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Money Magazine Offers Helpful New Money Rules

The April issue of Money offers a guide to playing by the "New Money Rules," in the wake of plunging stock prices, rock bottom home values, and soaring unemployment. While traditional advice may have dictated you should buy a house ASAP or hop from position to position, that advice doesn't have the same relevance it used to. What are some of the new rules?

  • Buy that house — if you plan to stay. In the long run, housing prices should keep just slightly ahead of inflation; in the short run, they may drop even more. Moving in less than five years? Maybe you should keep renting — you may not make enough on a home sale to cover your broker's fees and other costs.
  • Save for a hefty down payment. If you are ready to buy, you'll need to put down at least 20 percent to make a deal. More money down, along with a 720-plus credit score, will help you nab the best mortgage rate.
  • Try lowering the odds you'll get the ax. Take courses to keep your career skills current. You'll be less vulnerable in the next round of cuts and more competitive in the job market if you do get whacked. And make sure you have an emergency fund that can cover your living expenses for six months to a year.
  • Give the boss a reason to love you. Just because you need to keep working doesn't mean your employer will accommodate you. Make yourself vital: know the latest technology and gain a rep as a problem solver. Plan B: go part-time, which works almost as well for preserving your nest egg as a full-time gig.
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bellaressa bellaressa 7 years
Thanks for the post Savvy, I've been looking for a pt job that I can do on the weekends and maybe 2 nights a week. I'm not sure I can handle anything else with more days. I am looking to save more money for a substantial EF and down payment in the future.
ilanac13 ilanac13 7 years
i like a lot of these but the challenge with the last idea about getting a part time job is 1) who has the time, 2) there are so few jobs even part time available cause so many folks are out of work that what can you really do?
Spectra Spectra 7 years
Definitely try to have a sizeable down payment for your house because it'll help you on the financing. We actually HAD to have 20% down for our house because of some zoning regulations that required us to have at least 20% equity in our house from the beginning. That was actually part of why we got the house in the first place...most of the other buyers that liked it (it has a kick-ass 1200 square foot garage with a car hoist) couldn't make the down payment. It saves you on the amount of total money you'll pay the bank as well...no PMI, shorter loan term, etc.
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