please ignore

[Chicago526]

I keep reading about "downsizing" the house or apartment.

That advice really needs to be weighed against any increased costs or out of pocket cost prior to taking it.

For example, if you move you have to pay reconnection fees on electricty, water, phone etc... You may have to pay movers or at a minimum rent a truck and bribe your buddies with Pizza/Beer. You may have to pay a deposit at the new location prior to getting your deposit back on your current rental. If your interest rate is low and your credit has gone to pot, new house payments may be higher if you have to pay more interest even if the mortgage amount is lower.

Just things to consider. If you are in a cash flow cruch, moving may not be a good option.

All very true! But if the numbers work, or if it's "sell or foreclose" then it could be a good option.

 

[disneymom3]

I keep reading about "downsizing" the house or apartment.

That advice really needs to be weighed against any increased costs or out of pocket cost prior to taking it.

For example, if you move you have to pay reconnection fees on electricty, water, phone etc... You may have to pay movers or at a minimum rent a truck and bribe your buddies with Pizza/Beer. You may have to pay a deposit at the new location prior to getting your deposit back on your current rental. If your interest rate is low and your credit has gone to pot, new house payments may be higher if you have to pay more interest even if the mortgage amount is lower.

Just things to consider. If you are in a cash flow cruch, moving may not be a good option.

Exactly. Plus, your house needs to be in really good condition--at least here right now--to be marketable. We would need to do some major yardwork--buying plants and trees, reseeding some areas of the lawn, etc--we would also need to repaint the interior and new carpet is not a stretch. Plus, we currently have a 4.5% rate on our mortgage and lousy credit to the point that we wouldn't even qualify for a new mortgage. We looked at downsizing when DH was unemployed and no mortgage company would touch us. Where we live there are not a lot of options for apartments with a family of 5 due to occupancy restrictions. Most areas we would have to get a 3 bedroom apartment and the rent on those--which are few and far between was like $200 more a month than our house payment.

 

[SleepyatDVC]

I keep reading about "downsizing" the house or apartment.

That advice really needs to be weighed against any increased costs or out of pocket cost prior to taking it.

For example, if you move you have to pay reconnection fees on electricty, water, phone etc... You may have to pay movers or at a minimum rent a truck and bribe your buddies with Pizza/Beer. You may have to pay a deposit at the new location prior to getting your deposit back on your current rental. If your interest rate is low and your credit has gone to pot, new house payments may be higher if you have to pay more interest even if the mortgage amount is lower.

Just things to consider. If you are in a cash flow cruch, moving may not be a good option.

I agree that down-sizing should be done only as a last resort and after weighing all options and consequences.

Make sure you qualify for another smaller house or even a rental. Wil you qualify for an mortgage?

I am a residential property manager in the suburbs of NYC. I live in the building and am EXTREMELY strict in screening prospective tenants. We run all 3 credit reports along with a housing court record check. We need proof of income as well as current rent payment history.

If there are ANY housing court cases on record - automatic rejection, don't care why. If there are any collections, judgments, bankrupcies, or even delinquencies - rejection. In this case, NO credit is better than bad credit.
Over the years, there have been a few exceptions due to extenuating circumstances, but VERY few and aways well documented with why an application was approved. For example, we once approved a tenant who was divorced over 5 years ago when her credit report was horrible. She was able to provide proof through divorce and court papers that the bad debt was entirely her ex-husband's. What tipped the scales in her favor was that since the divorce 5 years ago, her credit report was as perfect as any I've seen and she submitted cancelled rent checks for the last 5 years since her divorce that proved she paid her rent on time. She lived in our building over 5 years and was one of our best tenants.

We made a decision to have ultra strict standards because NYC housing laws favor the tenants to such the degree that many unscruplous people do take advantage of the system. It takes FOREVER (read years) to get rid of a deadbeat tenant. Trust me, I have personal horror stories.

Not every non-paying tenant is taking advantage of the system. I have had tenants get laid off, etc. As long as they are honest with me and try to catch up or at least maintain the current rent, I am a sucker for a sob story and am more than willing to give them time to get their lives together. My boss calls me a big softie. (She's one to talk - she lets an elderly women who has mental problems live rent free - she stopped paying rent 5 YEARS ago when she lost her job and her mental disease got worse - apparently SHE owns the building and WE owe her money! My boss considers this tenant part of her Christian charity. )

Anyways, it's the non-paying tenants who take car service everywhere (when the train is a block away), who have the $95 monthly premium cable, and the a/c blasting all day even when it's only 70 degrees outside that get me mad. I had one tenant who had the nerve to tell me that "oh, I don't pay my own utilities, city public aid pays it!" Argh!

However, when you have strict standards, they have to be applied to everyone from the person who you suspect will skip out on the rent to the people who you feel just got a bad break and are trying to get back on track. If both applicants have so-so credit, I can't rent to the latter just because I like them better. I have to reject them both.

Not every landlord or property manager will or can be so strict. We can afford to be so strict because I manage a fairly large building that can afford to have a few vacancies for quite a few months before any danger of being in the red. Many smaller buildings can not afford to do this, so they are more likely to "take a chance." However, many properties in the better neighborhoods and areas do tend to be stricter so it definitely limits the choices that people with bad or over-extended credit will have.

As to downsizing rental apartments, make sure you price out the market before you tell your landlord to terminate your lease. Most of my tenants in our 2 bedroom apartments have lived here for many, many years - some longer than me. This is a rent stabilized building in NYC where the rent increases during lease renewals are set (capped) by the city every year. Depending on how long they they have lived with us, their personal situation, and what type of tenant they are, I do tend to let existing tenants renew at preferential rents that are even lower than the rent increases allowed by the city (typically 2% - 7%). Therefore, at the moment, all my 2 bedroom tenants are actually paying LESS rent than the market rent for one of vacant and available 1 bedrooms in our building as well as elsewhere in the neighborhood.

So, it this case, downsizing apartments would not save any money and even if it did, it would be so small, it wouldn't justify the expense of moving or of the loss of space.

Sorry to ramble. But bottom line, downsizing maybe harder than it sounds and is not for everyone. Make sure it works for you before you try to do it. Although, I said earlier that downsizing your house/apartment is a last resort, if you know you are eventually headed in that direction, DO IT EARLY while you still can while your credit is still decent. Once your credit is messed up, it may be much, much harder for you to get a new loan or apartment at a time when you most need it.

 

[peacefulgirl]

please ignore

 

[crisi]

I think its really helpful to sit down and figure out "what is the minimum my family and I could survive on" And I mean minimum. When I did it, I figured we wouldn't have a house, we'd move in with my parents. We'd eat a lot of rice and beans. Dry milk. My clothing budget would be cut down to goodwill/salvation army and garage sales....get the idea? This is not "I'd just have basic cable." This is a game of "how would we survive on selling plasma."

Once you do that, take it up a step. Move everything from "just surviving, feeding everyone enough calories, not freezing, keeping everyone clothed" to "money in the budget for meat once a week, clothes shopping at WalMart on a budget." Still in poverty, but past survival.

Then move everything up another step, repeat until you are past where you are now. Its fun to make the last step "what would I live like if I had Oprah Winfrey type money?"

Once you do this you see how many of your "needs" are really wants. How lucky you are to have what you do have. How much of a want basic cable really is.

 

[MrsPete]

OK, here's my question....what if there is no extra money? . . . Obviously the answer is to bring in more income.

Well, I think there are two possibilities:
1. Bring in more income.
2. Spend less.

For most of us, bringing in more income is tough. We're already working or working isn't feasible because of children, etc. While some people really do not bring in enough income (i.e., people just out of school and people who are under-employed), the truth is that most people have enough money to manage the necessities of life.

On the other hand, the great majority of us have some "fat" in our budget that can be trimmed. Whether it's the clothing budget, the kids' activities, meals out, or frequent trips to the craft store, most of us can cut out some unnecessary spending SOMEWHERE.

not to be misunderstood, I wasn't saying that I cut 40-50 from shopping that day, I meant I controlled what I spent. I was in a Super Walmart Store for food shopping and didn't get those "cute lil things" that I would of in the past.

I'd call that cutting $40-50 from a shopping trip! You're used to buying X amount of stuff when you go to Super Walmart; this time you didn't! Resisting those impulse buys is a good step in the right direction. How much of that stuff ends up in your yard sale pile within a couple months anyway?

Here are two hints to keep that trend going:
1. Grocery shop with a list; don't give in to the temptation to buy extras that aren't planned. Usually those extras are junk food that you don't need anyway.
2. If the Super-stores tempt you to walk through the clothes aisle, the children's area, the craft area, or whatever else, consider shopping at a plain old grocery store. There's a reason they put all this stuff together, and it's not for your convenience! It's profitable for them! They're counting on you coming in for groceries and noticing a pair of cute shorts.

I think its really helpful to sit down and figure out "what is the minimum my family and I could survive on" And I mean minimum.

That sounds like a good exercise. We are so accustomed to our American way of life that we often forget just how much we have.

 

[tlbwriter]

not to be misunderstood, I wasn't saying that I cut 40-50 from shopping that day, I meant I controlled what I spent. I was in a Super Walmart Store for food shopping and didn't get those "cute lil things" that I would of in the past.

But if you would have spend that money normally, and this time you didn't spend it, then you *did* cut that much from your normal spending. And that's $40-50 that can go toward paying off your debt instead. It's a good move!

 

[etwinchester]

Go to this Dave Ramsey Website.

http://www.daveramsey.com/fpu/home/

There are forms listed here (right side, under more information) to help you set up a budget.


For ALL Dave Ramsey Fans:
There is also a great Credit Rebellion Letter to print off and stuff in those junk mail envelopes. Make sure the envelopes do not contain your name anywhere on them and are the prepaid ones that they give you to send back to accept their offer. I would love to see the creditors face when they are getting these in the mail !!! It would make my day...

Let me know if you decided to join me in sending these letters !

 

[CarolA]

I have a friend who just sends the envelopes back. The creditors have to pay the postage that way. As for "seeing thier faces" it's just some person making minimum wage who just throws it away. Dave's theory on shocking them is a little unrealistic.

 

[Clancycat]

not to be misunderstood, I wasn't saying that I cut 40-50 from shopping that day, I meant I controlled what I spent. I was in a Super Walmart Store for food shopping and didn't get those "cute lil things" that I would of in the past.

But that said, I am keeping on a food budget and I didn't really have one set up before, this will save at least that amount I am sure.

Good for you! I've been keeping up w/ this post & the other budget/debt posts here and have picked up quite a bit of helpful info-- thanks everyone!

A website you may want to check out that can help w/ grocery savings is thegrocerygame.com I have saved a ton of money since joining. If it's in your area, sign up for the $1 trial period of 4 weeks. They print lists weekly that list sale items at your local supermarket and tell you if there are valid coupons for those items. I have gotten many things for free or close to it as a result of matching coupons & sales. My weekly bill is much less but I am able to bring home much more food, health/beauty, cleaning supplies, cat food/litter, etc and at the end of the week, my pantry is still full b/c I've been able to stockpile when things are on sale.

Keep up the good work & good luck!

 

[etwinchester]

I have a friend who just sends the envelopes back. The creditors have to pay the postage that way. As for "seeing thier faces" it's just some person making minimum wage who just throws it away. Dave's theory on shocking them is a little unrealistic.

I use to mail back just the envelopes as well. I thought this would be an added bonus. I'm sure that the letter would never reach the management level, but I'm sure the people opening them would find them amusing. I agree that "Shocking" is not the appropriate word, but I myself would find it humorous if I was on their end reading it.

 

[Nicolepa]

I have a friend who just sends the envelopes back. The creditors have to pay the postage that way. As for "seeing thier faces" it's just some person making minimum wage who just throws it away. Dave's theory on shocking them is a little unrealistic.

There is a website that you can go to to opt out of all the credit applications. Much easier (and more effective) than sending them back.

I am heading out the door now, but if anyone is interested I will try to find it later.

 

[disneysteve]

They print lists weekly that list sale items at your local supermarket and tell you if there are valid coupons for those items. I have gotten many things for free or close to it as a result of matching coupons & sales.

This is a great point which many people may not realize. The week that a coupon appears in your Sunday paper is often the same week that item is on sale at the supermarket. You can often get an item for well under half price by combining a sale with a double coupon. Even if you don't need the item yet, as long as it is non-perishable, that's the time to buy it. It may even be worth picking up extra copies of the paper to have more coupons (or swap with neighbors).

 

[lillygator]

for those credit card offers...can you just write return to sender on and stick in the mail?

 

[etwinchester]

There is a website that you can go to to opt out of all the credit applications. Much easier (and more effective) than sending them back.

I am heading out the door now, but if anyone is interested I will try to find it later.

Please list that information. I get so many in the mail and it's unreal.

 

[KIRSTIN'S MOMMY]

Thanks for the link to the forms etwinchester! I just printed them off. DH and I sat down last night a wrote everything out, but this will be much easier,lol. I can also vouch for the grocery coupon thing, my local carrier is a friend who gives me all of her leftover Sun. papers (sometimes 5 or more) and I clip the coupons out of every one of them. Last trip to the grocery store I saved $35 between coupons and my customer shopping card....I only spent $80 and it lasted us 2 weeks!
Congrats to everyone who is getting on this bandwagon....including me!

 

[CarolA]

for those credit card offers...can you just write return to sender on and stick in the mail?

I wouldn't. They do have some of your personal info on them.

Also, always be sure to shred those offers and any of those "convience checks" you get from CC companies.

 

[etwinchester]

Thanks for the link to the forms etwinchester! I just printed them off. DH and I sat down last night a wrote everything out, but this will be much easier,lol.

Here is another link to some more forms that you might be interested in:

https://www.mytotalmoneymakeover.com/index.cfm?intContentID=290

 

[kfeuer]

Here's how you can opt out of receiving pre-approved credit card offers:

Call 888-567-8688. Listen until you get the option to remove yourself permanently (the first option is to remove yourself for 5 years).

or

https://www.optoutprescreen.com/?rf=t

Be aware that they will ask for your social security number because this is how they credit bureaus track you. It's safe to give it (Clark Howard, consumer advocate, mentions it on his radio show all the time). I did it a couple years ago and we hardly get any offers now (companies you do business with can still send you offers, but I'd estimate we only get 3-4 a month). Be sure to do it for your spouse/significant other as well.

 

[minnie1928]

https://www.optoutprescreen.com/?rf=t

Be aware that they will ask for your social security number because this is how they credit bureaus track you. It's safe to give it (Clark Howard, consumer advocate, mentions it on his radio show all the time). I did it a couple years ago and we hardly get any offers now (companies you do business with can still send you offers, but I'd estimate we only get 3-4 a month). Be sure to do it for your spouse/significant other as well.

I did this several months ago and it really does work. I read that it can take up to 3 months for it to be in full effect. (Offers may have already been originated, not yet mailed kind of thing). Not only do you have less crap to sort through each day, you are saving tons of trees!