Man! If only I learned how to handle my finances 30 years ago instead of 10, I would be in a much better place in my life. As it happened, there was no class in school on personal finances, and growing up poor taught me that as soon as you get money, spend it on something you want because you may never have that chance again.
All this non-education growing up helped me go into debt often, buy things I couldn’t afford, and take money out of my savings and retirement to make payments on those things I couldn’t afford.
I’m not saying my life sucked, I mean I went on vacations, I bought new cars, and I ate out all the time since I was (am) too lazy to cook. When I didn’t have enough money to pay a bill, I would either work more, sell something, or take money from one card to pay another.
I actually thought I was being smart and that I was “good with money” because I could come up with it when I needed it. But that actually gets exhausting, and complicated, and confusing. And I knew it had to end.
The transition between having things and doing things with “borrowed” money and having things and doing things with only the money you have is tough. You have to go without long enough to save money to be able to have again, which also is exhausting, complicated, and confusing. But knowing what I wanted the outcome to be (financial freedom), made it easier since there is a true light at the end of the tunnel.
Starting out, I read a lot of finance books and tried all different financial freedom programs. Some were a waste of money and some really worked for us. If you have read any of my finance blog posts, you know I am a big fan of Dave Ramsey. He offers practical advice, easy steps to follow (he calls them the baby steps), and classes that offer the individual help and group support you need to be successful.
He also offers a free podcast, 3 hours each day, anyone can listen to. He answers caller questions about all areas of finance from budgeting to investing.
As most of you know, I love podcasts and I listen to his daily. His advice is very simple and useful. One of the topics he gets questions on all the time is mortgages. When to buy, how much to spend, etc. He has a few rules. Don’t buy a house without a down payment.
Don’t buy a house while you are still in debt. Don’t buy a house with anything other than a 15 year fixed mortgage. Never co-sign on a house with someone you’re not married to. Your 15 year fixed mortgage payment should be less than 25% of your monthly take home pay. Never take out a second (or third or fourth) mortgage on your house.
After breaking several of his rules, we started this year fresh with a 15 year fixed mortgage in our names only! And since we had some equity in our house, we even got to stop paying the mortgage insurance we previously paid each month for not having a down payment. It took us being home owners for 18 years and 3 houses later to finally learn!! Phew!!!
Don’t be afraid to tell your financial planner or your mortgage lender or your retirement advisor exactly what you are wanting. They will find a way to make it happen for you. If not, find another. I am lucky I met our mortgage lender, Mandy, several years ago. She has helped us with our financing and re-financing over the past few years.
If owning a new home or refinancing your current home or rental is in your 2017 resolutions, reach out to Mandy! She has made an otherwise stressful transaction easy and pleasant.
Join like-minded peeps working toward financial freedom…
See you there!