It's time to really prepare. We are in for more pain!
I hate to keep saying "the sky is falling"... but it is.

No longer can I even say that the down housing market is regional. It's not any more. Every area is feeling the pain to some degree. This is the calm before the storm. Please prepare.

EMPLOYEES!!! If you are an employee of any size company please keep your eyes open. Constantly plan for plan B which should include other means of employment ASAP and a savings account. Even if your savings account is small it can help bridge you over if you had to switch jobs and your paycheck is delayed till you start getting a new one. Every penny you can stick in your savings account will help. Start looking for other companies you could work for now before you need a new job. Keep a running list of other companies that could use your area of expertise so that if the worst were to happen you could take action and panic later! Update your resume and think outside the box. Now would be a good time to start a part time business on the side to ear extra income and have another source of money coming in!

Stop paying down your debts if you do not have a savings account. Pay the minimum payments till you have a decent savings account. I know this sounds crazy but hear me out...

Imagine you lose your job. You have no savings account. No problem you think, you'll live off credit cards till you get a new one, right? So you go to pay for gas and groceries with your credit card only to have both charges declined. What happened you think? Well, this credit crunch (understatement of the year) is causing banks to closely scrutinize ALL CREDIT THEY EXTEND including credit card accounts. You can have perfect payment history and they can close your account at any time. Do not depend on available credit right now. Make a savings account that you know you can depend on to pay for the necessities if you loose your job.

Homeowners!Are you in the middle of a remodel? Are you building a new home? Listen up! Another horror story to home owners that have heloc's and construction loans is that the bank is reevaluating the value of these homes which sounds like a smart idea, except imagine this scenario... you are building a home or in the middle of a remodel and you go to take a draw from your HELOC or construction loan only to learn that the bank has decided that the value of your property has gone down and they have closed your loan to any more draws... what do you do if you just tore up the kitchen and bathrooms and don't have the money to put them back together again? What was supposed to be a 30 day inconvenience for your family to live through, now leaves you with an uninhabitable home for your family for the who knows how long future!

See where I'm going with this. I'm not telling you what to do if you have a HELOC or a construction loan... but I know what I'd do... the money would be taken out of a HELOC asap and put in a bank account at another financial institution. I would not risk having to have my family live in a dangerous half finished home.

Depositors! Do you have a bank account? Maybe a checking account, a savings account or both? I'd definitely make sure that I stayed under the FDIC limits if my money was in an FDIC insured financial institution. I would not be pulling any money (other than cash for an emergency) out of banks as long as I'm under the limits. The truth is that your money is safe as long as you are under the limits. Remember when Indy Mac was taken over by the Fed's earlier this year? It was planned well. You could access your money over the weekend by ATM and by Monday morning all was back to normal. The money did not disapear and business went on as normal. Just be smart about the rules of being safe which included staying under FDIC limits.

So where is the silver lining in this? Well the most obvious one is that first time home buyers can now buy a home, or should I say they can buy one that they can really afford. And there are going to be major millionaires made right now. First time home buyers have many homes to choose from, great rates and low prices. Investors with cash can buy properties that "cash flow" and if they can hold tight till prices go back up again, and they will, maybe not in the next few years, but a long term investor knows to give it even 10 years and they will make a chunk of change! There has been no better time to buy in years!

So no need to panick if you are seeing the sky fall as I am...it's just our reminder that we need to keep thinking out of the box to make more money and save more money.

CHEAP!

Now I could have said free, but where's the fun on that?

Here are my favorite cheap deals!

1. Pizza Mia's from Pizza Hut. Being a non-cook, these pizza's are great. There's something about the dough that I just love. It's even better than the more "expensive" regular pizza. You can buy these for 3 for $12 if you use the 20% off your first online order coupon code IG.

2. Fresh and Easy reduced foods paired with a $5/20 coupon. From bread to pastries and everything in between, I love this store!

3. Formula checks and coupons. When my kids were younger I was in love with formula checks and coupons. If you choose or need to use formula, these 2 discounts really add up!

4. Free magazine subscriptions. I can't remember the last time I paid for a magazine! You can find these free gems all over the internet.

5. Money saving websites. www.slickdeals.net and www.fatwallet.com I never buy any bigger items without checking these sites first for either coupons, rebates, or just great sales.

6. Good Public Schools. I know that these are truly not free, but I have to pay property taxes anyways, so I appreciate a great public school.

7. Walmart brand items. I went to Walmart yesterday and bought the usual, toilet paper, paper towels (I use cloth towels 90% of the time, but I insist on using them to clean certain areas like the counter after raw meat is on it), soap, etc. I stopped adding up all the money I saved by buying the store brand. I have never had a quality complaint from not using a store brand.

8. Regular unleaded gas. I got rid of my "premium" only vehicle and now I drive one that takes regular and it gets better gas mileage and the payment is a lot less! Most importantly it's save and I LOVE it!

9. The Library. The local San Diego News reported last week that there was a huge increase in the usage of the library last year and I believe them. Where else can you read a magazine, go on the internet, borrow a book all for free!

10. Family and friends. Above all else having great friends and family is the best thing going... and free!

Well duh, don't you think... of course it changes everything. You can eat and pay your bills, but it also gives the confidence to keep saving.

Have you ever noticed that if you pay for something with cash you feel the money leaving a lot more than if you pay with a credit card... even if you pay the credit card bill in full?

Money in the bank is security and stability.

So how do you go about getting more money in the bank?

Easy, make a budget and put any money that is extra straight into your savings account.

It really is that simple. You need to start saving money. I am not a believer or follower in paying yourself first unless you have enough to cover your minimum payments on all your bills. Once you have enough to cover all of your bills (this is after you have tweaked the heck out of them to make your expenses as low as possible) then you need to add all of the extra to a savings account until you have enough to cover your expenses for at least 3 months, but 6 months is better.

Once you have 3-6 months in your savings account then you need to put the amount that you had been putting into savings towards your debt.

You should already have a list of your debts (the free debt budget worksheet from my website, www.NoExcuseBudget.com ) and you need to apply all of this money to the debt that has the highest interest rate. I know it can be tempting to pay off the smaller debts first so that you can feel empowered by having full debts paid off faster, but by paying off the higher interest rates first you will achieve a debt free life quicker and smarter... and that's what matters most!

Just like starting a new job, a debt reduction lifestyle is a life changing event. Once you get started things you think you need won't give you even close to the high that putting money in the bank will.

Happy Saving Everyone!

I don't believe that there is a "perfect" budget for everyone. Maybe you have an extremely small housing payment, but very high medical expenses.... but this graph is a good starting point. How does your budget compare to the suggested one below? I definitely agree with the savings section below. I am making a large effort to explain to my children (and anyone else that will listen) about the importance of savings. Saving for an emergency, saving for retirement and saving for a home purchase. Imagine the following scenario...

Starting with $0 and depositing $100 monthly over 65 years (at a rate of return 8% compounded monthly), you will save $2,296,847.
Initial balance: $0
Total deposits: $78,000
Total interest earned: $2,218,847
Total taxes paid: $0
Total Saved: $2,296,847

Now that really makes me want to save not only for myself but for my children! Even with inflation, that would really help with their retirement. I would hope they would have separate 401K's or IRA's too... regardless sometimes you need a visual push to get you to save.

Well I made it to day one!

I've decided to start a new style to my blog too. I'm one of those people that needs structure so I'm bringing it to my blog too. It should allow you all an easier reading experience too.

My blog will now feature

1. A commentary beginning. This might be a gripe, a vent, a complaint or an exciting victory, just depends on my mood and the day :-) You know how that goes!

2. Next will be a call to action to better your financial future.

3. Will be an insight into my work life.

4. A recap of last nights dinner. I know this sounds crazy but as a self proclaimed "foody" who can't cook and doesn't eat meat, I love to read about other peoples dinner happenings and I figured I can't be the only one, right?

5. Will be the main guts of the blog and in this series tips, info, and ways to save your home or save money on home ownership.

I'm excited to see how this will play-out over this next month. I hop you all will join me with your thoughts, questions and opinions!

Here we go!



Today's thoughts is brought to you by Mc Donalds! I'm trying to understand why Mc Donald's would allow a check casher/ pay day loan company to open a kiosk inside one of their restaurants. Better yet, I'm not sure why I care so much. I drove by a Mc Donald's and actually started laughing when I saw it, and I still don't know why it's still in my head. I really do not care for these pay day loans. I believe that in a true emergency everything is fair game, but they just seem to be the worst ones out there, and then to see it in a Mc Donald's, well, I guess it bothers me because it just makes it too convenient. Enough said.

The action for today is to call your creditors:
Here's how it's going to work.I know I've said this before but the first step to financial freedom is to pick up the phone. How many phone calls do you need to make that you've been putting off? I admit to needing to having calls that need to be made too. It seems like the majority of the time I remember that I need to call someone after business hours. I've been keeping a running list of "to do's" but I often joke in my mind that I should keep another list of places that I keep my master list!

So your list of people to call should include the following people.

1. All creditors- including your credit card company, mortgage company, and anyone else you owe money too. This is especially important if you are having problems paying all your bills. The point of your call is to ask in every which way if they can lower your rate and payments.

2. Utility companies-phone, cell phone, cable, dsl, dish, propane (you get the picture) You want to ask if there are any specials or different programs that lower your monthly bills. You'll be surprised how eager they are to help... many people on the other end of the line are feeling the pinch of this economy too, and who better to "know" the ways to a discounted bill than them.

3. Your insurance companies- This might not be on the top of your list of places to save, but it should be! With the right agent, who knows what questions to ask, you can save 20% or more by either switching companies or making small changes with your existing policies.

4. Your pharmacist and doctor- Both of these medical care professionals either have samples or know of programs that can help you save on your prescriptions.

Today's work activityis not too exciting. It seems we are having a problem locating a property that a bank needs some info. on. I've tried every which way, but everything I can find says it's vacant land and all the maps (and me driving for hours) don't show the house even exists. We'll figure it out, it's just frustrating. On another note, since the fires in October, I have done reports on house that truly no longer exist. Saddest one was a person who's escrow closed the day before the house burnt down. Talk about bad luck... their solution was to never make a payment. I know there's more to the story, but there were no winners in this deal, except for the sellers, I guess you could say they had really good luck, but even that sounds wrong.

On a happy note, we received another bank owned listing today. We'll be going out and checking to see if it's vacant. If someone is still living there we'll be offering them "cash for keys" which is paying them money to leave the property in a good, clean condition within a certain about of time. I'll blog more on that later.

Dinner last night was spaghetti and turkey sausage. It's amazing how cheap spaghetti can be. But do you ever wonder why Italian food at a restaurant can be some of the most expensive when the ingredients are the cheapest? Same goes for Chinese food. So the spaghetti was $1, the sauce $1 and the sausage was on sale as it was purchased on the sell by date for $3.45. So $5.45 for a dinner of 4. Not bad. Had this been at a restaurant I'm sure we would have been looking at at least $50 and that includes no beverages as we only drink water!

Deed In Lou of Foreclosure is the real estate topic for the day. First of all a deed in lou of foreclosure is when the bank agrees to take title to the property by the homeowner signing over ownership back to the lender. The former homeowner then walks away from the property and the loan (in most cases). I chose to talk about a deed in lou today because this is one of the most asked questions I get. On first look it seems that this could be a great solution to both the homeowners problems and the banks. You would think that the banks would jump at just taking the asset (the property) back without having to spend the time or money with a foreclosure. Unfortunately for anyone hoping to do this, I have only seen one property where the bank agreed to this and I've seen thousands of tax documents on different properties. From what home owners have told me the banks will say it's a possibility and request that you send in the financial packet and then say that they are not doing deed in lou's. Here are the reasons that banks are not open to deed in lou's even though it would save them money on the whole foreclosure and eviction process.

1. The banks don't want to make it easy to walk away from your home. Can you imagine if they said yes to every homeowner that has negative equity in their home regardless if they can afford the payment? By saying yes to one homeowner they are opening the floodgates to other homeowners requests. Which leads me into reason #2.

2. Banks try hard not to flood certain markets with foreclosures. They know that if they were to accept a deed in lou then the home would become instantly marketable and if they already have an over abundance of properties they are trying to sell, then they would further bring down the values of all the properties. If they can slow the process they can possibly slow the devaluation of their assets.

3. Banks hurt their balance sheets and financial worth every time they have to add an asset back under their ownership. It's in their best interest to slow down the acquiring of properties and clear out the ones they have on the books before they take more.

As you can see there's a lot more to the deed in lou for the banks. I think everyone would agree that it would be easiest and best for the homeowner to do a deed in lou, but the banks have decided that it's not in their best interest. If you are hoping to do a deed in lou, please contact your lender and explain your situation. Your best chance is to send them their packet filled out with your financial situation outlined, but just be prepared for a battle. There are other options available and be open to what they can offer. Just remember not to accept an offer from the bank that puts you in an even worse position.

Tomorrow we'll dig into short sales!

I shared that my website (www.noexcusebudget.com) is getting more and more visitors as the economy goes farther into a recession (yes, I've decided to call it what it is, regardless if the "experts" call it one or not) but the cat's out of the bag as to what my day job is (bank owned property specialist) and I've been receiving emails from people wanting to buy a foreclosure and from those wanting to avoid one. Here's my first post in my month long real estate series.

When I started this blog I had really strong feelings about budgeting and being responsible for your own actions. Well, I still do, but I've realized over the past couple of years that I live in a glass house, especially when I use this blog as a diary of sorts.

Real Estate has been my passion and means of financial support and when the market tanked I went into shock. I long said that it couldn't keep going up at the rate it was. Around here the median home price would have been 2 million dollars in a few short years. What I didn't expect was for it to crash in the way that it did. It was practically overnight when the sub-prime mortgages dried up and loans were nearly impossible to get. Thankfully my shock was short lived and I had to change directions. I was able to "get with the game" before it was too late for me and I now sell bank owned properties in Southern California.



Back to my glass house... surrounding myself with bank owned sales (REO's, real estate owned) has opened my eyes to the fact that nobody, no matter how well prepared you are, is immune to loosing your home. Now you can say "what if it's paid for", well what if you have no money for taxes? In my area you have 3 years before you loose your home to unpaid taxes, but still there are people who stay in financial shock for years. It can be debilitating and so can major medical issues, death, divorce. etc. There are so many scenarios that I have seen where people loose their homes in scenarios I never though imaginable. Even people who have owned their homes for 20 or 30 years and refinanced their homes during the peak can become homeless. These people will never "recover", they are retired and on a set income. Who's to blame, they are and maybe others too. It's not my place to place blame and it's won't change anything at this point. I just hope we all learn from this. Don't get me wrong, these homeowners made a very poor choice in taking out all that money and agreeing to a repayment term that they could not afford, but who knows what they were told. Maybe someone swore to them that they would be able to refi. to a better rate and term that they could afford, and when that time actually came to refi. these same people told the homeowners that the loans were no longer available. Again, I've learned not to judge.

To keep me from getting down and depressed about all these different senarious, I focus on the good side of my job...and that is to get new owners, who can afford to maintain their homes, to buy these empty homes thus helping the neighborhood recover which is good for all the other homeowners.

Here's a few tips if you are facing any type of default on your mortgage.


#1. Consult a real estate professional for a current market value of your property. We call these "CMA's". You need to know if you have equity or how much you are upside down.

#2. Re-do your budget (be sure to use my free budget worksheets) to see where your money is going and where it needs to go.

#3. Call your mortgage company and explain your situation and see what they can offer you to help you save your home.

#4. Don't go into shock. Remember to eat and sleep. This is a temporary situation. No matter what the outcome is, this will not last forever. I'm hearing more and more about people ending their lives over their housing problems. If you feel depressed and need help, please get help. Call your local hospital for a referral to a mental health professional. If the situation is acute, call 911!

#5. Don't use all your money to pay bills... sounds strange, but keep some cash around incase of a real emergency. Prioritize your bills.

1. Food
2. Personal care products (toilet paper, toothpaste, soap, etc.)
3. Gas and car payment (especially if you work outside the home)
4. Utilities
5. Mortgage (if you rent this might need to be higher on the list)

July brings a new month for us all. My goal is to blog everyday. Every time I try to do this some disaster gets in my way (literally, death, fires, you name it) but I'm going to try again. This month will be dedicated everything real estate. I'll be posting about short sale, what happens if you do loose your home and ways to save your home.

If anyone has real estate questions please feel free to send me an email. Please note that our brokerage (Sale Pros Realty) is in California. Laws vary by state. I'm more than happy to offer assistance and/or referrals outside of California, but it will generic in nature as I am only licensed in Ca.

I haven't visited budget basics lately, and I think it's time to take a step back and go there again.

Budget basics can be thought of in 2 different ways. Planning and surviving.

If you are in planning mode a budget takes you through a journey into how much money you make and how much you CHOOSE to spend. You can allot a percentage to housing, transportation, food, medical, entertainment, etc. Your in good shape here. You are in control of your financial future. Enjoy the freedom and relief that comes from this. Use this time to really plan dream about the future. You can make anything a reality!

If you are in survival budgeting you list your exact expenses, then list your income and you either smile or cry! After that it's action time. My budgeting plan says to tackle every bill or expense one at a time and either cancel it (if you can) or somehow reduce it. Asking for a discount in the interest rate or service works. Whatever it takes. If it means renting out a room in your house to taking any and all odd jobs, do it.

Some people will find that they start in survival budgeting and end up in planning budgeting. By reducing expenses and increasing income you can get back on track.

Money trouble shock is a common accurance in a down economy. You might feel desperate, stuck, and ill when it all catches up to you and you realize just how bad it all is. Don't go into shock. Do everything you can to keep on going. When you get through this period your only regret will be why you didn't start recovering earlier.

Do whatever it takes to get through the day. Make a list of what you have to get done and what you should get done to better your situation. Sometimes it helps to have someone else directing you towards a better future, and your list can be this "person". Be sure to get sleep so that your awake hours are as productive as possible. Don't give up. Nothing is forever.

I think everyone needs to visit budgeting basics at least once a year just to make sure that you are on the road that you want to be, if not regroup and take a new road!