what would you do?

i own 2 acres that cost $20,000 (correct) per acre. for my $40,000 i get a great view over looking the connecticut river valley, great view of vermont mountains, and spectacular sunsets. i see dear, bear, coyote, fox, raccoon, geese,on and on.

Problem= cost of property, taxes, on side of mountain with no flat ground to raise large livestock. it is to early to sell this place and buy more feasable property. i have only been here for 7yrs. on top of the mortgage for the land i also have a 3-year-old mobile home that cost close to $50,000 that's another mortgage. then there are the 2 relatively new cars that are costing a bundle. the list goes on and on.

it amazes me that i am as happy here as i am cosidering the monthly bills. however, i do need to make some changes. i have this awful fear that if i let things get anymore out of hand that i will not be able to afford this place should something happen with my job (which pays well) or should i get sick and am unable to work for even a short amount of time.

i get very stressed over the bills. i always feel like i am behind even though i am not. my co-workers asked me how far behind i am with my bills. they were amazed when i told them that i'm not.i asked them and they gave me answers that were in years not days, weeks or months. this is what got me nervous. what if i were in their situation what would i do? so i now realize that i do need to make some changes or i may very well end up behind on my bills.

i really found out how close i am when my friends daughter was behind on car payments and i paid her payments. she was suppose to pay me back but never did. did i ever sweat it and still am for that.

main question is what would you do and how.

thanks.

-- george in nh (rcoopwalpole@aol.com), November 07, 2001

Answers

Your first paragraph says it all. You can't put a pricetag on those things. It sounds as though you're a very responsible, practical person with friends who are not. I've found that cars can definately put people over the top, so how about trading for smaller, cheaper, more gas efficient models? Maybe you could combine all your loans and refinance at the new, much more attractive interest rates. Hang in there. Your life sounds wonderful and we all get a case of the panics once in a while. I think you have everything under control whether you realize it or not.

-- Mary Petersen (mpete05@aol.com), November 07, 2001.

With interest rates coming down, it could be a great time to sell. Or refinance, but add up all the costs, and figure in whether you will be staying or not. Could you get rid of one of the cars and turn around and pay off the note on the other, then get a second used one with cash as your situation improves?

Just curious, why would you pay off a friend's daughter's car payments? Why didn't the friend bail her out (or not, which would be my first choice. Learn the hard lesson now while you're still young.)? Did you get a signed note? I hope so. Sad, but you might have to sue (maybe the amount will come under small claims court in your area) to get it. Imho, if she (meaning the friend's daughter) can't afford the car, she shouldn't have one in the first place.

Can you rent out a room in the mobile?

You might want to look at disability insuance if this really bothers you to the point where you don't sleep well at night.

-- GT (nospam@nospam.com), November 07, 2001.

If you make your payments on time every time & pay attention to, or work on, repairing your credit scores, here's an option. Interest rates are real low now, and people with good credit (630 points or higher) are being offered mortgages with 6%, 5%, or lower, rates of interest. The Fed lowered its rate again yesterday afternoon. SO - have you considered refinancing your place - do a brand-new first mortgage that wipes out all current mortgages & other debts? The purpose, if your credit will support it and get you into a lower interest rate, is to consolidate ALL of your debt under one loan, which would lower your monthly outlay of funds. Then, all you would have is the one mortgage payment, along with your monthly cost of living expenses. After that, put all the money you would have spent on car payments, etc., into a savings plan that has a conservative (but decent) rate of return, and don't make any more credit purchases unless something breaks irrevocably or you can pay for it in cash and still leave a fairly good cushion. A good financial advisor or CPA ought to be able to advise you and help you in the process. The trick is to stay out of further large-scale debt if you can avoid it, don't lend money to anybody for any reason (unless they'll sign a promissory note) and pay off absolutely everything you can.

-- CJ Glass (glasss2001@hotmail.com), November 07, 2001.

Stop spending. I know, it sounds dumb, but think about how much you spend every day. Coffee shop, paper, lunch, snack, etc. All that little stuff adds up quickly. And just because you have a high paying job doesn't mean you have to spend everything you make and live high off the hog. Trust me, been there, done that, paid for it. We just sold our house and are living in an old mobile home (1974) - clean, adequate, nothing fancy - but are now debt free other than a $450/month mortgage, for 40 acres. No car payments, no credit card bills. In addition, I went through our 'things' and put everything of value that we don't use on eBay and Half.com. I've made enough so far to pay our next mortgage payment. In addition, we talk about everything we spend - even something as small as getting take-out Chinese for lunch. We often find we can do without something after talking about it. No, we're not depriving ourselves in the least, but instead learning to appreciate what we spend instead of just spending. It makes things better too - take out Chinese tastes a lot better if you haven't had it for a couple months. Lastly, we picked 3 days out of the week where we don't spend a dime. Not one cent. It was hard at first, but now we don't even have to plan the days anymore. It taught us to think about what we were buying insteading following an impluse. I have to agree with other folks about the cars, too. If you have a new car to keep up with the Jones' find new Jones'. :) That was a hard thing for me to admit to myself. Once you do, it's amazing how it releases you from all that pressure to keep up. I really know how you feel because I've been there. I also know if you work at it, you can change it and you'll feel incredibly free! Good luck and keep your chin up! You can do it!!!

-- Stacey (stacey@lakesideinternet.com), November 07, 2001.

Get the book "Your Money Or Your Life" by Joe Dominguez and Vicki Robin. It says it all.

-- Tracy (trimmer31@hotmail.com), November 07, 2001.

Dittos to what Tracy said....also read Amy Dacyczyn's "Tightwad Gazette" which tells how to cut costs everywhere and also features stories from her readers describing how they went frugal and got their lives back under control.

-- gita (gschmitz@directcon.net), November 07, 2001.

I've been there and done that too. The best thing I could recommend is to get the book "Financial Peace" by Dave Ramsey. I am a mortgage broker and it changed my life. It's easy to read and gives you a plan called "the six baby steps." Follow them, and it will change your life.

Good luck. Mike

-- Mike in Indiana (PARISH48@MSN.COM), November 07, 2001.

George-

You obviously have a low tolerance for debt, which is not all bad! After you have looked at cutting your expenses and reducing cash outflow, if you are still worried, why not consider working some overtime, or taking a temporary second job, with all earnings earmarked for savings, until you are at a level where you are comfortable?

-- Elizabeth (ekfla@aol.com), November 07, 2001.

Gosh George, my instinct chimes with yours...get out! Life is not supposed to be about payments! We went from an upscale life to a simple one in the country ourselves, and it's often hard not to just go out and buy whatever we want, but we learning. We've paid everything off (by downsizing considerably) except for a mortage on our place, (which is for sale, because we no longer wish to have a mortgage either!) It's very liberating to not have any bills in the mailbox, and we clean and maintain our 5 and 6 year old vehicles so they are practically like new, not too mention paid for! I think we have some scary times ahead of us, and instinct is urgently telling me to be as self sufficient as possible. Just my 2 cents. CJ

-- CJ (cjtinkle@getgoin.net), November 08, 2001.

I would unload the two cars and get a good second hand one that is paid for. Is that a lot of money for a 3 years old mobile home ?? I'm no real estate agent but it sounded like a lot to me. Does land really cost that much up in Vermont ?? Guess then I won't be moving there very soon. But if you really love the land get rid of what debt you can and try to live more simply. I wouldn't lend any more money out to anyone right now. Maybe you learned a "cheap" lesson in not getting paid back your friends money ?? Live and Learn !! Good Luck !!

-- Helena (windyacs@npacc.net), November 08, 2001.

George, Got to agree with the refinance. Land here locale runs about $16,500 per acre so I can sympathize. What type of cars do you have? Do you need "new" cars? If your really getting tense, try putting aside 25% of your income to a special "just in case" fund. Do this till you could survive 6 months if something should happen.

That must be some mobile home. Tell us about it.

-- Kenneth in N.C. (wizardsplace13@hotmail.com), November 08, 2001.

I agree with the idea of refinancing the house and land into a single mortage, but not things like the auto loan debt. It makes very little sense to take a five year debt (car) and turn it into a 30 year debt (mortage). Long after the car is gone, you'll still be making payments on it and chances are you will have financed another vehicle. This, in essence, means you're making two payments for one vehicle. You're better off taking any extra money and applying it towards debts of this type, eliminating them and doing what you can not to let them reoccur.

-- ray s. (mmoetc@yahoo.com), November 08, 2001.

I can not imagine paying that much for an acre of land here in north Alabama unless it was right in the middle of a growing metropolitan area! Here in north Alabama we have a nice three bedroom brick home on 13 acres and the whole thing, land and house, is only valued at around $90,000......

If this house and land were in California or somewhere like that I can imagine the whole deal would be worth about one-quarter to one-half-million!

Anyway, I would try to get out from under some of the vehicle payments and also check on re-financing your mortgage while the interest rates are low. If you really love the land there figure out how to keep it! Land is PRECIOUS!

-- Suzy in Bama (slgt@yahoo.com), November 08, 2001.

Suzy,

Prices in CA go all over the map, depending mostly on how close you are to the coast. In Palo Alto (Stanford University Area), for example, an old, crumbling 2bdrm bungalow on a standard city lot can go for half to 1 Million.

You can still find fairly reasonable prices in other parts of the state, however, though not as reasonable as in the midwest or south.

-- GT (nospam@nsospam.com), November 08, 2001.

Hi George..

I thought I'd mention that from the looks of your email address, I'm not too far from you [40 or so minutes]. Per what to do..you've gotten a lot of good ideas already. I'd crunch some numbers and see if you can do some refinancing. Rates have gone down a lot. I suspect this is easier to do with a standard home [including land] mortgage rather than the two separate loans you are paying. But, still worth a look.

NH is notorious for real estate taxes. But, weren't they working their way through something similar to VT's act 60? The town I was in before was hit pretty bad with act 60. My taxes there increased a lot and are high in the new town I moved to too. If you want to stay in the VT/NH area, I wouldn't move to a place based on real estate taxes. Both states are going through shake ups that will take a few years to settle out.

Per paying bills and getting behind..I'm not sure where you were before. I was once in a large metro New England area. Life here is very different. Not having money for bills is more common. But, I also see the gamut from wasteful consumption to spartan living.

If you sort of like where you live, I'd stay for a while and tighten your belt. Little things add up. Tighten up your house. Check your telephone plans. Get rid of cable. Etc. Also look into bigger things..do you carry car loans? Can you pay them off? Refinance home?

In your spare time check out http://www.realtor.com The site lists all the properties offered by brokers throughout the US. It's good for dreaming and figuring out how much your place might be worth.

Good luck!

-- pc (jasper2@iname.com), November 08, 2001.

Stock your pantry, buy a little extra each week and stash it aside, that way you could eat for months with out shopping. Build your savings up so it will cover you for six months of house payments if a emercency arises.

-- kathy h (ckhart55@earthlink.net), November 08, 2001.

thanks everyone.it is encouraging to know that others have been in my situation and have been able to get out.

i have gotten rid of 2 credit cards. i only have $1,900.00 in credit card debts. i believe from what i've heard that there are others who are alot more in debt with credit cards than i am.

i know at least one of the cars should go. that would free up $500.00 a month. i am working on this. someone asked what kind of cars a black super charged ultra buick and a white super charged ultra buick. do i need these? (NO) what was i thinking? i never got anything to keep up with the joneses. i just got them because i was looking for something cheap and instead liked these cars. again, what was i thinking. what i really need is to fix the pick-up i already have and use that (it is paid for).

as for the mobile home. i am embarassed to say that there was an old mobile home here that was replaced earlier than it should have been. the new home which was special built is beautiful but a major head- ache. when the mobile home was built we had all kinds of special things done. more insulation, thicker floors and ceilings. we got it all. what we have is a two bedroom, two bath, 16x80' with whirlpool tub in master bath. the livingroom has a fire place. you're probably wondering why such a nice mobile home? we thought of resale in the future and wanted the place to look as close to a home that was built for the spot as possible. everyone is amazed when we tell them it is really a 16x80' mobile home. hopefully if we decide to sell this will help.

i think i should state that i am in debt but not behind on any bills. i am afraid that i could end up there though.

i envy the fact that alot of you are able to own what you have and are making no payments, and that alot of you got a whole lot more for your buck then it appears that i did.

i am really embarrassed that i have gone over board on alot of things and hope that with help from all of you that i will be able to get my feet back on the ground.

my dad visited me this past july 4th and was shocked that his son who he had raised to be frugel turned out to be frivilous. i made all the excuses about why i needed the best but he didn't buy any of it. i envied him when he left because he was going back to his simple place that he was relaxed with and owed nothing on.

thanks again to you all. you are really full of great ideas and you're a great group of people.

-- george in nh (rcoopwalpole@aol.com), November 08, 2001.

Geore, first of all don't be embarrased to ask help! that is the first step in the right direction. And most of us have been there at one time or another!

If you truly love the land and want to stay, can you sell the mobile home and get something smaller/older/cheaper. Or if you do get rid of your vehicles for something cheaper, maybe you could purchase another older mobile home, and rent one or the other.

I realize you are way up north (In S.C. now, I used to live in Massachusetts), but do you have a garden every year? a big enough garden can supply produce to you, to sell and also to help feed small livestock like rabbits, chickens and maybe small livestock like goats or sheep (anything edible you can raise yourself reduces your food bill and your animals food bill!)

-- MissJudi (jselig@clemson.edu), November 12, 2001.