When you bought your home, you might have had a great job with great benefits, a company car, and maybe even an inheritance that helped you pay for the down payment. Now, your financial situation has changed. Maybe you got married or had a child, the great job was outsourced and you had to take something less, the company car is gone and you have a car loan, and at the end of the day, there doesn't seem to be enough money to go around. You may have started to rely on credit cards, and you may be taking from Peter to pay Paul every month, but you can see that this way of handling your money is catching up with you. You are about to fall behind on your mortgage payments, and you are worried about what will happen when you can't pay that high payment anymore.
Getting a clear picture of your finances is probably the best way to avoid mortgage arrears. Write down how much money comes in and how much money goes out. Next, you'll need to change what's most important to you. For example, having cable TV might be nice, but you can get by without it. Your mortgage should always be your top priority, and you should pay it before you pay any other bills. Some bills may be for goods and services that you no longer need or that aren't as important as they were when you signed up for them. Look at your car insurance after you cut your cable. You will need car insurance, but do you really need the same coverage you had when the car was new? You might be able to get some money back if you change the services you pay for.
If you've cut and pruned your budget and there's still a shortfall that you can see coming, you'll need to find ways to make more money. Getting a second job is a good idea, but there may be other ways to make money. Are there tax refunds you haven't looked into that you might be able to get? Are there tax breaks you might be eligible for but haven't asked for yet? Do you get the tax break for being a homeowner that you should? Do you pay too much in taxes because the government overvalued your home? If you ask yourself these questions, you might find ways to keep more of the money you've worked hard for.
Also, do you have a hobby that you might be able to turn into a small business? For example, if you like to make pottery in your spare time, you might be able to sell it online to make a little extra money. If you used a room in your house for this cause, you might even get a new tax break. As you can see, you can avoid mortgage arrears if you pay close attention to your finances before they get bad.
