let’s talk: QUICK TIPS TO IMPROVE OUR FINANCIAL PROFILES
Good Morning!
I am not going to lie, when I sat down to write this week’s LTRE, I was at a loss as to what I should talk about. On the REI side of things, all I am really doing is checking in with tenants, catching up on Quickbooks, trying to automate our processes a bit more, and facilitating minor fixes to properties. As a realtor, I helped a client make an offer on the home of their dreams… only to get shot down (again) as the owner decided they wanted to hold on to the house for now. Doesn’t sound like too much to celebrate or “preach” about right? So I sat at my laptop for a while just staring at my Mailchimp template thinking about what it was that I can actually do TODAY, specifically for my REI business, when the future is so uncertain… As I thought about my “goals” for a while I tried to think about what exactly I do know about myself and what I want to do in the future… I know for sure that I want to grow our rental portfolio, and try my hand at another renovation. So, in order to do those type of “sexy” REI activities, I need to make sure I am financially set up and ready to go once the restrictions are lifted. The good news is – getting myself financially set up is something I can actually do TODAY. So let’s talk about that.
So, as we do, let’s talk Real Estate, let’s talk QUICK TIPS TO UP YOUR FINANCIAL GAME…
When I decided I needed to get my finances right and ready to go, I went to some of the REI blogs I follow to see if they had any solutions. Good news – they did! This seems to be a topic on a lot of our minds right now. Below is a list of advice I compiled from others in our field.
#1 GET YOUR CREDIT SCORE IN ORDER
The good news is that there are a ton of free sites where you can quickly check your credit report. I use CreditKarma. Take a look at your credit report and see if there are any items on there that are negatively impacting your score. Maybe you were late on a few payments? Maybe you have some debt you forgot about? There are a number of reasons why your credit score might be negatively impacted but the good news is, you can fix it. Maybe we can talk about ways to boost your credit score on next week’s LTRE?! I will do some research and reach out to some experts on this!
#2 REVIEW YOUR CREDIT CARDS
My first reaction when I checked my statements… I need to get my online shopping / Amazon addiction under control. It was definitely eye opening. Her are a couple of other things I learned while reviewing my credit card bills…
CC Fix #1: Automatic Payments
I made sure that I had automatic payments set up (in a fashion that was suitable for my family’s current financial situation). We always try to pay any “debt” or bills as soon as we can / whenever we can. These scheduled automatic payments are super help keep me on track with that.
CC Fix #2: Rewards & Incentives
Check out the rewards & points incentives attached to each of your credit cards. I made a table for PK and I to reference whenever we use our credit cards. Booking a trip? Use Amex. Going grocery shopping? Use the Chase card, etc, etc.
The point of this was to make sure we get the most reward points for every purchase we make! I am always looking to get the most bang for our buck.
#3 CHECK YOUR SUBSCRIPTIONS
Subscription Fix #1: Eliminate When Possible
Can you cancel any of them? I was shocked to see how many “dumb” subscriptions I unknowingly had on my cell phone. I also found that I was signed up for several grocery delivery services that I never used… I immediately cancelled a bunch of them which saved me $100+ for the year. Check your subscriptions people!
Subscription Fix #2: Lower What You Can
Can you lower any of your recurring bills? i.e. cable plans, phone bills, sirius xm, etc. I sat down with PK today and we went through a lot of our recurring monthly bills. One thing that stood out – why the hell is our cable bill so high?! We are working on fixing that…
#4 CREATE A BUDGET (& actually stick to it)
I was SO good at this right after I graduated from college… mainly because this was my first time being truly on my own in life and I was living in an expensive town so I had no choice but to SERIOUSLY budget. I was SO diligent with it; to the point where if I bought a 99 cent big gulp from 7 11 – it got logged in the budget. After a few years of doing this I got lazy and stopped. Well, I am now trying to get back on my game. Setting up a new budget template for PK and myself to follow as we navigate the rest of 2020.
#5 ORGANIZE YOUR FINANCIAL LIFE
Get your DOCS in a row… get it?! Instead of ducks….I know, dumb joke, just going a bit stir crazy obviously. I have set up secure folders for us to use where we can access our tax returns, financial statements, etc. It is important to me that we both know and understand where we stand financially.
#6 SET CONCRETE FINANCIAL GOALS
Financial Goal #1:Income Goals
Determine your income goal. What do you want your take home pay to be in an ideal world? How can you achieve that? Is that working a certain number of hours per week? Taking on a side hustle? Closing a certain number of transactions per year? Whatever it is, try and develop a concrete plan as to how you can achieve that income goal. I just dropped this “to do” item on PK. Literally I am typing this as I tell him this little activity we are about to do – lets just say he looks less than thrilled to partake in this concrete goal setting but we are doing it people!
Financial Goal #2:Retirement Goals
Plan for your future. What does your retirement look like? As of right now, our retirement plan looks like a mix of our 401k(s), security investments and rental property income. I have seen a lot of successful investors that will tell you to cash out your 401k and invest it all in rentals… I personally disagree with that advice. Diversification can be your friend. Also, L O L that I am talking about our retirement plans at the ripe old age of 27 BUT I do believe that getting yourself set up for retirement as early as possible is very important. It is something both of our parents stressed to us when we first graduated college and just 6 years later, it is crazy to see how quickly these accounts can grow. FULL DISCLOSURE: This does not mean our retirement accounts are stacked so please do not come at me. The point I am trying to make is the power of compounding is very real so might as well get started on that $$ growth as quickly as possible. Even if you can only set aside a few $$ every month know that every $ counts!
#7 PLAN WAYS TO FUND YOUR GOALS
Since my goal is to do another renovation and grow our rental portfolio, I am going to have to find a way to pay for that. We have done everything to fund these activities from using our personal savings, to taking out personal loans, to bank financing, to using rental income. Going forward, I want to spend some time reflecting on which funding approach works best for us. Because trust me, not all of these funding methods were a good idea.
That is all I have for today folks! I hope you did not read this and think “I HAVE TO DO ALL OF THIS RIGHT NOW?!” – that would be way too overwhelming. I simply put this together as a guide for all of us to use, in the event we are looking for ways to potentially improve our financial profile. Also please note, that I am NOT a financial advisor. I am simply a 20 something year old girl just trying to navigate life as best as I can, and for me, part of that means trying to get my finances in order, which led me to today’s post! So, let me know if you have any other suggestions! Trust me, we are ALWAYS open to learning new ways to UP our financial game!
Charities That Need Our Help
Feeding America
“This organization helps feed communities and individuals facing hunger across the United States through a nationwide network of food banks.”
No Kid Hungry
“With coronavirus forcing mass school closures across the country, millions of children are losing the daily meals they depend on. No Kid Hungry uses donations to send emergency grants to food banks and local community groups. It diverts resources to feed kids in the hardest-hit communities. The organization also has plans in place to ensure families know how to find food while schools are closed and making sure kids get three meals a day.”
Meals on Wheels
“This organization delivers meals to the country’s elderly population. Many of its local programs are struggling with the additional costs of delivering meals during the outbreak.”
The CDC Foundation
“This nonprofit organization for the CDC is raising funds to help respond to the public health threat when federal and state funding is not available. The foundation said it will use the funds to support state and local health departments in the US as well as support the global response including logistics, personal protective equipment, and critical response supplies.”
The American Red Cross
“As the number of coronavirus cases increases in the US, the number of people eligible to give blood and platelets for patients in need could decrease further, the Red Cross said. The organization is urging all eligible, healthy donors to donate blood and platelets to help maintain a sufficient blood supply flow and avoid potential shortages.”
Happy Wednesday! & Stay Healthy!
Erin
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Opinions stated here are my own and not the views of eXp Realty.
Data Sources for Today’s Content:
Me – this is based on my own personal experience!
https://www.biggerpockets.com/blog/financial-fixes
https://www.thebalance.com/building-complete-financial-portfolio-357968
