This New Year’s Eve was a special one—we said hello to a whole new decade. That means you have a new starting point to make some major money moves! With a few simple personal finance strategies, you can set yourself up for long-term success in the 2020s.
Setting Better Personal Finance Goals
A new year brings with it the promise of new beginnings, and many of us use this occasion to set fresh goals, or resolutions, for ourselves. Studies have shown that you’re more likely to succeed when you set goals that are specific, measurable, attainable, relevant and time-based (or SMART). This year—and this decade—consider using this guideline to set financial goals that will set you up for long-term success.
How can a mortgage professional help you define and achieve your financial goals? You may be surprised by how many hats our Mortgage Specialists wear. They can provide useful guidance that affects the big picture of your financial life—not just where you live. We sat down with Sr. Mortgage Specialist Nick Carter, who’s also the Branch Manager of our Eugene, Oregon location, to talk personal finance goals and showcase the expert coaching and advice you can receive when you build a personal relationship with your mortgage lender.
Starting With the Basics: Credit Scores and Savings
While everyone’s financial situation and goals differ, there’s one thing that’s fairly consistent: we all know we should improve credit scores and boost savings as well. These two financial goals may seem difficult to achieve, but they aren’t impossible. Nick Carter has years of experience coaching his clients in these exact topics, and he has some wisdom to share.
One important thing to remember is that your credit-to-debt ratio matters a lot when it comes to your credit score. This means that you want to have a lot of credit available, but you don’t want to use it all. “Make sure you keep your credit card balances at less than half of their max,” Nick says, noting that doing so will help improve your credit score. Nick typically advises clients to pay off their credit card balances every month to avoid incurring high-rate interest charges.
If you can manage it, paying off your credit card balances entirely is a great financial move. However, once you pay those cards off, you should leave them open. “Never close an account on your credit report without speaking to your mortgage advisor first. Most people assume that closing an account will help their credit score, but it typically does the opposite,” Nick advises. That’s because closing an account will reduce the amount of credit you have available, which in turn harms your credit-to-debt ratio.
Sometimes, we end up in serious financial trouble, and our credit scores take a major hit. Don’t assume that there’s nothing you can do about it. Nick says many people “don’t realize that we can help them raise their credit scores.” Even with collections and judgments, experienced advisors like Nick can help you figure out strategies to make payments and improve your score. Small moves now will make a big difference by the end of the decade. No matter what your credit situation is, you can improve it.
Building up your savings is also a great goal that you can make slow but steady progress on over the course of several years. Nick notes that he sees a lot of clients who live paycheck to paycheck, but still advises savings wherever possible. “Just putting away a little every month adds up over the years and will help you achieve your savings goals,” he says.
It’s also important to think about spending. Nick admits that “I have tough conversations with my clients. Would you rather drive a fancy car and go out to eat every weekend, or would you rather own a nice house?” Sometimes, we have to make sure our priorities are in line with our long-term goals. Spending less can free up extra income that you can then save or even invest in a 401k or IRA. Every little bit counts, and it can add up to financial stability that leads to homeownership.
Setting Better Personal Finance Goals
If all this is new to you, but you’re still hoping to buy a house sometime soon, call your local Directors Mortgage branch office to get some personal advice. Even if you aren’t ready to buy right now, Mortgage Specialists like Nick will still be happy to talk to you. According to Nick, “the sooner our clients come see us, the better.” You don’t need to wait until you’ve found your dream home—starting the process well before then will give you plenty of time to learn, make changes and explore your options.
As you can see, our Mortgage Specialists do more than just close loans. Nick wears a lot of hats with his clients—as he describes it, “I serve as a credit-repair person, financial advisor, marriage counselor and so much more.” When you work with Directors Mortgage, you get a partner who will work with you to help you achieve your goals. That kind of one-on-one advice is valuable, and it can help you achieve bigger goals than you may have thought possible.