Attract Next Year's Homebuyers Today Using Financial Education

The first step to being healthy, regardless of it being physical, mental or financial, is to recognize where you have been and acknowledging how you got there. This requires a long, hard look in the mirror and allowing yourself to be honest as well as vulnerable. For many of us, we think we know but we still need clarity. Therefore, we must embark on an exercise to monitor and track all of our spending for 60 days. (If we were discussing physical health, you would track what you ate and what you did for exercise.) Tracking your spending will allow you to put together a realistic budget. This is where you must start if becoming a millionaire is in your future.

The first step in creating a budget is to start by writing down how much your household brings in each month. (This would be your pay after taxes and cost of health benefits are subtracted.) Then, from studying your 60 days of spending, notate how much of what was spent is a non-negotiable (i.e. housing, car payment, basic food, utilities) and how much was discretionary spend (concert tickets, drinks at a bar, subscription services, new clothes etc.). The removal of discretionary spending will be key to your success. You now have the data you need to create and follow a realistic budget. By following a budget, you can formulate a plan to live a financially fit lifestyle that includes spending less than you take home and saving for retirement. Here is your step-by-step plan:

Step 1: Spend less than you bring home. (If this is not possible, put yourself in a position to earn more money, which could include a second job.)

• You should be able to achieve this in 60 days.

Step 2: Establish a Reserve Account. By tracking your spending and focusing on bringing home more than you spend, you will have money left over each month. With this money, you will establish a reserve account that holds six months’ worth of your monthly budget. This is your rainy-day fund. You should never again need to use a credit card to bail you out of a financial jam. This reserve account should never hold less than 6-months of reserves for long. Meaning, if you dip into it because life threw you a curveball, your priority is to pay yourself back ASAP.

• This could take 3-9 months to achieve.

Step 3: Pay off all credit card debt. Once your reserve account is full, focus of paying off all credit card debt.

• This could take 6 months, or it could take 24 months.

Step 4: Begin to generate wealth via homeownership and retirement savings. Once you have achieved the above, start focusing on wealth generation and retirement savings.

• If you do not already own the home you live in, formulate a plan to purchase a home. This will be your #1 way to generate wealth.
• Enroll in your company’s 401k. Most companies offer a match to your savings. Think of this match as FREE money.
• Open a Roth IRA. This is another way to save for retirement.

Step 5: Be a forever learner. Don’t be afraid to consult with a financial advisor. Read books. Attend workshops. This is a lifestyle to live and embrace. Things like picking stocks, trading crypto, flipping real estate etc. should only be considered once Steps 1 through 4 have been mastered.

Finally, trust the process. No one gets rich overnight by systematically contributing a few hundred dollars each month to a 401k or IRA. Same applies to owning your own home. Your home is not a get rich quick scheme. Those schemes don’t exist. However, over time, the compounding effects of living this financially fit lifestyle gives you the greatest chance of becoming a self-made millionaire. I know this because history tells me so. Research indicates this basic strategy is how the bulk of today’s millionaires generated their wealth. And now you can too. Just remember, it is a process. Think marathon and not a sprint. ?

Mortgage professionals are uniquely positioned to play a pivotal role in guiding potential customers towards financial well-being. Let's explore how you can incorporate this into your video content strategy to connect with even more potential clients.

1. Educate Your Audience

Create informative videos explaining the importance of establishing both short-term and long-term financial health. Break down complex financial concepts into simple, digestible pieces for your viewers.

2. Set Realistic Goals

Talk to your viewers about the significance of setting achievable financial objectives. Encourage them to set short-term goals, like creating an emergency fund, and long-term goals, such as saving for a down payment on a house.

3. Creating Financial Action Plans

Guide your audience on how to create actionable financial plans tailored to their budget, emphasizing saving and investing. Introducing people to user-friendly, digital tools will only help you here.

4. Keep Your Audience Motivated

Offer tips on how to stay motivated throughout their financial journey. It’s like a diet… easy to start, but difficult to maintain. Be sure to mention the importance of tracking progress, celebrating milestones, and visualizing the end goals.

5. Tracking Financial Health

Provide resources and insights on how your viewers can conduct a thorough financial health check-up. Direct them to reputable websites or tools that help evaluate debt, savings, investments, and retirement plans.

6. Share Success Stories

Showcase success stories of individuals or families who have achieved their financial dreams through prudent planning and responsible mortgage decisions. Real-life examples can be highly motivating and will ensure your viewers don’t feel all alone.

7. Interactive Q&A Sessions

Host live or pre-recorded Q&A sessions where your viewers can ask financial-related questions. Address their concerns and provide insightful advice. Helping people solve rea-world challenges is a great way to build trust with your audience.

8. Collaborate with Financial Experts

Don’t be afraid to call on other financial advisors or experts for a video series. Their expertise can provide immense value to your audience, and vice versa.

By integrating these topics and strategies into your video content, you can effectively connect with potential customers and referral sources.

Remember, empowering individuals with financial knowledge as a mortgage professional is a selfless journey at the start. Stay committed and it will be a rewarding one.

As a loan officer or financial professional, you have the unique opportunity to guide positive emotional?and practical experiences in your client's financial health journey. This article will give suggestions on how to overcome emotional or practical barriers to setting and achieving financial planning goals which plague many Americans. As noted by the Federal Reserve Bank, “47% of Americans are ‘financially fragile’ and could not cover an unexpected $400 expense without going into debt.”

Start with Compassion

It helps to recognize that setting a financial goal can seem useless or defeating for consumers. Make it your mission to help clients set achievable goals, access subsidies, and leverage savings partnerships and automations that celebrate the success and pride to be taken in incremental wins.

Enhance the Experience

We all need treats and rewards. Without wins along the way, it’s hard to stay committed to the bigger vision. Using programs that add automation, incentives, and support, like?Holiday/Vacation Accounts,?Incented Savings Programs, and?Matched Savings Accounts (IDA)?are a motivating way to make your client’s saving goals feel attainable.?

Celebrate The Wins

Build on success, subsidies and SMART goals. Encourage clients to set up high yield/automated savings accounts cited above for the small but mighty milestone of a dream vacation or short-term win. Celebrating small wins can be a potent tool for your clients to begin to believe they can achieve other milestones in their financial health and homeownership journeys.?

Lead The Way Seasonally

Engage quarterly on “Putting the FUN in FUNding” milestones that could match common requirements for your client’s longer term goals:

-? ? Holiday/Vacation FUNds

-? ? Emergency FUNds

-? ? Debt Paydown FUNds

-? ? Closing Fees & Home Purchase FUNds

Best of luck inspiring and engaging your clients this season! Just as you can guide them to the fun of financial health, I wish you all the fun of celebrating their incremental steps towards success!

What I know about managing my finances results from years of mistakes, testing and learning. ?In my case, formal schooling did a poor job of preparing me for personal financial responsibility. For example, my college finance degree enabled me to use complex stock options models and help mega-cap companies develop cash flow models but left me woefully unable to manage my own monthly cashflows.

And even years later, in the midst of the dot com bubble, I seriously considered quitting my ‘real job’ because my relatively short-live dot com gains exceeded my annual salary (until they didn’t!). Fortunately for me, I never quit my day job.

So, with those disclosures in mind, here’s what I’d recommend to my 25 year old self.

1. Identify your unique financial situation.?The first step of the financial planning process is to assess what is happening in your life right now and how if and how you can change your financial situation. Some areas to reflect on are your household budget (I use Mint.com for budgeting but there are plenty of solutions), other financial obligations such as major family events (weddings, death, divorce), retirement savings, and tax strategies.?You can’t manage what you can’t measure, and as a credit expert I see every day the pitfalls of assuming what you think you spend is accurate. Get the facts.
2. Set realistic financial goals.? Goals serve four basic functions: they provide guidance and direction, facilitate planning, motivate and inspire personal success, and help individuals and families to evaluate that success.?Your goals need to reflect your lifestyle (single, married with kids, divorced paying alimony) and your career risk tolerance – for example, can I afford to be an entrepreneur early in my career or only once I’m financially stable? Am a company lifer, or am I willing to start over and relocate for that big promotion?
3. Make plans for the future.?Once you know who you are, where you stand and where you would like to be financially, you can begin to plan for the future. I recommend engaging a fee-only financial advisor early in your planning, there are plenty of low cost options. For some, meeting financial goals will simply mean continuing on their existing path. For others, realizing financial goals will require a change in lifestyle.?Even the best plans are subject to the unknown, so be willing to adapt and review.
4. Manage the monthly income you have available. Managing the money you currently have will most definitely determine how much money you have to manage in the future. ?Your income needs are directly related to your spending habits, and your situation is unique to you.?A relative recently shared that he had concluded that managing his spouses spending was a non-starter – for him, the only viable path to successful retirement as a married couple was to earn significantly more than she spent.
5. Review your plan on a regular basis. Your financial plan should be a living document, and it needs to accurately reflect what your personal lifestyle requires. As your circumstances change, the financial plan should be updated. A good time to review your financial plan should be when major life changes – such as marriage, having children or changing jobs – occur. I recall a co-worker saying once that his rule of thumb was you need a net worth of $10 million to retire. Can you imagine the un-necessary stress that would cause if you actually bought in to that? Keeping up with the Joneses is a bad strategy.