Hard to give a definitive answer without getting into specifics of your finances. A few questions to consider:
What is your current income? Is it stable? Why is money getting tight? Recent layoff? Mounting debt? Unexpected expenses?
I'd start by putting together a household budget -- then working back from there. List your monthly income first. Then list your reoccuring expenses. Stuff like rent/mortgage, car payments, taking 17% of your pre-tax income and putting it into a retirement account -- everything that has a fixed amount that is billed on a monthly basis. After that, list your variable expenses. Food, electricity, credit card debt service -- things you know you're spending cash on every month -- but fluctuates. Then list your annual expenses -- insurance bills, DMV fees -- stuff that hits once or twice a year. What's important is to also list WHEN this stuff hits -- because if you have a bunch of annual expenses hitting at the same time -- that will kill your cash flow and send your debt soaring if you're not preparing for it in advance.
If you've never done this -- you might be able to determine areas where you can cut expenses without sacrificing your standard of living. For example, I know a guy who has a wife and kids who goes out to dinner every night of the week. The tab's around $100 a night -- or around $3000 a month/$36000 a year POST TAX because they do it on the weekends, too. This guy makes a good living - but saves absolutely nothing for retirement because he's blowing it all on booze and food. You can also look at each credit card you have -- and see if their interest rates can be lowered by shifting their balances somewhere else.
Selling a treasured possession will not solve long-term financial issues if money isn't being managed properly. It just provides a short-term boost that gets eroded over time.
My wife and I are lucky. We're doing well. But I'm still very cautious with money. We clip coupons -- and actually keep a list of consumables our house uses (Drano, Clorox, Duraflame logs, blah, blah, blah) so we can stock up when stuff's on sale (buying with coupons, too) then drawing stuff down when it's not. For example, we've got five cats. We feed them Iams. The small bags go for 2.50 a pound. We buy the big 20 pound bags when they're on sale for 20 bucks -- then use coupons to get the cost down to 18. Same cat food -- less than half the price. Diet Coke? $4.79 a 12 box regular price. On sale? $5 a 24 can case.
Sometimes, when we hit things right -- we get our groceries for 50 percent off. On a bad weekend -- we get them for 20 percent off. But with a savings of anywhere from $40 to $100 a weekend -- that adds up to anywhere from $160 to $400 a month -- and it takes all of 15 minutes a week to do.
And you know what really kills your net worth? Cars. Go through your checkbook and add up all your payments, insurance, DMV fees, etc. Depending on what your payments are -- it could be several thousand dollars. The thing is we kind of blind ourselves to how expensive they are. We buy a $30,000 car, make a bunch of payments, then unload it 5 years later for $10,000. The depreciation alone is $4,000 a year -- but it's hidden because all we do is think of making the down and payments.
Anyway, do a budget first. Maybe there are some things you can do, like making a pizza at home instead of going out on Friday nights, that will free things up -- so you can hang onto a great looking car. Good luck.
Last edited by b_a_betterperson; 11-16-2005 at 09:58 PM.