When you bought your home you might have had a wonderful job with great benefits, a company car, and maybe even an inheritance that helped you with the down payment. Now, your financial situation has changed and perhaps you have gotten married or become a parent, the great job was outsourced and you had to settle for something else, the company car is gone and you have a car loan, and at the end of the day there does not seem to be enough money to go around. You might have begun to rely on credit cards and in some ways you are robbing Peter to pay Paul every month but you can tell that this kind of financial planning is catching up with you. Mortgage arrears are just around the corner and you are afraid of what will happen when you cannot pay that high mortgage payment anymore.
Probably the best way to head off possible mortgage arrears is to get a clear picture of your financial health. Writer down every penny that comes in and every penny that goes out. Next, you will need to shift your priorities. For example, while it might be nice to have cable television, you can live without it. Your mortgage always needs to be the top priority and it needs to be paid before you pick up any other bills for payment. Some bills may be for goods and services that are redundant or perhaps not as important as they were when you signed up for them. After cutting your cable, take a look at your car insurance. Obviously, you will need car insurance, but do you really need the same kind of coverage you had when the car was new six years ago? You may be able to free up some funds by adjusting the services to which you subscribe.
If you have cut and pruned your budget but there is still a foreseeable shortfall, you will need to seek ways to increase your income. Obviously a second job is a good idea, but perhaps there are other avenues as well. Are you able to qualify for tax refunds that you have not explored? Are there write offs that you might be entitled to but have not applied for? Are you getting the homeowner exemption you should have? Are your taxes too high because the taxing authority has overvalued your home? Asking these questions may help you to find ways to keep more of your hard earned money.
Similarly, do you have a hobby that perhaps you could turn into a little freelance business? For example, if you enjoy making pottery in your spare time, you might be able to sell it online for a bit of extra income. If you dedicated a room in your home to this effort, you may even qualify for a new tax exemption! As you can see, mortgage arrears can be kept at bay if you take a diligent look at your financial health before it becomes ill!
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