7 Steps To Wealth On Your Own Income

If you’re handling life financially on your own, these steps will help you toward real wealth:

1. Save money first

• Learning to keep money consistently is foundational to wealth-building. This is the first step.

• If you have little or no savings right now, decide to keep a percentage of your income as soon as you’re paid (e.g., 10%).

• Transfer that savings into a shared savings account, preferably one that earns interest like a money market account.

• Determine how long it would take to save up $1,000 doing this consistently. Target your first savings goal to $1,000 and increase the percentage to achieve it faster.

2. Control spending to protect your savings

• Learning to control your expenditures (using money that leaves your checking account) is just as foundational as saving. This is the second step.

• Create a budget using the remaining income after saving (e.g., 90% or less if you’re choosing a more aggressive savings rate).

• Review expenses, find leaks, and cut unnecessary expenses (e.g., unused subscriptions, overlapping services).

2b. Pay off consumer debts fast

Skip this step if it does not apply to your life. Consumer debt, like credit cards, student loans, car loans, medical debt, personal loans, and HELOCs, is detrimental to wealth building. Get laser-focused on completing this step with everything you can, so you can move to the next step as fast as possible.

• Avoid passive strategies like consolidation that stretch payments out.

• Choose an aggressive payoff method:

• Debt Snowball (best for behavior and momentum; not the best money saver)

• List debts by smallest balance to largest.

• Pay minimums on all but the smallest.

• Throw all extra cash at the smallest until it’s gone.

• Roll that amount into the next smallest, and repeat.

• Debt Avalanche (best for saving money; harder to execute)

• List debts by highest interest rate to lowest.

• Pay minimums on all but the highest-rate debt.

• Throw all extra cash at that one until it’s gone.

• Roll that amount into the next highest-rate debt, and continue.

• Pause all investments, including retirement contributions, to unlock extra income and apply it to your debt.

• Set a debt-free target date and post your payoff progress somewhere in the house to show progress.

• Say no to new consumer debt, period, moving forward.

3. Protect what you’ve built

• Now that you’ve freed up your income, build an emergency cash fund with at least 6 months of expenses in an account that yields interest.

• Avoid risky money moves like crypto or day trading until you have at least a $1,000,000 net worth and the amount to risk is relatively small (e.g., $500).

• Review your insurance coverage, such as health, home, and auto, and fill in the gaps.

• For big financial decisions, get advice from a trusted financial coach or fee-only advisor.

• Give yourself time to think before committing (e.g., days for reasonably small choices, months for major ones).

4. Multiply your savings

• List existing retirement, brokerage, and savings accounts.

• Choose a set amount or percentage to invest regularly.

• Automate your investments into simple, low-cost index funds.

• Stay consistent, even when growth feels slow.

5. Own and pay off your home

• If you’re buying a home, go through each step with caution and seek advice from people you trust with this experience - financing, touring, negotiating, and closing.

• Save for the down payment from your budget.

• Create a plan to pay off the mortgage as fast as reasonably possible.

6. Secure your future

• Consistently invest in retirement accounts. Think 401ks and Roth IRAs.

• Maintain your 6-month emergency fund by replenishing what you withdraw.

• Get appropriate insurance plans in place, like health and disability, and term life if you have dependents.

• Set up simple estate plans, like creating a will, adding beneficiaries to your wealth-building assets (e.g., retirement accounts), and add a health care proxy and power of attorney in case of an emergency.

7. Increase your earning power

• Once you're stable, build additional income streams like side work, creative endeavors, etc.

• Keep your skills sharp and continue exploring new career opportunities with higher pay.

• Explore further education or certifications as long as it can be paid for in cash.

If you’re consistent and intentional with these steps, you’ll lower money stress, gain control, and build real, lasting wealth.

Check out these 9 steps to building wealth and trust as a couple.

Reach out if any questions come up and I’ll see how I can help.

justin@wealthandwisdomcoaching.com

360-230-8562

Visit my home page.

9 Steps to Build Wealth and Trust as a Couple

If you have two incomes and plan to build a life together, I strongly advise you to merge your finances, especially if you're married. Marriage also provides legal protections that help keep things clear if the relationship ends. If you're not married, just be very cautious. Without legal protections, merging finances can expose both people to risk. Set clear agreements and consider keeping some accounts separate until legal protections are in place.

Here’s how to manage money as a committed couple working toward long-term wealth:

1. Combine income into one place

• Redirect all income into a joint checking account. This includes:

  • Paychecks / direct deposits

  • Any income from side gigs or selling items (e.g. Craigslist, Facebook Marketplace)

• Request a debit card for both partners on the account.

2. Maintain some financial independence (optional)

• Open two personal checking accounts, one for each partner.

• Both partners should have access to each other’s accounts, even if you use them separately.

• Request a debit card for each personal account.

3. Save money first

• Learning to keep money consistently is foundational to wealth-building. This is the first step after merging income.

• If you have little or no savings right now, decide to keep a percentage of your income as soon as you’re paid (e.g., 10%). Agree on a savings rate (%) for every dollar earned (e.g., 10% of each paycheck).

• Transfer that savings into a shared savings account, preferably one that earns interest like a money market account.

• Determine how long it would take to save up $1,000 doing this consistently. Target your first savings goal to $1,000 and increase the percentage to achieve it faster.

4. Control spending together

• Learning to control your expenditures (using money that leaves your combined checking account) is just as foundational as saving. This is the second step after merging income.

• Create a joint budget using the remaining income after saving (e.g., 90%).

• If you’re keeping personal spending accounts, include those amounts in the budget (e.g., $200 for one spouse, $200 for the other).

• Review expenses together, find leaks, and cut unnecessary expenses (e.g., unused subscriptions, overlapping services).

4b. Pay off consumer debt fast, together

Consumer debt, like credit cards, student loans, car loans, medical debt, personal loans, and HELOCs, is detrimental to wealth building. Get laser-focused on completing this step with everything you can, so you can move to the next step as fast as possible.

• Treat all debt as joint debt, no matter whose name’s on it.

• Avoid passive strategies like consolidation that stretch payments out.

• Choose an aggressive payoff method:

  • Debt Snowball (best for behavior and momentum; doesn’t save money)

    • List debts by smallest balance to largest.

    • Pay minimums on all but the smallest.

    • Throw all extra cash at the smallest until it’s gone.

    • Roll that amount into the next smallest, and repeat.

  • Debt Avalanche (best for saving money; harder to execute)

    • List debts by highest interest rate to lowest.

    • Pay minimums on all but the highest-rate debt.

    • Throw all extra cash at that one until it’s gone.

    • Roll that amount into the next highest-rate debt, and continue.

• Pause all investments, including retirement contributions, to unlock extra income and apply it to your debt.

• Set a debt-free target date and post your payoff progress somewhere in the house to show progress.

• Say no to new consumer debt, period, moving forward.

5. Protect what you’ve built

• Now that you’ve freed up your income, build an emergency cash fund with at least 6 months of expenses in an account that yields interest.

• Avoid risky money moves like crypto or day trading until you have at least a $1,000,000 net worth and the amount to risk is relatively small (e.g., $500). Agree on this together.

• Review your insurance coverage, such as term life, health, home, and auto, and fill in the gaps.

• For big financial decisions, get advice from a trusted financial coach or fee-only advisor.

• Give yourself time to think before committing (e.g., days for reasonably small choices, months for major ones).

6. Multiply your savings as a team

• List existing retirement, brokerage, and savings accounts.

• Add both names to each account.

• Choose a set amount or percentage to invest regularly.

• Automate your investments into simple, low-cost index funds.

• Stay consistent, even when growth feels slow.

7. Own and pay off your home together

• If you’re buying a home, go through every step together with caution and seek advice from people you trust with this experience - financing, touring, negotiating, and closing.

• Save for the down payment from your shared budget.

• If you already own, put both names on the mortgage and deed.

• Create a shared plan to pay off the mortgage as fast as reasonably possible.

8. Secure your future together

• Add each other on retirement accounts, pensions, savings, and emergency funds.

• Get term life insurance (e.g., 10x your income for 20 years).

• Create wills to lay out how you want to care for each other and others.

9. Support each other’s earning potential

• Once you're stable, encourage each other to explore side businesses, creative hobbies, or new income streams.

• Encourage further education as long as it can be paid for in cash.

• Act as accountability partners for dreams that build wealth.

If you’re intentional with these steps, it’ll create trust in your relationship, reduce money worries, and enable a secure financial future for you both. You’ll communicate better and start building real wealth.

Check out these 7 Steps to Build Wealth On Your Own Income.

Reach out if any questions come up and I’ll see how I can help.

justin@wealthandwisdomcoaching.com

360-230-8562

Visit my home page.

Before Your Merge Finances

Merging your finances is a significant and powerful step to building wealth. However, it’s critical to think beyond the numbers. The foundation is trust, habits, and how each of you sees money. It’s common with one spouse having mistrust from prior relationships around money. It’s also common to have one spouse or both struggle with giving up individual financial independence. What matters most is being honest with yourself and each other about what merging money really means before you move forward.

Here’s a simple checklist to help you think through it:

[ ] I know my income (what I bring in), expenses (what I spend on), debts (what I owe back), and assets (what I own that has value).

[ ] I have shared my full financial picture with my spouse; there are no hidden accounts or debts.

[ ] We agree on saving at least 10% of our combined income.

[ ] We have a plan to live on less than we earn, consistently.

[ ] We’ve talked about what financial security means to each of us.

[ ] We understand each other’s past money habits, good and bad, and choose full transparency going forward.

[ ] We’ve decided how to handle individual spending within a shared system, such as having a joint account that all income flows into and a separate account for each spouse for individual spending and goals.

[ ] We have a plan to pay off any existing consumer debts together (credit cards, personal loans, car loans, student loans, medical debts) and not take on new ones.

[ ] We’ve chosen to track our spending, regularly.

[ ] We both agree that our financial future is a shared responsibility. We’re choosing to put our names on all wealth-generating accounts, including savings accounts, mortgages and deeds, retirement accounts, and brokerage accounts.

Check out these 9 Steps to Building Wealth as a Couple once you are ready to plan on merging.

Reach out if any questions come up and I’ll see how I can help.

justin@wealthandwisdomcoaching.com

360-230-8562

Visit my home page.

Merge Finances to Build Incredible Wealth

Merging your finances with your spouse can dramatically increase your ability to build wealth and reach large financial goals faster.

What I mean by merging, I’m saying:

• All incoming money starts as shared.
  Every paycheck from both spouses are deposited into one joint checking account. This also includes income from side gigs and garage sales. Both see what’s coming in and make saving and spending decisions together.

  • And don’t worry - both spouses can have separate accounts as well.
    If some financial independence is important, each person can have a separate checking account, but all incoming money starts in the shared account and is transferred to each individual account as agreed.

• Consumer debt is shared.
  Credit cards, medical debt, student loans, car loans, or any other type of consumer debt, regardless of whose name they’re in, are considered joint responsibilities. Consumer debt is detrimental to wealth building regardless of how it got there. Once both spouses agree on this, the couple should stop taking on new debt, pay them off as fast as possible, and be done with them for good, together.

• Strategic debt is shared.
  This refers to debt that also creates wealth, like a mortgage, and should be in both spouses’ names. That includes being on the deed and loan, so both benefit from the home’s equity while paying off the debt faster, together.

• Big savings goals are shared.
  Think of vacations, a new primary home, a new home to rent out, home renovations and big repairs: these are joint priorities and should be saved for together.

• Small individual goals are respected.
  This is incredibly important for couples that want some financial independence while agreeing to merge finances. If one spouse has a personal goal the other doesn’t share, you can still agree to fund it from the joint account and transfer that money into a personal account.

• All wealth-building assets are shared.
  Retirement accounts, brokerage accounts, real estate equity; all should be viewed as a joint endeavor, and both names are on the accounts.

For many couples, merging finances can feel like a stretch, especially if there’s a history of mistrust or financial stress. But when you manage money together, your capacity to build wealth is significant. I strongly consider merging, because you can:

• Save more, faster.
  If not merged - $5,000 individual income at 10% savings = $500/month
  Merged - $12,000 combined income at 10% = $1,200/month

• Avoid costly financial mistakes by making decisions as a team.

• Grow your wealth faster through shared investing and compound growth.

• Buy a home and pay it off faster, together.

• Build strong retirement savings that secure both of your futures.

• Free each other up to pursue new careers, education, or side income without financial stress.

Review a simple checklist to begin understanding what it means in practicality to merge finances.

Also, check out these 9 steps to building wealth as a couple.

Reach out if any questions come up and I’ll see how I can help.

justin@wealthandwisdomcoaching.com

360-230-8562

Visit my home page.

4 Steps to Budgeting

Controlling your spend is the key to protecting your savings. A budget is a plan for where every dollar goes after you have allocated how much you plan to save (e.g., 10%). Budgeting isn’t something to see as restrictive or scary. Instead, think of it as a tool. And like any good tool, when you know how to use it, it makes life easier.

This is how to budget the remaining income after saving:

1. Organize the budget by month

• Monthly budgeting is the easiest way to plan for most people. Most bills are monthly. Many people get paid monthly or biweekly.

  For example, create a budget for the month of July.

2. List out income expected that month

Write down every dollar expected to come in that month. This includes paychecks, side gigs, tips, anything you plan to sell, like on Facebook Marketplace, as well as money rolled over from the previous month. Ideally, it all flows through one checking account to keep things clean.

Here’s a sample July income:

• July 1 (leftover from June): $200

• July 5: $2,000 paycheck

• July 14: $2,000 paycheck

• July 18: $150 (sell the couch)

• July 26: $3,000 paycheck

Total income for July: $7,350

3. List every planned expense or goal for the month

Next, map out where all income is going. This is everything planned for spending or saving for the month, including fixed bills, like mortgage/rent, HOA, utilities, and the car payment; flexible/variable expenses, like groceries, gas, and eating out; savings goals, other debt payments, childcare, travel, healthcare, and subscriptions.

It takes a few months of budgeting to get this part correct, and that’s okay. It took me about three months to get it in good shape.

4. Subtract all expenses from total income

The budget should zero out, meaning income minus expenses, including savings and debt payments, equals zero. Every dollar is accounted for.

• If over budget, it’s a sign to reduce expenses where possible or find ways to bring in more income to bring it to zero.

• If under budget, it’s a surplus. Decide ahead of time where to put the extra dollars, like towards savings.

Why this works

When your income and expenses are laid out clearly and organized, it puts you in control of your situation and reduces stress. I advise sitting down every month to work on the budget for the next month, agree on changes if you’re doing this with your spouse or committed partner, and re-align on your goals. It’s not always perfect, but it’s the most powerful habit to have to protect your money and plan your future.

Reach out if any questions come up and I’ll see how I can help.

justin@wealthandwisdomcoaching.com

360-230-8562

Visit my home page.

Know Your Net Worth

Your net worth is the amount of money you’d walk away with if you sold everything you owned and paid off all your debts. It’s basically your financial report card.

If you Google “why net worth matters,” you’ll find plenty of articles. But here’s what it means in terms of building wealth: it’s a way to track progress. It can help you stay motivated by showing you where you stand and how to move forward.

Net worth shows you how much consumer and strategic debt you have to pay off. As you watch that number go down, it can motivate you to keep going.

And if none of that hits home, this might: your net worth tells you how far away you are from becoming a millionaire. Most millionaires are regular people who make consistent, smart decisions, like controlling their spend, saving, investing and saying no to debt. And they know their net worth.

Here’s how to figure it out:

1. List Your Total Assets

• These are things you own that have value. Think:

  • Your bank accounts

  • Retirement accounts

  • Cars

  • House

  • Any valuable items you could sell

• Write down how much each would sell for today, not what you paid for them. Add it all up.

2. List Your Total Debts

• Write out every debt you owe:

  • Credit cards

  • Student loans

  • Car loans

  • Mortgage

  • Anything else you’re making payments on (medical debt, HELOCs, etc.)

• Use the payoff amount for each one, not the balance showing online. You may need to call your lenders to get the exact number. Add it all up.

3. Do the math

• Take your Total Assets and subtract your Total Debts. That’s your net worth.

Here are some pro tips for assets with debt:

Car loans:

• Look up your car’s private sale value on Kelley Blue Book. Add that to your assets.

• Call your lender to get the current payoff amount. Add that to your debts.

Mortgage:

• Check Redfin or Zillow to see what your home might sell for today. Use that as your asset value.

• Call your mortgage company for your payoff amount, not the balance you see online. Use that as your debt.

Tracking your net worth gives you a clear target. It shows how much debt you have left to pay off and your wealth-building is going. It turns a vague goal into something real and measurable. And that can make a big difference in how you do personal finance.

Reach out if any questions come up and I’ll see how I can help.

justin@wealthandwisdomcoaching.com

360-230-8562

Visit my home page.

How To Build Credit for a Mortgage

If you have existing consumer debt (credit cards, car payments, HELOCs, personal loans, etc.), I strongly recommend becoming debt-free instead of following the advice in this article.

This article is intended to show how to build credit when you’re debt free and want to build up a credit score to apply for a mortgage.

Before continuing, I suggest checking out Dave Ramsey’s recommendation on manual underwriting before attempting the below. If you’re already set on using a credit card, here are steps to follow that will keep you moving toward wealth as long as you maintain discipline.

Quick steps:

1. Create a budget.

2. Add a line in your budget for the credit card you plan to use. Use only one card and set a strict dollar limit.

3. Once the month begins, only swipe your credit card for planned purchases.

4. Pay off the card immediately after each purchase, down to the cent.

5. Track each payment in your budget against the credit card line you created.

6. Never go over the limit you set, and never carry a balance into the next month.

Example:

• Your take-home pay next month is $5,000.

• You add a budget line: "Credit Card - $300."

• In week 1, you spend $20.06 at happy hour. Pay off the $20.06 the same day.

• In week 2, you spend $129.54 on groceries. Pay that $129.54 off immediately.

• Repeat this until you’ve spent up to, but not beyond, your $300 credit card budget.

• Use cash or debit for everything else.

Pro Tips about Credit Scores:

• It’s not about how much in total you swipe. It’s about how much of your available credit you use. The lower, the better.

• If your credit card limit is $2,000, plan ahead to use as little of that as possible. The more of that credit you use, the worse it looks on your credit report.

• If you’re going to build credit, do it with a plan and strict limits. Stay in control.

Reach out if any questions come up and I’ll see how I can help.

justin@wealthandwisdomcoaching.com

360-230-8562

Visit my home page.

Ditch the “Emergency Credit Card”

Keeping a credit card for emergencies is ingrained in culture. However, credit cards are consumer debt tools that are detrimental to wealth-building. So I suggest trying a different path.

Here’s how to ditch the “emergency credit card” and feel safe to handle the unexpected.

1. Start saving money

• Look at your income and decide on a starter savings rate (%) for every dollar earned (e.g., 10% of each paycheck).

• Transfer that savings into a savings account, preferably one that earns interest like a money market account.

2. Control spending to protect savings

• Create a budget using the remaining income after saving (e.g., 90%).

• Review expenses, find leaks, and cut unnecessary expenses (e.g., unused subscriptions, overlapping services).

• This step, when done in parallel with saving money above, is foundational to wealth-building and becoming free of the need to rely on credit cards.

2b. Pay off consumer debts fast

Skip this step if it does not apply. If you have consumer debt, get laser-focused on completing this step with everything you can, so you can move to the next step as fast as possible.

• Avoid passive strategies like consolidation that stretch payments out.

• Choose an aggressive payoff method:

• Debt Snowball (best for behavior and momentum, but not the best money saver)

• List debts by smallest balance to largest.

• Pay minimums on all but the smallest.

• Throw all extra cash at the smallest until it’s gone.

• Roll that amount into the next smallest, and repeat.

• Debt Avalanche (best for saving money, but harder to execute)

• List debts by highest interest rate to lowest.

• Pay minimums on all but the highest-rate debt.

• Throw all extra cash at that one until it’s gone.

• Roll that amount into the next highest-rate debt, and continue.

• Pause all investments, including retirement contributions, to unlock extra income and apply it to your debt.

• Set a debt-free target date and post your payoff progress somewhere in the house to show progress.

• Say no to new consumer debt, period, moving forward.

3. Protect what you’ve built (here it is!)

• Now that you’ve unlocked more income from clearing debts, build up an emergency cash fund with at least 6 months of expenses in an account that yields interest. <— This is the key to addressing emergencies without a credit card.

• Maintain the emergency fund by replenishing it if you have to withdraw.

So instead of an “emergency credit card”, you have an “emergency bank account” that is yours and yours alone. And because it is parked in an account that yields interest, your emergency bank account is making money.

Reach out if any questions come up and I’ll see how I can help.

justin@wealthandwisdomcoaching.com

360-230-8562

Visit my home page.

Get Out of Consumer Debt in 6 Steps

Consumer debt is high-risk, high-interest debt that doesn’t make you money; it drains your money. I’m talking about credit cards, car payments, HELOCs, personal loans, payday loans, and medical debt.

If you want out of these debts, first take a moment to step out of feelings around guilt, shame and embarrassment (which are all valid - I’ve been there), look in the mirror and say “I’m done with this. I’m tired of the stress. I’m not going back.” When you hit that moment, you’re ready. Getting out of debt is not easy. It’s uncomfortable, and it takes intensity, consistency, and patience.

Here’s how to pay off these debts and get back to wealth-building:

1. Start saving first (10% or more)

• Learning to keep money consistently is foundational to becoming and staying debt-free. This is the first step.

• If you have little or no savings right now, decide to keep a percentage of your income as soon as you’re paid (e.g., 10%).

• Transfer that savings into a shared savings account, preferably one that earns interest like a money market account.

• Determine how long it would take to save up $1,000 doing this consistently. Target your first savings goal to $1,000 and increase the percentage to achieve it faster.

2. Get control of your spending

• Learning to control your expenditures is just as foundational as saving. This is the second step.

• Create a budget using the remaining income after saving (e.g., 90%). This shows you how much you can put towards your consumer debts. Without it, you’re deciding to wing it, and you won’t feel meaningful progress.

• Review expenses, find leaks, and cut unnecessary expenses (e.g., unused subscriptions, overlapping services).

3. List everything

Write down every single consumer debt you have, such as:

• Credit cards

• Student loans (list each one separately)

• Car loans

• Any other debt you owe back that you’re making payments on (e.g., medical debt, HELOCs)

Ignore your mortgage for now. We’re focusing on consumer debt. That’s the high-interest, high-risk stuff that’s draining your budget.

4. Unlock as much income as possible

Pause retirement contributions. Pause any other savings goals. Sell stuff. Take on extra work. Free up every dollar you can toward one goal of paying off these debts.

5. Decide on a payoff approach

Avoid passive strategies like consolidation that stretch payments out.

Choose an aggressive payoff method:

• Debt Snowball (best for behavior and momentum, but not the best money saver)

  • List debts by smallest balance to largest.

  • Pay minimums on all but the smallest.

  • Throw all extra cash at the smallest until it’s gone.

  • Roll that amount into the next smallest, and repeat.

• Debt Avalanche (best for saving money, but harder to feel traction)

• List debts by highest interest rate to lowest.

• Pay minimums on all but the highest-rate debt.

• Throw all extra cash at that one until it’s gone.

• Roll that amount into the next highest-rate debt, and continue.

6. Protect what you’ve built

• Now that you’ve freed up your income, build an emergency cash fund with at least 6 months of expenses in an account that yields interest.

• Maintain your 6-month emergency fund by replenishing what you withdraw.

Becoming debt-free reduces complexity and stress in your finances and frees up your income to live and spend time how we want to. That’s a version of wealth itself.

Reach out if any questions come up and I’ll see how I can help.

justin@wealthandwisdomcoaching.com

360-230-8562

Visit my home page.

5 Steps to Save for a Home (My Personal Story)

Early in the COVID-19 pandemic, like a lot of people, I bought my first home to take advantage of historically low interest rates. But as I started researching the process, I felt anxious and overwhelmed about home-buying.

I was reading about down payments, PMI, and surprise repair expenses, and started to question if homeownership was realistic.

Fast forward to today, my family is settled into our first home and plan to stay a while. We’re very grateful, not just for the house itself but for the peace of mind we created from a few financial steps we took before buying. Here’s what we did:

1. Set a target monthly payment

We looked at our income and decided our mortgage payment (including the principal, taxes, and insurance) should be around 25% of our take-home pay. We wanted enough room to cover bills, live comfortably, and save for other goals once we bought and moved in.

For example, if monthly take-home income is $10,000, the mortgage payment is around $2,500 per month.

2. Use that number to set our max home price

Next, we used a mortgage calculator to reverse-engineer what price the home should be to fit the target monthly payment. We factored in local property taxes, insurance, and potential HOA fees according to some of the areas we were looking in.

Continuing the example, a $450,000 house could fit a $2,500 monthly payment, with the following:

• 20% down: $90,000

• 30-year fixed loan

• 5% interest rate

• 0.73% property tax rate

• $2,221 annual home insurance

• $100/month HOA fee

3. Lock in a down payment target

We wanted to avoid PMI, so we aimed to save 20%.

In the example above, that would mean saving $90,000.

4. Get financially organized

Once we saw that target, we realized we needed to free up as much income as possible to buy within two years. We paused retirement contributions, agreed on financial priorities, and focused our income on one goal at a time.

First, we paid off our high-interest consumer debt to free up several hundred dollars a month. This included our car loan and credit cards. Once that was all gone, we saved up a 6-month emergency fund. We didn’t just want to afford a house, we wanted to be financially secure to own one.

5. Save for the down payment with intensity

With our high interest debt gone and a safety net in place, we stayed on a conservative budget and left retirement contributions off, and threw every extra dollar we could find toward our 20% down payment goal. We reached it in under two years.

Looking back, I’m so thankful we took these steps. We’re able to enjoy our home and cover repairs with cash, and we’ve transformed our financial future through focusing on getting to financial solid ground at the beginning.

Pro tip: Decide to wait to engage a realtor until you are nearly at your target down payment amount. This will give you a big boost of confidence and power and keep the stress low.

I want to share a personal lesson learned. If I could go back in time to what I know now, we would have saved instead for a 15-year fixed loan to significantly reduce interest paid over time and pay off our home faster. Our 30-year-fixed mortgage is within our means, to be sure, but it is a slow progress to pay off, even with making extra payments. The next home we buy we will do a 15-year fixed. I highly encourage you to consider a 15-year fixed loan and take the time it requires to save a down payment for that loan instead. It’ll be worth the wait from personal experience.

Reach out if any questions come up and I’ll see how I can help.

justin@wealthandwisdomcoaching.com

360-230-8562

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Just Say No to Consumer Debt

I’m personally guilty of using consumer debt in the past ($100,000 worth). It took me until my thirties to figure out that it was detrimental to building wealth for my family.

Consumer debt shows up in our lives for two reasons:

1. It feels normal. Everyone uses it.

2. We don’t see another way to afford what we want or need.

However, using consumer debt to fund your lifestyle is going in the opposite direction of wealth-building. Every one of these high-interest, high-risk loans or credit cards create a hole in your portfolio that you have to fill with future income, and those holes often multiply whether we want to admit it or not. And, these debts don’t make you money.

Instead, these drain your money and delay wealth-building:

• Credit cards

• Student loans

• Personal loans

• Car loans

• Medical debt

• HELOCs

• Boat or camper loans

• Payday loans

Now, some debt can be strategic and make you money, like a mortgage that builds equity. I advise paying those off early to save on thousands in interest and build equity faster so your wealth portfolio increases significantly.

If you want or need something, find a way to save for it. Build the habit of living on real money like cash or debit.

Check out these articles if you’re ready to try something that works for wealth-building:

• I manage my money solo

• I manage money with a spouse or committed partner

Reach out if any questions come up and I’ll see how I can help.

justin@wealthandwisdomcoaching.com

360-230-8562

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