Decreasing your housing budget

Decreasing your housing budget may mean more money in your pocket.

That’s because housing is the single largest expense for most Americans. Reducing mortgage payments or rent by even a fraction can free up substantial cash flow.

The best part? You don’t have to move into a shack to make it happen. Here are a few strategies to increase cash flow by decreasing your housing costs.

Choose the suburbs over the city. On average, suburbanites save $9,000 per year on housing and child care when compared to city-dwellers. By and large, the money you may save on the cost of living in the suburbs can outweigh the added transportation expenses. It’s not a shift for everyone, but relocating further from the city might make sense financially, at least for the short-term.

Rent until you’re ready. It’s worth considering leasing a house or apartment until you’re financially positioned to buy a house. Even if a mortgage payment seems cheaper on paper than renting, ownership can come loaded with unforeseen expenses. Flooded basement? That’s on you. Broken furnace? Also on you. Renting isn’t necessarily a permanent long-term strategy, but it beats potentially going into debt covering surprise repairs that are beyond your budget.

Find a reliable roommate. Sharing the cost of housing can free up a significant portion of your cash flow, especially in expensive cities. In New York City, for instance, having a roommate can save you up to $15,500 every year. Just be sure you take on a roommate that doesn’t flake out when rent is due.

Rent out a room. If you’re a homeowner with room to spare, consider leasing space to a trusted friend. The extra income can offset the cost of mortgage payments and result in more cash flow going toward saving, investing, or even paying off the house faster.

Contact me if you’re interested in learning more about how budgeting fits into an overarching financial strategy. We can review your income and expenses and make a game plan for how you can stop spending like a sucker and start saving like the wealthy.

M.Amos

Train your brain for efficiency

Chances are you have cooked some pretty elaborate plans to trick yourself into being more productive.

Have you considered the role your surroundings play in your everyday life? It turns out that one of the easiest ways to bring about change in our lives is to actually change our environments. What if the layout of your bedroom or the distance from your desk to the kitchen was impacting your productivity and decision making? There is plenty of room for each of us to improve. Here is how and why making some changes to your environment works.

Your brain is efficient
Making decisions is draining. (Heard of “decision fatigue”? It’s real!) We can only make so many choices per day before we start to run out of steam and need a rest. But we are faced with countless choices every time we wake up! Should I go back to sleep? Should I shower or brush my teeth first? What will I wear to work? Should I try out that new shortcut to the office? It can become stressful for your brain to struggle with a choice every time one of these little prompts presents itself. That is why we rely on decision shortcuts called habits.

A habit is just a routine that you regularly perform. Most of the time we don’t even notice that we are engaging in a habit because it’s second nature to us. And there is a reason for that. It is your brain saving energy by going on autopilot to perform an action without having to make a decision. That way you can use the bulk of your mental power on unique and important problems that might pop up during the day, not on thinking about when you should brush your teeth!

Trick yourself into making wise decisions
What does your brain’s love of shortcuts have to do with your environment? Let us look at an example.

Your alarm clock is right next to your bed. It goes off every morning at 7:30am. It does not take you long to figure out that you can smack the snooze button and go straight back to sleep with hardly any effort. Before long you have hitting the snooze button every time the alarm goes off without even thinking about it. You have trained yourself to sleep in later by making your alarm easier to turn off. But what if your alarm was on the other side of your room? What if to silence it you had to stand up, walk over, and hit a button? That simple change could give you the jolt that you need to wake up and get your day started on time!

Take a look at your surroundings and ask yourself what kind of behavior it encourages. Is it more convenient for you to grab a soda from the fridge or fill up your water bottle? When you work at home, are you in the middle of distractions like the kids playing or too close to the TV? At work, does your office layout lend itself to productivity or socializing with your co-workers?

It might take some legwork to get started but try to arrange your life in a way that makes wise decisions easier. You might be surprised by the results!

Why did we start a Financial Services Firm?

Why we started our Financial Services firm?

Hi there, Reggie & Sindy Moon here. We are excited to tell our story.  The reason we wanted to tell our story right now is because so many people ask us “what do you do” or “why did you guys start selling life and health insurance” and then there is “why financial services” and we think they want a one sentence answer but there’s really not one.  We own a Real Estate Company, we’re Brokers, we’re Financial Wellness Coaches & Life Coaches, Motivational Speakers and we teach financial literacy to small business, families and even high school students the fundamentals of how money works.

Sindy was asking me to tell the story of what happened in my life when it was just me and my son around the time of the 2008 economic crash.  Well, I had a bill collector call me consistently for payment and one day I simply asked him a question.  “Do you know how many cans of soup you have in your cupboard?” I told him that the reason I was asking that question was that he was talking to a guy that has some late bills and can tell you exactly how many cans of soup I had in my cupboard.  “It’s TUESDAY and I have three cans of soup in my cupboard, and yet I don’t get paid until FRIDAY!” was my response to him. The point of that story is that’s where we were! A lot of middle America went through the same thing. You’ll hear things like their 401K turned into a 201K. Basically it’s what happened during the ‘lost decade’ and each family thought it was only happening to them at the time.  What it did to middle America still has not been fully recovered from.

Those same middle Americans are now trying to get out of the house because they are upside down in the equity and they can’t get their credit right and maybe can’t even get their income high enough to qualify for what they’re looking for now.  We all lived it and are now trying to recover.  Just remember, if you keep doing the same thing, you’ll always end up with the same results. At that point you’re not insulated against another economic downward spiral.

Does it take a millionaire to insulate themselves against a market shift, no! It takes someone that insulates themselves well enough to know that if there is a shift in the economy they are not going to be literally down to three cans of soup.  When we sell someone a house, what do we change?  We change their address!  When we show people how money works, coach them and show them the financial pain points and remind them it doesn’t have to last for a solid decade or even forever. It doesn’t have to be the middle-class-curse!

Contrasting that time in Reggie and Forest’s life is what we did this past Tuesday.   Which was that Reggie went to the mall and bought an entirely new Winter wardrobe with tailored suit and ties, the works.  Sindy was sitting at the home office working in pajamas while Reggie was out buying a new suit.  The only concern at this point was Atlanta traffic for Reggie and for Sindy, it was whether to have that second cup of coffee in her pajamas or not.

So, what we do is assist families and small businesses reach Financial Freedom!

Financial Freedom is not only owning a fancy car or private jet but it actually means that you can go get what you need and get it when you need it.  That is what we do.  That is why we do what we do and are thrilled to be in this business …. The MONEY business!

The Financial Literacy FAIL

Financial literacy fails because it addresses only one problem:   It focuses on facts and figures while largely ignoring behavior.

This is insane.

This is like promoting sex education that talks about penises and vaginas while never discussing what it’s like to be madly in love with somebody so in love that your brain stops working and you just end up being ‘CLOSE’ anyway.  For sex education to be effective, it has to deal with real-world circumstances and behavior.  It has to teach about psychology and emotions, not just body parts!

The same is true with financial literacy.

Literacy = “… the ability to use printed and written information to function in society, to achieve ones goals, and to develop one’s knowledge and potential.”

  1. Folks are too influenced by a barrage of media, admitting they are influenced by it but ADMIT and recognize it and then NOT fall prey to the temptation to buy just because they have great marketing.
  2. THINK about spending. Ensuring that each dollar has a purpose before it even comes into their hand.   Stop spending on impulse and be deliberate about where those dollars go.

Instead of teaching Americans about credit cards and rates of return, we need to be teaching them about behavioral finance.  We need to be showing them how to break free from the marketing messages that are all around.  We need to be showing them how to set (and achieve) personal goals, especially financial goals.  We need to teach skills like conscious spending.

Ultimately, if we want Americans to be smarter with their money, we need to encourage them to consume less media — to avoid advertising — and we need to teach them to master the emotional side of personal finance.  We need to show them how to change their BEHAVIOR.  We need to appeal to their self-interest.  We need to help them find intrinsic motivation to save.

Each of us needs to dig deep inside to find what it is that’s important to us, what it is that brings us joy, and we need to prioritize that instead of all the other garbage.  I’m not suggesting that we abandon traditional financial literacy completely. But I think a constant push for more financial education is a waste of time and is not enough.  To truly be successful, financial education has to address the behavioral side of money because that is absolutely the biggest piece of the puzzle.

What do you think?  Have you seen this happen in your life?   Leave a comment below.