Are you house poor? Millions of Americans struggle to save, pay debts, or meet monthly expenses because their mortgage eats up too much income.
If that’s you, don’t panic!
It can be frustrating and difficult, but smart choices now will pay dividends in the long run. You need a good strategy.
Here are x things you can think about to get your finances back on track:
Stop Paying Extra on your Mortgage
You may be up to your eyeballs in debt, but if you’re house poor (or if you have any other debt at all) then there’s no reason to be making more than the minimum payments on your house.
You see, your mortgage is probably your lowest-interest loan. If you have any extra money for debt payments, put it towards your highest-interest loans first. Credit cards, student loans, auto loans. These are all good candidates for those extra debt payments.
Eliminate Unnecessary Spending
Most house-poor folks aren’t putting any extra towards their mortgage principal. If that’s you, you need to find other ways to cut your expenses.
But where do you cut?
Go through your expenditures line-by-line and look for things you don’t need. Do you really need a cable subscription? Can you spend less on groceries?
A good place to start is to comb your credit card and bank statements to see where your money is really going. It might surprise you how much you spend—and how much you can afford to cut.
Ask for a Raise
Asking for a raise can be tough—but if you want to keep your house, and if you can’t cut your expenses any further, then you REALLY need to increase your income. Can’t get a raise? Maybe think about starting a part-time job on the weekends.
Downsize, If Possible
The simplest solution is to sell your house. Because if you can’t afford your mortgage, then you can’t afford NOT to sell.
Your house is causing the problem, and selling takes care of it right? Well maybe. But if you aren’t underwater, you need to consider selling.