Every now and again, I get e-mails from readers asking for advice. I always stress that I’m licensed to give individual financial advice. However, I often opine with what steps I would take if I found myself in a similar situation.

This week’s e-mail comes from Candi (as always names have been changed for anonymity and to stimulate readers’ imaginations). I’ve paraphrased it to put a focus on the important information:

Hi, I briefly read some of your articles. I need financial help and don’t know if you can help. I have made poor financial choices in the past. I am in debt and can’t seem to get a helping hand.

• I was a Prosper client in the past, but never was able to get funded. My credit score has dropped and therefore couldn’t continue w/Prosper.
• I am married w/ three children and a baby due in a couple of months.
• I have foreclosed on an investment property and gotten evicted on the home lived in. I have no home of my own to live in and I’m very stressed out about this.
• I am now trying to get a home to live in, but because of my past history can’t even rent something. I was looking itno rent to own programs in my area and they want big down payments because of my eviction/foreclosure. I need $5,000-$8,000 for a down payment and would like to consolidate my debt.
• My biggest debt is the family van w/ a balance of $17,000 and my husband’s work car w a balance of $1,800. Both monthly payments equal to $680
• I have various other personal loans, totaling $5,000.

If someone could just fund me what I owed and let me borrow the down payment for my home, I know I can get back in track. Ideally I want to only worry about a house payment and repaying whoever can consolidate my debts. I have a stable job working for the state I live in. I worked there for nine years. My husband also has a stable job as a wheelchair/elevator installer. I am very trustworthy and though my credit history might say something else. Please let me know if any help is available.

This e-mail hit me like a ton of bricks. Though the desperation seems obvious here, the unedited e-mail was even more explicit.

Often times I write about why America needs to wake up financially, but I don’t typically have the pulse of the problems. They usually come to me in statistical form, not from a real person with a very real problem.

Here is my response to Candi (edited for “publishability”):

• Transportation – How much is the family van worth now? What could you get if it were sold? I know you owe $17,000 on it, but perhaps if you talk to the dealership, you can trade it in for used Kia Sportage. If your current van is worth $14,000 to the dealer, perhaps you’ll only owe $3,000 plus the price of the Kia. I’m seeing a 1999 Kia Sportage on Ebay for $1,600. This would take the total cost of your family van from $17,000 to $4,600. If your husband’s work car is worth more than the $1,800 you might be able to sell it and buy a cheaper. If it’s worth $6,000, you can sell it, pay off the $1800 you owe on it and have $4200 left over, enough for the Sportage or a good chunk of down payment. If nothing else these two moves should help you look better to landlords. It shows that you are willing to make moves to turn things around. I think at that point, with two steady jobs, I think you could draft up a very convincing piece of paper of income and debts that may make you seem like a better person to rent to. Here are some hints to Save Money on Cars, but in your unique circumstance, I wouldn’t necessarily look to stick with the car you own.
• Focus on the Basics – From the desperation and lack of home, I think Candi should focus on the basics like food, shelter, clothing, etc. Anything extra (like the cars) has to protect their income and that’s all.
• Sell Anything Extra of Value – This is much like the above advice. If you are homeless, you won’t have a place for the stuff, so you might as well sell it. As George Carlin once said, “A house is just a pile of stuff with a cover on it – That’s what your house is, a place to keep your stuff while you go out and get – more stuff!” If you have less stuff, you can get a “smaller cover” which will be cheaper. It’s a financial win-win – you make money from your stuff and save money storing it.
• Look for Outside Help (community/friends/employers) – Religious institutions can help in situations like this. Other times a friend can help. Perhaps one of your employers can front you some money for a place to live. You’ll then have to live on limited income for a bit, but if you reduce your monthly expenses, you could do okay.
• Look to Eat Cheaply – There are a lot of cheap foods. A diet of beans and rice might not be ideal, but people have historically lived on much less. Just be sure to add a little fruit and maybe some cheap meats to get more nutrition. I know a lot of people who get a lot of expensive junk food.
• Make a Game of It – It’s going to be tough with 3.8 children. When I was little, my mom used to include me in the bargain shopping. She’d have me on a treasure hunt to find coupons that could save money. I’m the first to admit that I was weird, but this was FUN. The best part was the receipt at the end that showed how much we saved. Using simple division to determine the percentage of savings, I had two scores (net and percentage savings) to try to beat the next time we went shopping. I got very good at math as an added bonus. One might also draw a similar parallel to some parenting tactics displayed in Life is Beautiful.
• Day Care? – If you have three kids (and the fourth one coming), it may make sense not have a job and save on day-care expenses. I don’t know if you have this expense. If you are making $24,000 after-tax on your job and require a car, professional clothes, etc… and day care is costing you $20,000 it may make sense not to work.
• Exercise (though check with your doctor since you are pregnant) – This sounds extremely bizarre. However, in the situation you are in, it’s
  easy to get depressed. Exercise is very good at making you feel better than yourself. Many times it’s free. Plus if you are eating cheap foods, exercising may help maintain your overall health – again check with your doctor. (This message was brought to you by Lazy Man and Health.)

So there you have it? Did I miss any obvious things? What would you recommend?