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Your income is not the problem its your spending

By
Mortgage and Lending with US Mortgages - David Shamansky NMLS#392126

halfYour income is not the problem its your spending.

Do you ever want to reach across the table and let your buyer know that with 8,000, 10,000, 15,000/mo income the buyers don't need to figure out how to earn more, what they need is some financial lessons to teach them how to buy/spend better/less!

In my 20yrs of being in the mortgage industry it never ceases to amaze me at the number of HIGH income earners that have little to nothing in the bank! Sure they have the nice home, the nice cars, the toys etc but they also have ALL the debt that goes with that and at the end of each month don't have reserves in the bank, they pay all that out to a depreciating asset??

I also have to say it comes as an equal shock that many times borrowers with well less than 1/2 the above monthly incomes have 5,000, 10,000 sometimes 20,000+ saved up!

So what is the secret?

Its not how much you earn that counts its how much you SAVE that counts!

Things happen, life happens... cars break down, kids need braces, home needs repairs, your kids school needs xxx, you decide you NEED a vacation... It really doesn't matter what, the bottom line is ITS reality.

Things are nice, having many is also nice, IF you can afford them and I don't mean cover the monthly bill, I mean if YOU own them and they don't own you!

Turn the tables on debt and REDUCE it! Just because you can afford something doesn't mean you should own that. Savings is NOT an option its a must so if you are putting 5-10% of your income each month aside and want something and will not impede your savings... go ahead. If you are not saving at least 5% of your income you are headed for serious troubles later in life.

Savings and financial plans are simply not an option they are a must and it doesn't take more money it takes LESS spending!

Posted by

araward

Colorado 1st Time buyers, if you are ready to stop renting, get the many benefits from home ownership, or maybe your a current homeowner looking to move up or maybe looking into what it takes to become an investor in this incredible market, that WILL create millionaires, and you are looking for a strategy, answers and direction, please feel free to call or email me. My 22yrs in mortgage lending and 30+ years in finance gives me an in depth knowledge, critical to helping others and making their dreams go from dream to reality!

David Shamansky
"Positive reinforcer, promoter, success coach, entrepreneur, team builder, wealth builder, blessed individual, business leader and professional lender"

US Mortgages
6855 S Havana St Ste 520
Centennial CO 80112
720-524-8020
NMLS#392126
Equal Housing Lender

*photos used may come from my personal pictures or www.freedigitalphotos.net

 

Comments(60)

Travis "the SOLD man" Parker; Broker/Owner
Travis Realty - Enterprise, AL
email: Travis@theSOLDman.me / cell: 334-494-7846

Good article. I'm semi-retired and have a very low living expense, but DO need to start saving more. Thanks for the reminder!

Aug 16, 2013 02:42 AM
Team Honeycutt
Allen Tate - Concord, NC

Your blog is full of good information. You make some terrific points and I think they will actually help me. I am not the best at managing money. Thanks for sharing.

Betty

Aug 16, 2013 03:26 AM
Edward & Celia Maddox
The Celtic Connection Realty - Queen Creek, AZ
EXPERIENCE & INTEGRITY - WE TAKE THE HIGH ROAD

I wish the US government could take a hit from this blog.  Of course, they can print more money and an individual eventually runs out of credit cards, etc.

Aug 16, 2013 03:28 AM
David Krichmar
www.DaveYourMortgageGuy.com - Legend Lending - Sugar Land, TX
DaveYourMortgageGuy.com

So true David and great advice.  Another thing I run into is "what am I pre-approved" vs "I do not want a mortgage payment more than "x"".  determine what the amount that works best for you, not just what the most is you can get approved for. 

Aug 16, 2013 03:45 AM
Marie Story
Coldwell Banker - Pinecrest (Miami) - Pinecrest, FL
Broker Associate, Pinecrest (Miami) Specialist

Recently I was hearing someone complain about how broke she was.  That she should start thinking about retirement because she doesn't have two nickles to rub together.

Then she picked up the phone to schedule her weekly manicure and pedicure appointment.  Hung up, then she told me about the vacation she was taking to New England in October and then invited me to go outside to see the brand new car she just bought!

Is it me?  I don't get it.  Don't people know the difference between needs and wants?

Aug 16, 2013 04:15 AM
Carla Muss-Jacobs, RETIRED
RETIRED / State License is Inactive - Portland, OR

Great blog title!  Yes, I've seen this phenom a lot.  I call in the U.S. Federal Government Syndrome . . . with a secondary "Consumerism" diagnosis!!

Aug 16, 2013 04:21 AM
Jeff Pearl
RE/MAX Distinctive / LIC in VA - Lovettsville, VA
Full Service Full Time Realtor

I wish they would have taught more classes on money managent, financing, savings, compound interest, etc in high school or before. Many people just seem to adjust their spending to whatever their income is.

Aug 16, 2013 05:17 AM
Pam Jank
Coldwell Banker Schneidmiller Realty - Coeur d'Alene, ID
Your Coeur d'Alene & North Idaho Real Estate Pro

Great post!  I agree, it's not how much you earn, it's how much you save!  I have had clients making over 6 figures that  I couldn't qualify for loans because their debt ratios were so high and they had nearly nothing in savings.  Most of he debt was for STUFF/TOYS... nothing really necessary for a good life.

Aug 16, 2013 06:27 AM
Marc McMaster
RE/MAX Centre Realty - State College, PA
Putting my clients before myself

Its the new normal...people have to have everything they see on TV no matter what it costs.  Credit card debt is ridiculous these days.

Aug 16, 2013 06:41 AM
April Weeks
Mcbride Kelly and Associates - Tampa, FL
Top Short Sale Expert

Few people save these days! Its always about keeping up with the latest in greatest! I loved your blog.. keep them coming!

Aug 16, 2013 07:19 AM
Joan Whitebook
BHG The Masiello Group - Nashua, NH
Consumer Focused Real Estate Services

Lots of great information.. and information which my buyers should find i5nteresting.

Aug 16, 2013 12:55 PM
Gary Frimann, CRS, GRI, SRES
Eagle Ridge Realty / Signature Homes & Estates - Gilroy, CA
REALTOR and Broker

Well put.  In my lending days, this is the one issue that always puzzled me.  People would finance to the hilt for the toys, but not have a house (or savings of note).  It was amazing.  

Aug 16, 2013 01:15 PM
Inna Ivchenko
Barcode Properties - Encino, CA
Realtor® • GRI • HAFA • PSC Calabasas CA

So true, many of those who make a lot of money don't keep those money. They love living a luxury style and often have bad credit because of that overspending.... Go figure.

Aug 16, 2013 04:52 PM
John F Muscarella
RIVER FARM PROPERTIES, LLC - Venice, FL
Broker/Owner, Venice, FL, Florida's Suncoast

Tryer words never spoken.  I think many people are trying to get to that point nowdays. 

Aug 16, 2013 08:36 PM
Tracy Oliva
West USA Realty - Arizona - Fountain Hills, AZ
The Oliva Team Arizona Agents

Good Morning and how true this is !! keep up the good work and good luck with your business,  E

Aug 17, 2013 12:29 AM
John McCormack, CRS
Albuquerque Homes Realty - Albuquerque, NM
Honesty, Integrity, Results, Experienced. HIRE Me!

Brotha Man ....... You knocked this one out of the ball park! 

Last night we were test driving new cars.  We got back in our ride with only 40,000 miles and Debbie asked, "what are we doing? We don't NEED this car.  We just want it and therefore it can't be justified."  So no new car and like squirrel's we will be saving that chunk of change for leaner times.

Aug 17, 2013 01:30 AM
Troy Erickson AZ Realtor (602) 295-6807
HomeSmart - Chandler, AZ
Your Chandler, Ahwatukee, and East Valley Realtor

Most people, no matter what their income, tend to live day-to-day, and don't ever think about retirement or a savings account.  I believe that they are relying on their family inheritance to help them retire.  It's a complete change of thought from the older generations, but in today's society everyone wants what they want right now, and they do not consider that they really can't afford it.

Aug 17, 2013 03:02 AM
Lynn Pineda
eXp Realty - Boca Raton, FL
Real Estate Promises delivered in SE Florida

David, well said. Saving is so key and so many suffer from not doing it correctly. I'm teaching my young adult son about the importance of saving once he graduates from college and starts out on his own. It can really make a huge difference in one's future.

Aug 17, 2013 04:52 AM
Joni Bailey
101 Main St. Realty - Huntsville, TX
Your Huntsville / Lake Livingston Area REALTOR®

OUCH! Yep. These "little" truths hurt, don't they! Love the title!! :)))

Aug 18, 2013 09:24 PM
Debbie Laity
Cedaredge Land Company - Cedaredge, CO
Your Real Estate Resource for Delta County, CO

Great advice, David. I do see it all the time. I also see the flip side of the coin in our property management division, but it should be a lesson to everyone. There are renters that have to pay late because something in life comes up...usually a car repair. The best advice is to save what you can...even if it only seems like a small amount to you.

Aug 19, 2013 11:14 AM