I've posted this several times, but it's worth repeating here:
Question from reader wrote:Picture yourself a 30 year old father of
3 kids under 5. There is a lot of love in my household and not so much
cynicism. What would be the best advice you could give for our
immediate future? Thanks for your reply.
Answer wrote:Picture a world where you're a 30 year old father
with 3 kids under 5, you've lost your job with no hope of getting
another job, so you and your family have to live for the foreseeable
future on what you have today. How would you change your life?
You would save every penny, knowing that if you can save a dollar
today, then that dollar may save your life a year from now. You
would cut out every expense not necessary for survival - magazine
subscriptions, piano lessons for the kids, clothes, movies, pizzas,
wide-screen tvs, lights left on when nobody's around, driving when
you can take the bus, etc., etc.
The best advice I can give you is to speak to your family now, tell
them what's coming and why you have to save every penny, and then
follow through.
One more thing: Many people should start thinking about moving in
together. Two families sharing a home will save a lot of money. If
your rich cousins have a couple of extra bedrooms in their mansion,
ask them if you could live there. You'll both save a lot of
money.
How do people survive today, on a day to day basis?
Which leaves me with a question I'm afraid I know the answer to - my water heater dates back to 1998 and I have been lax about having it drained every year, to the point where the plumber said doing so now would make matters worse. The daily paper, in a discussion of energy saving, said tankless heaters can be had for ~ $2,000. [OTH, a frugality column listed a cheap meal with "bell peppers, $0.50@" Huh? Where does SHE shop?]
So - assuming I have the $2K and intend to live in this house as long as I can - which would serve me better? The cash or the water heater? Because when they fail, they do some damage, and it's always and forever on a weekend or holiday. No. Seriously.
I have no idea what the answer to the water heater question is, but everyone should know
that Pat is a VERY frugal senior, and she is very well prepared for the coming crisis.
All right. Seriously. I haven't touched any of my funds or stocks or anything. I have no desire to make matters worse or to trigger a general freeze on sales or withdrawals from such accounts. (Straw, meet camel...) and most of them have such an early purchase date that my losses would be, like my former gains, all on paper. So - suggestions? - Sell now? Hold? What?
I can pay the mortgage, or the credit cards, but not both
Mortgage = secured debt
Credit cards = unsecured debt
Owe more on house than it is worth.
If I don't pay the mortgage, I have to move.
If I don't pay credit cards, I will undoubtedly get harrassment (possibly rightly so), and possibly have to file for bankruptcy, but on the other hand, I may mot have to move.
Have a wife and two school age children at home.
I am inclined to pay the mortgage, and not the credit cards, as the mortgage is secured and the credit cards are unsecured.
My wife and I have tried to keep the wolf from the door for as long as we could, but they are knocking, and we have to choose....
Hi all,
I'm new here, this is my first post, but I've been avidly reading the blog and wow! someone can actually explain to me what's going on.
A few thoughts for discussion (with regard to this thread):
1) maybe the real topic we need to discuss is "Surviving during the financial meltdown". If the similarities between this current financial crisis and the last generational crisis continue, we have several years of pain ahead of us.
2) Pay your mortgage before you pay your credit cards. Always put your money towards the things you need to survive (housing, food, etc) before you put it towards anything else. That said, take a good look at how whether or not you can actually afford the mortgage you have. If you can't, you need to either increase your income or decrease your expenses. Given your situation, moving should be a last resort. But don't blow off your credit cards- see if you can negotiate for a lower interest rate or longer payment terms...and stop using them.
a) does your wife work? If she doesn't, maybe she can find a job. If she doesn't have marketable skills, or your kids are too young and daycare is not afforable, can she take in a few kids extra during the day to make a little extra money?
b) Do you have a spare room in your house? Take in a boarder. Yes, the lack of pivacy sucks, but it is better than losing your home.
3) Get your water heater fixed. It is already deferred maintainence- think of it as a debt- if we really go into a deflationary spiral, debts get harder to pay.
Just my two cents...but I can buy more with them now than I used to be able to!
Update on the water heater - I had in the most nitpicky,perfectionist plumbing contractor I know. He inspected it top to bottom, and pronounced it good for another two years, though he gave me a point-by-point dissertation on the sloppy installation of the guys I'd bought it from and the truly strange workarounds from the previous owner of the house.
He asked me if I'd started dealing with the lack of under-floor insulation yet. (Yes. I am playing phone tag with an insulation company's tech right now and we'll see what we shall see.) He also took a look at my access to the under-the-roof space and said nobody could get in there to put insulation in; they'd have to poke holes in the ceiling and blow it in. Oops! Have to get a price on that. Bet it's mega-high.
So the preparation proceeds apace. Snail's pace, perhaps.
Tomorrow the gardener is coming in to sculpt a small barren space for an herb garden and install a rain barrel and hose tap. We shall have water savings and more interesting salads.
