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Coupon Abbreviations
  • SC = Store Coupon
  • MC = Manufacturer Coupon
  • SS = Smart Source
  • RP = Red Plum
  • PG = Proctor and Gamble
Coupon Terms
  • WYB = When You Buy
  • B1G1 = Buy One Get One Free
  • .75/1 = 75 cents off one item
  • .75/3 = 75 cents off three items
  • EXP = Expiration Date

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creating your budget, tackling the housing category

Yesterday we started focusing on budgets by taking a good look at what you are actually spending.  Once you get everything assigned to categories and see exactly how much you are spending it’s much easier to see where you need to make changes.

The biggest category for spending is traditionally housing.  You need to look at this including every expense, not just your rent or mortgage.  Make sure to include your insurance payment, any tax payments, and homeowner dues.  After factoring in all costs we want to get this section of your budget down to around 25%-30% off your monthly income.  In other words, you make $2000 a month that would be $500-$600 a month.

If you are way over the 30% mark this is the first place to look at making big changes.  This is not the place most folks want to make any changes, but if the goal is to get out of debt and actually make expenses equal income this is one area where a big change has a big impact!

Options for renters:

Rent a smaller house/apartment.

Move to a different area of town that is cheaper.

Bring in a roommate.

Work directly with your homeowner (not the rental agency) to see if you can lower rent possibly in return for doing yard work or other things around the house.  (Renting houses is usually cheaper than large apartment complexes).

Options for Homeowners:

Bring in a renter.  Look for singles in your church that may need a cheap place to live.  You can charge $200 a month and they have a steal, but you have extra money towards this part of the budget.  For families with kids, don’t toss this to the side without thinking about how awesome this could be if your renter was up for baby sitting…

Look at selling and moving to a smaller house in a cheaper area.  This will affect a few things in your budget in probably huge ways.  Not only are you reducing your monthly payment, you could reduce utilities, household expenses, insurance and tax payments.  For some of you that are incredibly underwater in your mortgage contact your lender for advice or contact the HUD Housing Counselors to see what options may be available.

Refinance your mortgage over a longer time to reduce payments. (This is complicated and has additional fees so make sure to weigh all sides).

Reducing other expenses:

If reducing your mortgage or rent payments isn’t something you want to do, or you are not that far away from the 30% mark, look at ways to reduce your other expenses related to housing.

Reduce house insurance or renters insurance payments by increasing your deductible.  This isn’t as big of a change as reducing your mortgage.  Also make sure you have the coverage you need and that values are way over inflated.  If your policy is covering $4000 in jewelry and you maybe have $100 in jewelry they can make some line item changes.  Lastly check into seeing if you can get lowered rates by extra discounts like adding cars to the same company, being claim free etc.

Reducing Property Tax Payments.  This isn’t as easy as you would like it to be.  You can go to the assessors office in your county and see if they can reassess your home.  If values have fallen significantly (as they have in most of the south) this can be a big help.  In many counties you can look at the “rate card” for your house to see how it was assessed.  Make sure that information is correct, many times they assume how many bedrooms and square feet you have from neighbors, aerial photos and other vague guessing techniques.

Homeowner Association Dues.  You can discuss with them your hardships and see if they are gracious, but beyond that you don’t have many options. Buying into a neighborhood with a POA is something too many families take too lightly.  In most states if you do not pay your dues they can place a lien against your house and put your home in foreclosure.

Do you have any other ideas for folks on reducing rent or mortgage payments or even reducing other housing related expenses?

Tomorrow we are tackling Utilities.

    • Jen

      Didn’t know where to ask this: If I missed the Spreecast, where do I find it to watch it now. I did this everytime before, but I think I just had to go back thru the posts to the reminder to get to it. Is there an easier way?

    • Latoya

      Do you know if Kmart has stopped doubling coupons up to $1.00 with a purchase of $25 or more. I am located in North Carolina and I have went to Kmart over the last few weeks and have noticed that they stopped doubling. Can you please let me know if you have heard anything about this. Thanks

      • Latoya

        @ Jen

      • They have stopped doubling at all locations as of January 11th.

    • Melissa

      I read somewhere that someone had called their mortgage company or bank and asked for lower rates and was able to get them to lower it without refinancing. I believe they said banks aren’t wanting to lose customers to other companies with lower rates. I guess it couldn’t hurt to try. All they can say is no.

    • LizinDallas

      Jenny, Thanks so much for all you do! I was told by one of my patients (who worked for Wells Fargo) to go with a community bank for a refinance. We qualified for a HUD refinance through Community One (in NC). We kicked ourselves for not checking into this sooner. The savings are almost unbelieveable.
      Mortgage insurance can also be dropped once a certain percentage of the value has been paid off the mortgage.

      • Brooke

        It is possible to avoid mortgage insurance even if your financing over that 80% mark of your home. When we initially purchased our home, we did 80/15/5. Our primary mortgage covered 80% of the home, a second mortgage covered 15% of the home and we put 5% down. The rate on the second mortgage was higher; however, when you ran the numbers it was cheaper in the long run, the monthly payment was about the same and the second loan was only a 15 year loan instead of a 30 year loan. So our housing payment would drop about $200 at 15 years. We have since payed of the second loan and refinanced our primary loan with a lower rate! Also if you can make the sacrifices and swing a 15 year loan, it will save you so much in the long run over a 30 year loan. Blessed we were able to do that when we refinanced.

      • Nancy

        I live in NC – did you have a good experience with Community Bank? I have only $50K left on my mortgage, but it is 7%. Last year I got completely out of debt except the mortgage. I don’t know if it’s worth it to refinance.

    • Teresa

      If you have land you may be able to get your property considered part of the “Green Belt” this saves us about 20% a year on property taxes. We just can’t sell within 10years and can’t develop our woods.

    • Susie

      We’ve had State Farm insurance for the last 30 years using the same agent. There are a ton of ‘discounts’ that come off each item we have insured there automatically, even with two college age boys. One of them totaled a new car and I knew the rates would go up but they didn’t. On reducing property taxes, with the housing market where it is, you should really look to see that your homes appraised value has gone down in recent years. If it hasn’t you should definately ask for a reassessment. The area we live in has dropped by about a third of the value accessed in 2007. That makes for quite a difference in your property taxes. And to anyone who is out there with a house payment that’s over 30% and really doesn’t want to downsize, take it from someone who is a bit older, debt free, and retired by 51, over 30% is doable. In the early years of our marriage our house payment was over that amount, it took some sacrifices, but we built our house the way we wanted and were willing to make those sacrifices. I’m glad we did.

    • Mommyof1

      After having to move for a job, we decided to rent first. We live in a lovely apartment in a great community ( low crime rates etc) There are houses for sale/rent in the same area, but they cannot compare in bedroom size (my kid’s room is huge, his own bathroom and walk in closet) and our amenities here are amazing (pool, gym, car wash…) In order to get the same amount of things, we would be spending a few hundred more a month on buying OR renting a house. I used to think that people living in an apt/condo by choice were rather silly, but now I understand. We would love to own a home here someday, but have not found anything worth while to make us move. I just wanted to share that because sometimes I think the “American dream” tells us to own our own home, when in reality, it doesn’t make sense for a lot of folks anymore. That is just my opinion, and I am certainly NOT bashing anyone’s choices.

      • Susie

        Please don’t think I’m bashing your decision either, but there’s one thing that you don’t think of when you are young. If you spend your money all your life on rent, when you are retirement age you would still have that monthly housing expense each month instead of having a house that’s paid for. I know several older couples that struggle with retirement income not being enough to cover housing and everything else.

    • Nancy

      If you rent a home, your utilities will be higher; plus typically you would be purchasing equipment to maintain the property (aka lawn mower, blower, etc), and yard beautification/gardening, should you so choose.