to look first at your expenses, and see what you can cut, then look at increasing income, possibly by a second job. Selling your house should probably be your last resort unless it's a super-expensive house and is draining you, then selling and buying something smaller and cheaper could make sense.

If you have a trust, it would probably get taken in a bankrupcy, or would prevent you from filing, depending on how large it is.

Answer 3

Maybe you are spending too much. Actually it's not a maybe since you have stated that you have a substantial amount of debt.
It's either a 2nd job or sell the house. But you're still going to have to pay rent somewhere.
I don't think that you can declare bankruptcy when you are sitting on a trust.
No one can possibly answer your question about when you can go bankrupt since we don't have all of the particulars.

Answer 4

Instead of saying "my salary is 80% of my expenses", you should look at it from another perspective. Say "My expenses are 125% of my salary". Now we know that this can be fixed.

When you say "my salary is 80%.." the goal here is to increase your salary to match your expenses. The problem here is (1) Its is not easy to increase salary by 25%. (2) Even if you are able to do that, believe me you will still not reach that target. Your expeses will increase with your salary and it is going to be a moving target which can never be chases.

Now looking at the way "My expenses are 125%....", the goal now is to bring down expenses to meet salary. I understand that it is not easy. But if you sit down and list all your expenses, I am sure you can identify many of them which are luxuries or the ones which you can live without. Try eliminating them an you will be surprised! You will soon be spending 100% of your salary

Your next target is to spend 80% of your salary. Save 20% for retirement and for unexpected expenses.

Now dont say that you have a low salary and savings is out of questions. There are people with 20k salary which save. And there are people with 150k salary who do not save. So it depends on you.

Good luck my friend.

Answer 5

It's pretty simple. If your fixed monthly expenses are more than 50% of your income you are in big trouble. Right now you're saying your expenses EXCEED your income. Unless you reduce your monthly bills (selling the house, cars, cancelling monthly memberships, etc) it will just keep getting worse.

Answer 6

Im so sorry Are you married or living with anyone? Get their input. I would either increase income or put it up for sale since youre already in trouble. Good luck

Answer 7

That's pretty high friend. I would first consider what these expenses are? Can any of them be cut? If so, what does that turn your debt-to-income ratio to?