Tackle debt faster with a steady paycheck

Dear Liz: My fiance and I sell cars for a living and we work on commission only. We can never predict what our pay will be. The worse part is that if we do not sell a car, we run the risk of owing our employer money. We are both divorced and have bills from our previous marriages. Please let me know how we can simplify our bills. I am trying to pay off my debt, but as soon as I start gaining momentum I get stuck because my paycheck is lower than I had hoped. We do not find out what our pay will be until the day before payday.

Answer: Would one of you consider another job? Sometimes the best solution to an unpredictable income is to find a different career. That might create an existential crisis if you are single and have your heart set on being, say, an artist.

But it is hard to imagine that selling cars is your heart's desire. If it is, there is a good chance your fiance might consider finding a job that's less volatile. If at least one of you has a steady gig, you can start repaying your debt based on that income and boost those payments with the commissions.

If you insist on staying put, the only way to handle unpredictable incomes is to base your expenses on the lowest amount you expect to get paid.

Buy a house only if you are ready

Dear Liz: As a first-time buyer, I'm wondering: Is this the right time to buy a new home? Based on current economic indicators, house prices may go down further. When do you think is the best time to buy?

Answer: The best time to buy a home is when:

* You have a strong desire to be a homeowner.

* You are financially prepared and can afford the costs of a home.

* You are ready to stay put for several years.

Those are the same conditions buyers should have been able to meet at the peak of the housing boom. The best time to buy a home is when you are ready, regardless of the market.

That said, if you buy now, you must be psychologically prepared for your home to lose value. You could wait until prices start to rebound -- but you may lose out on low interest rates or some great deals.

Focus on getting your finances into shape. In today's credit crunch, people with high credit scores and decent down payments (10% or better) get the best mortgage deals. You should also have at least three months' worth of mortgage payments after the deal closes to ensure you're ready for all the other costs of homeownership.

Liz Pulliam Weston is the author of the new book "Easy Money: How to Simplify Your Finances and Get What You Want Out of Life." Questions for possible inclusion in her column may be sent to 3940 Laurel Canyon Blvd., No. 238, Studio City, CA 91604, or via the "Contact Liz" form at www.asklizweston.com. Distributed by No More Red Inc.