Adjustable rate mortgages can be dicey if money's tight
Adjustable rate mortgages can make it difficult to plan ahead. See question No. 4 of the reader mailbag for advice about how to deal with an adjustable rate mortgage if you're living paycheck to paycheck.
In this photo take Oct. 26, 2010, a sold sign is displayed outside a house in Mayfield Hts., Ohio. When is an adjustable rate mortgage a good idea?
Amy Sancetta / AP / File
What’s inside? Here are the questions answered in today’s reader mailbag, boiled down to five word summaries. Click on the number to jump straight down to the question.
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The Simple Dollar is a blog for those of us who need both cents and sense: people fighting debt and bad spending habits while building a financially secure future and still affording a latte or two. Our busy lives are crazy enough without having to compare five hundred mutual funds – we just want simple ways to manage our finances and save a little money.
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1. Combining budgets
2. Considering major life changes
3. Board games with wife
4. Nervous about adjustable rates
5. Starting business with debt load
6. Low-yield savings account
7. Self-employment and debt
8. Emergency fund use
9. Psychological trick with online shopping
10. Employer bankruptcy and 401(k)/403(b) status
Several people have asked me what food I miss most since switching diets.
Easy. Cheese and eggs. I really don’t miss the meat too much at all, but a cheese-and-egg sandwich still sounds wonderful to me.
Q1: Combining budgets
I am recently married and we are interested in combining our finances soon. I’m first in the process of selling my house. When this happens (hopefully soon…my agent expects an offer from another client this evening actually) it will free up about $900 a month for us. (The payment, insurance, taxes, utilities, etc.) We’ve maintained seperate accounts since we were married a few months ago and decided it would be a good idea to combine them when we were free of my house responsibilities.
We both have kids, and are expecting another soon. We both really got after our cc debt the last year and have decided that paying down any debt is the most important thing before we either buy or build another house or add on to our current one. But the truth is I don’t think either of us has a real great idea of what the other actually pays out each month. I don’t think we’re being deceptive but we’ve both been independent for so long that sharing this or even starting to work on a budget has kind of been shrugged off.
Is there a budget form or method you could recommend that would lay it all out on the line for us? Call it lazy or what-have-you, I feel like we’d be both more willing to set a budget and be more upfront about everything if we had something pre-made to work with. I would even settle for a book or another site that would help me explain and feel more confident in this.
- Erin
Generally, I don’t think budget forms really work aside from just creating a picture of how people spend their money. They either create too many categories or not enough categories and result in confusion or difficulty for the people involved.
If I were you guys, I’d sit down together and look at your last few months of bank statements and credit card statements so you can see where your money actually goes. Talk about these things openly, not defensively. If you can do this without trying to hide things or getting anxious or angry, you’re probably in a very good place when it comes to money.
If you’re find you’re having trouble making ends meet, I suggest “automatic budgeting,” meaning that many expenses are automatically withdrawn from your checking account. Set up an automatic transfer to your savings account each week. Set up online bill pay and have many bills paid automatically. In other words, take care of as much stuff as you can automatically so that you can feel more free to use what’s left for what you want.
