Category Archives: our economy

How much do you pay to banks each month? Take a closer look!

I am curious, do you know the exactly how much money you are paying in interest and bank fees each month?

I ask because recently I’ve been particularly worried about this one credit card account I have. It was literally the first card I got when I decided to try reestablishing myself credit wise.

This means I had to pay an annual fee for the card and a pretty high interest rate. It was something I felt was necessary though since nobody would extend credit to me otherwise.

Well just the other day I got a notice from that credit card company about how the account terms are being changed. The annual fee is going up and so is the interest rate, big time. It’s been five years since I accepted that car and I actually forgot just how much I was paying them to extend credit to me!

Since accepting that credit card offer I’ve improved my credit tons and I now have several lower APR/ no annual fee cards that are a much better deal. I quickly decided that this first credit card is something I don’t need to be paying for any longer and am closing it.

Well, this all got me thinking about how much N and I are unknowingly throwing away on bank fees and interest charges each month. I was scared to sit down and figure out the exact dollar amount but I also knew that if I didn’t we wouldn’t truly see how much we can cut back and even save if we make some small changes.

Let me tell you adding it all up and listing it all really does put it in perspective folks! It also really helped me to see which accounts we wanted to focus on paying down first. Throwing less money away is always a good thing right? You gotta take those blinders off first though.

Plus, once it is all listed you can go through it and see how the interest rates and owed balances are looking. Available balances and interest rates are two very different things, just because you have the money available to spend doesn’t mean you should.

Listing your monthly interest and fees paid will also help you see if you are using high interest rate cards too often or if you have too much charged to them. It will help you determine if you should be paying more towards one card as opposed to another. It will also help you to see if certain cards are just charging you too much in comparison to all your other accounts. Ignorance is bliss… but it is bliss you probably can’t afford right now!

Are you convinced yet? If so you can use this free spreadsheet right now to plug in your own information. It will figure totals for you over a 6 month period, then you can print it out and keep it as a reference if you want.

I am also curious to see how much individuals are paying each month and how all my readers average so I made an anonymous survey I hope you’ll take.

It is just asking for your January 2009 numbers, no personal information. It’s all recorded on a spreadsheet and then I’ll share the anonymous values with you all in another post so you can see how you compare to other readers.

In these times of economic hardship everyone is looking for ways to cut back and to save money. Watching your monthly budget and spending trends is a simple and obvious way to find areas that you can cut back. How much interest and fees banks charge you is a big one many people overlook!

Yep, we are moving AGAIN… Shoot me now!

Did you watch Obama’s thing last night? I did because N and I are all opinionated about the government and we’ve been looking real hard at the governments ideas to help the housing market.

We’ve officially come out of our state of delusion and are actively looking for a new home that we want to be in BEFORE Tater Tot arrives (it is our perfect world goal but we’ll move after the baby comes if we really have to). Unfortunately this is dependent on several other things like getting out of our current lease… can we buy a home, will we just have to settle with renting, etc…

One specific tax incentive has us looking for more info, it is the home buying one that is proposed to be included in the stimulus package. The house passed a version of it that few republicans supported and now it is being messed with  and voted on in the senate today.

Personally I don’t prefer to keep offering incentives and tax breaks to those who already have money and are doing fine. I am hoping that we’ll get something in place that will actually help middle to lower class families. We don’t need more investors or multi home owners to buy right now we need to get non-home owners and first time buyers in homes they can afford.

I am sure many of you remember how often we’ve been home hunting. We have actually been in the market to buy for several years but because of economic reasons and lending practices we’ve been shut out.

We have a hefty down payment in an IRA for our first home purchase and we (as a couple) have less than $8,000 in revolving credit card debt (unlike most Americans). We aren’t making a car payment and the only other debt we have is N’s student loan that we are paying as agreed. Still we couldn’t get a mortgage to buy a decent home in Arizona when we tried.

Now that we are in a different housing market we are gearing up to try again for a mortgage, we’ll see though. It would be nice to be able to finally get in on the real estate market without overextending ourselves. It seems for many in our age group this is just not an option though.

In other news I am still eating conversation hearts like crazy and Tater is kicking me as a result. Tater is going to be a sugar addict before even coming out of the womb thanks to valentines day candy, the OBGYN would be so pleased…

Speaking of the OBGYN we are going in for our rescheduled ultrasound appointment Thursday. Oh and I gained another 3 pounds in 2 weeks briging my weight to about 115 and my waist is measuring at almost 29 inches so growth is still not an issue here. That is 25 pounds of gained weight and almost 5 inches in waist growth (that is not even the biggest part of my belly!). Now go enter your baby weight guess and get in on the betting pool guys!

So what are your thoughts on the stimulus package and all the stuff going on in the house & senate right now?

Coming out of the winter coma on a warm and sunny weekend…

You’ve heard about S.A.D right? It is a type of “winter mood disorder”

I’ve seen commercials about S.A.D and the prescription pills that “I should ask my doctor about if I am experiencing similar symptoms”. I have always rolled my eyes about the idea of the winter season making people depressed enough to need a special prescription.

Well, N and I were chatting about how strangely productive we’re feeling as a result of the oddly warm and nice weather we are having and have been having all weekend. We might be coming out of our own winter depression or something! (by the way that is why I didn’t post all weekend, we were busy doing stuff outside…)

We got all our storm debris cut up and ready to be hauled away and we finished the 100% homemade rabbit hutch for Boner! We went grocery shopping, made yummy meals together for dinner, cleaned stuff, looked at rental home possibilities, toyed with the idea of trying to get approved for a mortgage, tried to have the brakes replaced and were outside in the fresh air. It was so nice.

I am super proud of N’s rabbit hutch project (I hope he’ll blog about it and share the plans). We are just waiting for the sealant to dry then it is ready for Boner to move in! Look how it turned out:



Oh, and we stopped in our local Circuit City just for fun to see what deals were to be had (N still wants a 42in flat screen LCD tv…). Have you been to their going out of business sale? We were just amazed at how many people were still looking for and actually buying those high ticket electronic items.

Actually all this weekend we saw people everywhere buying all this high priced non necessity stuff like big screen TV’s and other electronics despite the claimed economic hard times so many are experiencing. N and I just scratch our heads when we see it. We DIDN’T buy a tv by the way…

I mean these aren’t wealthy people, they appear to be mid to lower class and they are just lining up for a $2000 big screen tv or a new video game system. Um, hello! Save your money and think ahead about your economic future guys!

Oh and don’t even get me started on Nadya Suleman, the now mother of 14 who just had octuplets

Home buying fun in Evansville, IN- sellers are still greedy even when screwed!

Remember all the times I have talked about trying to buy a home on this blog? Well we are still living the first time home buyer saga. Over the weekend we looked at a place here that was a possible option for us, we met a Realtor that was overly eager to make her money and we once again have home buying on the brain.

The main reason we are looking to buy is because of the economic state, it is a buyers market for sure. Houses on the market are in abundance, home prices are falling and lots of people are desperately needing to sell the homes they can no longer afford.

Plus with President Obama it is likely we’ll see some type of housing market stimulus attempt, you know to get people buying again and to turn the market around. We suspect this will be most beneficial for those who have not been sucked in to the subprime mortgage mess and whom have not lost homes or even purchased them to begin with.

We have worked very hard to get money for a down payment in the bank. Thanks to employer sponsored 401K plans and roll over options we now have a decent down payment in an IRA ready for a home purchase, we are very pleased about this.

Now we are looking at our home buying options and considering what is truly in our best interest. Obviously we don’t want to remain in a mold filled rental home especially with a baby on the way so we have reinstated our home buying search.

We are looking at unconventional purchasing options at this time. Things like contract sales and owner carry buying options. We are doing this for credit reasons and also because we know somethings are going to change with the new president in regards to the housing market and financing options.

What cracks me up right now is how delusional sellers and agents are right now, they are still trying to be as greedy and shameless a possible even though the number of sellers clearly outnumbers the number of buyers in Evansville, IN.

The place we saw over the weekend was not spectacular by any means, the basement clearly had flooding issues and there were also structural issues on the 2nd floor. The seller made some crazy offer to us that was just a crock and we just laughed about (I don’t want to bore you with the specifics).

What I am wondering is when will people wake up? We are in a recession and greed just doesn’t work anymore. Seriously you selling me your house is NOT doing me any favors. We can rent forever and just keep making interest off that down payment money in the IRA, it’ll be more saved for retirement or whatever. Or we can buy another house, there isn’t a housing shortage you know.

When you have a buyer that is interested how can you honestly make such laughable requests when YOU are the one that is struggling under 2 mortgage payments YOU can’t make? We aren’t struggling financially to pay for our housing because we didn’t get in to an agreement that was impossible to make good on.

When you get someone who is willing to make your payments for you and help YOU out how can you still be so greedy? I know you really want to make your $50,000 profit off the home sale but which is better taking a profit cut or holding out in greed and risking foreclosure?

What kills me is that so many are honestly willing to loose their homes to foreclosure instead of just cutting their losses, learning from the mistake and just selling for what they can get. Those greedy people make me feel like foreclosure is deserved and that we shouldn’t care about their suffering or bail them out, I mean they did it to themselves right?

The Celebrity Ads, what are your thoughts?

It seems everyone but Britney Spears has responded to McCain’s petty celebrity ad! When Paris Hilton responded it was funny but now that Obama has responded I am not sure what I think.

I mean there are too many other important issues to focus on right now and all we can dwell on is the celebrity ads. I have already made up my mind about the candidates but isn’t this petty stuff just ridiculous?

What are your thoughts on it all? Here are the videos in case you missed them, though I doubt you did.


See more funny videos at Funny or Die

So much chaos and uncertainty in the USA right now *sigh*

I have been following the news of the massive flooding occurring in the Midwest right now since Indiana is a place we may be relocating to. Many people are displaced and have had their homes ravaged by the flooding and storms. Wisconsin, Indiana and Iowa are in a state of emergency as a result of the flooding and the video footage is just heartbreaking to see, houses are just being swept away by raging waters.

In the east people are experiencing a heat wave as temperatures reach triple digits and earthquakes are devastating many in places such as Nevada, California and Greece. I was left thinking “Holy cow, what is going on with the weather” after learning of all the chaos.

Add the weather stress to the economic stress of fast rising gas prices, home foreclosures, layoffs and financial uncertainty and you can pretty much guarantee you know someone who is having a tough time right now. All this craziness is sad and it makes for a hard time for many, thinking about it makes me sick to my stomach and it is surreal.

Income inequality and how it impacts life in the USA.

I have got to admit, I envy those of you living outside the US sometimes. Today I am just not loving our consumer driven corporate America. There are just too many greedy people out there looking to use one another to get ahead in life, this leaves the rest of us going without and struggling.

Do any of you ever stop to think of the massive divide between incomes these days? Many are making millions annually and I even read that “the United States has one of the highest levels of income inequality. I don’t doubt it for one second! (want to see it on a graph?)

I was just wondering how many Americans earn at least a 6 figure income and how that would compare to the rest of the population. I couldn’t find any statistics but I am sure it is just sickening, it reminds me of a blog post I just read about life and working.

Do you work to make a living or do you work to build a life for yourself? Think about the question for a moment and try to see the various meanings behind it. Sorry, I don’t mean to give you a brain overload this early in the morning, I am just on a roll.

Those working to make a living are often only working to get by, most of their waking hours are spent on the job and sadly there isn’t much time for enjoying life. N and I have been in this category for a long time now. It is an exhausting state to be in and knowing that you spend all your time at a job that only just covers the bills is demoralizing for anyone.

Working to build a life for yourself is the opposite of working to make a living. When you are making a life for yourself you get to enjoy the little moments and focus on the day to day joys. Your time is spent focusing on the important things in life, family, home etc. Many stay at home moms find themselves in this category while their men are in the other category.

Maybe I am just dreaming here but shouldn’t it be easier to provide for your family and also enjoy the moments in life? Why aren’t more people concerned about this? Working 50-60 hour work weeks for measly pay is not that fair, especially when so many other people are making so much more money for less work.

I guess I am just rambling on here but the income inequality in the US just strikes a nerve for me. Maybe it is because of our financial dealings right now. Oh, I guess I should update you…

The mechanic confirmed that our engine was shot, a new one would cost 5-6 thousand and a used engine would cost 3-4 thousand. We havn’t made a decision about what we want to do yet.

Also, Evansville offered N the job and sent over a potential contract for us to look over. It it is for oh, about half of what the job opening salary was posted as, which means they offered him about $2000 more than what he is already making here. This is disappointing news for us. They will only cover $1500 in moving expenses (which will come out to about $3000) and we don’t really know if a $2000 raise and a lower cost of living are incentive enough to pick up and move 1500 miles away.

In general we are just tired of the contract negotiations, they limit and impact other decisions we make about our life. Plus every time we enter negotiations we find we are just being low balled and taken advantage of, you know so the company can save money or whatever… Too bad the companies never kick back any of their fortune to the little guys, it would sure help us live better.

Being a renter in Arizona kind of sucks!

Well, this was going to be an auto post for tomorrow since we are heading down to my moms house but I am just raging mad right now and have to share this shit with you guys!

Yesterday I mentioned that our landlord informed us that the home we are renting was being put on the market and that we would need to show the house to potential buyers, this is not good news to us!

We looked over our lease and had a family member and real estate expert, Jerry, look over the lease. Nowhere in the lease does it say that we are obligated to show the home to potential buyers and agents (like it did in the previous lease we signed for another home) but it does state the landlord must provide 48 hours notice of intent to enter.

We only have 3 months left on this lease and we would prefer to not be showing the home in addition to trying to plan and research a cross country move. Plus we have a medium sized dog, who is not friendly to strangers and we have inside cats who have to be prevented from escaping the house so allowing strange people into the home when we are not present isn’t really an option. It is barely possible when we are home!

So I went online to do some research. I found this page which outlines that in Arizona according to A.R.S. § 33-1343
“the purposes for which a landlord may enter a rental premises are to:

• Inspect the premises
• Make necessary or agreed repairs, decorations, alterations or improvements
• Supply necessary or agreed services
• Exhibit the dwelling unit to prospective or actual purchasers, mortgagees, tenants, workmen or contractors”

So it seems like we are going to be forced to show the home we are renting even though it was not agreed to when we signed the lease. Apparently that is the crappy law here in Arizona that favors the f*&kers landlords.

I emailed the landlord about how this is an inconvenience for us and I warned that our dog was not friendly and that entering the home without us being present was a very bad idea for them since our dog is not nice to strange people. I also stated that we were not agreeing to anything at this time because we were waiting for more information about our rights.

The landlord responded that we had nothing to agree to and that the only right we had was the right to a 48 hour notice of intent to enter. He also went on to say that after the 48 hour notice was given we could not refuse the showing and that they could enter whether or not we were home.

Then my phone rings and it is our landlords secretary stating that they were trying to schedule a showing for Saturday, which is 2 days/ 48 hours away. We wont be here for the showing but I am sure they will just do what ever the hell they want to!

I am now wondering if the landlord can “check keys out to possible buyers and their agents” and allow them to show up here unaccompanied while we aren’t present, I was under the impression the landlord had physically to exhibit the dwelling under this law, can they just give keys to anyone who comes by and allow them to enter after giving us notice? What if we aren’t able to be home, can they enter the home anyway? What do you think?

If they do enter the home they will be unpleasantly surprised and possibly bitten in the ass by our very protective dog.. Maybe we will leave some sex toys out around the house! Bet that would cut the visit short huh? I am so flipping MAD!

When life gives you lemons…

… smash them into a sorry pulp, take some photos and blog about it.

Things are crazy right now (that is quite the understatement)… Our living situation saga just keeps getting more and more interesting as the days pass.

Back on January 15th 2008 I wrote “You broke your toe? Want to buy a house?” where I shared with my readers the interesting letter we received from the owners of the home we are renting. They were expressing their “urgency” and wanted to work with us to make our ownership of their house possible. Back in August when we agreed to rent this house on a month to month basis my man was negotiating his contract at work. His contract stipulates pay over an agreed amount of time and a bunch of other legalities. We were considering refusing the contract and possibly moving to a higher paying area, possibly out of state. We want to buy a home and start a family… All of this depends on his contract.

Anyway we had expressed an interest in buying the home as we were signing the rental agreement… Come January when the economy is verging recession and we are locked into another 1 year contract the home owners contact us and ask us to make an offer on the house… We offered what we believed the house was worth taking our own financial situation into account and also the state of the economy.. No response from the owners.

Two weeks later on January 31st the stove catches fire (we don’t own it, the home owners do) and we are notified that the house has a contract on it and is in the process of selling. N thinks the owners only wanted us to make an offer on the house so they could be sure they were getting the most they could for it. Greed!
felt-like-this.jpg
So, (I am getting to the “when life gives you lemons part, don’t worry) we come to terms with the fact the we have to move in 30 days and we begin lining everything up. Found a new house to rent, will sign the 6 month lease tomorrow.. Got a replacement stove delivered, the home owners bought a used one and have been working to bust out my bulk purse order (only 16 left to make).

Last night N and I were home together and I had planned to make my favorite Moist roasted chicken recipe, I get the chicken all ready and I go to turn the oven on… Recipe calls for baking at 450 degrees, I hit the bake button and NOTHING happens!

N tries to turn the oven on, pressed various buttons, reset/ off, cook time, bake etc and the oven wont turn on… It gives us an F 13 error code. What the f? He pulls the oven away from the wall to unplug and re-plug it in, maybe it needs a “reboot” or something. No dice.. oven will not turn on, it’s about 9pm now we are snowed in and can’t cook our food.

I was planning to roast the chicken and to bake some brownies, both are not possible without an oven but we are resourceful (here is the lemons part)… N goes out to the shed to grab this old rotisserie thingy he purchased before we first got together. We wiped all the salt off the chicken shoved it in the rotisserie for cooking. Then we grabbed this old toaster oven thingy from the shed turned the temperature to 300 and cooked the brownies.

It was a frustrating night of cooking but what can you do? I considered throwing the defrosted chicken out into the snow out of anger but that would have just wasted a perfectly good chicken..

I just can’t wait to move out of this house now.. The stove/ oven replacement is used/ not fully functional and I just feel like the owners half-assed that whole thing. Seems like they just want to make a quick buck off the house and that they have no regard for anything else. They supposedly remodeled the place and did all this wonderful work on it but so much was just sloppily thrown together (this may just be my anger about having to move talking so you be the judge and view the photo slide show of the house). I just feel sorry for the poor soul that bought this little place.

By the way… you can click on the photos to get a better/ closer look at them….

🙁

Our gas bill is how much?

My blood started to boil when I walked into the dining room and peered over N’s shoulder at the gas bill.

Last month we paid $55.39 for 40 therms over the course of 2 months, this was November & December. Our new bill is for $208.61!!

Apparently we used 170 therms in 32 days… That’s 5.31 therms per day folks 🙁 So now we have to pay over 3 times what we paid last month and I don’t know where that money will come from.

How is your gas bill this time of year? Have you ever experienced a major jump in usage like ours? Any ideas about this insane increase in our bill?

So the gas bill makes me sad but this video of the president makes me laugh! http://www.thedailyshow.com/video/index.jhtml?videoId=148214&title=bush-truly-happy

Credit and how they are screwing you.

I saw a documentary last night that I highly recommend every American sees, it is called Maxed out. The movie basically illustrates how much of a struggle it is to get out of debt and it’s also illustrates how lucrative debt and debt collection is for creditors and collectors.

This movie made me very, very angry because it shows how eager top lenders and collectors are to make a buck by ruining your credit and possibly your life. Creditors want to give you credit when you need it most because they know they can make money off of you. When money is tight it’s easy to think that credit cards will save the day and often times people don’t pay attention to the deadly fine print. Creditors know you are desperate and that you will simply agree to their insane terms. This is how they begin screwing you, once you agree to the terms and are financially strapped often times you have no way out.

The most sickening part of the movie is that creditors are portrayed as preying on those people who are just barely scraping by. They promise “too good to be true” things and we jump on board without completely understanding what we are agreeing to and assessing the long term affects of the agreement. Credit is good when you can pay off the total balance of charges each month, it is bad when you need it to live and you can only make the minimum payment each month.

In the movie these two mothers set out to try changing what was and wasn’t allowed, they tried to get a bill passed to protect consumers but it was two women against the corporate giants… They were squashed and we will continue to get taken advantage of until we realize that creditors are out to make money off of us any way they can, stop wholeheartedly trusting them!

The best way protect yourself is to smarten up! It is the consumer’s responsibility to keep their debt manageable, creditors may be sending you offers but that doesn’t mean you can afford to accept them. Believe it or not creditors are eager to lend to those they suspect might not be able to make good on the agreement- why? So they can make a killing off of charging you interest and other fees. I am a perfect example of this!

Right after I graduated high school I wanted a computer of my own. I knew I would be moving from my parent’s home soon and that I would need a computer to do school work. I was not financially stable and had no credit history but I found a deal online. They would give me a loan that would pay for my computer and I would pay a set per month fee towards the loan to make good on the amount I borrowed. I was approved for a $2500 credit limit on the loan and my computer actually cost $ 1373.88, they loaned me about 45% more than I needed to purchase the computer- that should have been a warning sign to me. I bought the computer back in 2001 and obviously defaulted on the loan, my credit report stated back in 2007 that my balance had grown to $2056 after all the late fees and interest fees, That is $682.12 in fees! I was not credit worthy yet they loaned me what I needed plus and extra 45%, do you think they expected me to default and incur delinquent fees?

An alarming number of Americans are in debt these days. Collectors are harassing you, the pressure is felt and it sometimes seems like there is no way out of the mess. What’s done is done debt wise, you can’t take it back now but you can learn from it! Don’t run from your money troubles, assess them and determine your financial situation. The worst thing you can do is get into more debt to remedy your current debt, that is what creditors want you to think and that is how they trap you!

If you have a debt that has recently gone into collections you should spend some time learning how to demand debt validation and how to protect your rights. Some collectors won’t complete the debt validation you request which means they can not report the “un-validated debt” to your credit report.

If the creditor does validate the debt often times they will demand payment in full for the debt. Most people are not financially able to pay off the debt in full but few know that most collection companies will accept partial payments, even though they say they wont.

Does the collector have to accept my partial payments? No, they do not and many of them will claim that they won’t accept a partial payment. Collectors want you to send them a lump sum payment and they don’t care if you have to borrow it from a relative, skip your car payment or take a cash advance from your credit card. So they use very aggressive tactics to scare you in to paying the debt in full as quickly as possible. But the smarter thing to do is to pay them only what you can afford to pay them. Keep paying your house and car payments, don’t borrow money from relatives or your credit card and pay them only what you can afford each month. Send it in every month even if they keep sending it back. Keep proof that you’ve been trying to send them money. This will significantly reduce your odds of being sued, as most collection attorneys know that a judge, when presented with evidence that you tried to pay the debt, will yell at the plaintiff for wasting his time with an unnecessary suit when the defendant was trying to pay the debt. Eventually, most collectors will give in and accept the partial payments.”

Forgive yourself for your financial mistakes and start learning your options. If you are currently being harassed by collectors you need to read the Fair debt collection facts for consumers, you have rights and you can minimize the stress and harassment by learning your rights and demanding that they are respected. Don’t let the collectors bully you or convince you that your life is over, and don’t ignore your debts. This often only makes them worse, you made a mistake and it will take time to remedy but it is fixable.

Wondering how long a creditor has to collect a debt from you? Believe it or not each state sets a time frame in which collectors have to collect the money owed. After this time frame (statues of limitation) has passed you still owe the money and a collector may still take you to court but you can ask the judge to dismiss the suit on the grounds that the statute of limitations has expired.

I found some other interesting information online. Did you know that when a derogatory item on your credit has been charged-off and 7 years has passed that the same item cannot be re-entered on your credit report? This does not mean you don’t owe the debt it just means it can’t be re-entered on your credit bureau file after it has “rolled off”. This is good information to know if you get a call from a collector who is telling you the debt will ruin your credit. If the debt has rolled off it’s done, you still owe money though.

I found a great question and answer site that deals with credit & collection, you may find helpful information in reading the questions and responses here.

Okay, that was lots of information. Hopefully it empowers and protects you. Knowledge is power so rent the movie Maxed out and protect yourself from the greedy and selfish lenders/ collectors by learning about credit/ lending and making wise choices.

Can Washington prevent a recession?

N came home for dinner last night and told me about the announced plan to offer “tax-rebate checks of at least 300 dollars per taxpayer, with some seeking as much as 800 dollars per person or 1,600 dollars per household”. They think giving people money to encourage them to spend more will fix all the issues in the economy? Can you believe that?

Most experts say that recession is unavoidable and that the announced plan is not going to be “the cure all “. You can listen to the audio segment and read the blurb about it here.

One of the major problems with the economy now is the huge overstock in housing. Sellers are asking high prices that most buyers can’t afford and if they can afford to buy getting a loan is impossible. People who have recently bought homes are in jeopardy of loosing them due to adjustable rate mortgages and increased debt to income ratio.

People are loosing their homes to foreclosure over adjustable interest rates, they have marked their home prices up and are trying to sell but the amount of foreclosures already are making the banks lend less which in turn makes it impossible for new buyers to buy the homes that are on the market and in jeopardy.

Another issue is that money is tight for most middle/ lower class families because oil prices are high, that strains the economy. Oil prices not only affect how much we spend in transportation it also affects the price we pay for food and other supplies because it takes oil/ gas to transport these items.

With money being so tight many people have managed to rack up high amounts of debt and have little savings, many people are struggling and I don’t think that a measly tax rebate check will solve the countries problems. It’s the “quick fix”/ half-assed way of trying to make things better.

Our country should be focusing on alternative fuel options, making home purchases more possible for the middle and low class families, paying workers more/ creating more jobs and improving home life/ life satisfaction.

Sometimes I just don’t understand how so many elected government officials loose sight of what is really important. I mean I understand that increased spending could boost the economy but just because spending has dropped doesn’t mean we need to increase it. How about we take a look at the aspects behind why spending has dropped and fix those underlying issues instead of just slapping a band-aid on the wound?

This announced plan is a lot like our countries obsession with many prescription drugs- a quick fix that just masks the underlying issues. I’ll save that for another post though!

The economy and house prices….

Well, today the owners of the place we are renting made us another offer.. You see when we first agreed to rent this place we were in the middle of contract negotiations and we were interested in buying a home but were not finding anything at the right price.

We agreed to rent on a month to month basis while they still listed the house as for sale. Since August the house has been for sale, we have been showing the house as interested people come along but for the last 2 months nobody has been interested in seeing the house. Also, since we began renting the selling price of the house has been dropped about $50,000.. Yep our rented 2 bedroom 2 bath home in Flagstaff, AZ was initially listed @ $299,000!!

Like I said we just got another phone call, another price drop on the house…. $248,000 is the offer with a lease to own option. We would still need to make a down payment and the money we have paid till this point would not apply to the purchase. We are still not interested, here is why:

Do you think we are headed for a recession? We sure do and I know many economists are denying it but the bottom line is that our economy has always gone through it’s ups and downs… It’s inevitable. The economy has been doing considerably well for a while but things are taking a turn… With oil prices rising, the surplus of houses, number of places for sale, lack of buyers, the amount of debt people have and with all the foreclosures and variable rate mortgages people aren’t doing that great financially and neither is our country.

We aren’t buying a 2 bedroom, 2 bath house for $248,000 thats $248 per square foot. If a recession is on the way this in not the time to be buying a home because what if we can’t afford it later? What if home prices drop even more? Besides $248 per square foot is still above the average selling price per square foot in our area.

We have been working hard to clean up our credit and to get our finances in order since about may of last year. Our credit scores have each jumped about 49 points in that time and it’s continuing to improve.

Unlike some Americans we are doing good financially, we don’t have any current debts we are defaulting on, we have credit available to us that we aren’t using, we have not over spent and do not owe more that we can pay and our credit scores are continuing to improve.

Basically we are just not spending and we are trying hard to stay within our budget, we are living off of one measly income right now and any supplemental money I can earn… Things are tight but it feels better to go without than to rack up tons of debt we can’t pay off.

What are your thoughts on buying a home and on the economy? Do you think rough times are around the corner or will it all stay the same?