As foreclosure cases become increasingly common, many are wondering what the cause is, and how they can avoid a similar fate. While we emphasize practicing smart money management techniques, the truth is, sometimes money management isn’t enough to stave off foreclosure.
Foreclosure Is Not Failure
Plenty of people who practice good money management skills (budgeting, saving, responsible spending, etc.) still end up facing foreclosure. The truth is, no matter what you do to ensure you can pay your mortgage every month, unexpected circumstances still arise. If you are laid off or unable to work due to medical reasons, you might struggle with your mortgage. If you get so behind, foreclosure might soon follow.
Foreclosure doesn’t necessarily mean failure. Oftentimes foreclosure happens to people who have been responsible money managers. In these instances, you have to move on, pick up the pieces, and start again. If you have experienced losing your home due to foreclosure, you don’t need to feel like a failure. Rather, with no mortgage burden, you now have a fresh start to begin anew!
One good money management technique that can help reduce the likelihood of foreclosure is setting aside cash that is easily accessible (whether it’s in a bank account or buried in the backyard). Use this cash to pay off your mortgage in the event of unexpected circumstances. Knowing that you have the ability to make a few payments no matter what happens can give you great peace of mind. See what you can do to get started on that rainy day fund!