Today on MoneyLife

At the top of the program, Chuck tells listeners that some of our listeners may not have as much joy entering this holiday season in the past because of the down economy. Some have lost their homes and others are concerned they will lose theirs in 2009.

Now lenders don’t want houses back, so they’re coming up with ways borrowers can stay in their homes. One new program involving Fannie Mae, Freddie Mac, and many other major lenders starts December 15. It’s for people who are 90 or more days past due on their house payment or who are in foreclosure. You're not eligible if you’re already in bankruptcy.

To qualify you also must have a loan-to-value ratio of 90% or more. That means the equity you have in the home must be 10% or less as determined by the lender. If you have a lot of equity in your home, you don’t qualify.

To apply, you must complete a hardship statement, provide proof of your monthly household income, and sign a modification agreement, meaning you’re willing to accept new terms from your lender.

If you think you’re eligible, call your mortgage lender and give them your loan number, monthly household income, and an estimate of homeowners association or condo fees. Your lender will tell you whether you meet the requirements.

If you do qualify, the lender will try a combination of options to reduce your payment to no more than 38% of your gross income. The lender will either extend the loan term, lower the interest rate, or push back payments on the principal. For more information, visit HopeNow.com or call 888-995-4673.

After the break, Chuck answers some of the most frequently asked financial questions frm listeners.

Q. What should I do with my 401k now that the market has crashed?

Chuck: It depends on your age. If you’re young, leave it in the market. Buying and holding is the best investing strategy. If you think you’ll need the money in the next five years, it’s a different situation. I believe the next five years will be tough, slow recovery for stock market. It's best to try and weather the storm, because if you pull it out, you’ll lock in the losses and incur penalties. If you must take the money out, try to do it in a way that avoids penalties. If you're in higher risk investments, consider moving your money to a more secure investment like a money market fund, keeping it inside the 401(k). Actually, there is some wisdom in actively investing in your 401K right now as many stocks are selling at bargain prices. No one knows what the future holds, so get your money in a safe place within your 401(k) and hang on.

Q. I'm worried about losing my job.  What should I do?

Chuck: The jobless rate is increasing, and could reach 8-9% in 2009. It's affecting different industries, but the sky isn’t falling. Here are steps to increase your job security:

• Make yourself valuable to your employer…be proactive, go the extra mile, do your best work
• If your industry is downsizing and there's nothing you can do about it, then begin the process of updating your resume, network with friends and family, consider moving to another part of the country (if you want to stay in your particular industry), perhaps consider going back to school or being trained in another skill
• Remember that God gave you the job, and that He promises to take care of you no matter what, so don’t live in fear
• Take it one day at a time

Q. I've been out of work for 6 months.  How do I keep from getting discouraged?

Chuck: I've never been out of work for more than two weeks, so I can only imagine what you're going through, but whenever I lost a job, I always started looking for a new one the next day with a goal of working again in less than two weeks. I believe in working somewhere to produce income while looking for a career job. Stay active…do not become a couch potato. Continue to treat your job search like a JOB…get after it each day. Stay in touch with other believers, network. If you're a guy, form a group of other men who can encourage you and pray with you. Ladies, get a group of other women together to do the same. You can also listen to several past MoneyLife programs (October 22, 23, and 30) with career expert Brian Ray (see a video of Brian here). Also, see Matthew 6:34.

Q. I don't make very much money.  Do I still need a budget?

Chuck: Absolutely, no one is exempt from needing a budget. One guy who became a millionaire never earned more than $11 an hour. He lived beneath his means and invested the difference. You have to have a budget to live beneath your means. Also, don’t be wage complacent, believing you're stuck at a certain income level. I've seen people make more in the same job as others because of their high productivity. Do your best and see what God will do.

Q. What's the easiest way to set up a budget?

Chuck: You can use the free budget tools available on the Crown Web site. If you want something more sophisticated, check out Crown Mvelopes, which automatically tracks your spending but requires a small monthly fee. We have other tools available purchase here. One simple way is to get a 3x5 index card and start writing down everything you spend each day. Budgeting isn’t hard but it takes discipline and self control to stay within your limits. If you do it, it will pay huge dividends.

Q. Is it still a good time to buy a house?

Chuck: It is if you can afford it. The current condition of your personal finances is more of factor in the decision than the current housing market. You must be able to put at least 20% down. If you can keep the cost of the house under 25% of your total gross income, you could buy a house. There are good deals available right now, but don’t buy it as an investment. Make sure you want to live in it. I really don't think home prices wwill recover for 10 years.

Q. How do I know if I really trust God?  Is there a "litmus test?"

Chuck: The Enemy attacks your trust in God first because it's the bedrock of your faith. He wants you to doubt whether God is reliable. He uses economic circumstances to manipulate your emotions. The litmus test is whether you’re worrying about your life. Worrying denies faith in God; it's like atheism. It’s what unbelievers, not believers should do. We have worldly obligations to think about and plan for, but if you believe in God and trust Him, you can be free from worry.
Live for today and seek first His kingdom. See Matthew 6:25-33

Job Loss

Dealing with lay off is not pleasant, but look at the lay off as an opportunity that can be conquered.

• Read More

Steps to Making a Budget

In making a budget, there are several steps, each requiring individual effort.

• Read More

Purchasing a Home

Housing is generally the largest item in a budget and often causes the largest budget problems.

• Read More

Attitudes that Identify Self-Control

When we turn our finances over to God we must be willing to accept His direction.

• Read More

Other Resources:

• ABCs of Money Package
• Career Direct
• God's Principles for Operating a Business
• Business By the Book
• Crown Mvelopes