Budgeting Meeting with Adam
Updated: Apr 26
One of the ways that I assist buyers and sellers, especially buyers, is by providing guidance to boost their budgeting power, especially prior to a house purchase. Below I wanted to provide some guidance on best practices before a meeting. Also keep in mind that I am a licensed real estate agent, not a certified public accountant, attorney, or certified financial planner & any insights I have are best discussed with your CPA, financial planner, or attorney when relevant to their respective field of specialty.
Review Helpful Resources from My Website 1st
In order for our meeting to be most effective, it's best to do some homework before the meeting. I’ve included some great information on my website that could be really helpful for you on getting financially prepared and getting your budget in a better place.
Meeting Format
I sometimes meet in person for credit-boosting meetings, but in the majority of cases, I use Zoom. If you've never used it before, I suggest signing up for a free account and going through my article on the subject here. With Zoom, we can use the screen share feature and otherwise so that I can see your screen. It's best to conduct the meeting while you're on a desktop or laptop including the Zoom meeting on there rather than using a phone. Also prior to the meeting, be sure to log in to the accounts that you've signed up for relevant to the meeting and have your budget spreadsheet ready.
Budgeting Spreadsheet
No matter how much or how little your income, your financial potential will always be more limited if you don't develop and use a budget. If you would like to go over a budget and some ways that you might be able to save, and don't currently have a budget, here is one that you can fill out here that will also expedite & enhance our meeting. It's best to copy that template into a Google sheet rather than another format, that way we can both edit it without lag from remote desktop and make edits after the meeting has been completed. As close as you can, fill out your current budget, budget goals prior to purchase, & projected budget after purchase. As you go about this process, think about what you prioritize the most, especially among your flexible expenses. Be sure to look at the net amount of spending vs. income with your current spending habits to make sure that it lines up. There shouldn't be any surplus; if there is it means you're missing something. For expenses that fluctuate a lot, just put the average monthly cost.
Instructions on Copying & Sharing A Google Doc
If you're unfamiliar with Google Sheets, and don't have another platform (i.e. Microsoft OneDrive) that allows for document sharing and edits by others with real time updates, here are some instructions on how to make your budgeting template editable:
Create a free account with Google mail if you don't already have one.
Open the spreadsheet above
Click "File" on the top left & select "Make a copy"
4. Rename the new file and if desired, add it to a folder, then click "Make a copy":
5. Click "Share" on the top right.
6. Ensure that general access is provided to "Anyone with the link" & that "viewer" is changed to "editor" before clicking "Copy link".
7. Put the link in an email draft to Adam.
8. As close as you can, fill out your current budget, budget goals prior to purchase, & projected budget after purchase.
Where to Sign Up For Free Accounts for Budgeting
To help with your budget, while not required, I suggest using https://www.mint.com/ or a similar free program if you haven't already. To utilize it most effectively, instead of using cash or credit cards, use debit cards for every spending that you do where a debit card is possible, that way you can track all of your spending with a lot of options for budgeting. Be sure to connect whatever bank(s)/credit unions you use for spending (as well as any loans), whether you only use debit cards like I often suggest for those working on improving credit or use credit cards as well. Doing it long before the meeting will give you the best information. With Mint you can set individual budgets based on spending categories, then check Mint to see if you have gone past the spending that you should for a month depending on how far into the month you are.
Debit Cards, Not Credit Cards for Your Expenses
For anyone with below a 740 credit score, I typically recommend that they use debit cards instead of credit cards until at least a year after your credit score is back up over 740.
Separate Designated Accounts for Major Fixed Expenses w/ No Monthly Fees or Transfer Fees Incurred
In order to budget effectively, I recommend that you have multiple types of free accounts at multiple institutions & that you automatically have money transferred to those institutions soon after your paychecks hit as long as you receive the money from your paycheck at regular intervals. If possible, it's also nice to get multiple direct deposits going at multiple institutions. While some banks may allow for multiple accounts at a single institution, if you have all of your accounts at 1 institution, it is too easy to pass the money in between accounts. For instance, it's good to have money going to separate institutions for (most important in bold):
Your housing payment, car payment if applicable, & any other fixed expenses that don't fluctuate more than once a year (& be sure to have those dates in your calendar in case you need to make adjustments)
Fluctuating expenses that are critical and that you don't actively see being incurred, i.e. electric bill, water bill, sewer, gas, etc.
Highly fluctuating expenses that you should be watching closely for budgeting purposes in a checking account
Emergency Fund
Savings Fund
Investment Fund
Savings for taxes if you have your own business
Any tuition expenses
Home & vehicle maintenance fund
Health fund, especially if you have high medical expenses
Vehicle fund for your next vehicle if you currently own your vehicle without any payment
Mortgage fund if planning on purchasing a new property without selling your current home
Tax-advantaged funds (i.e. 529 plan if you plan to pay for your or your family's school at least in part, Health Savings Account if available via qualifications like a high deductible health insurance plan, etc.)
Effective banking includes different accounts for different purposes. I have some for high interest, some for cashback debit cards, 1 for unlimited ATM fee reimbursements, 1 for free cashiers checks & free money orders, 1 for free wire transfers, a few with many local branches and many without local branches, etc. I don't incur any monthly fees for any of my banks/credit unions & don't get charged for any transfers between my accounts. My highest APY for years has been over 6% on up to $1k and I have an APY of 5.02% as of 4/26/23 on an account that has a minimum of $1k to achieve that APY. See more under my banking section.
Related
Your budget is often impacted by your credit since credit determines interest rates for borrowing in most cases. If you'd like to integrate credit in your discussion, go here.
Part of good budgeting that can help your credit is not being overtaxed and using strategies based on your knowledge of the tax code so that you can stretch the money you have further. Here is my page on saving on taxes.
Often those that need budgeting &/or credit boosting could also use some time management boosts. Here is more information on that.
Loan Program Where Credit Score is Not Considered
There is a loan program where credit score is not considered, offering below market rates for below median income borrowers (for the area), no down payment requirement, & reduced expenses at closing. That said, they tell real estate agents that they are not supposed to mention the name of the program in advertising, and this public page could be construed as such. The program typically takes around 6 months to get through and has many hoops to jump through, with some people being approved and then denied after getting under contract, but the numbers with the program for many that persevere & use it is solid. Be sure to ask me about it in our meeting.