Get Out of Debt and Save Your Home!
With the recent economic downturn, and the problems in the mortgage industry, it’s more important than ever to make sure you’re protecting yourself and your home from foreclosure. Some tips to protecting yourself can include:
- Live within your means. Don’t go buy that jet-ski if you can’t pay cash for it. Don’t go into debt for anything other than a practical car or your home. (This means if you can’t afford a Lexus, don’t buy it! Go for the Camry instead!)
- Don’t take out a second mortgage to finance your car. If for some reason you can’t afford to pay it back, the bank can take back your house, rather than simply your car. It’s better to lose your car than your house!
- Put off your vacation until you’ve saved up enough cash to pay for it. This includes airline tickets, hotel rooms, food expenses, and any other expenses vacations tend to have.
- Set a budget - and stick to it! Have a grocery budget. Pull out enough cash to last you until the next payday, and only use that for groceries, spending money, etc. When it’s gone, it’s gone. Don’t be tempted to grab the debit card, because you’ll be breaking your budget. Cash is easier to track because you know exactly how much you have.
- Find ways for an early mortgage payoff There are companies that specialize in helping homeowners pay their mortgages off early, and many people can actually do this. It’s not just for the wealthy trust fund babies - ordinary people have managed to become homeowners much sooner than they expected.
- Pay off high-interest credit cards. You’re throwing money away if you’re paying interest to the credit card companies. Many charge upwards of 30%, and that’s a waste of money. Pay off your highest interest card first, and only pay the minimum on your other cards. Once this card is paid off, work on the next one. Paying them off early will save thousands of dollars in interest, and can help free up your money for other things.
All of these tips require discipline, and they can be difficult to follow. They’re not impossible, however, and with some work, homeowners can be out of debt, and protect themselves from losing their homes.
Frank Armstrong has been a successful business owner, but only as a result of going through some tough times. Pulling through the more difficult times has given him an appreciation for living debt-free.
Add comment February 14th, 2008
