Foreclosure Advice: Did You Know That How Much You Save Affects Whether You Will Be Foreclosed On?


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Many who are facing foreclosure and/or have lost their home to foreclosure did so because of a loss of income. Proof?

According to a report from Treasury, 68.1 percent of homeowners who received a loan modification said loss of income (curtailment of income or unemployment) was the main hardship they faced. In addition, the survey found 72 percent of those who make more than $75,000 had at least three months of savings compared to 35 percent for those making less. [Source: Survey: 27% of Americans Have No Emergency Savings]

So, one could surmise that how much you save directly impacts whether or not you will survive a foreclosure or not.

If you’ve already lost your home to foreclosure, are facing foreclosure and/or are rebuilding your credit after a foreclosure, following are some healthy financial habits to get into — especially as it relates to housing.

How to Rebuild Credit After a Foreclosure & Other Healthy Money Habits You Should Invest In

1) Save 6 to 8 months of expenses: Some experts will even advise building up an emergency fund that can carry you through a whole year. The reason is, it’s taking longer to find a job after you lose one. And, many who do find jobs find themselves underemployed (ie, earning less). So, the more you have saved, the better your chance of surviving a job loss, illness or other type of emergency.

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2) Revamp Lifestyle: There’s nothing like losing the very roof over your head — or the threat of it — to make you assess what’s really important in life, ie, can you really afford a $500 per month car payment; eat out to the tune of $400 per month; get weekly mani/pedi’s; buy the latest tech gadget?

Many of us live way beyond our means — and don’t even realize it. Proof? Watch “money shows” like Til Debt Do Us Part. I’m constantly amazed at how many of the couples featured on this show have no clue as to not only how much they’re overspending each month; but many don’t even realize exactly how much they earn.

This brings me to my next tip which is to . . .

3) Get in Touch with Your Money: As in, KNOW — to the penny — how much you earn each month. This will not only tell you how much you can afford (or not afford) to spend, but to respect your money. Much like dating, if you want to get to have a relationship with someone, you have to get to know them. And to do that, what do you do — ask basic questions; learn who they are and what they’re all about.

Same thing with money — you need to get it touch with it and learn about it in order to develop a healthy relationship with it. This means knowing BASICS like how much you earn, what you spend it on, what you want/need it to accomplish for you, what it means to you, etc.

4) Learn How to Use Money Smartly: If you’ve been taught (or witnessed) unhealthy money habits growing up, it’s up to you as an adult to change this. So, invest in classes; speak with money experts, talk with friends who have good relationships with money — in short, do whatever you need to to turn things around.

As alluded to above, you have a RELATIONSHIP with money whether you acknowledge it or not. Make sure it’s a healthy one — one that brings you prosperity and happiness; not stress and unhappiness.

5) Make Saving a Habit: How much you save will depend on many factors, eg, your earnings, but many experts will advise you to save at least 10%. The point is to get in the habit of saving SOMETHING out of everything you earn. And if you start saving early (eg, in your 20s) and invest your money wisely (eg, in a well-researched mutual fund), it practically won’t matter if you ever earn “a lot” of money in your lifetime, because compound interest will ensure that you’ll be okay in your old age.

How to Save One Million Dollars

Sound impossible?

It’s not. Proof?

. . .  as Einstein reportedly put it, compound interest is the “eighth wonder of the world.” . . . Becoming a millionaire depends on how much money you currently have saved, how much interest that money will earn, how much you can save each month — and, of course, how long you can wait before making a withdrawal.

You see, becoming rich is not about how much you earn, it’s about how much you save. And, as the first link in this post underscores, those who earn more seem to figure it out much earlier than those who earn less. . . . which means there’s no better reason to do as the rich do when it comes to money, no?

Related Posts

Foreclosure & Credit: How Does a Foreclosure Impact Your Credit Report?

Home Loan, Bad Credit and How to Qualify: Yes, It’s Still Possible, But . . .

Foreclosure Advice & Credit Card Debt: Can Credit Card Companies Put a Lien On Your Home?

Home Foreclosure: The New Credit Standards to Qualify for a Mortgage Brought on by the Crisis

Foreclosure Laws: Divorce, Debt & Foreclosure – What Every Dependent Spouse Needs to Know

Foreclosure Consequences: Exploring “Voluntary Foreclosure” 

Cash for Keys Program: If You’re in Foreclosure and Have Filed Bankruptcy What You Need to Know

Underwater On Your Home? Filing Chapter 7 Bankruptcy? Should You Reaffirm Your Mortgage?

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Copyright © 2013 Yuwanda Black for Foreclosure Business News. Legal Disclaimer: The information dispensed on this blog is not to be taken as legal advice; it is for general purposes only. Please consult a qualified professional (eg, attorney, accountant, real estate agent, etc.)  — in your jurisdiction — before taking any action based on the information listed here.

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