Homeowners Make Tradeoffs as Costs Soar

The 2007 U.S. Census figures show that for over 15% of all Americans, half of their paychecks are allocated to housing expenses. This is a rise of over 400,000 Americans since 2006.

Even those with good incomes are seeking help to pay debts. The combination of the mortgage crisis, credit crisis, rising unemployment, high fuel cost and high price of groceries can all negate even good incomes.

A survey by the CCCS in Atlanta determined that 5,500 families seeking budget assistance or credit counseling in August averaged spending $638.00 for food and fuel. In January this number was 20% less. The survey did distinguish that food prices for August were higher, despite lower fuel prices. These families had an average household income slightly above 49,000.

Could this fact be forcing people to choose between medicine and food or paying a mortgage note or buying gas for work? Either way, the person is at a loss. If they lose their job from lack of gas, they can't pay the mortgage. If they pay the mortgage, they loose their job. Missing payments destroys credit, making it nearly impossible to refinance.

Rising interest rates are exploding monthly mortgage payments. This further strains budgets. The same survey found that the homeowners that sought credit counseling were reporting monthly housing costs of $1,423. This is 25% higher, than 12 months ago.

If you do not have a penny left from your paycheck, you have two options: Cut the budget further or increase income.

Here may be a list of options:

  • Can you car pool?
  • Public transit?
  • Ride a bike?
  • Brown bag lunch?
  • Omit snacks and soda from grocery list?
  • Second or third job?
  • Work weekends?
  • Put your kids to work- babysitting, mow yards, etc..?
  • Refinancing?
  • FHA loan?

Plan a family meeting to discuss the budget, and be honest with kids about dire times. They will probably be glad to help out.

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