I have spent the day sitting in my house, wandering around. Putting wood on the fire. Sitting in the dining room. My favorite room. Lying in the kids’ beds. Looking at old pictures of the kids sitting in the kitchen I designed and my husband built. Looking at pictures of our backyard in the spring time. Pictures of the pool where all the kids learned to swim and spend every day of every summer.
And I’ve spent the day crying.
I don’t know how much time we’ve got left here. Hopefully a lot.
I love this house. I never planned on leaving it.
I also never planned on it going into foreclosure.
Hopefully we will figure out a way to stay. But we may not.
The feeling of wondering if you are going to lose your house is not good.
In fact, it’s probably up there in the Top 10 Shittiest Life Experiences I’ve had so far.
So I’m going to take this opportunity to try and save a couple of you from having this on your Top 10 SLE List.
If you are fortunate enough to never find yourself in this positition, you may be sitting in judgment shaking your head.
You would never, ever allow yourself to be put in this situation. I mean, after all, you are a college graduate. You know better.
Sure, maybe you do.
But I’m a college graduate, too. So is my husband. I’ve even got my masters degree.
We never planned to be here.
And yet, here we are.
So unless you own your home outright, don’t be so quick to shake your head.
We don’t live in a McMansion. Our mortgage isn’t ridiculously huge. Not for this area of the country, anyway.
You just never know.
You don’t plan on the housing market crashing, customers who don’t give final payments, life threatening accidents and multiple major surgeries.
You also don’t plan on making mistakes.
Well, we didn’t, anyway.
Our problem right now isn’t that we aren’t making enough money to cover our expenses. For the first time in about three years, we are making enough money to survive and we are even able to save some money each month.
The problem is that we can’t come up with the amount of money we are behind on our mortgage.
If only I could go back ten years and do a few things over. Even with the emergencies and the expenses we never could have predicted, I think we’d be in a much different situation had we done things differently.
If you are living paycheck to paycheck, if you are at all behind on your mortgage, if you have no emergency fund to fall back on, I am URGING you to take a look at how you are living your life. And I am strongly suggesting you make some major changes.
NOW.
As inconvenient as you think cutting out some necessities (which are most likely not needs, but wants), losing your house is much more inconvenient.
Clearly, I am no financial expert, but I have learned quite a few things along the way.
And here is my advice to you:
DO NOT GET BEHIND ON YOUR MORTGAGE.
This is the number one thing. You have to stay current. Once you are a payment behind, you are in danger. Climbing out of the hole is much more difficult at that point.
If you find yourself one month (or more) behind, it’s time to find ways to cut down on your expenses. by doing one (or all) of the following things:
If you are in debt, don’t keep it a secret. Tell someone. Tell everyone.
One of the biggest things that keeps people from making financial changes is comparing your life to your friends and neighbors. And shame. Living in Fairfield County, Connecticut, this is especially commonplace. People have big houses, nice cars, country club memberships, expensive handbags, personal trainers, private tutors, wardrobes for their kids from Abercrombie or wherever, every latest ipod/pad/phone, and there is quite a bit of (self-imposed) pressure to have (or appear to have) the biggest, the best, and the most.
If you are struggling, keeping up the facade of making ends meet when you are nowhere near making ends meet is exhausting and debilitating. Trying to prevent people from finding out is a full time job.
But you’d be surprised by how many people are in the same boat as you.
Really surprised.
When I started writing about our financial situation, you know what happened?
No one belittled me. But dozens and dozens of people wrote to me and told me they could relate. They didn’t admonish me.
They thanked me.
If everyone who was trying to keep up with the Joneses stopped caring about keeping up with the Joneses, well, people would be able to get their sh*t together and save themselves years of financial stress and anxiety.
You made some mistakes? No big deal. You are definitely not alone. There is way more support and understanding out there than you can imagine.
And not carrying around that secret and burden is extremely freeing. It opens up space in your head for you to think clearly about what you need to do to get back on track, and it allows you to no longer feel the need to appear to be keeping up with the Joneses.
If you aren’t married yet, save as much money as you can.
And when you get married, don’t plan a huge, over-the-top wedding (We didn’t do this — we got married and had the reception in my parents’ backyard. But we spent too much money on our honeymoon — all my doing). Rethink your wedding and honeymoon plans. Consider putting a big chunk of that money toward a down payment on your first home.
And if you are married, pay your debts off and then save as much money as you can. Like a year’s worth of expenses.
Seriously. A year’s worth. Because you never know. You never know what might take you out of commission and for how long you could be there.
How the heck do you pay stuff off and save for a year’s worth of expenses?
Keep reading.
Reconsider your vacations.
Before I got married, I took two vacations every year.
After I got married, I wasn’t really willing to give these vacations up.
I don’t think giving up vacations completely is the answer either. But we could have scaled them back. And we should have saved up for them and paid for them in cash, rather than putting some, part, or all of them on a credit card.
We didn’t need to stay in a place that was right on the beach. We could have managed just fine in a smaller condo rather than a huge beach house. We could have taken four modest vacations for the price of the one we took in 20011 (which coincidentally, was the last one we were able to pay for).
At the time I had convinced myself we needed luxury. Of course, now I’d be happy with a trailer on an empty lot near the beach.
It’s all about perspective.
Do you really need a new car?
In 2006 we bought two brand-new cars. A Suburban and a big ass, extended cab, diesel truck. Of course we didn’t have the money to pay for them up front. While we were able to get 0% financing, we still had monthly payments totaling over $1100/month for six years. We paid over $80,000 for those cars. That’s a lot of money.
I’m sure we could have found two cars that would have met our needs that were much less expensive. But we needed the biggest. And the best. And the newest.
We had to sell the truck a couple months ago. And the Suburban is presently full of rust, scratches and dents. Same as a used car would be right now had we bought one six years ago.
Hindsight.
Change cell phone carriers. And if your kids want a phone, let them pay for it themselves.
We used to have Verizon. With four phones and wireless and texting plans, our bill was over $350 a month.
I know! Ridiculous!
We switched to Republic Wireless about a year ago. We now pay less than $100/month for the same services and the same plans.
Is the service as good as Verizon? Pretty much. A year later I don’t miss Verizon. But I definitely miss the extra $3000 a year we gave to them.
Get rid of cable.
This is a huge and unnecessary expense. Your kids will survive. You will survive. I know. Because we got rid of cable a year ago, and we are all still alive.
And there is always Netflix.
Or, you know. Books and old-fashioned stuff like that.
Learn to handle less than ideal temperatures.
We used to keep the heat turned up to (at least) 68° in the winter during the day, and not much lower than that at night.
This year, we really tightened the screws on the heat. We keep the thermostat turned down to 60° at night, and the highest I turn it up during the day is to 64º. Sometimes I keep it at 60º and use a space heater for a little while in whatever room I’m in. Of course it helps that this year we had a fairly mild winter and oil costs are much lower than they were last year. But our heating bill is a fraction of what it was in years past.
The funny thing is that now I’ve totally adjusted. 60º doesn’t seem cold anymore. But 68º seems way too warm.
Of course, it could be menopause starting early. But I don’t think so.
Plan your meals, shop with a list, buy what’s on sale, and shop at one or two grocery stores.
I do all my grocery shopping at Costco and ShopRite. Those two stores work best for us. Costco may not work for everyone. But some grocery stores are less expensive than others. You need to find the ones that work best for you.
I remember back when we first got married I’d shop at a smaller and much more expensive store for all of our groceries. I’d find recipes with twenty-five ingredients on them and buy every single one. I’d easily spend $400 a week on groceries for four people.
Ugh! I wasted so much money at the grocery store!!! I could kick myself!
I haven’t bought anything at the grocery store that wasn’t on sale for over three years now. In fact, if a bag of a hundred million dollars fell out of the sky right now, I still wouldn’t buy food that wasn’t on sale.
I have managed to cut our grocery bill down to about $200/week for eight people (and it’s food that’s good for you)! In the last ten years I have doubled the number of family members but halved the amount of money we spend on food! I only wish I had come to my senses much, much earlier. I’m on a mission to get that number down even lower.
Imagine if I had figured this out ten years ago.
$200 savings a month x 12 months = $2400.
$2400 x 10 years = $24,000. Twenty four thousand dollars. That would almost solve our foreclosure problem right there.
Dammit.
Please, learn from me!
Plan your meals. Buy stuff that’s on sale in bulk. Eat produce that’s in season.
Get rid of the credit cards.
If you can’t pay for it in cash, don’t get it.
I know. You need it.
No you don’t. You need a roof over your head.
I started using a cash envelope system. Every Monday I put a budgeted amount of cash in envelopes for groceries, gas, toiletries, spending money, vacation, entertainment, etc.
If I use up all the money before the week is over, I have to wait until Monday when I refill the envelopes.
It definitely takes discipline, but it makes things so much more manageable, and I know exactly how much money I need every week.
It also forces me to think about whether I need something or I want something. I usually don’t need it.
And it is much more painful to fork over your hard earned cash than it is to mindlessly swipe a piece of plastic, so it’s easier to stay disciplined this way.
Scale back on the birthday parties and birthday and Christmas gifts.
I bet you could easily save yourself a couple hundred dollars a year per kid right here. And what you will find is that when you give your kids less, they appreciate things more.
Other ways to cut back:
Find a gym that has free babysitting.
Our YMCA is great and it has free babysitting! I can drop my kids off there for two hours every day. I don’t work out that whole time. But I use the whole two hours. Very often I’ll bring my laptop and sit in the lobby and get some work done after I work out. I’d have to pay a babysitter at least $10/hour for that. That’s $20/day. That’s $100/week! That’s $5200 a year! That’s like two full mortgage payments that I save if I use those two hours each day wisely!
Clothing and hair cuts
I am a huge fan of second hand clothes. My kids don’t care one bit. When we get a bag of clothes from a friend who has outgrown them, my kids are just as excited as if they received a bag of clothes that were brand new.
I also cut the kids’ hair myself (sometimes they cut it for each other, but that’s a whole different story). That’s a few hundred bucks a year right there.
We have made all of these changes in the past couple years, and we have reduced our expenses by at least one third.
Had we done these things years ago, we would have found ourselves in a different position than we are in now.
Take a look at how and where you are spending your money.
The prospect of losing your cable or your oceanfront vacation rental might seem crappy to you.
But trust me, it’s nothing compared to the prospect of losing your home.
Don’t be stupid. Make changes now.
In ten or twenty years when your house is paid off or you at least have a year’s worth of savings to fall back on and you are debt free, then you can start spending your money a little more freely.
And when you can truly afford to do that, spending your money is a much more enjoyable experience.
Thank you for sharing your experience
.
Very good advice. It’s too easy to go down that slippery slope. When I was in my late 20s I declared bankruptcy and felt very low about it. However, now I appreciate the hard lessons it taught me. Fifteen years later, I have excellent credit, I secured a mortgage to buy a nice home in a family neighborhood, I have some retirement savings and an emergency fund (which definitely needs to be bigger, but at least I have something set aside) I also have built a college fund for my kids. It’s not large, but it is a few thousand dollars that I would not have had if I hadn’t made it a priority years ago.
I go by the motto, “Slow and steady wins the race.” First, I started having money deducted from my paycheck for retirement. The next raise the following year gave me the opportunity to set aside $50 a month for the NYS 529 college fund which is now over $6000. After that I started an emergency fund online and again, money was automatically deducted and I could watch the sum grow.
I shop primarily at Aldi, I always buy used vehicles, I shop secondhand, clearance, and sales for clothing, my yearly vacation involves camping in a tent, we only eat out on special occasions like birthdays, I find bargains on yard sale sites online, and my kids have Tracfone cell service ($7 per line per month).
I’m a single mom of a 17 year old son, 14 year old son, and 11 year old daughter. I’m a teacher, and I do not receive financial support from anyone. I don’t profess to have it all figured out, as I have some expenses to pay back from my move, but I am working on it and figuring out a plan. Sure, my kids would love iPhones, but they are not entitled to them. My son found out about the bring-your-own-phone program on Tracfone, purchased a smartphone on EBay and my cost remains the same, $7 a month. Sure, they would love to stay in motels on vacations and eat out more (we eat out one meal per day and have the other meals at the camp site), but too bad. I’m paying, so I choose. Sure, sometimes I can’t help but notice something that someone else has, but then I think of all those who would love to have what I do. I worked long and hard to get here. And like this blog says, I need to stay mindful of not losing what I have built up. Thanks for the reminder.
Oh Susie, my husband who died suddenly five years ago at 50 years of age, would say, “Hindsight is 20/20 Mary”. We too, made some very poor choices. We lived paycheck to paycheck and robbed peter to pay paul. A little too late, we learned. Well, maybe not too late, since our money woes were all cleaned up five years before he died. And he, in his wonderfulness did a fantastic job of having his affairs in order in the event that he would die. Please people – dads and moms – get a will – get things in order – make sure your loved ones don’t have to suffer through extra financial pain in addition to their unbearable grief over the loss of a loved one. You really can’t afford not to. We are not infallible and bad things do happen to good people. And people die. Not to be a downer, just the reality I live in. Great post!!! Such good advice. And I’m sorry for what you are going through. So hard.
I’m so sorry you are facing this. I really had hoped the gofundme campaign would get you the money you needed to save the house. *sigh* Hindsight is always 20/20, so hopefully your wisdom shared here will help someone else avoid these financial pitfalls.
I am so so so sorry you are facing this. My husband and I are young, just starting out, and looking to start a family this year. We live in a small house (950 sq. ft) and pretty much currently live the way you have described you are living with all the cut backs — we don’t have cable, cars are paid for, I cook a big crockpot meal every Sunday that we eat all week, we keep the heat down, don’t take flashy vacations, put money in the bank every month, etc. I think it’s because my parents are older than most parents of people my age and my dad has residual Great Depression habits that rubbed off on me. 😀 Anyways, I’m not writing this to say anything snarky, but to say, thank you for the reminder to live below our means. We (hubbie and I) get pressure from family to buy a bigger house (“when you have a baby where are you going to put all their stuff? Haven’t you seen how much baby stuff your sister has?”) and take on a larger mortgage, pressure from his siblings that we CAN’T POSSIBLY live without cable (“what do you do every night???”), and some people I know look down their noses at our little house. But, your story is helping many people – to either cut back their expenses now, or to remind those of us who sometimes wistfully look at larger houses for sale and look at the dings on our cars and the hole in the upholstery, to STOP and rethink it before we get the larger house, the larger payment, the new car, etc. etc.. It’s so much more than skipping lattes – it’s a whole lifestyle to be frugal. Thank you for being so candid about what you are going through. I truly hope you are able to save your home.