Like anyone in business, I am never thrilled to tell a client to hold off a purchase. However, that is exactly what I did a few days ago. The couple may be able to make the move, but only by the skin of their chin, if at all. They don’t have much of anything saved and they would have to roll in closing costs. I assume the move would require calling on friends because I don’t believe they have the money to hire a crew either.
Lately I've been encouraging folks to save first and move second, when they have an option. I think moving is great and recommend that everyone in N. Dallas metro call us when they get ready to buy or sell a home. I just want to encourage people to consider stabilizing their finances first. For me, that means:
- 3.5 - 5% min. cash saved and seasoned for down payment.
- 3.5% min. cash saved for reasonable closing costs and basic move.
- 4-6 months cash reserve in EMERGENCY ONLY savings.
- Less than 10% of available funds "carried" on any credit card. (build credit)
- 1 auto loan under 50% of value, per couple.
America has a Billion dollar weight loss industry because of our unwillingness to delay gratification or endure discomfort. There is only one way to lose weight and everyone in America past 15 years old already knows exactly what it is. Consume less energy than you burn. (or spend less than you earn) Can I have a small piece of that Billion for my 6 word sentence?
The pain of the nation’s financial situation has opened my eyes. We were told that with the stimulus package we’d be able to keep unemployment under 8% but without it, it was possible to see it raise as high as 9%! Well I got news… The point is, if we are unwilling to save anything today, we'll be forced into delayed gratification and being extremely uncomfortable later when life eventually throws us a curve ball, or two. We may be introduced to a new life experience called poverty if we are already over extended when the unexpected happens. Just thinking about poverty makes me want to save. I heard about this one guy in Plano, TX who had to give up the unlimited data package on his iPhone after losing his job and blowing the 401k.. NO THANKS!
Don't let your American dream become a nightmare. Save first and win!