You can't read a paper or talk to a friend without hearing about someone who has lost their home. What we don't hear too much about is how to stop it from happening. Most of the time our fiends are too uncomfortable to talk openly about financial problems. Hey, I've been there, how about you? A few months back Ron and I got a mailing back from a client and found out they had lost their home and we had never heard from them asking if we could help. That one pained us a lot. They had a bunch of equity and we probably could have helped. Oh well... Anyway, below are some ideas we came up with to help others in trouble. Pass it on if you want.
THE FIRST STEP: TAKE ACTION
So many people are in trouble as a result of inaction. It's not surprising. We all get a bit embarrassed when finances are a mess. We get mad, depressed and tend to put our heads in the sand. Such inattention is a huge mistake. Action is called for when financial trouble is brewing. The first step is to get moving. Don't sit around watching TV and ignoring the problem. Take action now.
THE SECOND STEP: CREATE A BUDGET
If you are in trouble financially, you need a picture of the problem. You need hard facts to make good decisions. Imagine repairing your car without diagnosing the problem. You might replace a fuel pump only to find out it was an ignition problem. A budget is the first step in finding and resolving the problem.
What if you have never put together a home budget? There are many options and several are free. Do you work for a company that has a finance person? Do you attend a place of worship? Is there a family member who has a knack for good financial management? Ask an expert for help creating a budget and analyzing it for solutions. You can go on the Internet and find home budget programs too. However, finding a person with good budgetary skills may be more helpful as they can assist diagnosing problems and finding solutions.
THE THIRD STEP: CUT BACK ON EXPENSES
The easiest way to put more money towards problems is to cut back on expenses. Perhaps you'll need to stop cable TV service for a bit. Not forever, just a few months. Where else can you find non-essential dollars going out the door. Your budget will tell you. Gather the family, get input from the gang, explain your needs and see what each can give up for a bit while you regroup.
THE FOURTH STEP: INCREASE THE FAMILY INCOME
There may be hidden financial sources lurking within the walls of your home. I talked to one father who laid out the financial problems to his family and asked for help. The kids stepped up to the plate by taking on neighborhood jobs such as baby sitting, lawn mowing, paper routes, dog walking and such. Between the three kids, they brought in an extra $400.00 per month while the parents worked out some new home financing. As a family they made it through the rough times. Today they are prouder and stronger than ever.
THE FIFTH STEP: LEARN ABOUT FINANCES AND BECOME AN EXPERT
They say knowledge is power. Why… because it is. No one tries to fail financially. They simply don't have the skills in place to win. Become your own expert. The library and Internet are great sources for articles on financial management. In addition, there are lots of people who love to teach when they have a motivated student. We have a lender we turn to for knowledge about home loans. She loves that we want to learn and boy does she have a lot to teach. Ministers, priests and rabbis often know retired executives who like to lend a helping hand. They simply need to know you need their assistance.
That's all from the Urban Advise Column for this week. Pass it on to a friend in need and we wish you well.
Gene Urban and Ron Urban
The Urban Team
Copyright2008
