With unemployment continuing to rise, Americans don't have much of a financial cushion in the event they suddenly lose their income.
According to a new survey by Country Financial, nearly half (49 percent) of Americans nationally say they wouldn't be able to pay their bills on time if they went more than one month between jobs.
"With some economists predicting the U.S. unemployment rate could rise to 10 percent, it is more important than ever to have a cushion against lost income," says Keith Brannan, vice president of Financial Security Planning for Country Financial.
Brannan offers these tips to protect yourself:
• Live frugally, no matter your employment situation. Most advisers recommend stashing away three to six months of income in an emergency savings fund.
• If you are in a job you think might be downsized, polish up your job skills. Take a course at a community college or consider an industry designation to make yourself more marketable and keep your resume up to date.
• If you have lost your job, the best advice is to do everything possible to limit expenses. Eat at home, grow a garden, shop with coupons and take advantage of inexpensive entertainment, like a free concert in the park.
• If you are in between jobs, consider ways to boost income, like getting a part-time job. Even a lower-level or temporary job can help cover expenses while you look for permanent work. Having a garage sale or selling old items on the Internet can also put more money into your wallet.
Brian O'Connor
On February 18, 2009, President Obama announced his housing plan designed to help 7 to 9 million families avoid foreclosure by refinancing or modifying their mortgages. The plan also strengthens the federal commitment to Fannie Mae and Freddie Mac (the government sponsored enterprises, or GSEs).
On March 4, 2009, the administration released detailed guidance on the Making Home Affordable Program.
Here are the key elements of the Obama plan:
1. The Home Affordable Refinance Program. Under this program, eligible borrowers may refinance loans that Fannie Mae or Freddie Mac (the government sponsored enterprises, or GSEs) own or guarantee. The program can help homeowner-occupants who are current in making loan payments and have loan-to-value ratios (LTVs) above 80 percent but not more than 105 percent. Cash out refinancings are not permitted. The program ends in June 2010.
2. The Home Affordable Modification Program. This is a $75 billion program with lender, servicer, investor, and borrower incentives to make it work. The program is limited to homeowner-occupants who are at risk of default or already in default and who have loans at or below the maximum GSE conforming loan limit of $729,750 (or higher for 2-, 3-, and 4-unit properties). Loan modifications under the program may be made until December 31, 2012.
3. More Support for the GSEs. President Obama also announced more support for the GSEs, including doubling of potential Treasury investment from $100 billion to $200 billion for each GSE, to maintain their positive net worth. The plan also raises the cap on mortgages that the GSEs may hold in their portfolios by $50 billion to $900 billion.
As part of its plan to stimulate the U.S. housing market and address the economic challenges facing our nation, Congress has passed legislation that grants a tax credit of up to $8,000 to first-time home buyers.
Here is more information about how the 2009 First-Time Home Buyer Tax Credit can help prospective home buyers become part of the American dream.
Breaking news: Tax Credit Can Be Used on Closing Costs.
First-time home buyers who purchase homes between January 1, 2009 and December 1, 2009.
To qualify as a “first-time home buyer” the purchaser or his/her spouse may not have owned a residence during the three years prior to the purchase.
The 2009 First-Time Home Buyer Tax Credit may be applied to primary residences, including: single-family homes, condos, townhomes, and co-ops.
The maximum allowable credit for home buyers is $8,000. Each home buyer’s tax credit is determined by two factors:
The price of the home—the credit is equal to 10% of the purchase price of the home, up to $8,000.
The buyer's income—single buyers with incomes up to $75,000 and married couples with incomes up to $150,000—may receive the maximum tax credit.
Yes, some buyers may still be eligible for the credit.The credit decreases for buyers who earn between $75,000 and $95,000 for single buyers and between $150,000 and $170,000 for home buyers filing jointly. The amount of the tax credit decreases as his/her income approaches the maximum limit. Home buyers earning more than the maximum qualifying income—over $95,000 for singles and over $170,000 for couples are not eligible for the credit.
No. The buyer does not need to repay the tax credit, if he/she occupies the home for three years or more. However, if the property is sold during the three-year period, the credit will be recouped on the sale.
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