While this year is different than all others, the kids are heading back to school in some way. Perhaps, they did not need to do as much back to school shopping as years past. Regardless, you may have spent significant money this summer on vacation or and other summer activities to keep the family sane while you were working from home and they kids were home without camp.  Or maybe your income has been reduced due to the pandemic.

Either way… with Labor Day behind us and the kids heading back to school, it may be a good time to look at your finances.

What should you look at?

I tell my clients that they should know their level of debt and their “income to debt ratio.” How much is owed, to whom it is owed, and payment schedules are all important information. Debt can include car payments, mortgage, credit card bills, student loans and medical bills to name a few. On the other side of the equation, you should know your weekly, or monthly, income. The third component is your day-to-day bills. These items may include utilities, rent, food, gas, and entertainment. Does your income exceed your debt and daily expenses or are you falling short?

The best thing you can do for yourself is to write all the above down on paper. Create a budget. A budget will give you a clear picture of your finances.   It will tell you if your expenses exceed your income.  If so, then your “income to debt ratio” is not healthy and your credit is going to suffer.  Your credit report may not be reflecting your unhealthy income to debt ratio yet, but it will catch up to you.  If this is the case, what are your options?


You can certainly run up additional debt on your credit cards or take out a loan. This is not a recommended strategy if there is no long-term plan to pay off old and new debt. More realistically, you can eliminate unnecessary spending from your budget. By cutting spending, do you have enough income to meet your obligations? If the answer is no, then you need to have another plan. One idea is to renegotiate your debt. Some creditors may be willing to have a discussion. Some may not.

One word of caution – do not fall for any debt relief scams like “debt invalidation” or “debt consolidation” programs. There are far too many out there preying on the vulnerable. If something seems too good to be true, it probably is a scam.

Even after going through the above, you may feel like you are out of options and everything is out of your control. If this is the case, bankruptcy may offer you the fresh start you need and have a right to. Please call us to schedule a free consultation. We can see what option will work best for your financial situation.

Summer is over and the kids are heading back to school. This time of year is like a second New Year. Use it to create a new beginning for yourself and your family!