LIFE: THE MONEY TRAP Morgan Fisher, Jay M. Weller, P.A., Julian Credit Management

At some point in our lives we have all run into financial trouble. Our finances are like a puzzle that we are struggling to piece together to get the big picture. We continuously reevaluate our finances, trying to find a way to get more out of what we have. Most advice on how to save money focuses on cutting out the little things that really "add up". For instance, buying your lunch everyday verse packing one, going to the movies verse renting, eating dinner out, and many other ways you can blow money on food or recreation. Forget the pennies and nickels, we all know what they add up to. What happens when you are struggling to pay for the fixed costs of life or the things that are beyond your control?

The number one asset of American households is their home. Families are taking on larger and larger mortgages, and foreclosures are at record highs in these trying economic times. You might be able to afford the huge mortgage payment, but one must remember that with a big mortgage comes higher insurance, higher property taxes, bigger utility bills, and higher upkeep costs.

About 40% of people owe more on their car than it is worth. People that already have financial trouble, but need a bigger car for their bigger family or to replace their broken vehicle find themselves drowning in through the roof interest rates. Many people just get caught up in image and try to live beyond their means. They will still owe money on their old car and trade it in for a new one tacking on the rest of the old loan to the new one. You shouldn't buy a car that you can't pay off in four or five years because cars don't hold their value. Realistically, you shouldn't trade in your car until it is paid off, but sometimes you don't have a choice. Driving the car to the dealership on its last whim just hoping it will run long enough to make it there.

Many people do not have enough medical insurance. The problem is that when people weigh the opportunity cost of the large sum of money being taken from their paycheck each month or saving for a medical emergency, they choose to foot the bill. Unfortunately, in the event of a serious medical illness, it will be impossible for one to cover the costs.

Another large expense is your kids. It is hard to estimate how much your children will actually cost you, and it is a lot. Accidents happen and when an already struggling family has an unexpected pregnancy it can be detrimental. The medical bills, baby products, grocery expenses, school expenses, and clothing can run you into the ground.

Your car breaks down, your dog gets sick, your AC unit blows up, and your husband loses his job. Yes, it can happen and all at once. We all know the saying, "When it rains it pours." According to an SMR Research study of Census Bureau data, more then 40% of American households have less than $1,000 in their savings accounts. When you are living paycheck to paycheck a minor setback can have huge ramifications. Sure, you can always turn to your credit cards, but what do you do when those are maxed out? Next your credit card companies will issue you higher interest rates as well as over the limit fees. If possible you should start building an emergency fund now. However, it sounds easier than it is. I know how it is when no matter what you do you can never get ahead. Just when you think you finally have some money saved disaster strikes.

It seems that most of these problems arise from poor financial planning, but really, sometimes no matter how well you plan things, it seems the worst is yet to come. No one can predict the future. We don't have a crystal ball that we can gaze into. That is why there are certain types of relief out there, such as debt consolidation programs and bankruptcy. Nobody ever wants to file bankruptcy, but it can help you. It is there to give you an opportunity to start anew. Of course your credit is not going to be great after filing a bankruptcy, but if your credit is already badly damaged, it can't do that much more harm. It will give you a clean slate. No more sleepless nights. Financial troubles cause the worst kinds of stress. They can even lead to divorce. When you have no where else to turn. Seek the help that is available to you before it is too late.

Julian Credit Management is a firm that practices exclusively in the area of Bankruptcy and Debt Consolidation and has offices in Clearwater (Pinellas County), Port Richey (Pasco County), Tampa (Hillsborough County), Lakeland (Polk County) and Orlando (Orange County). We represent persons throughout the State of Florida.

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