Tuesday

Are "Fixed" Expenses Really Fixed? Part 2 (Housing)

Earlier, I talked about re-evaluating our expenses and determining what we currently consider “fixed” and “variable” expenses.

Today, let’s talk about your biggest “fixed” expense. For most of us, that expense would be our mortgage or rent payment. Most of us will put this expense in our “fixed” category because that amount doesn’t change from month to month.

Does it HAVE to be fixed? CAN it change?

I know, you’ve got your mortgage and that amount won’t change. Then again, will it? Is your house too big? Could you make some sacrifices to lower that amount?

Even if you can’t sell your current house and move into a smaller one, are there things you can do to reduce that amount more quickly? Don’t borrow any more (or ever) on your house. Can you pay any extra to help pay off your mortgage early? Imagine how much more money you’ll have to work with for your kid’s college, your retirement, traveling, whatever once your mortgage is paid off.

With the mortgage industry as it currently stands, many are reporting that they’re able to make adjustments to their loan terms even if they aren’t behind on payments. What could it hurt to call your mortgage company and ask if they’ll do a contract adjustment to lower your rate? If you’re in an adjustable rate mortgage, see if they’ll offer to fix the rate for the rest of the mortgage. Of course you should ask for paper confirmation of any changes they make, but one call COULD save you money! Some mortgage companies are even willing to do this with one phone call. They’d rather have you paying on time than they would have to deal with another possible delinquent mortgage or foreclosure house.

Renting? Check out current rental rates. With the housing market being down in many areas, it’s possible that the glut of available houses has led to many rentals which will drive down the price of renting. Talk to your landlord. If they aren’t willing to bend, consider moving when your lease is up. What you save now will benefit you in the future if you save the difference.

I’ve learned through the years and MANY moves that it’s not the size of the house that determines whether it will work for you or not. A really small house that’s set up really well can be much more comfortable and easier to live in than a big one that doesn’t have what you need. Likewise, a big one that’s set up well can be better than a crummily (is that a word?) set up small house. In other words, it’s not the size of the house but what it offers that matters. Plus, the smaller the house, the less you have to clean. (That’s a HUGE plus for me!)

I realize that housing is not only usually the biggest expense a family has, but it’s often the hardest to change. Therefore, any change to this category will take the longest to happen. Still, that doesn’t mean it’s not possible. It just means it will take perhaps more of a sacrifice to make this particular change happen.

So, I’ll ask again. Is your housing expense really fixed? Can you make changes? I challenge you to ponder this for a bit. Consider it. Talk to your spouse about it. Pray about it. (And think of the money you can save!)

-Me

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