Fix Your Finances
Real Estate Problem Solver specializes in making the real estate hurt go away when you need to sell your home fast. BUT, sometimes it may not come to that. Everybody runs into financial trouble at one time or another. Not being able to pay the bills can cause unwanted stress to anyone. Many times it’s not our fault, life changes. There may be a death in the family, a job loss or change of jobs. Injuries that cause attacks of medical bills in the mailbox is one of the most common problems that we run into. No matter the situation, if life happens in a direction that the income can’t handle, don’t be afraid to make the necessary changes. Here are some ideas that I think everyone should change in their day to day finances.
To fix your finances, it involves the whole family. I grew up in a world where kids were seen and not heard. IT SUCKED. I never felt like part of the family bond, because I was not included in the “Adult” stuff. Don’t be that person. Include the whole family in a quarterly or semi-annual briefing on how the family is doing financially. This does a couple good things. It makes the kids and spouse feel involved. The kids get a financial education early in life, that is more valuable than you can imagine. The family can come up with solutions together that you may not have thought of. My favorite, when times are tough, the family understands not to ask for extras they don’t need. The first year we got out of our three years slump, we asked the kids what they wanted for Christmas. I was shocked when they wanted clothes, cd’s and a big family get together. That’s it. Makes a dad proud.
There are a lot of small leech expenses in the house that add up quick. Do an inventory of every single thing that may cost money, or uses a resource that costs money. Computers, Game Consoles, and cell phones all add up the electric bill. Plastic on the windows can help the A/C and heat costs go down. Do you really need the premium channels, Netflix, or even a landline? In tough times years ago, I cut off the TV/satellite all together and put the money we saved to the credit card with the worst APR and we wrapped the water heater. Board games and card games were more fun anyway. Another source of waste is a long shower. Wash the dishes by hand, it’s not that bad. Also, Make sure there no water leaks that are costing you extra money. Hang the clothes on the line outside. Turn off the A/C at night. These all help bring down the water and electrical bills. How bad do you want to get out of trouble?
After the 2008 housing bust, many people in our area started carpooling. Some made a side income out of it and even got carpooling subsidies from the government for it. I live in the country, so we made sure to have a good long list of destinations and planned the route before we drove anywhere. That alone saved almost a hundred dollars a month.
Credit cards and loans
Credit cards are the first culprit in a financial problem. High interest loans and credit cards are designed to make you be responsible or pay dearly. Structured loans like your car and house are hard to fix on a monthly basis, but credit cards can be fixed. All the money you can comfortably spare should pay down the credit card with the highest interest. When that card is zero, snowball that money to the next one and so-on.
The little known trick
Fixing your financing also involves changing the way you think about debt. My favorite lending program is a line of Credit. This is a bank’s in-house line of credit and it does not get sold to another bank. The interest rate is higher than a normal loan, BUT HOLD ON, let me explain. A regular loan structures your payments, how much goes to interest, and how much goes to principle from the start. A line of credit is more flexible than that. If you don’t withdraw the money, it sits there on standby, for free. You only get charged interest on the money you take out for the time it’s gone, one day, ten days etc.. Withdrawing $10,000 half the month will cost the same in interest as withdrawing $5000 for the whole month. It’s an average daily balance that a LOC charges. You control the cost.
The trick I use on an LOC is this: once I get the line, I pay off any credit cards or loans charging the same or more than the line. Each pay period, I put my whole paycheck in the line. CRAZY RIGHT!? No wait, THERE’S MORE. The paycheck counts as a payment to the line and cancels interest until I’m ready to pay my bills. Then I either cut checks directly from the line or transfer JUST ENOUGH money into my checking account to pay the bills. The longer I leave the money in the line, the lower interest I pay. Neat huh? The big picture is that you pay less interest on the line of credit than you did on the accounts you paid off.
Finally, if the finances are coming into check as well as hoped, maybe it’s time to move to a more affordable home. There is nothing wrong with this, things happen. It’s more responsible to make your finances manageable than push a bad position and chance bigger troubles later like foreclosure. We solve issues like this.
If this is an option, Real Estate Problem Solver can help. We can offer quick and simple solutions to your real estate needs. You may not need to sell your home, but don’t you want to know for sure? Opt in on our home page for a free consultation. Whatever you decide to do, start today! Hope this helps, good luck.