How to Tighten Your Financial Belt

Many Americans live on a margin, spending more than they earn, using credit to make up the difference, and saving at near invisible rates.

Living past their means, they use credit to buy houses, cars, and merchandise that many experts would suggest they really can't afford. This "good life" is great, until the person is no longer able to make their payments. And as unemployment rates hover over 9 percent (U.S. Bureau of Labor Statistics), more and more Americans are finding themselves in this predicament and subsequently facing bankruptcy, foreclosure, and even homelessness.

Are you one of the millions who need to put your debt on a diet? This financial restructuring just might help you save your home one day. Take a moment to look over these tips.

1. Credit Cards: Don't just pay the minimum payment each month, pay as much as you can. If you owe a credit card company $5000 at 18 percent interest and all you do is pay the minimum each month it will take you over 30 years to pay it off. Call your card companies and try to negotiate a better rate, as well. Pay off the cards with the higher interest rates first.

2. Emergency Fund: In today's economy it is important to be prepared for long stretches of unemployment. Each household should have an emergency fund equal to eight months worth of bills.

3. Wants Versus Needs: The best way to start saving more, is to start spending less. In this country we have created a tradition of expecting bigger and better. It may be time to examine your lifestyle and to be realistic about what you can really afford. And that doesn't mean what payment you can afford, but what you can actually afford to buy.

4. Increase Your Income: There may be extra ways for you to have cash coming in, including selling off unneeded items. If your debts are large, you may consider taking on a second or part-time job. If you are a stay at home parent, perhaps you have skills that will allow you to work part time from your house, such as design work or even baby-sitting.

5. Plan for the future. Many Americans have no retirement savings. Consider changing your priorities from "plenty now" to "enough for the future." Exchange the morning Starbucks for savings bonds and IRAs.

Overall, it's about restructuring how you approach life. The saying, "Money can't buy you happiness," couldn't be more true. You may be surprised that exchanging weekend shopping trips and dinner out for family game nights and home-cooked meals may be a welcome change in your family.

Some Home Buying Tips...

As you hit the internet or paper or start calling your favorite real estate agent, such as myself... here are a few things you should consider:

• Study - Do your homework before you buy. Review the prices of comparable homes in the neighborhood, a real estate agent can provide the latest sales data.

• Cure your credit - Today's best mortgage rates require a credit score of more than 700. Learn how to boost your credit score before you apply for a mortgage. Not only will a low credit score cost you more in terms of the interest rate on your mortgage, it could also prevent you from obtaining a mortgage.

Go to AnnualCreditReport.com, the only federal government-sanctioned service for obtaining a truly free credit report from one or all three of the major credit bureaus. The report is free, but you will have to pay a nominal fee to get your credit score.

• Consider a 'Lucky 7' loan - Take advantage of the lower interest rates available with a 7/1 adjustable rate mortgage (ARM), when compared to a fixed-rate 30 year mortgage. The interest rate on a 7/1 ARM is fixed for seven years. In the eighth year the loan resets as an ARM. Just be sure you know what the margin, life cap and periodic caps will be beginning in the eighth year to avoid surprises. Use those seven years to reduce debit and increase your income in preparation for what is likely to be a much higher rate than your starting rate.

• Get pre-approved - Go beyond prequalifying for a mortgage, which only tells you what you can likely borrow. Get a pre-approved mortgage and you'll know your home price shopping parameters. You'll also present yourself to the seller as a serious buyer. Financing in hand will also help level the playing field with all-cash buyers and investors and it will help you negotiate a better purchase price. I CAN'T STRESS THIS ONE ENOUGH!

• Inspect everything - Get a home inspection for a new home, a resale home, a nearly new home or a very old home. Always. Just because it's new doesn't mean it's defect free. Hidden problems can torpedo the value of your home.

• Read the title report - Make sure that any new additions or construction to an existing home are fully permitted and recorded with the local municipality.

• Check the appraisal - Likewise check the appraisal report for any oversights, missed features or other errors that could cause the property to be undervalued.

• Negotiate - Don't be afraid to dicker. It's a buyers' market. Concessions are available from both new home builders and existing home sellers. Ask for help with the closing costs, repairs, even furnishings and other perks. Motivated sellers have much to offer.

• Don't skimp on the help - If you look for the least expensive attorney, real estate agent, inspector, etc., you will get what you pay for. Ask family, friends, co-workers, realty professionals and others you trust for referrals and then carefully vet them.

It's Gutter Time!

As the leaves are starting to fall right now, it's time to think about cleaning the rain gutters.

Debris from pine needles and leaves that collect in the rain gutter can lead to a fire hazard as well as block the rain gutter’s function, causing water to back up and potentially weaken the gutters and the home’s eaves. It can also create standing water which can lead to rot, mold, and mosquitoes.

Trying to clean gutters yourself can be quite dangerous. There are several deaths a year that were caused by falls from roofs or ladders while cleaning gutters.

There are some systems on the market that claim to keep the gutters free of debris and leaves. However, experts caution that in heavy rain storms sometimes certain products may malfunction by causing the leaves to dam up on the rain and prevent rain from entering the gutter too.

The bottom line? Use experts to safely clean your gutters. And even if you have gutter guards, don’t rely solely on them--have your gutters checked regularly.

A Common Investing Mistake...

Let's start with the first common investing mistake -- not understanding local market realities.

Not every property in every city is going to make money for you even if people are buying them for pennies on the dollar. Not every deal is a good deal. Pay attention to where the markets are going to continue to be better or continue to improve as opposed to continue to have problems.

When investing outside of your own local area, is it important to work with professionals you can trust to have your best interest at heart.

There is a difference between price and cost. The price can be right but the cost can be huge. There is a reason the price is right and it's because the property doesn't make any money.

If you can't find someone in another market who you can trust and you can rely on, then don't buy there unless you can go visit it for yourself. Know your market. Know where the good neighborhoods are. Drive through in the daytime and then drive through about ten o'clock at night. Take a look and see how it looks then. See what comes out from under the rocks and if you don't like the looks of what comes out, you don't want to buy there because it's going to be nothing but trouble. Know where the things are going to be improving, where they're going to build new shopping centers, freeway interchanges, new convention centers, hotels, etc. Find out the areas that are trending and capitalize on that.

Caution: Laptops May Result in Skin Burns...

A medical report says people who work with computers on their laps for long periods could suffer from "toasted skin syndrome."

In one case, a 12-year-old boy developed a sponge-patterned skin discoloration on his left thigh after playing computer games a few hours every day for several months. Ew.

The danger has been highlighted by Swiss researchers in an article Monday in the journal Pediatrics.

The condition is generally harmless but can cause permanent skin darkening. In very rare cases, it can cause damage leading to skin cancers.

They do not cite any skin cancer cases linked to laptop use, but suggest placing a carrying case or other heat shield under the computer. Or perhaps you can just wear some kevlar pants...