Do you qualify for lower payments?

From the Post and Courier 8/30/2010

Written By: Katy Stech

"Foreclosure counselors across the country keep running into the same scenario: Weary homeowners are struggling to make their mortgage payments, but they're too discouraged to begin the tedious process of asking their lender for help.

A loan modification approval can take months to secure, it requires mountains of paperwork and lenders have been notoriously disorganized throughout the process.

But a California-based software company is proposing a helpful fix for Charleston area homeowners.

CounselorDirect provides a website that home-owners can use to plug in basic information about their home to calculate their chances of qualifying for lower payments.

When deciding whether a homeowner qualifies for lower payments, lenders look at their monthly expenses and income.

So as users plug in their financial information into the system, it estimates whether they have enough remaining income.

"If you found out that by spending 10 dollars less per month in groceries, you could qualify for lower payments, would you do it?" said CounselorDirect spokesman Jason Kirshner.

The program recently partnered with Family Services Inc. of North Charleston, a nonprofit that provides free foreclosure counseling.

Homeowners can visit the agency's website at foreclosurehelpforsc.org, to see their chances of qualifying. And that information can later be passed onto a Family Services counselor."

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Investing in yourself pays off in fulfillment, satisfaction

Another insightful blog post from our friends over at ACCE:

"I never realized how precious time was until I had children. For instance, where I once showered with leisure, I now consider it a good day if I can make it through a shower without someone pounding on the door or trying to peel back the curtain while I’m shaving my legs. In fact, some days even getting a shower is a triumph.

From the moment I wake up, someone, somehow, is demanding my attention. Our needy basset hound wants a drink, or to go outside, or to come inside. Meanwhile, a child wants a snack, a piece of gum, a tissue, a puzzle, a pencil sharpened—the list is seemingly endless.

It can be easy to live by what a friend calls “the tyranny of what has to be done.” Bills need to be paid, laundry done, dinner served, bathtubs scrubbed, checkbooks balanced, whether you’re like me with small children, or in any other season of life.

In truth, time is a lot like money. If you don’t have a plan for how you want to use it, you can easily end up squandering it. Or at the very least, you can misallocate it, spending it in ways that ultimately bring more frustration than satisfaction.

By carving out time for activities that make your life better, you lay the groundwork for increased happiness and a greater sense of fulfillment. You won’t be so apt to get bogged down in all of life’s have-tos. In other words, deciding on specific ways to use your time allows you opportunities to invest in yourself. And in so doing, you capitalize on your best asset: you.

Take a few minutes and consider how you are using your time right now. Are you happy with the tenor of your days? If not, what can you do differently to budget your time more effectively? What do you like best about your days? What do you like least? What would you like more than anything else to accomplish?

Once you’ve decided what you want, then you can look for ways to free up time to do it. A friend buying a new house, for instance, has decided he won’t get cable when he moves. He wants to invest the time he used to spend watching television on taking MBA classes. He’ll also be able to use the money he saves to help pay for his education.

To help me make better use of my time and focus on ways I can invest in myself, I made a list of 36 things I want to do before I turn 36. The list runs the gamut from reading Anna Karenina to learning better photography skills, to making time to go dancing, to cleaning out and organizing my freezer. Some activities on my list, such as tackling the freezer, will pay dividends in the future. An organized freezer leaves me more room for make-ahead meals, which frees me up to enjoy the company of my family in the evening, instead of scurrying to get dinner on the table.

It took some effort to make the list, but I’m already reordering my days to accomplish what I want to do. I’ve replaced the usual stack of design magazines on my side table with a hulking copy of Anna Karenina, and I’ve started using up the 10 pounds of rhubarb in my freezer to make way for this year’s harvest. And finishing each item on this to-do list will be a pleasure. I’ll be richer for the skills I’ve learned, books I’ve lingered over, and moments I’ve taken to simply enjoy life."

Feeling deprived isn’t part of our budget plan

From ACCE Money Tips:

"I’m surprised by my naiveté. When I declared that we were taking a serious look at our food budget and attempting to cut it in half, I thought the decision was largely a dollars-and-cents issue. We reasoned that we’re spending more than we wanted, so we just needed to cut back.

The situation is far more complicated than I first thought. In the last few days before I went shopping again, breakfast was utter chaos. Our three oldest children were so frustrated that we had run out of our customary breakfast fare that they were all crying. Honestly, I felt out of sorts too, grumbling to myself when I was out of coffee and half and half, and feeling crabby when I had to field questions about what we were having for dinner.

I didn’t realize how much we depend on the familiarity and convenience of certain foods. When we ran out of yogurt and didn’t have the kind of cheese we like, for example, we felt deprived. Those feelings of deprivation mean that the pendulum of our food budget adjustments has swung too far the other way.

While we don’t want to spend thoughtlessly on food, we don’t want to be slaves to our budget, either. We want to be as intentional with our food dollars as we are with other parts of our budget. We still want to shop and eat in ways that leave us feeling happy and nourished.

As my husband and I discussed our budget for the coming month, we talked about the parts of our plan we need to revise. But our cost-cutting food plan also has benefits that we like. First, we both agreed that we were glad we raised our budget consciousness and learned that it’s possible to scale back what we spend. Now, we can adjust our food budget so we have more freedom to buy what we enjoy, but not so much flexibility that we return to our old ways. For now, we’re increasing our bi-weekly budget from $150 to $200.

Second, we want to continue using the cash-only approach to eating out. Having a specific parameter in place makes meals out an event we can look forward to, not just a budget-gobbling habit. Though we blew our eating out budget the first week, we stuck to our plan and spent only what we had set aside. When we went out to eat at the start of another two weeks, the opportunity excited us.

Third, we both appreciated how some upfront meal preparation paid off over the following two weeks. I bought hamburger in bulk (at a phenomenal price) and made spaghetti sauce, meatballs, sloppy joes, and taco meat all at the same time. I froze the meals in family-size portions, so we could pull out what we needed the night before and spend just a few minutes boiling noodles, grating cheese, or making a quick side dish to get dinner on the table.

Finally, we want to revisit our list of goals – such as buying a woodstove – that prompted us to trim our food budget, and we’ll create a more specific plan to accomplish them. If we’re going to continue making changes in the way we spend our food dollars, we need to see tangible benefits. Right now, we’ll take the money we’re saving and transfer it into an account we’ve earmarked for our goals.

Even with a few bumps along the way, budgeting can work. We’ll keep adjusting our budget until we find a balance that lets us save money while shopping wisely and eating well."

We've got a brand new (FREE!) budgeting class that we have rolled out. Feel free to come and check it out.

Use frugality to fund your goals

For all my frugality, I still have an Achilles’ heel, a small but significant point of budget vulnerability. Ironically, thrift stores, those bastions of economy, sometimes threaten to sabotage my well-laid plans.

The notion of a beautiful lamp, just waiting to be unearthed, a vintage cashmere cardigan lurking in between polyester blouses, the possibility of finding retro tumblers for our 1978 pop-up camper literally quickens my pulse when I walk in my favorite shops. But when my husband recently suggested I create a thrift store fund, I realized it’s time to rethink those frequent forays.

His suggestion reminds me that frugality isn’t an end, but a means. In other words, it doesn’t matter how much money I save on a pair of thrifted designer shoes, if buying them is keeping me from reaching my goals. I can string together as many frugal practices as I can conjure up, but this misses the point of living with thrift.

Frugality for frugality’s sake can make you feel like Sisyphus, the king in Greek mythology who was forced to spend eternity pushing a giant boulder to the top of a hill, only to watch it roll back down again. If sticking to a budget (or the very idea of starting one) feels like drudgery, or even a punishment, it’s time to see your budget through new eyes.

Using frugal practices as a way to get what you want is empowering, even exhilarating. It’s packing your lunch, not as a way of denying yourself the pleasure of a meal out with friends or coworkers, but as a means to use the money you would have otherwise spent to take your dream cruise to Alaska. It’s kicking the habit of buying new books in favor of borrowing titles from the library so you can buy a new sewing machine or jigsaw.

Without something to motivate you, your budget can become a giant stone in your life. One way to nudge that stone from its place is to write down five things that you love. Don’t sensor yourself while you’re making your list—just write.

Maybe travel or music makes you feel fully alive. Perhaps it’s the notion of living by the water someday or opening a business that excites you. Photography, crafting something with your hands, horses, writing your memoir, finally getting all of your family together, being debt free—whatever stirs within you—write it on your list.

Next, choose something from your list and begin thinking about ways you could indulge this passion. If it’s photography, could you use your favorite photograph to make a canvas print for your dining room? Or what about getting a new camera or taking a photography class to sharpen your skills?

When you settle on a way to tap into your passion, estimate how much it will cost. Say you want to make a 20-by-20 inch print of the starfish you snapped at the beach, which you find will cost around $100. Now ask yourself how you can adjust your budget to save the money you’ll need.

You can use coupons when you shop for groceries and stash the money you save. You can calculate what you spend on eating out each month, cut that amount in half, and squirrel away the savings. Funnel all your change into a jar, or be more adventurous, and color your own hair instead of going to the salon.

Whatever cost-saving measure you take, be diligent to use the money to help you reach your goals. The lesson for me in all of this is to be frugal, but always with purpose.

POLL REVEALS THAT MORE THAN ONE-QUARTER OF AMERICANS WILL OPT IN TO OVERDRAFT PROTECTION

From the National Federation for Credit Counseling:

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"Silver Spring, MD – Recent legislation passed by Congress has changed how financial institutions will authorize and pay overdrafts associated with checking accounts. Although most overdrafts from paper checks and automatic payments will continue to be covered (for a fee), consumers must now opt in to authorize this service for ATM and debit card transactions made at a point of sale.

The National Foundation for Credit Counseling’s (NFCC) July online poll revealed that 26 percent of the 2,089 respondents intend to opt in to overdraft protection in spite of there being a fee charged for the service.

“It is disturbing that this many people live so close to the financial edge. Anticipating that they will overdraw their account, they are willing to exacerbate the problem by paying a fee to have their purchases approved. The real answer lies in examining the root problem and resolving it, as continued overdrafts can result in some significant financial damage,” said Gail Cunningham, spokesperson for the NFCC.

As of August 15, 2010, both existing and new customers of financial institutions must sign up for overdraft protection before the bank is allowed to charge the customer a fee for clearing the transaction. If consumers do not notify their bank or credit union, they will not be covered, thus no action is necessary by consumers who do not wish to opt in.

Industry studies show that the average overdraft fee charged by a financial institution is $27, with approximately half of the more than $37 billion generated in fees in 2009 coming from debit card and ATM overdrafts. Banks are anxious to retain these fees, with many having launched significant campaigns encouraging consumers to opt in.

The NFCC suggests that consumers consider the following instead of opting in to the potentially costly overdraft protection:

Keep your check register current, recording all withdrawals and balancing often. Be sure to notate all ATM and debit card transactions along with any paper checks written on your account.

Link your checking account to your savings account. In case of an overdraft, the money will be automatically taken from your savings with little or no fee attached.

Pad your checking account by carrying a balance that you will not likely exceed. Most people spend a similar amount each month. If possible, keep an extra $100 in your checking account to cover unplanned expenses.

· Utilize technology. If your financial institution offers it, sign up for email or text alerts that notify you when your balance is low.

Reach out to your creditors. If payment due dates do not coincide with paydays, contact your creditor and request a due date change. You may have to pay a little extra interest to cover the gap for the first month, but over time this step should help to organize your finances.

· Get help managing your finances. Reach out to an NFCC Member Agency by going online to www.DebtAdvice.org, or to be automatically connected to the Agency closest to you, call (800) 388-2227. For assistance in Spanish dial (800) 682-9832.

“Even though there may be a small embarrassment if a transaction is denied, the consumer should evaluate this inconvenience against the potential savings and value of solving the underlying financial issue that resulted in the overdraft. Know that if you have already opted in, you can always cancel the program,” continued Cunningham.

The actual July survey question and results are as follows:

Q: Consumers must now opt in to have their debit card purchases approved if the charge exceeds the balance in their account. Will you

A. Opt in to ensure that purchases will be approved even though a fee will be added on = 26%

B. Opt out and risk being embarrassed at checkout, but save the fee = 74%

”Note: The NFCC’s July Financial Literacy Opinion Index was conducted via the homepage of the NFCC Web site (www.DebtAdvice.org) from July 1-31, 2010 and answered by 2,089 individuals.""

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