A Top 10 List On How To Avoid Foreclosure

Are you having problems keeping up with your mortgage payments? Have you received a notice from your lender asking you to contact them? Please don’t wait! There are several things you can do so that you won’t lose your home. In the spirit of David Letterman’s “Top Ten List” usually read in reverse countdown order, and accompanied by a drum roll at the end, here is our top ten list on ways to avoid foreclosure – for obvious reasons this is done without the drum roll and humorous spin.

Top 10 Ways to Avoid Foreclosure

10. Do not ignore past due notices and letters from your lender

9. Know your budget; review current expenses and cut back on your spending

8. Identify your wants versus needs

7. Think of ways to increase your income

6. Live within your means

5. Have one month’s worth of household expenses in a savings account

4. Contact a HUD approved housing counseling agency as soon as you start having problems

3. Contact your lender and ask for options

2. Do not obtain new credit to supplement your income

1. Consider selling before it is too late (a house is just a material thing)!

Submitted by Beverly Ward, Homeownership Services Counselor, YWCA Delaware

Respect the Budget

What does it mean to "respect the budget"? Ultimately, it means spending within your income, but there are a myriad of temptations to distract you from doing such. According to a recent Money magazine article, for every additional hour of TV watching (per week) you do, your spending is boosted by $200 a year. Why? The article posits that we are no longer keeping up with the Joneses, we're keeping up with the Kardashians. Not to mention the countless other messages we get, subliminal and otherwise, that encourage us to part with our dough. We've heard of them all: how shopping carts are engineered to be larger in an effort to get you to fill it with more junk, how buy one get one free "deals" are sometimes misleading, or that the notion of buying in bulk is good (which we know not to be true in all cases; do the math and look at the per unit costs!). Nevertheless, we have to fight these demons of "spend, spend, spend."

Although the circumstances are unfortunate -I'm no fan of massive layoffs, individuals losing a ton of money in their retirement savings, not to mention, an overall wariness of the banking system- but, this recession has forced many of us to think twice about how we spend our money. Folks are reintroducing themselves to the concepts of spending plans, coupons, and plain ol' doing without.

There are, however, a number of people who are not. Case in point: I went to the mall to help my girlfriend shop for a dress for an upcoming wedding. We spent a considerable amount of time looking for parking (and I doubt that all of those parking spots were occupied by people who worked at the mall); at any rate, I asked aloud, "what recession?" By the looks of it, folks were happy-go-lucky shopping. Now, there may have been folks in there simply window shopping, or getting their walk-around-the-mall-exercise on, however, my eyes did not deceive me. There were bags from Nordstrom's, the Children's Place, and some sneaker outfit. Folks were spending money!

I wish I had such luck. I physically handed over my credit cards to my girlfriend so as to not be tempted to purchase anything. I simply cannot afford it at the time. I did manage to spend $4.12 on a nutty cinnabon (totally not in the budget). In retrospect, I chalk it up to the fact that this was a peer pressure induced purchase. My friend got one, and the thought of a warm, gooey, 1500-calories sweet treat of my own was unbearable. I just had to have one!!! Besides, I hadn't had one since forever ago! My brief rationalization cost me a couple of bucks and worked against any notion of a diet I might have had. You might be thinking, "yeah, but $4.12 isn't bad!" That's not the point. The point is I failed to respect the budget. This expense was not accounted for in my financial plan for the month- this plan, of course, being geared towards me achieving my goals for saving and eliminating debt. So, I take a hit, there's an opportunity cost (that $4.12 could be a part of some larger sum of money doing something more productive.)

So I say again, respect the budget. I warn you, however, that it is no easy feat. In the same weekend that I succumbed to an overpriced treat, I managed to say "no" to eating out for breakfast and offered to cook at my house instead. I already had the ingredients and I saved my friends some money as well. I also declined to go out to the movies, after which my proposal for a rented movie at my house was defeated. Respecting the budget means saying no in anticipation of greater things, or at the very least, finding a less costly alternative. Those anticipated things may be as simple as maintaining your bank balance so that you can pay all of your recurring expenses without going overboard. Those anticipated things may mean having enough money to reach your savings goals or to pay off a debt.

Whatever your financial intentions, I encourage you to respect the budget. Take control of the way you spend money and do so with an awareness of your [financial] big picture.

Submitted by Shani Gibson
Financial Empowerment Curriculum Coordinator
YWCA Delaware

Sources:
Fried,C., Futrelle, D., et. al. "Eleven ways to improve your financial self now" Money Magazine, June 2009.