How to Handle a Tight Budget

Ken Dolan: Now let’s talk about some source. Daria Dolan: You scared me. Ken Dolan: I didn’t mean to scare you. I thought I saw a mouse. I’m sorry. Well, in this video I’d like to talk about some “yes” sources for money, maybe not clearly obvious to you and some “no” sources of money. Daria Dolan: If you need to find some money for that. Ken Dolan: Some extra money. Do you want to do the yeses or no’s? Daria Dolan: I’ll do the no’s. You know me, I love to beat people up. You do the yeses. Ken Dolan: I’ll do the yeses. Daria Dolan: Okay. Ken Dolan: Home equity lining credit, here again. We don’t want you to use your house as a piggy bank but you’ve got to have at least twenty percent equity in your home. That’s not so easy these days, Daria. And what you may want to do is get a line of credit. Home equity line of credit whether you use it or not while you’re employed especially if you think things could get tough at work. So, reasonably speaking, if you use it responsibly, hold equity line of credit. Daria Dolan: That would be in my no source. But go ahead. Ken Dolan: You give me a no. Well, I’ll take. Give me a no source. Daria Dolan: Alright, convenience checks. If your credit card company is still soaked in just to send those to you. They have a much higher rate of interest. It puts you more in hot to the credit card company and thinks a whole deeper before you even can say I dug a hole. So don’t use those convenience checks and in fact, if you still receive them in the mail, we don’t anymore. So I don’t even know if they’re sent anymore. Call your credit card company and say “knock it off”. Those are so dangerous if they land in wrong mail box. Ken Dolan: And someone steals it. That’s absolutely right. Here’s a risky source, a real risky source but we have to discuss it family and friends and I’m going to tell you if you think Thanksgiving and Christmas is a little tight and wacky, then in fact have somebody owe you money when they come to your house for the holidays. But family and friends, it is a source of money if you’re lucky enough to have family and friends that might be able to help you out through a short period of tough times. Daria Dolan: Okay. Here’s another one, a no source of money, your retirement plan. Please. I employ you. Unless you’re about to end up on the street or you can’t have an operation that’s going to save somebody’s life in your family. Don’t touch your 401K money, your IRA money. Please don’t do it. It’s all you’ve got from here to retirement. Ken Dolan: Exactly right. And that loss if leverage and that loss of velocity of money invested the tax for is a mess. Here’s a yes. You may want to consider selling some stocks, now whether you sell them in a profit or a loss. It’s almost a tax cue. Daria Dolan: As long as they are not in your retirement plans. Ken Dolan: That’s a very valid point Daria. I wish I’ve thought of that. Daria Dolan: And to be honest, you should be selling all of those. And your mutual funds too because if you need money you have no business being an investor. Ken Dolan: Daria, excuse me. Daria Dolan: Sorry. Ken Dolan: This is my yes. Thank you. Consider selling some stocks. Talk to your tax adviser for any tax ramifications. Alright, give me a no. Daria Dolan: Also leave your worth IRA’s away alone. Even though you could remove the initial investment for $5000.00 that you originally put in after it’s been there for five years, you can’t replace those withdrawals so you basically put a lot less money working tax-free for you which is even worse than taking tax deferred money out of circulation. Ken Dolan: Well said. You also could consider borrowing. Again, these are not the greatest solutions. We’re talking about emergency. You may want to consider taking a look at a whole life or a permanent life insurance policy where there’s a cash value build up because you can borrow that money if you need do it your own money. You can borrow money but don’t forget that in fact the death benefit while that loan is out, that death benefit that you have for yourself and your family is reduced by the amount of the loan. But that’s a yes. Alright, your good chance. You have one yes. Daria Dolan: Okay. Last yes. And this is going to be tougher to do too because there are not a lot of people shopping anymore. But if you have stuff that you don’t use, it’s in good condition that might be interesting to someone else, check out eBay and put it on eBay and sell that stuff and get some cash. There’s a good book by the way, “Starting an eBay business for Dummies” by Marsha Collier. Ken Dolan: Starting an eBay business for Dummies. There’s some yeses there’s some no’s. Often a lot of us are really hurting in a few bucks could make a difference. There are some good ideas and some bad ideas.