There's a new danger signal out that should
make all of us sit up and
take notice. There are now more than one in 25 homeowners
that are
having trouble making their mortgage payments on time, or
are delinquent
with payments. What does that mean to those making
payments on time?
This could mean that we're living a little too fat, have
too much debt, or are
experiencing a bit of a debt hangover.
- Are your payments current? You should address your
own financial house
to be sure it's in order and that there are no
danger signals closer to home.
- Are you having difficulty making your credit card
payments? Are you simply
paying the minimum amounts due? Do you realize that
you could be paying
that debt for another 30 years with minimum
payments?
- Is your spending moving too fast? It's drudgery to do
and nauseating to see
the results, but track every single purchase you
make (regardless of the
amount!) for a one-week period. Then, sit back and
closely examine the list.
Was it necessary to spend more than $3 for a cup of
coffee? Do you really
need to spend $2 on a bottled water? Review every
purchase and see where
you can cut back.
- Avoid taking out a new loan to pay off old debt. You'd
just be exchanging a
new debt for others. Also, never use home equity
loans to pay off debt. You
could trade in your good name, or your home should
you fail to pay off that new debt.
- Attack your spending. If you can't cut back somewhere,
put those credit cards
into the deep freeze. Take your cards and place
them into a zippered plastic
bag. Add water. Zip. Throw into the freezer until
you can spend smartly on
your purchases.
Watch out for lemons for sale during this unsure time.
- Fixed-rate annuities are teased to offer 1.5% higher
rates than certificates
of deposit. However, the interest rate is usually
paid for a shorter period than
the time your money must remain in the account.
- Be cautious of advertised savings notes or savings
certificates. These are
not FDIC-insured and only insured by the company
selling these products.
If you are invested in individual stocks, prices are
not affected by what the
Feds do, but by company earnings. If profits are good,
stock prices are
generally healthy. You should be invested in individual
stocks if you have a
belief in the company and can determine the company
health.
Remember, nobody can predict what the future holds.
But, it's a good time to
look at your own financial house to see that it's in good
order.
