Keeping finances above water

Underwater mortgage This deep sea diver reminds me of the need to keep finances liquid.

Homeowners complain that they’re underwater. Although hurricane Sandy comes to mind because of flooding, this is not the only way that they’re underwater.

Homeowners say they’re underwater when the total cost of the mortgage (say an 8 million dollar total mortgage payment) exceeds the market vale of the home (say $146K). Talk about teaching children the value of a dollar- we overpay on a regular basis.

Thankfully, there are people who are willing to be underwater and will buy and sell real estate because they view it as a home and are more concerned with having a place to live.

Water is a good metaphor for money. One that we can use to explain finances to our children.

Everyone needs a liquid emergency fund. Having access to cash of your own in any economy staves off creditors offering interest rates that are too high.

Using credit for the small emergency – like the blowout on the highway-winds up costing more, and some rescuers will even negotiate the repair and tow when cash is in the picture.

Cash emergency funds also help maintain sanity, as long as the funds are replenished as soon as possible.

Children can learn to stash cash for emergencies too. Saving allowance for the last-minute field trip they forgot to tell you about, is a god way to reinforce disciplined saving and money management.

I guess the price of anything is the price someone is willing to pay for it.

An emergency fund is a key principle in good money management. That’s why “Can I Have Some Money?” helps children learn about it and other basics.

About candi sparks

Candi Sparks is a fully licensed financial professional and a Brooklyn mother of two. She works with private clients, business owners, the NYC Department of Education, faith based, non profit and community organizations on financial education and implementing financial strategies for success. Events are fun, interactive and solid financial information. Sparks Fly, financial literacy for YOU(th) Learn more so you can live more! toll free: 866.556.2432
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