Carmen Wong Ulrich
"On the Money" Host

If you live with family, that makes your money a family affair. In day three of our Financial Fitness series, we met Greg — the sole breadwinner in a household of five (and then some): two kids, his wife and mother-in-law and two very big dogs. Greg makes a comfortable six figures (partially commission-based) but his income has been going down as his employer is tied to the sinking auto industry. More importantly, no matter how much he makes, Greg feels broke. (We also found that his credit scores are as close to needing ER-trauma assistance as we’ve ever seen—in the 400s). Whether you’re a sole paycheck earner or a two-income-plus household, everyone in the family bears some responsibility for how family money is spent. A family budget is for everyone to bear and it’s in everyone’s best interest to make sure your household budget is in financially fit shape.

Greg’s household is operating at a deficit of over $1,000 a month and he has several debts in collections. Looking at his budget we found over $500 going to eating out and membership dues as well as other miscellaneous (read: nonessential) spending. A household in this bad financial shape needs to commit quickly to fitness plan. Greg is ready to cut down on spending (first, finding out where all the money is really going) to erase that monthly deficit. I also asked him to consider having his mother-in-law to take care of the kids so his wife can work as well (this has worked for my brother for nine years). But he was less likely to consider the drastic, but efficient, move of selling their home for a small profit and renting for a few years until his credit is in shape and his finances are ready to again take on homeownership.

Sometimes the path to financial fitness can follow a combination of prescriptions—we must factor the human elements beyond the math. It’s difficult to move a family of five so if by bringing more money in and finding more money in the household budget will allow Greg and his family to stay in their home, their path to financial fitness may be slower, but more manageable, and that much more likely to succeed as a family.

*Watch On The Money every night this week at 10p ET to see someone new get inducted into our Financial Fitness club*

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