Thursday, June 9, 2011

When the Dream Home Turns into a Nightmare

By Teresa Mihelic, Real Estate Broker          
Now that you have your dream home, what do you do when you find that you owe more on your mortgage than the home is worth?  While it may not make you feel better, know that you are not alone.  It unfortunately has become all too common.  So, what should you do?

First of all, don’t panic.  There are options.  They aren’t convenient, and they will hurt but you CAN get out from under it with some gut wrenching decisions and much perseverance.

If Possible – Hang on to it!!!

Take a look at your overall financial picture.  If you don’t have to sell your home, DON’T.  Hang on to it and wait out the economy.  The “guru’s” all seem to think 3-5 years for recovery and depending on how upside down you are, you may be able to ride out the storm.  Tighten your budget so that the ride doesn’t bankrupt you.  And if you can afford to, just one extra payment per year can take years off your overall loan.  If you have an adjustable rate mortgage, making extra principal payments can reduce your mortgage payment too. 

Modify the Loan

Talk to your current lender about a Loan Modification.  This is the hard part.  They aren’t easy to get, they are a lot of work, and take some time to complete, so be ready for it.  But they do get approved and can significantly improve your budget.  But don’t get lulled into easy street.  Even though you can get the payment reduced temporarily, continue to put away as much money as you can so you are ready when the modification ends.  And even if you do get a long term modification, continue to budget for the long term so you can get back on your feet even if the economy doesn’t.  DO NOT, under any circumstances, pay someone to do a modification for you.  These are scams out to steal your money.  They don’t work no matter how great they sound.  Remember when your Mom said, “if it sounds too good to be true, it probably is”?  Live by that.  She was right! 

Short Sale

If you have to sell, this is where a “short sale” comes into play.  You’ve heard people talk about it.  It’s when you sell your home for less than what you owe on the mortgage.  It can have serious tax and credit ramifications so be sure to talk to your accountant before engaging in one.  The “forgiven debt” (the amount the lender forgives on the loan balance) in some cases can be taxable income, or you may be exempt depending on your situation.  Your accountant can guide you on that.  Now for the credit problems; a short sale will have a serious negative effect on your credit for at least 2 years under current lending guidelines.  Yes, it’s easier on your credit than a foreclosure, but it still hurts.  A lot.  So just know that you may end up paying higher interest rates on car loans, credit cards (you shouldn’t be carrying a balance anyway), and you’ll probably have to rent for a while, while you rebuild your credit.  But it gives you that clean slate to start over.  If you decide to choose this route, be sure you hire a real estate agent who has extensive experience doing short sales or you may end up in foreclosure anyway.  It’s a difficult and time consuming process so you need someone on your side who knows what they are doing.

Last Resort

Your absolute last resort is foreclosure.  This will ruin your credit for a least 7 years and will have wide spread consequences for future purchases for just about everything you need to finance.  You will likely also end up paying higher rents and higher deposits to compensate the landlord for taking on what is considered a “high risk” tenant.  Some people have a lot of difficulty with the stigma attached to foreclosure.  I’ve seen many marriages fall apart over this so this would be a good time to consult a counselor or your clergyman for guidance on coping with the disappointment and hardship.

The goal here is to get back on your feet as quickly as you can so it doesn’t snowball into something larger than life.  Be proactive.  Know your options.  And know when to cut bait when all else fails.  And be sure to have your support system in place while you go through this so you stay strong, united, and confident to put things back together. 

Friday, June 3, 2011

Buy & Sell - Tips To Saving Thousands on Everyday Items

by Daryl Cesal
Ebay – a.k.a the “Online Garage Sale”
If you need it, eBay has it and more than likely the product is brand new and could be listed up to 75% off.  This is not for all items, sometimes the discount isn’t that great so the best thing to do is to go to and search for the item.  The way eBay works, is a private seller uses eBay’s website and lists their item.  If it is listed in an auction, you can view the item and see how much it is going for and when the time ends.  To forecast how much you think the item is going to go for, search for the item, click on the drop down menu on the right that says “best match” and select “time ending soonest”.  If you are lucky, you will see a bunch of the items you want and will be able to gauge on how much it is going to sell for.   Make sure you look at the listing carefully and see all of the details, i.e… shipping price, checking  the sellers feedback rating, etc….

Craigslist – “Your best classified advertising service”
 Probably the best way to buy anything used period.  Craigslist a free classified advertising service for ANYONE to use!  It is so simple to list anything on this site it makes you wonder how makes any money (because there is no advertising on this site).  The seller lists their item and the website works just like any classified ad you ever saw in the newspaper.   It is so amazingly simple and very profitable to the buyer and seller.   When searching, make sure you type in the item, click search then click “title only” in the upper right hand corner.  If you do not do this, it will pull up all listings.  I recently read a story on-line how craigslist is completely decimating the want ad market, and it makes sense.  You list at home for free and for the buyer their product is just a click away.  They allow you to include up to 4 pictures, once again all for free.   If you need anything from furniture to a blender, it is on this site and is very local/close to your home and the best part—NEGOTIABLE!  Once you start on this site, it is addictive and you will almost feel guilty going to the store to buy anything except for food items.  Example on craigslist--- kitchen table with chairs, paid over $400, sell for $100, moving.  You then contact the customer and offer them $50 and go from there.  If successful, you just saved over 75% for making a phone call.  Same goes with selling.  If you have to sell an item, upload the pictures with your digital camera or cell phone, post the listing and voila!  Let the sales commence… Important--- watch out for scams as craigslist is known for a lot of them.  If it looks too good to be true (very cheap car, someone asking you to call them even though you left your # on the listing, schemes about being out of country and needing daycare service, etc…) it is too good to be true.  Use your best judgment on all of these and let the savings commence! 

Garage Sales – “The Saturday Morning Assault”
There are so many opportunities at garage sales it is not even funny.  Most people have a garage sale to get rid of junk, unwanted items, things to clear out the house and make some quick cash.  This is another huge opportunity to make money.  Buying and selling from garage sales is not that uncommon nowadays as you can buy an item for cheap (always offer them ½ their asking price) and sell on craigslist or eBay for 500% more.  Example, I bought a set of golf clubs from a garage sale for 7.50 last week.  Took the clubs and turned over $100 profit from selling on eBay and craigslist.  All it cost me was the ebay fees (listing fee and 5% of the sale price) and gas to either drop off the item at the individual’s house or at the post office.  I recommend when getting started to have someone positioned at your personal computer and if you think it is a good deal, have them look it up on eBay or craigslist and make sure the item has bids (make sure you select “time ending soonest”).  If so, offer them half price and away you go!  Oh BTW—as I was typing this, I received a call from a buyer for something I bought at a garage sale for $3 and he’ll be at my house this afternoon to buy it for $25.  It works, it works, it works!!!!  Remember, every garage sale does not have treasures; you just have to look hard and find that “diamond in the rough”.   Keys to a successful deal at a garage sale, establish rapport with the seller upon arrival, find the item and deal away… tons of fun too!!!!

Coupons -  “2 for 1”
Do you like to go out to eat at Outback, Chilis, and other name brand restaurants?  First always go during happy hour, drinks are half price and you do not have to wait in line.  But, if this is a special occasion and you have to go out at 7PM on a Friday night no biggie.  Go to the website of the restaurant you plan on eating at and see if they have any deals for free appetizers or an anniversary dinner.  They will require you to sign up for an email newsletter and voila, you’ll receive a coupon for buy one get one free on the meals or a free appetizer… Ebay also has major fast food restaurant coupons that are for sale… search away!!!!

Friday, May 6, 2011

Odyssey Into Frugality

By Jonni McCoy

Parenthood brings about many changes -- but frugality was not one that I expected. My husband and I had a pleasant lifestyle. Adding a child made it even more pleasant. But, as the years went by, I could see that I had to make a choice. Was being away from him at work best for my child?

In order to appreciate the frugal changes that our family has experienced, you must know that I am not frugal by nature. It was something I had to learn. I was raised overseas where we lived in large homes with at least five servants. I attended private schools and a University. We traveled to exotic countries for our vacations, several times per year.

After college, I was on the yuppie track. I worked at high-tech companies such as Apple Computer, Inc. and National Semiconductor. After my first child was born, I arranged a job-sharing program so I could work reduced hours. I had my coffee flown in from Hawaii, hired a nanny, and went on weekend vacations. I "had it all."

After my son turned three years old, I was beginning to think I would like to spend more quality time with him. I began to see the importance of having a mom at home with a child in order for him/her to grow up well. But there was no way I could quit because I was earning 55% of our family income. So we decided to move to a remote suburb where our house payments would only be about half of what we were paying in Silicon Valley.

I quit my job and put our townhouse on the market. Then, I realized I didn't want to move out into the farmland, but I also didn't want to be working. I was determined to find a way to stay where we were.

The reality of a severely reduced income and an expensive area (San Francisco Bay Area ) was shocking. After all, we were living in the third most expensive city in the country and I had been earning 55% of our joint income. We would have to either move or radically change our ways. I chose to try the latter and see what happened.

So began our odyssey into frugality.

I began my quest by looking at the things I could do without. I first reduced my tax withholding, because our income was now half of what it used to be. We did not have child-care expenses. New clothes were not a necessity for me since I had a wardrobe from my working years. I stopped going to the salon for my haircuts. And we decided not to eat out or go on vacations until this was all sorted out.

Then came the harder things. Most items left in the budget were fixed. The mortgage couldn't be reduced or refinanced at the moment. Utilities were already low, but we made a small dent in them. The only large item left in the budget was groceries. I focused heavily on this area because it was the largest area in our family's budget that wasn't fixed.

I eventually arrived at what I call the Eleven Miserly Guidelines. When I follow all of them faithfully, I could feed a family of four on $40 per week (in 1991). That saved us more than $240 per month in this one area. This may sound extreme, but the results were amazing. We were able to stay in our home, keep our cars, have another child, keep me at home, and even go on vacations.

Many people think that my husband must have been making a bundle to make this happen. He wasn’t; with my loss of income, we were living on half of what was the average household income in our region.

When we first embarked on this adventure, our family went through a very difficult time. We didn't know how to live within our means. We felt poor and weren't sure we liked this feeling. We had to plan for everything we wanted to spend money on. And we had to do without some things. We started to feel deprived. Deprivation wasn't something we were familiar with, nor was it a nice feeling. But we knew that millions of people had gone before us in this transformation from yuppie to virtual non-consumer without losing their self-esteem or sense of dignity. I was determined to maintain ours as well.

We gained a sense of self-confidence that earning high salaries couldn't provide. We now know how to provide for our family on half of what we did before. We can do a good job with the talents and wisdom that we possess. This is a great feeling -- better than any raise or bonus that I ever received. It took creativity and an ambition to make it work. We weren't going to stay home and mope about how we couldn't afford to go anywhere. We were determined to find things to do that we could afford. And we did. We had fun for little or no cost. We made sure we enjoyed ourselves in new ways.

These are the kind of changes that will stay with us forever. If we have money again and can buy things freely, we will always know we can do without those things -- and still be very happy. We have become closer to one another. And we know we can do whatever we set our mind to. Many people would pay a therapist plenty to learn these attitudes.
If any message comes from our adventure, I hope it is that you can do whatever you have to, if you believe in the goal. You can learn practical ways to reduce a budget without fearing images of dumpster diving or eating unhealthily. I am proof that people can retain a sense of class and still be on a budget.

This article copyrighted by Jonni McCoy 2011, 

Sunday, April 17, 2011

My Walking Prayer List

One of the many memories I have of my Mom was her devotion to praying for everyone in the family.  She had a picture “prayer book” and would religiously spend at least 30 minutes going through every page specifically praying for each family member, close friend  and our government leadership – even though she may not have voted for those in office.  (She had a very strong belief that the Lord could change hearts.)
Continuing her Legacy
When my Mom passed away in 2007 I decided to continue her legacy of praying for our family members and started collecting pictures of all family members and close friends.  Each day I would take time to flip through the prayer book and pray for that person or family by name and always knew of a specific need or prayer request.  It was amazing how many praise reports I would get over time as I prayed for each individual and family by name on a daily basis.  It was also a nice feeling to take the focus off of me and put it on others.  Now, I realize why my Mom always had that certain peace about her and even in her last days of battling pancreatic cancer she would ask, “How can I pray for you today??”  Wow – now that is a GODLY women.
Kicked it up a NOTCH
I have kicked up my “prayer list” technique a notch by combining it with exercise.  Five days a week I will take at least a 30 minute walk by myself and pray for each family member and many of our friends.  I have shared with friends what I do each day and they ask if I can add them to the list.  I am to the point now where it takes at least 30 minutes to cover everyone.  What a peaceful time for me to refresh my own spirit in the Colorado great outdoors.  (Even have walked outside with temperatures below zero)
Let me challenge you to give this a try – not only will you have many prayer requests answered but you will appreciate what you have so much more and get some exercise at the same time – we can always lose a few pounds…..  I guarantee in YOUR last days you will be able to say, “I have NO regrets.”

“My “Prayer List” order
1.        Give thanks for my job and where I live
2.      Grandma Cross – 106 yr. old granny and Oldest Laker fan….
3.       Lou – 90 year old step father who was a great husband to my  Mom         in her last years.
4.      Robin – wife of 37 years
5.       Chris (son) and girlfriend, Meghan
6.       Cori (daughter) and husband, Ben
7.       Brother Mike and entire family (3 adult children and 8 grandkids)
8.       Brother Jimmy and family
9.       Sister Molly
10.   Robin’s sister, Debbie and family
11.     Robin’s brother, Mike and family
12.  Friends and Relatives

I always finish with, “Father, I want YOUR will for my life - not mine.”
You fill in the names and start a “Living Legacy” for your family and friends.
Please leave your prayer request as a comment below and Robin and I will add you to our list (I may even have to extend my daily walk to 60 minutes)

Friday, April 8, 2011

Colorado's On Fire...and it's only April!

For most people, a wildfire is something that happens “over there.” But every single state in the country has experienced at least one devastating wildfire.  And states like Colorado can experience many.

Wildfires can happen at any time!  A spark from a campfire, a lit cigarette thrown from a moving vehicle, a lightning bolt. Once started, wildfires can travel up to 15mph and burn for days...even weeks. If you live in the country or a heavily wooded area, your home may be especially susceptible. By taking safety precautions, you can help your home survive a wildfire.

Wildfires follow a path that’s affected by three things: weather (especially wind), terrain and fuel. Since there is little you can do to influence the weather and the terrain, your best bet is to reduce the amount of fuel that helps a wildfire spread to your property.

Create a Safety Perimeter
·    Remove all dry grass, brush and dead leaves. Homes should have a minimum safety  zone of 100 feet to be best protected.
·    Eliminate plants growing against exterior walls; especially ivy and vines. Trim tree branches to at least 10 feet of your home
·    Store firewood 30-100 feet from your house. Keep combustible materials at least 10 feet away.
·    Thin out tree clusters to create a 15-foot gap between tree crowns if they’re inside your safety perimeter.
·    Remove any old debris surrounding your home.

Landscape a Fire-Resistant Yard
·    Create fire breaks on the ground with stone or gravel walkways
·    Consider replacing vegetation in your safety perimeter with fire-resistive plants, i.e. hardwood trees like maples are less flammable than pine trees.
·    Keep your lawn mowed and properly watered.
·    Remove tree limbs within 10 feet of the ground to eliminate ladder fuels (vegetation that allows fires to climb into the trees).
·    Rake leaves, dead limbs and twigs frequently.

Protecting Your Home
·    Replace your roof with Class A fire-resistant-rated materials. Keep roof and gutters clean of any flammable vegetation such as leaves and pine needles.
·    Cover vents, soffits, chimney tops and any openings under porches with ½-inch or smaller mesh screens.
·    Make sure all windows are made of tempered glass.
·    Protect the sides of your home with fire-resistant materials such as brick, concrete, rock or stucco.

Preparing For a Wildfire
·    Review or take a home inventory.  If your home is caught in a fire, this will make EVERY difference when filing your insurance claim.
·    Create a family escape plan and a designated meeting place away from your home.
·    Know at least two evacuation routes from your neighborhood.
·    Teach your family how to use a fire extinguisher and show them where it’s kept.

When a Wildfire Threatens
·    Move any flammable furniture away from patios or balconies to inside your home.
·    Shut off pilot lights and gas at the meter.
·    Close all windows and doors. Remove any lightweight curtains from windows. Move furniture away from windows.
·    Open your fireplace damper. Close your fireplace screen.
·    Connect garden hoses to outside taps. Consider watering your roof and yard.

Prepare Your Car
·    Back car into garage or park it in an open space facing your escape route.
·    Roll up all windows and close all doors.
·    Pack your car with emergency supplies and valuable documents.
·    If parked in garage, close garage door. Disconnect your automatic garage opener so you can open your door in case of a power failure.

Evacuating Your Home
·    Wear gloves, rubber-soled shoes, a handkerchief to protect your face and cotton/woolen clothes that cover your skin.
·    Call a friend or relative and tell them where you’re going.
·    Lock your house.
·    Choose an evacuation route that takes you away from the approaching wildfire.
·    Listen to the radio for reports.

After A Wildfire
·    Return home only after authorities say it is safe to do so.
·    Take pictures of the damage.
·    Call your insurance provider.
 For more information visit:          

National Fire Protections Association

Sunday, March 20, 2011

What’s a Life Without Experiences?

By: Chris Stoll

Admittedly, I am newly retired.  I don’t feel old enough to have reached this milestone.  But, I know it’s true because my alarm isn’t set for 5:30 A.M. anymore.  I’m busy all the time, but still have a lot more time to do the things I love.  There’s also more time to work on my list of projects, many of which have been on that same list for ages. 

The Stuff 
I’ve had years in which to buy things I thought I loved and to acquire the possessions of a middle-class life.  So, what has been the most driving idea that has consumed my time in these first months of retirement?  How to get rid of my stuff, most of which has to be cleaned, fixed, stored, or moved to make room for other stuff.Over the holidays, I was walking through a department store.  As I took in the racks, displays and piles of clothes, I had an almost physical reaction. I wondered what could be there that I needed.  I thought back to all of the clothes I have bought and barely worn.  I turned around and found the nearest exit.  How much are we influenced by what businesses put in front of us, making us think that these are things we need or should want?  Are we being manipulated?  You bet.So, I am now on a program of “Stuff Control.”  Surfaces at home are being cleared, cabinets are being cleaned out, closets are being edited, and the garage is being tackled.  Many of the items are being donated.  Some are being sold, and much is being tossed.  It’s a good feeling, this cleaner, sleeker, and more organized existence.  I’ve made a little money.  But, most of all, I am now surrounded by the things I really need or love.  And, shopping to replace what is gone holds no interest for me.

The Experiences  There is, however, one cabinet and several nearby drawers where very little has been thrown away.  It is where I keep pictures, travel journals, and family heirlooms.   Inevitably, when people faced with natural disaster are asked what they grabbed from their homes to save, it is their precious pictures and family heirlooms.  These are the tangible reminders of our history with those we love, of memories being made, of the adventures of our lives.  I am thankful for that cabinet and drawers, and for a mind filled with memories of adventures, times with friends and family, and moments that reminded me that life is good.
Like a recent afternoon at the beach.  I found myself standing on the sand in the late day sun watching my grandsons play with their sand pails at the water’s edge.  And thinking, this is all I need.  Life is good.  God is good. 

Experience Travel
Living a financially empowered life doesn’t have to mean giving up what we love.  Maybe it means approaching what we love in a new way.  Maybe it means stretching ourselves and discovering new passions and ways of contentment.  Maybe, like me, one of the things you love to do is travel.  Does it mean that we have to give it up for this new way of living?  Not by a long shot.   In fact, travel, done with good planning, can be an important part of a financially empowered life.  In the months ahead, I hope to be able to share with you some ideas on how to make travel a vital part of your new way of thinking and a goal worth striving for.  We will explore ways to get-away within your budget, whether it be for fun, for relaxation, for enrichment, or for inspiration.  
Why am I so passionate about travel?   How can it be such an integral part of a financial plan?  Should we really be spending our hard-earned dollars on this luxury?  Or, is travel really a luxury?  I see travel as a necessary part of my life.  Sometimes my travels have taken me to far-away and fascinating places, like the Great Wall of China, or the stunning Machu Picchu.  I’ve hit the roads and highways of this great USA seeing the beauty it has to offer.  I’ve found places that re-charge me every time, like Yosemite, NYC, and Paris, where I return as often as possible.  I have a collection of treasured experiences from past travels, and lots of plans for the upcoming years, like my safari and gorilla trekking in Africa this summer.  And, I am making it a priority to find the little treasures right near my own home.  I’ve had a lifetime of travel, and hope to continue adding to my portfolio of experiences for years to come. These experiences with family, friends, new cultures, and new places are, for me, the ones that really count.

Over the coming months, I will be sharing with you some of the lessons I’ve learned planning, paying for, and taking several vacations a year.  I’ve made my share of mistakes, but don’t make them twice.  Using travel dollars wisely contributes immensely to the experience.  Coming home is always better knowing the trip was well-thought out and already paid for.  Paying off a trip after coming home is not only unwise, but takes much of the joy out of the trip.   Hopefully, I can give you a few ideas that can keep that joy in your travel by making good financial decisions.
Some of the most familiar words in the Bible are from Psalms 23:
                        He lets me lie down in green pastures;
                           He leads me beside still waters;
                           He renews my life… 

We have an awesome God who has created a world for man to use.  The majesty of God’s creation has the potential to excite and inspire us, to renew and restore us.  Explore this gift from God, and make a lifetime of experiences for you and those you love.    

Thursday, March 17, 2011

DINKS (Dual Income, No Kids)

 by Cori Bryan 

What a great situation to be in! First of all, I want to say congratulations on being a successful couple in a difficult economy. It is important to be very thankful for the situation you and your spouse have created for yourselves. You are independently successful financially and have now joined together in holy matrimony, "for better or for worse....for richer or for poorer." As of now you are in the "richer" part of holy martrimony and the goal is to remain that way till "death do you part."

How to Stay "Richer" and Never "Poorer":
You are now dual income with no kids, but there may soon be a day where that is not the case. There are several situations that may change your status. Kids may come, one spouse may choose not to work or heaven forbid one or both of you may be laid off. The way to prepare for this time is to live in the DINK stages of your life as if you are not a dual income family. From the first day of marriage, always LIVE WITHIN YOUR MEANS. When you decide on large purchases, try to think about what you NEED versus what you WANT and come to a middle ground based on your income. Try to make large purchases you will be able to sustain on only one income.
Living on One Income:
As everyone's goals are different, it is a necessary to sit down with your spouse and talk about what you want in the future for YOUR family. Hopefully you talked about this before you wed, but it is never too late. My husband and I are both pilots in the Air Force and we have been married for 3 and 1/2 years. We decided very early on that when we have kids we want the OPTION for myself to be a stay at home mom. Although we may both continue to work even after children arrive, we have positioned ourselves to live on only one income. This has afforded us the luxury of having options when the time comes. We purchased our house as if we were a single income family and we have made all of our large purchses based on what we could afford at the time. If we couldn't pay cash for something, that meant we could not afford it, even cars. We have also paid off all loans and our only debt is our home, which we are working hard to pay off. There is no risk associated with living a debt free life.

Times to "cheat":

The goal is to figure out how much income the spouse planning to continue to work makes and live on their income alone. Month to month you should be able to save one spouses entire income. As there are times in every diet where you should be allowed "cheat days," the same goes with saving as DINKs. On average, live on one income, but when there is something you really want, allow yourselve to indulge on occasion. As long as you can pay cash for that item, there is no reason not to reward yourselves for your hard work. Remember why you married your spouse in the first place and support each others passions. My husband and I both find pleasure in the great outdoors and have made several purchases to support this lifestyle with some very nice outdoor gear. We love boating, competing in tritahlons, working out, rock climbing and photography and with these hobbies come expensive equipment. We feel it is important to stay healthy and believe these have been worthwhile purchases. An emphasize item however is;` we have our days in which we "cheat," but we maintain a debt free standard of living with the exception of our mortgage.

In Conclusion:
DINKs have a tough task. It is easy to live large, but you would be letting down your fellow DINKs if you do not live responsibly and set yourselves up for future success. Please do not make the rest of us look bad...we have worked hard to get here. If you remember nothing else...remember these three tips:
3. Enjoy it while you can :)