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Question for the Money Doctors

Question submitted on Sep 9, 2015.

Question

I'm 47 y/o and starting over. I am a single Mom of a high school student. I have just gone back to school because on my income, I am tired of just making ends meet. I lost my home to foreclosure nearly 3 years ago, however according to BofA, it's still not finished therefore it lingers on my credit as LATE payments. Before I left my home, I let my car get repo'd and let several bill fall behind in every effort to try and save my home after my husband left. Eventually I was drowning and left. We moved from Texas (where my home was) to start over in Minnesota. My credit is horrible now and I'm just at the point where I have a LITTLE extra. My question is WHERE DO I START? Do I start a savings, do I start trying to pay on all the charge off's (which is a lot)? I really have no idea. I had to do financial aid to go back to school on top of it. Thank you SO MUCH!

Answer

Most experts agree that it is most important to establish an emergency fund.  You want to have enough in a savings account to meet unexpected, large expenses, such as car repairs, temporary unemployment, etc.  Try to put at least $1000 in an easily accessible account.  Once you have that money set aside, you can chip away at your debt.  Be sure to make your payments on time and you will slowly start to see your credit record improve.   Another thought might be to consider a consultation with a credit counselor once things are on the upswing. 

 


For additional information visit http://www.360financialliteracy.org/

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