My finance tips

Archive for June, 2010

How Gentrification Saved Harlem

Recently homeowners in my corner of Harlem held a soiree in someone’s garden. We form a warm group of 130 people who represent the changing neighborhood black oldtimers with a growing number of whites. Everyone brought a dish or bottle and the talk over the macaroni was cheerful. Did anyone know a good contractor? How did the Little League do this summer? A door prize a box of Godiva chocolates was awarded to the longest resident Dina Morrison 93 who has lived with her older sister in the same place for 67 years. No one mentioned foreclosures.

Foreclosure crisis? What crisis? Not in Harlem.

Harlem is full of the sort of people who are losing their properties all over New York City namely little old ladies and workingclass AfricanAmerican families. But the nation’s black capital has been insulated from the subprime meltdown by the very thing usually blamed for destroying communities of color gentrification.

While the dreaded G word has priced some residents out of the ‘hood we’ve seen a paradoxical upside. The house values that have skyrocketed over the past 15 years in Harlem scared off many predatory lenders who targeted other black areas. These 1millionplus price tags have also given homeowners who are struggling to keep apace with mortgage payments the option of selling out before the bank closes in.

“There tends to be a tight connection between property values and foreclosures” explains Josiah Madar from the Furman Center for Real Estate and Urban Policy at New York University.

He and other experts understand little about the mechanisms of abusive lending other than the stark racial component. Eight of the ten top neighborhoods hit by foreclosures in the city are overwhelmingly nonwhite. A map representing the worst afflicted areas among them BedfordStuyvesant East New York North Bronx South Jamaica says it all. Each filing is a dot and the aforementioned areas resemble solid metastasizing cancers with several hundred foreclosures each.

Yet the area comprising Hamilton Heights which claims some of Harlem’s most prized Victorian brownstones had just eight foreclosure notices so few one can discern the individual specks.

It appears that the conmen who besieged other black neighborhoods steered away from Harlem wagering that anyone who lived in a valuable townhouse would be too financially sophisticated for their tricks. Unlike in the outer boroughs where the racial demographic is similar but house values lower Harlem residents didn’t report a barrage of flyers pushed through mail slots that promised zero interest rates. The scam artists who solicited people to overborrow just didn’t approach Harlem as aggressively. Take a look at the numbers. Only 0.8 percent of all homepurchases mortgages in the Hamilton Heights area in 2006 were subprime versus 34 percent in BedfordStuyvesant and 39 percent in East New York. EDITORS These are the latest available figures. Refinancing loans from risky lenders were likewise lower here.

“It was all a matter of the assumptions of the predators” said Dwayne Jones lending director of the Parodneck Foundation a housing advocacy group. “They did not come to Harlem.” He credits the large concentration of organizations like his as well as social networks like our homeowners’ association for raising awareness among less savvy member of the community.

Those Harlemites who did borrow more than they actually owned could take the money and run. That’s what our nextdoor neighbor did. Literally a week before the bank jumped to possess her 1888 row house she sold the property for a nice packet to a white family and found something cheaper. Granted it’s disruptive to move but she was spared financial ruin.

The added positive effect is that properties like hers do not sit vacant during New York’s long foreclosure process. We see a vicious cycle in foreclosurehit areas where empty houses sink the cost of those nearby. As anyone who lived through Harlem’s dark ghetto days knows no one wants to live next to a boarded up building that tempts drug dealers to loiter. Moreover few people want to buy a boarded up building with a leaking roof which is often the case as banks rarely maintain the properties they seize.

This is not to say that gentrification is great for everyone. Of course it has a bad side. Most Harlemites rent apartments and do not dwell in fancy mansions. The locale is losing its status as the last outpost of affordability in Manhattan. Those suffering are victims not of the white professionals who buy shells and fix them up. No the destructive forces are the big developers who scoop up rentstabilized apartment buildings and then try to force out tenants by doing improvements and jacking up the price. Some of these investors borrowed more than the value of their properties and now risk default. Then what happens to the residents living on the premises?

For the time being though homeowners like Dina Morrison are in a good place. There’s talk among the homeowners of a jolly Christmas party just like every year of plenty.

2008Judith Matloff

About the writer:  Judith Matloff is the author of Home Girl Building a Dream House on a Lawless Block Random House.

Balancing Budget And Social Life

Everyones going out for drinks after class. Theres a bar down the street that has great appetizers and the cocktails arent too expensive and it will be really good to connect with other people in the class so never mind the fact that with a couple of 7 drinks and an 8 plate of food and a 20 tip that social hour ends up costing you 25. And you have class a couple of times per week so that adds up to an extra 200 per month that you could really do with avoiding but everyone else is doing it and you dont want to be the one to admit that finances are tight and be a downer on the evening so you go along and have a good time but all the while feeling just slightly anxious because you know that most of this is going to end up on a credit card at the end of the month and those bills are getting high enough as it is…

Does any of this sound familiar? I know this used to a regular occurrence when I first moved to Los Angeles to pursue my acting career. I would go out with friends after class or rehearsal and have a great time but there would always be that nagging voice at the back of my head telling me that I couldnt afford this. So the question is: how does one balance the need for a social life with the realities of a tight budget? We have three different suggestions here.

1. Dont try to keep up with the Joneses. We are in some ways lucky as artists that we dont have the pressure of some of our corporate counterparts in this area. For us this area is more about dress and eating out than driving the newest Mercedes or living in the right part of town. But it is still a factor. The need to look good; is almost beaten into us from an early age so avoiding falling into this trap can be hard. Try shopping at a discount store instead of going to namebrand shops or having coffee with friends instead of drinks a 1.50 coffee is much easier on the wallet than a 6 beer. You will often find especially when it comes to socializing that people are really glad not to be spending money as they are all engaged in keeping up with you as well even if they cannot necessarily afford it either…

2. Forecast your fun. Forecasting is the process of projecting what your spending will be in any area of your life. The way to determine this is to complete a Chart of Expenses email us at infoabundancebound if you would like one from which you will be able to see exactly what you are spending on average across the financial board. You can then determine exactly what areas you are overspending in and where you can spend a bit more if necessary. The key to this process is not denial however: not not remove categories as trivial without serious consideration because there is nothing like forbidden fruit; for enticing you back. So never go into a month saying I am not going to go out at all; you are simply setting yourself up for failure. Instead allocate a certain amount for Eating Out; or Drinks; or whatever other category you want and then when the end of the month comes around and you are near the end of your allocated funds suggest Dennys instead of the local bar for those after class drinks.

3. Work together to save money. Given that most people are in the same boat as you when it comes to money be the first one to broach the subject of saving money with your friends. There is such a taboo in this country about discussing onesnbsp;finances that most people go through life never saying more than the obligatory Im fine…; usually a lie or Im broke…; but with no real attempt to solve the issues causing that situation. Break with tradition and work with others on ways to both save and make more money. You will be amazed at the ideas that come out of brainstorming these things with like minded individuals so give it a go! At the very least it will take the pressure off the next time you say Make mine a water…;

So anyway I hope these pointers give you some ideas about how to have fun but still make sound financial decisions at the same time. Again it is never about saying I won

t go out until Ive made X.; That may work for some people but I have yet to meet them. Instead map out your spending and put your money towards things that you will enjoy. Instead of feeling guilty about buying a Ice blended latte every day and then stressed about the 30 on drinks going out with friends drink regular coffee instead. 1.50 a day instead of 3.50 is 14 per week you have saved which is 28 every two weeks which covers an evening out with friends every other week. Talk to people and work out things together and then stick to your plan. Your bank account and stress levels will thank you for it.

About the writer:  Miata Edoga is a working actor and founder of Abundance Bound Inc the financial education company for actors and artists. She recently released The Artists’ Prosperity Home Study System designed to give anyone who wants them the tools to take control of their money.

7 Tips To Repair Your Credit Score Fast

Do you think you need to repair your credit score fast? Does your credit report have some negatives on it? Do you have poor credit record? Have you ever made a lot of loan applications and missed some payments in the past? Then these tips on how to repair your credit score fast will show you how to deal with your problem permanently.

1. Correct Any Mistakes on Your Credit Report

One of the first things you should do if you want to repair your credit score fast is to correct any wrong info from your credit report.

Write to the credit bureau and request to correct the mistakes on your credit report. If in cases that they do not agree with you that it was a mistake you can add a comment onto your credit report to explain. But be sure to keep your comments neutral and there is no accussation to anybody.

2. Create A Financial Plan

After taking care of any mistakes on your credit report then you must start to manage your finances in a much better way. You should set a budget and stick to it. Only buy what is truly necessary for your needs.

3. Keep Your Credit Cards

If you want to to raise your credit score fast you should maintain a good payment history on your credit cards. Use your credit cards only for necessary purchases.

About two to four credit cards is a good number to have. You will not be able to repair your credit score fast if you only have one credit card. Also if you have more than four credit cards you would have a bad credit report. Having too many cards with large balances on them would not help your credit score. You would probably be better off financially and for your credit score if you consolidate some of your debts into a lower interest loan. However you should not really overdo it.

If you need to reduce your number of cards drop the newest credit cards first. An older credit card will count for more points as you start to improve your credit score.

4. Always Send Payments on Time

Of all the ways to repair credits it is very important to always pay on time. You should never miss a payment on any loan or bill that will show on your credit report. Even if a loan company or credit card company offers you a month or two grace periods as extension to make payments it is better if you do not accept this offer. Missing the due date may still show as a missed payment on your credit report. So it is better for you to make your payments on time if you really want to repair your credits. Also be sure that your payments are received on or before the due date.

5. Pay More Than The Minimum

When it is possible send credit card payments that are more than the minimum amount due at any time that you can. It will help your credit rating save you on interest and would bring you closer to debt relief.

Take note not to max out your credit cards. Ensure that the balance amount is way below your credit limit. This will help improve your credit report.

6. Don’t Make Too Many Loan Applications

Applying for too many loan applications will quickly flag you as a possible bad payer so do not ever do it. Also do not switch credit cards several times to take advantage of offers or get new loans to pay off old loans.

To consolidate all your debts just do it once. If you are shopping around for the best terms try not to give out your name and address.

7. Make That Phone Call

If you are in a situation where you will have a difficult time meeting the deadline for a payment do make that phone call. It is much better for you to call them than waiting for them to contact you. If you are going to miss payments they might start with the collection agencies and that is really the worst thing that can happen for your credit score.

Talk to them briefly and explain your situation truthfully. Be prepared to make them an offer and negotiate. Create a payment plan that is realistic for you. If they will offer you two paymentfree months say something like: “No thank you I would prefer to keep paying a little each month”. This will help you avoid missed payments showing on your credit record and proves that you are really serious to have debt relief.

When you have a new payment plan worked out together with them do try to ask them if they would agree to stop reporting on you so that you have a chance to repair your credit score fast. Many companies will agree to this request as long as you commit to send payments on time and not miss any payments on your new plan.

Once you follow these tips you will be able to improve your credit score quick. It will also help you to manage your finances and achieve debt relief in the future.

About the writer:  Do you know that you can also easily fix finances in 3 easy steps? Find out at http://www.earndollar.ws/creditrepair. How to Fix Finances in 3 Easy Steps.