More Concerns in the Mortgage Industry

Troubles for Freddie Mac and Fannie Mae may mean bigger problems for the whole economy. But those same problems illustrate how important it is for those seeking to purchase homes do their research and buy within their means. If you plan to live in a place for three years or more then you should look for fixed rate mortgages. And your mortgage payment should be no more that 25% of your family take home pay. Read about the Freddie and Fannie problems here.

Trying New Backgrounds

Please be patient. We're trying some new looks for the blog. You'll probably see a few changes over the next several days. It could be fun. It could be annoying. Time will tell. But even while we're playing with ideas, we'll keep you informed on financial matters and give input on Recession Proof Living.

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New Ways to Hide Rising Grocery Costs

My wife found this article about new packaging and thought it would be good to pass it along. Click here.

Natural Gas Prices Set To Rise

More bad news on the fuel front. I guess it was just a matter of time, but I heard this evening that Natural Gas prices are set to rise to the point that home heating costs are expected to go up 30% by winter. That's amazing.

It's time to prepare now. First, make sure your house is insulated properly. A few rolls of the stuff in the attic might go a long way toward saving you some money. Secondly, check for drafts around doors and windows. Summer and autumn are the time to put up weather stripping and do that caulking project. Third, if you have a wood burning fireplace, start bringing in wood now. A cozy fire is a great way to take off the chill on a cold winter evening. Brittan and I have a gas starter for our fireplace, but we don't use it. Actually, we burn those fake logs. They cost a couple of bucks and burn for 2 or 3 hours depending on what size you get. While they don't warm the house, they do actually add warmth to the family room.

Let's see, we're up to number 4. Plan now to set your thermostat at a lower temperature. You can save a lot of coin simply by wearing an extra layer rather than overheating your house. Brittan and I keep our thermostat set on about 62 throughout the winter. And we're not cold. If we're a bit chilly, we will grab a throw blanket that we got at the dollar store and in minutes we're toasty. And think of it this way, when it's 30 below zero outside, 62 above feels quite pleasant. Even if its 40 above, 62 is nice. And we do turn it up (a bit) when we have guests.

Fifth, get jammies and a nice housecoat. Brittan got me a heavy terry cloth house coat several years ago when we lived in Maine. Even on the coldest evenings that thing is great.

Sixth, Electric blankets are much cheaper than heating the house. I don't like them, but B does. We have a dual control blanket and I never need to turn my side on. I generate plenty of heat just from being overweight. Seriously, electric blankets cost pennies to use even all night, verses many dollars to heat the house.

Seventh, just like with air conditioning, be sure you close off rooms that you don't use. Shut the vents and close the doors. It's silly to heat rooms that no one is using.

Finally, at least for now, make sure your heating unit is serviced an running properly. The little expenditure on the service could save you hundreds of dollars during the winter months.

Ok, I know it sounds crazy talking about saving on heat bills when it's 90 degrees out, but planning is a big part of winning. It's crucial to have a plan of action. But only if you implement it,of course.

Gas Prices

It cost me $60 to fill up Brittan's car yesterday. It's $100 to fill up my truck. For the last couple of years, I've budgeted just over $100 a month for gas. Now its more than that a week. Yowza! That makes it doubly important to budget everything right, including gas usage. I'll be honest, we're not good at planning our trips out. It's going to take a while. But B and I do ask each other, "Is there anything else we need to do while we're out, so we don't have to make another trip?" We also try to use the car more and leave the truck at home.

I considered the idea of getting rid of the truck and getting a smart car. But they cost about $14k. My truck is paid for. Even at $100 a tank, do you know how long I could drive this truck for $14k? Besides, the truck is really useful for trips to Home Depot for all those DIY projects. And don't forget how much easier it is to get a deer carcass in the the back of a truck than it is into a Smart Car.

Gas prices aren't coming down any time soon. Maybe never. We have to adjust. It will take some planning, but we can figure it out. We will not be defeated by inflation.

Recession Proof Living - Part 1

Life has changed forever, financially speaking. $2.00 a gallon gasoline (or milk, for that matter) is a thing of the past. With fuel at or near $4.00 a gallon and climbing, it's getting more and more expensive to produce and transport the goods and services we've all grown to rely on for daily life. Sooner or later, even mighty Wal-Mart will have to start raising prices or cutting profit margins. Neither option is good for stock prices, but that's another story for another day.

We already see the inflation in the grocery aisle. Milk is as dear as gasoline. Other dairy prices are rising right along side of milk. Canned goods have gone up. Fresh produce is nuts. Especially on items that are not locally in season and must be shipped in. Just a couple of days ago, B and I went to the grocery store to pick up a few last minute items for a Holiday dinner. One thing we wanted was a bell pepper. Brittan prefers colored ones to green, because they are sweeter and less bitter. I have a less discriminate palate.

Here in North Georgia, it's not quite sweet pepper season. So the beautiful specimens we see at Kroger, Publix, Wal-Mart, Ingles or Super Target are shipped in from other places, like California or Mexico. So getting them here is not an inexpensive proposition at $4.50 a gallon for diesel fuel. You can imagine the shock on our faces when we saw a price tag of $5.99 EACH for red or yellow bell peppers. We settled for green ones, which were $1.49 each. Five dollars and ninety nine cents for a single pepper. Are you listening? The train is off the track. The words of the old Larry Norman song flooded my mind, "Life was filled with guns and war, and everyone got trampled on the floor. I wish we'd all been ready. Children died, the days grew cold, a piece of bread could buy a bag of gold. I wish we'd all been ready......"

While the current world and economic climates may indeed be a sign that Jesus' return is near (which would be a good thing, from my perspective), it may be just a sign that we've been foolish in our management of resources, both natural and human. We become accustomed to having fresh (or canned or frozen) produce at our finger tips at incredibly low prices. We have been able to acquire larger house and multiply fuel inefficient motor vehicles due to low interest rates and easy credit. Oh, did I leave out things like unprecedented numbers of RVs, boats, personal water craft, snowmobiles, ATVs and the like. We have obtained the latest fashions and home accessories courtesy of Master Card, Visa, Discover and American Express. "Buy now, pay over time," has become a way of life more than a marketing slogan. But time has passed, now it's time to pay, and there's not enough money. Multiple millions of Americans are facing the "perfect financial storm" and are being swept away. They are losing their houses, their cars, their credit ratings and their self esteem. Marriages, already under enough stress are crumbling. Where do we turn for help? How do we get relief?

Most Americans appear to be looking to government to fix the problem and bail us out. I find that answer to be both tragic and laughable. It's tragic because it's irresponsible. We make a financial mess by living for today and not considering the big picture, then we expect the Govt. to save us from ourselves. I find it laughable, because Govt. can't fix anything. Anybody seen the national debt lately?

Over the next several weeks, we're going to uses this space to take a close look at how we can take responsibility for our own futures and make good financial decisions. There will be hundreds of practical ideas for saving and making money. We're going to do something really wacky. We're going to apply COMMON SENSE to our financial lives. Hey, nothing else has worked, why not give it a whirl?

Along the way, I fully intend to sound off on subjects like, debt, credit, dependence on government, the oil crisis and any other darned thing that strikes my fancy. All is not lost. The future does not have to be grim. There are good days ahead. Don't panic. Don't give up. I have a very positive outlook. I believe that if Americans take responsibility for our own lives and look to God for strength and wisdom that we will not only survive the current economic crisis, but we will thrive. I hope you'll stay tuned and travel with me.