( OPRAH.com ) -- Financial columnist Michelle Singletary maps out a financial rescue plan for Tisa McGhee , a 39-year-old , single mother of two who has lost her job and watched her debts pile up . Here 's what you can do if you 're in a similar position . In the Short Term . 1 . Stick to a budget . I started by giving Tisa a blank financial worksheet to fill out . By looking at the full financial picture , I saw some expenses she could cut . First , she 's paying $ 220 a month for cell phones for herself and her daughters . She should stick with the cheapest plan -- no downloading ring tones , surfing the Internet , or texting for the girls . Second , she has to cut back on restaurant meals , one of the most common ways people waste money . Third , she needs to spend less on transportation . Ideally , 6 to 15 percent of your net income should go to transportation costs ( including your car payment , gas , and insurance ) ; Tisa is spending more than 18 percent . I also advised her to make a list of top priorities and , every time she 's tempted to buy something , pull out that list and look at it . Oprah.com : How to be a black-belt shopper . 2 . Stay on top of the mortgage . Part of Tisa 's trouble is her adjustable-rate mortgage . When housing prices were rising , a homeowner could refinance when interest rates went up . But once home prices began to fall , that was no longer an option for many borrowers . While Tisa 's interest rate was rising , the value of her home was dropping -- from $ 302,000 to about $ 230,000 by last November , according to an estimate by Zillow.com . Thanks to her emergency fund , she was able to keep up with the higher mortgage payments until August 2008 . But then she stopped paying , and the lender began foreclosure proceedings . She eventually sought help through the Obama administration 's Making Home Affordable program ( MakingHomeAffordable.gov ) , which allows strapped borrowers to refinance or modify their mortgages . Tisa 's lender offered to lower her monthly payment from $ 3,180 to $ 1,747 ; she began making the new payments last July but stopped because her lender never sent her the proper paperwork . I suggested Tisa turn to NeighborWorks America ( NW.org ) , a nonprofit that helps consumers avoid foreclosure , and the agency intervened . If you are having trouble paying your mortgage , you can also contact a free counselor approved by the U.S. Department of Housing and Urban Development ( find one through HopeNow.com or at 888-995-4673 ) . Oprah.com : Unlocking the keys to your mortgage woes . 3 . Stop making extra debt payments . Tisa has been trying to dig herself out of debt by paying more than the minimum on her credit cards . Normally that would be smart . But because she is unemployed , I advised her to preserve as much cash as possible , making basic expenses -- food , housing , utilities , and transportation -- her highest priority . 4 . Get financial counseling . Tisa needs to work one-on-one with a credit counselor . Counselors with the National Foundation for Credit Counseling can provide free or lowcost debt help . To find a counselor , go to DebtAdvice.org or call 800-388-2227 . Look for accredited counselors who have independent certification and training in budgeting , consumer credit , and debt management . Oprah.com : 9 small steps that will pay off next year . In the long term : . 1 . Stop using shopping as therapy . Emotional spending causes a lot of people to end up in serious debt . Seventynine percent of women go on spending sprees to cheer themselves up , according to a 2009 study released by the University of Hertfordshire , in England . Forty percent of the women surveyed named `` depression '' as a reason to go shopping . 2 . Save to buy a used car . Tisa , who has spent almost $ 30,000 over the past six years on two leased cars , needs to eke out some money to pay cash for a used car when her current lease is up . Yes , you can lease a car for less each month than it would cost you to buy the same vehicle , but at the end of that lease , you have no car . In the long term , buying a car and keeping it for years saves more money . 3 . Aggressively pay down debt . After Tisa starts working full-time again , she needs to follow what I call the Debt Dash Plan : List your debts , starting with the smallest . Take all the extra money you can find in your budget and apply it to that debt , and make only the minimum payments on your other debts . When you pay off the first debt , move on to the one with the next lowest balance , and so on . This strategy works because people get an emotional boost from eliminating one of their debts quickly , which motivates them to stick to their debt repayment plan . 4 . Pay down student loans . Once Tisa is back on her feet financially , she must start paying off her student loans , because the interest is killing her . An income-based repayment plan for her federal loans will cap her monthly payment at an affordable amount based on income and family size . ( For information about this plan , go to Ibrinfo.org ) Her lender will determine her eligibility and how much she must pay each month . ( But , in exchange for lower monthly payments , she may end up paying more interest than under a standard ten-year repayment plan . ) 5 . Build the consulting business . Tisa has already started her business , Mc3 Consulting Inc. , which teaches nonprofits how to improve their services and internal operations . `` Mc3 Consulting is the seed I am planting for my girls , '' she says . `` I want them to see their mother be successful and show them that we can turn this situation around . I want them to learn from my mistakes . '' Tisa has a good business plan and great contacts , but until she has enough contracts to cover all her expenses and debt , she needs to pursue and stay in a full-time job . She should continue to seek advice , especially to steer clear of tax problems . One place to start is score ( Score.org ) , a nonprofit association of working and retired executives and business owners who donate their time to advising entrepreneurs . Tisa has been financially solid before , and she can do it again . She needs to set a budget , get rid of her debts , and keep spending in check . Recognizing her issues is a big part of the battle . `` A combination of factors led me to where I am today , '' she said , `` but I ca n't regret those things . They 're helping me become the woman I hope to be someday . '' Oprah.com : 25 ways to save a bundle . By Michelle Singletary from O , The Oprah Magazine , January 2010 . Subscribe to O , The Oprah Magazine for up to 75 % off the newsstand price . That 's like getting 18 issues FREE . Subscribe now ! TM & © 2011 Harpo Productions , Inc. All Rights Reserved .
As expert , Singletary helps single mom who lost her job . While mapping out a budget , expert suggests 3 big ways to cut costs . These sites can offer help in renegotiating mortgage payments . Aggressively pay down mortgage , pay down student loans , save for used car .