In this Issue: Ways to Preserve Your Personal Finances Buying a Home? How to Cut Closing Costs Shopping for a Mortgage - First Things First (Please leave us a comment at the bottom of the newsletter.)

Ways to Preserve Your Personal Finances

Most people have a hard time managing their personal finances. After paying their bills, there seems to be no money left, which is why most people are unable to save anything for the future, or save enough money for a down payment on a house. The scary fact of the matter is, many people are just one visit to the hospital away from being personally bankrupt.

When you have more month leftoever than you have money, the stress can make things even worse.

So how can you better preserve your personal finances and make sure you're not in that situation?

Start by cooking more . Unfortunately, most Americans have fallen into a tailspin when it comes to saving money in the food category. Each meal that you eat out at a restaurant can cost as must as the food for an entire week if you would plan and prepare meals in your own kitchen.

We have become a fast food, grab it and run, eat something quick society. Recent downturns in the economy have curbed eat out spending somewhat, but many people still spend far and away more than they should eating out.

Watch for fraudulant charges - In the process of paying your bills, do you really read them? Do you look at all the inserts and read the line by line breakdown of what you owe? Do you look for anything that seems odd? If you just pay your bills on auto-pilot without reading them thoroughly, you may be wasting money that you don’t have to waste.

Charges you didn’t authorize have the potential to be fraudulent. Sometimes such charges are big and obvious, but sometimes they are small and can go unnoticed for many months, especially when you don’t take the time to read every line of your bill. Then, when you finally do notice, you’re shocked to realize that you’ve paid hundreds of dollars that you never authorized.

Read your bills every month , question every charge and if something doesn’t seem right, report it immediately.

Billing mistakes happen, and pretty frequently, too. Sometimes you’re double billed for things (medical bills are legendary for this), utility meters are misread, charges are posted to the wrong account, your charges don’t match your receipts and on and on. If you catch these mistakes early, you can ask to be re-billed for the correct amount and refuse to pay until you get a correct bill. Or you can dispute an incorrect charge and have it corrected. However, if you go ahead and pay the bill or fail to notice the mistake quickly, you can have a much more difficult time getting it corrected because the company may take the fact that you paid as acceptance of the mistake and may make you go through more hoops to fix the problem. Mistakes may also become permanent, such as when you are billed the wrong amount for a service, you fail to challenge it, and then the next month the computer spits out the same wrong bill. This can go on for months and cost you big money if you don’t catch it.

Trim the Fat. How much stuff are you being billed for that you never use? Are you paying for an unlimited texting plan and you send two texts per month? Are you still paying for that magazine subscription and you haven’t read the publication in six months? Are you paying for features on your phone bill like call waiting that you never use? How about your cable bill. Are you paying for channels you never watch? Find the fat and cut it. There’s no sense in paying for stuff you aren’t using.

Save on gas . Do you live close enough to your work to walk, ride a bike, or carpool with someone? You'd be stunned at how much you save in a year by eliminating just 1 or 2 trips in the car that you take every day. At today's fuel prices, it doesn't take a math expert to figure up how much you might save by doing this one little thing.

Quit smoking. Pack-a-day habit? In some places, that's easily $5 a day — or about $1,800 a year — that can go right into your savings, not to mention what it saves you on insurance and health care.

Buy used. The average consumer spends about $1,750 a year on clothing and its upkeep, according to the U.S. Bureau of Labor Statistics' most recent Consumer Expenditure Survey. You can potentially cut that in half by shopping at consignment shops and auctions, though the life of the goods may be less than buying new.

There are dozens and dozens of ways you can save money and preserve your personal finances. These are just a few. Saving in these areas alone could mean the difference in whether you can buy a home, or even keep the one you have.

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Buying a Home? How to Cut Closing Costs

Closing costs when buying a home average 3 percent of the purchase price and can reach 6 percent in higher-tax areas. But you can ease the pain a little.

In today's "buyer's market", one way to save on your closing costs is by asking the seller to pay some of your closing costs. Plus, you get a tax break for mortgage points the seller pays (each point is 1 percent of the loan amount). Note that there are limits: Freddie Mac and Fannie Mae allow sellers to pick up closing costs worth 6 percent of the purchase price for loans with 10 percent or more down; the Federal Housing Administration allows up to 6 percent; and the Department of Veterans Affairs allows 4 percent.

Shop loan terms. The "no-cost" mortgage, which rolled most closing costs into your interest rate, has largely disappeared, and lenders have resurrected fees for everything. Charges vary dramatically, so shop and negotiate all the loan terms.

Call three or four lenders for their best rate (preferably without points) and an estimate of their fees (excluding third-party charges and escrow amounts). Apply with the lender that's offering the best deal to get a good-faith estimate. If you're refinancing, your current lender may discount fees.

Pay less for PMI. If your stake in a home is less than 20 percent, you must ante up for private mortgage insurance. Monthly premiums typically cost 0.5 percent to 1.5 percent of your loan amount per year, depending on how much equity you have, your credit score and whether you get a fixed or adjustable-rate loan.

You could negotiate with the seller to pay a single premium upfront, or you could roll that premium into your loan. The downside of taking the larger loan is that you'll pay more interest. But you can deduct the extra interest and not worry about the limits on deducting PMI premiums. PMI can be canceled when your equity reaches 22 percent of the home's value, but a word of caution - you need to keep track of your loan-to-value ratios and ask for the PMI to be dropped. Most PMI companies will not do that for you automatically.

Find cheaper title insurance. Title insurance protects against challenges to your ownership, with coverage for your lender and for you. But as much as 80 percent of the premium goes towards the agent's commission, so shop for cheaper title insurance.

For example, EnTitle Direct (EnTitleDirect.com), which operates in 32 states, charges lower premiums by eliminating the middleman.

These are just a few of the ways for you to save money by lowering closing costs. Talk to us about other ways to save when buying your new home.

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Shopping for a Mortgage - First Things First

With interest rates continuing to hover near all time lows, and time now running low on the First Time Home Buyer Tax Credit, many people are asking, "What do I need to do first in getting ready to shop for a mortgage and a home?"

In part 1 of a 2 part series (part 2 in your October newsletter), Money Talks editor, Stacy Johnson, explains the importance of getting your credit score as close to perfect as possible BEFORE you start the process:

In our October issue of this newsletter, Stacy will look at Part 2 of this series, "How You Find the Right Lender" once you've gotten your credit report looking its best.