WORD: Crisis Budget

And the WORD for Today is:

Crisis Budget—refers to a temporary budget which a consumer needs to create in the event they are struggling with house payments. Particularly in current times when many are facing a default on their mortgage devising a crisis budget could be helpful both in trying to get some relief as well as having a sense of making headway in getting control of your finances again. On their own or with the help of a foreclosure prevention counselor the consumer needs to first take an honest and realistic look at their current income and ability to make payment for any and all expenses. Then choose which debts they can pay. A way to determine that is to consider which creditors can take quick action against their home, utilities, car and other essentials. Then establishing a priority of whom you will pay (perhaps being realistic that even necessities must be reduced). So:

• Household necessities-food and medicine: cook at home, switch brands, minimize food purchases as best you can. Look into "Angel Food Ministries" for help with food prices.
  
• Housing-mortgage, insurance Contact the lender for help with loss mitigation.
• Utilities-can you get help with these?
• Car loan-is the car necessary for work? Can you switch to a lower car payment? Get rid of a second car? Use public transportation?
• Child support debts can bring prosecution if you do not pay them. Try to maintain these.
• Income tax-file and make payment arrangements.
• Student loans-have a low interest rate and should be a low priority on a crisis budget.

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You can find more helpful definitions of WORDS like these in Your Real Estate Advisor which can be purchased at www.DovePublishingHouse.com.

(Please E-mail Heather at homeownershipmatters@gmail.com with any questions, comments or concerns you might have! We appreciate all comments and feedback, so please don't be shy.)