Action Ideas: Budgeting & Debt Reduction

Posted May 20, 2011 in Curriculum, Learning, Mutual Aid, Social Action. Tagged:

Resilience Circles can be a place where we support one another to get our personal financial situations in better shape. Below are some of the activities that clubs have done to support one another.

1. Assess Your Debt

Take inventory of your debt.  Is your debt a serious issue?  Take this confidential Debtor’s Anonymous quiz to assess your situation.

2. Create a Budget and Keep Track

Even for those of us who feel we “live within a budget,” it’s always a good idea to once a year actually develop a budget. Sometimes tracking expenses for a month in a small notebook helps us remember all the hidden expenses and fees we don’t include in a budget. The National Foundation for Credit Counseling has this nifty budget worksheet in English and Spanish.

3. Budget Makeovers

Many ongoing circles do problem solving and budget brainstorming for their members.  One common approach is humorously called a “budget makeover” (feel free to call it something different). A circle member volunteers to share information about her/his personal financial circumstances. S/he prepares a budget that includes income, major expenses, and debts. S/he can pass out this confidential budget as part of the discussion – and collect the copies at the end to protect confidentiality. Together, the group brainstorms ways the person can reduce costs and save money. Great ideas and a sense of support can come out of such a session.

4. Renegotiate with the Big Boys – Together

Many people are paying high credit card fees or have poor credit ratings. Sometimes a late payment might trigger a higher interest rate, etc. But there is important room for negotiation with credit card providers. Call and press them to cancel or reduce fees. Even better, schedule a meeting where a few members of your circle make these calls together. This can turn a dreaded chore into a social occasion!

5. Know Your Credit Report and Score

A poor credit rating makes it difficult and expensive to borrow for necessary items like a car or home.  There are things we can do to repair one’s credit rating – and correct mistaken information on rating forms.

Listen to this wonderful episode of Fresh Air with Terry Gross interviewing Elizabeth Warren about Credit Reports and Credit Rating Agencies.

6. Set Goals and Make Pacts

Based on looking at your own budget and talking with other circle members, you might want to set some personal goals.  These could include:

  • Set budget goals and track expenses.
  • Pay off existing credit cards.
  • Meet with a credit counselor.
  • Stop carrying a monthly balance on your credit card.
  • Cut up some or all of your cards.
  • Attend a meeting of Debtor’s Anonymous.
  • Use cash more for purchases.

Whatever goals you set, you can state them publicly and use the circle’s “go-round” time to report on how things are going. Others in your circle may wish to make similar goals so that together, you can hold each other accountable.

7.  Get More Help: Debtors Anonymous

It may be that you need more help than your Resilience Circle can provide. But your club can support you to get that help. Debtors Anonymous is a national network built on the voluntary and free peer assistance model of Alcoholics Anonymous.  From their web site you can view tools and find local meetings.

8.  Take Social Action for Consumer Protections

The financial services industry has used their considerable political clout to stack the deck against consumers. Recent legislation providing for the creation of a financial reform agency will begin to chip away at this. But the reality is, we still need greater consumer protections and regulation of the financial sector. Organizations like Americans for Financial Reform can keep you posted on timely actions we can take.

9. Your Money or Your Life

The Resilience Circle Network has developed a special session for clubs that taps into the marvelous book and curriculum called Your Money or Your Life. The 9-Step programs supports you to:

  • Explore your relationship with money.
  • Understand better the relationship between money and values.
  • Begin to discover what is “enough” for you.
  • Change habits and initiate major life changes.