photo credit: mrpattersonsir

The 700 Billion bailout plan is not enough to help struggling American’s save homes currently facing foreclosure notices. In some instances a couple may be living paycheck to paycheck and one minor hiccup can derail the family finances. A hospitalization, a reduction in work hours, or increased expenses could mean the difference between shelter and homelessness. Many large institutions that are labeled “too big to fail” have the U.S. government to help when investments go bad, who can you turn to when you hit a rough spot in your family finances?

Your friends are hurting and feeling financial devastated right now. You want to help, but don’t know how. Should you offer to help them in some way as they are having mortgage paying issues? Solving a families money problems with more money may not be the best solution. How can you help friends who are facing a financial nightmare?
Here are free creative ideas to help friends facing foreclosure or bankruptcy:

1. Date night. Offer to watch your friends children while they have a date night. I’m not suggesting you promote going out to Ruth’s Chris steak house and a concert. You can offer to watch their kids at your house and let them have a night to catch-up. No strings attached and you shouldn’t probably assume they will talk about money issues. It’s just a good opportunity to have them talk again.

2. Recommend financial counseling. If your friend was ill or needed surgery, I’m sure you would recommend a good doctor that they could contact. Since a home foreclosure or bankruptcy is a serious financial emergency, see if they would be willing to talk with a professional. Many local cities and counties offer debt counseling services. Also, if you attend a church you can see if your pastor has access to Good Sense Ministry, Crown Financial Ministries and Dave Ramsey church programs. These courses are free at many churches and can offer ideas to help create a budget and track and cut expenses. I have taken the Good Sense Ministry coursework and while much of the information is very easy to understand, you can implement changes overnight. Tracking your expenses daily will open your eyes to where your money is going. The most important aspect of any of these seminars is open communication between spouses and a willingness to try something new with your finances.

3. Listen to your friend. Talk is cheap and free advice is still free. Listening to a friend who is going through a financial disaster like a foreclosure or bankruptcy can be priceless. You might not have the answers, but offering to listen to your friend in need could be the most important thing they need right now. The hard part is going to be listening, as you probably be tempted to give advice.

4. Cook a meal for them. If money is tight for your family as well, you could offer to fix them a spaghetti dinner or have them over to your house for a combined family meal. This will allow you to talk more and show your support through the financial crisis. A healing meal can be a wonderful blessing to your friends.

5. Recommend a professional. Do you know how to work with your lender and get months added to your mortgage? Do you know what letters to write your lender if you want to extend your foreclosure process? A great, not good, but great realtor or mortgage broker could assist your friend with this information. They have the industry knowledge and could keep your friends in the current home for a few more months. This could also allow them to negotiate the loan terms and keep the home too.

6. Miranda at Yielding Wealth suggested a coupon competition to spark a healthy competition with your friend to try and save as much money as possible. Could you save over $100 a month on your grocery bill? You could also swap coupons or trade coupons with your friends if you don’t purchase a particular item or brand.

7. Buy heating oil in bulk with your neighbors and negotiate a lower price. If you need to purchase heating oil this winter Greener Pastures: Personal Finance suggests helping neighbors save money by buying oil together.

8. Laurel Plum suggests helping friends declutter and sell unwanted items on ebay or craigslist. Laurel has a lot of great info on here website as she specializes in helping people organize and declutter.

9. FruGal emphasizes listening to your friend facing a bankruptcy or foreclosure and also offering to drive kids to school. A carpool to school or even offering to pick up your friends children from soccer practice might give them a little break.

10. FFB recommends calling up a creditor or mortgage company and asking to negotiate the terms of your loan. Can’t hurt when facing a bankruptcy or foreclosure. I would be surprised if they said “no” flat out and wouldn’t be interested in working with the person. If the mortgage lender could add a month or two to the loan, that could help a friend save a home.

11. Jennifer has a wonderful idea to offer and help your friends pets. Pets can be impacted by a foreclosure and might have to be surrendered to a local animal shelter or adoption agency. If you have the room or yard, you might want to consider offering to house a friends pet.

12. Susan suggests watching a friend for signs of stress and depression. Offering to talk, listen, and finding medical help if necessary. She also shares how a prepaid phone card could help a friend in need. This could allow someone to stay connected and negotiate with lenders, creditors, and even a realtor.

13. Sean suggests the Drugstore Game found at Chief Family Officer that can help reduce expenses for pennies on the dollar. Great tip!

Do you have a creative free idea that could help your friends through a financial disaster? Leave a comment and I’ll add it to the list above.

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The Passive Dad combines my interests in working from home, passive income and the adventures of being a husband and dad. This blog will allow me to document my journey and share successes, failures, and have some fun along the way. I’m 35, and a work from home dad who raises our children from 6am-5pm. I say that because after 5pm, my wife comes home and gives me a breather from our 2-year-old son and 4-year-old daughter. As far back as high school and college, investing and personal finance have always been a passion of mine. I would spend hours daydreaming of business ideas or inventions that would transform everyday chores. I majored in Business and Economics in college and enjoyed business law, personal finance, and marketing classes. After college I worked for 12 years in the banking and investment field and was fascinated by the amount of new wealth created daily. At one firm, they called the new clients “Googlers”, for all the newly minted Google millionaires. Google is just one example. Many of the companies were also less known, but still impressive. Restaurant chains, software companies, telecommunication companies, and even teen clothing companies, all followed the same business model. Creating a new product or way of business, while increasing profits and growing sales quarter after quarter. This is a dream that I share and that many would like to attain in their business venture. While working at the brokerage firm I enjoyed reading research material on new prospects and finding out how they had created their wealth. Even the most successful entrepreneurs manage risk in both their business life and in their investment portfolio. Over the years I have read some wonderful books about some of the pillars of the investment community: Lynch, Buffet, Gates, and they all spend time discussing managing risk and having a diversified portfolio. Warren Buffet is probably the most talked about and most admired businessman for his financial success and discipline with investing.

My days are spent working from home and finding great investment opportunities through stocks and mutual funds, while also starting to build passive income. My current strategy has been to find stable and conservative passive investments and branching out to online opportunities. Passive investments are those that require little to no work and pay income in the form of rent, dividends, interest, or commissions. A simple example would be a bank money market account. You deposit $100, and the 3% interest is passive income. You had to earn the $100, but the interest on that money is passive. The banks clients (borrowers), are working to pay you that 3%. The online example would be an ebay affiliate. You can earn a commission for every ebay sale that originates from your website.

My interest for starting a blog was created after reading several “work at home mom” websites and several budget blogs. One day I googled “work from home dad income” and didn’t’ find much information. I found the typical parked domains and news articles for the first few posts, and had to really search to find some great content for dads. I found myself reading blog after blog of stay at home moms or SAHM’s and was fascinated by the online community that existed. Several sites discussed online income opportunities such as paid surveys, reading emails, and clicking websites. All this sounded interesting, but was this passive income or just a part-time job.

My other reason for starting a blog was to write about and find others who are passionate about eliminating debt. I just don’t mean being “frugal”. I actually don’t consider myself cheap or frugal. I do have some rather expensive items and can splurge from time to time on my wife and kids. Being frugal is something I admire in many of my friends, but that doesn’t mean everyone has to be or should be frugal. I actually might consider myself a hybrid-frugal man. I recently paid to have our new HVAC system replaced in our house. The new air conditioner was over 12 years old and not efficient, and we couldn’t keep our house under 80 degrees during the summer months. Some of my “frugal” friends don’t even have air conditioning and think I should have saved my money for something else. Well, very simply- “Happy wife, Happy life”.

My parents and grandparents helped me create my first budget when I wanted to save for the most treasured item of a 10 year old. The ATC or motorcycle cost $650 and I had to mow many lawns to pay off the loan. My dad kept my loan above my growth chart in the kitchen and allowed me to watch the progress daily, and dream of the day that I would be debt free. I was thankful that my parents kept the loan on the wall, as it was a reminder of my contract and promise to repay the debt. My original loan of $650 would not last long. My parents thought buying safety gear was probably a good idea for a 10-year-old boy; and we needed to go shopping for a helmet, goggles, boots, and gloves. In total my original loan grew to $800 and I was learning very quickly the power of compound interest. I didn’t realize it, but I was about to add to this debt over the next few years and get to a point where I became very frustrated and confused. My dad and I went to take the motorcycle out one day and ran into a U.S. Park Ranger. He was very interested in my motorcycle and enjoyed finding issues that needed to be fixed. He pointed out that I needed a proper spark arrestor and off-road permit to drive my motorcycle. Add another $75 to my loan. How was I going to pay back $875?

Fast forward to graduate school for my wife. We were about to get married and we both had debt from college and she needed a new computer. Our old computer from college was not able to connect to the Internet and we needed a color printer. Yes, my wife and I went to college before email. We had to put the new computer on our Visa card and were about to learn a hard lesson. Our student loans were manageable as the interest rates were low and we could manage on our tight budget. The computer, monitor, and printer cost $2700. When the credit card bill came we paid the minimum and didn’t look at the interest. Our budget allowed for $25, but nothing else. This was a hard lesson. The 19% interest was much more than the 5% student loan rate, and the burden seemed huge for us. How were we going to pay down this computer debt? Did we have to buy a new computer? Did we have to buy a color printer? The use of the Visa card didn’t end with the computer. I had to be hospitalized from a food allergy and was working as a consultant without health benefits. $1,000 was added to our Visa balance. Next came the new tires for the car and the cost to rent a car during some unexpected repairs. Our Visa bill quickly grew to $5,000. Ouch! We needed a plan of action, as this amount was not decreasing.

I would like to say that this was an easy and fun learning experience for my wife and I. It wasn’t! It was tough and taught us a lot of our spending behavior and lifestyle wants/desires. We had a wonderful used bookstore around the corner from our apartment in San Francisco, and we would spend hours reading investment and self-help budget books. What I learned got me excited that we could change our situation, but it would take hard work and time. I was looking for that quick fix or easy money as a young 25 year old, trying to climb his way out of $5,000 of unsecured debt. I don’t recall the author that I found then, but Dave Ramsey talks about the same principle today in the Debt Snowball Plan. Ramsey recommends an emergency account of $1,000 first, then working on paying down debt. We made the minimum payments on our student loans but applied $200 a month towards our Visa bill. W
e weren’t making more money at the time, but we did move our focus from the student loans to the Visa bill. The psychological benefits were huge for us a young married couple. Over the next few months we managed to each receive a raise at work and we applied that money to the Visa bill. Once the Visa was paid off, we applied the $200 to pay off the student loans. Our next goal was to establish a safety net and setup a savings account for unexpected purchases.

My wife and I have been using the same principles we learned through our twenties and think back to the $2700 new computer when we want to purchase something new. As I mentioned before, I don’t believe I am frugal or cheap. I enjoy buying quality and dependable items that I feel will last a long time. We have purchased some very expensive items for our family, but we still adhere to the principles of living within our means and not straying from our personal budget goal. Another reason for starting this blog was to network with others, who are at different places on their financial journey. I would enjoy sharing ideas on personal spending habits, family budgets, and sources of passive income.

I am fascinated and eager to hear where you are on your financial journey.

Scott

ThePassiveDad.com

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