Holding On To Your Los Angeles Home In Turbulent Times
Holding On To Your Los Angeles Home In Turbulent Times
We are living in turbulent economic times with stocks, 401Ks and home values decpreciating daily. But don't panic says Shari Merle, an independent certified financial planner licensed through LPL Financial. Merle has been dispensing advice about money matters for 20 years and has suggestions on how to hold onto your Los Angeles home:
-- If you have an adjustable loan, try to get it changed to a fixed loan.
-- Make a budget. See how much money is going out and how much money is coming in.
-- Avoid credit cards. If you don't have the cash today, you aren't going to have the cash when the bill comes due.
-- Keep an emergency fund of liquid assets that will cover three to six months worth of household expenses.
-- Stick to the basics; live within your means.
"I've had clients tell me that their emergency fund was the line of credit on their homes," Merle said. "Not good!"
Sandie Thomson, the operations manager for LPL Financial, is following Merle's advice. Sandie; her husband, Dan; and their 6-year-old son are getting through the economic crisis by purchasing only the essentials. "There won't be any large expenditures or new cars in our foreseeable future," she said. "We know the difference between what we want and what we need."
She and her family are reducing household costs in several ways:
-- Free family outings, such as visits to the library.
-- Combining several errands into one trip.
-- Planning and preparing meals based on sale prices at the grocery store.
-- Packing a lunch for work instead of eating out.
-- Giving up expensive haircuts and patronizing walk-in salons.
Annette and Kevin Garcia of Salinas have a son in college and two younger sons at home. "We're saving money on food by shopping for groceries at big-box stores like Wal-Mart and Target instead of stores like Nob Hill," Annette said. Because she works at Target, her employee discount is an added benefit.
Additional ways the Garcias are saving money include:
-- Buying only clothes that are on sale.
-- Celebrating special occasions at home instead of at restaurants.
-- Cutting back on luxuries such as biweekly manicures and professional hair color.
Kim Hanagan, a single parent in Redding who works for the state Department of Public Health, has two teenage sons and said, "I'm tracking my expenditures each month and I realize the main area I can control is groceries and gas. I've also considered cutting the kids' allowances and the Y memberships ... but those don't seem like the right areas to cut."
She's focused on paying off her credit card, in addition to the following:
-- Not eating out as often.
-- Shopping at budget grocery stores.
-- Focusing on only what is necessary, such as tires for the car.
-- Maintaining what she owns, to avoid repair costs.
-- Not attending events when tickets are pricey.
Keith Adams, a software developer and former San Francisco resident, and his partner, Benhur Lee, an associate professor at UCLA, will have to refinance their home in February 2010. Right now, that prospect is worrisome because of falling home prices. "We have really good credit and income," said Adams, "but the plain fact is, our house will be worth less than we owe, even though we live in the Hollywood Hills, one of the more desirable parts of the country. My 401(k) has fallen 40 percent," he added.
Adams' efforts to control his household finances include:
-- Consolidating debt into a low-interest rate credit card.
-- Dedicating $1,000 a month to paying it off.
-- Paying $800 monthly to his 401(k) loan.
-- Going to one family car.
"And to make it all work," Adams said, "I've put together, for the first time in my life, a detailed monthly budget so that we don't start building up additional debt."
For more information on Los Angeles homes and real estate, visit EileenWalshRealtor.com or give us a call, 310-738-3807.
