Are You House Poor?!

 

The first and most costly monthly expense for most of us is our housing.  How much are you paying for your rent or mortgage?  Is it ever difficult to meet that obligation?  Are you facing foreclosure?  If so, it is time to start looking at alternatives before you are forced to and are at risk of losing your home.  No one ever wants to find themselves at risk of being homeless, but sadly it happens.  More than you might think.  Do you have a backup plan?

 

In a previous post I talked about living within your means as if you are a fast food worker.  This is a really good way to gauge your overall expenses and your spending habits.  It is an eye opener to the importance of getting out of debt, having savings and a stockpile of some sort to help you become financially successful.  Think about it.  At this time could you weather a job loss?  How would you get buy until you found a new job?

 

If you are a homeowner, overwhelmed with debt and need to lower your expenses it might be time to sell your house and move into something far less expensive.  Would the current equity in your home pay off the mortgage and the 2^nd mortgage you may have?  And possibly some other debt?  If so, selling your house and downsizing into a smaller much more affordable home is the best solution to start your debt elimination journey and cut expenses.  Before you consider purchasing another smaller house however, you may want to consider renting for a brief period of time.  This may be a better option as it will allow you the time you need to pay off all debt, build an emergency fund, establish savings and retirement accounts and make better financial decisions.  No need to jump from the frying pan into the fire.

 

Rent the smallest size apartment you need.  If you have children they can always share a bedroom.  Two in a room with twin beds, three in a room with a twin and twin bunk beds and four in a room with two sets of bunk beds is doable.  If four in one bedroom seems a bit much then consider having the children sharing two bedrooms and the parents sleeping in the living room.  There are ways to make it happen.  And families really can share a single bathroom.  It’s been done for decades in the past.  Remember this situation is temporary.

 

While your home is up for sale, or even before while you are considering and researching your options, now is the time to start clearing out the excess.  We’ll be discussing that more as we continue along in this journey to debt freedom and financial success but right now, what can you sell?  Get it listed and use the proceeds to pay off debt.

 

If you are renting perhaps you need to move into a smaller apartment or even a studio.  Or take on a roommate to share the rent and utility bills.  Use the half you save toward paying off debt.  Don’t want a roommate?  Perhaps moving to a less expensive location or the town next door, however don’t move if that area would compromise your safety.  Safety is important.  But if you struggle to make rent and don’t feel a roommate is a good idea you might need to compromise and seek out a studio apartment.  Or, simply rent a room from someone else and tough it out in the meantime remembering this is simply a means to an end.

 

Some people will move temporarily move into their RVs or their automobiles when times get tough and there is no shame in that.  Some find tiny home living is the key to their financial success.  Long term house sitting works too!  Look at all the options and choose whatever is right for you.  Remember this is only temporary until you are out of debt and have made your savings goals.  It’s a means to an end.  An end to stressful days and sleepless nights!  And an end to worrying about your finances.  Change is good.  You can do this!