A Lesson in Making Ends Meet

Whether you are fully employed, under-employed or just plain old unemployed, one sure way to make life more livable is to reduce overall expenses. 

There are certain expenses, like our ever increasing property taxes or the price of a monthly Long Island Rail Road ticket, of which you have little control. These
are our fixed expenses. But there are other expenses, such as utilities, which you can reduce by using less.   

While we all want to be warm this winter, we must remember that fuel oil is over $4 per gallon so by reducing the thermostat a couple of degrees, say during the day when the kids are at school, a substantial saving could be realized. Also, while your auto insurance may remain a constant, you can reduce expenses by limiting driving and, therefore, reducing the purchases of gasoline. 

It all sounds logical but to most of us our mortgage payment is our biggest monthly bill. One of the best ways for a homeowner to cut overall costs is to re-finance their mortgage for a reduced rate or extended term of payment.  

Qualifying for a new loan that would reduce your monthly payment may be very difficult. If you are under employed or unemployed this task can often be more
difficult. 

According to recent reports from the Bureau of Labor statistics, eight million people are working part-time jobs because their hours have been reduced or because they could not find full time employment. It was also reported that
those unemployed, who were lucky enough to find employment, often earned 20 percent less than they were making in their last full time job.

These are very sobering statistics particularly if you are attempting to re-finance an existing mortgage. The “grave” condition of the job market has led the Federal Reserve to announce a plan in which it would buy $40 billion of mortgage backed securities a month. This action could add some life to the mortgage lending business. 

Another federal program that could be helpful is home affordable refinance
program (HARP. The aim of this program is to help financially troubled homeowners stay in their homes. Homeowners can always speak to their current
lender about a loan modification which typically would be at a reduced interest
rate. 

In addition to reducing overall expenses one can look to increase income. Since the yearly salary review has gone the same way as the employer Thanksgiving turkey gift and the yearly Christmas bonus one needs to look elsewhere for a second income. Since part-time evening jobs, that actually pay a salary rather than simply dangling a pie-in-the-sky sales commission, have all but vanished one must expand their horizons and consider a simple home-based business like child care as a viable alternative.

Listen, no ever said this would be easy; did they? 

- Patrick Ingegno can be reached at inner-circle@optimum.net or www.innercircledebtsolutions.com