The Shame in Your Money

I talked to an old friend today who needs my help. She said something to me that has been a recurring theme from my clients... She said she was ashamed and embarassed about her financial situation. That she had been thinking about calling me for months, but didn't want to have to admit, to me or to herself, that she needed help.
Can I just tell you that almost everyone I talk to is ashamed and embarassed about their finances. Can I also tell you that I have never been unable to help someone due their financial terribleness (not sure if that's a word...) And, as soon as people start making progress in their own lives, the shame vanishes.
You know, there's a song out right now, and the girl says several times that "you're not what you've done, you're what you've overcome"
Taking control of your finances isn't about restrictions and guilt and regret. And I know that you can't control everything, but there are a lot of choices that are made daily, that alter your financial outcome. When you are in control of who you give your money to, that's where you'll find financial freedom!

In the world you have tribulation, but take courage; I have overcome the world! ~Jesus

The Real Housewives of Atlanta

So, I’ve been DVRing the Real Housewives of Atlanta for entertainment while I fold laundry, etc. and obviously, these shows are enticing – the people have so much pretty stuff and their lives seem so glamorous. My first thoughts are things like: wow – I wish I had …fill in the blank.

Then, I watch a lady spent $8,000 on some new furniture for her child. When the store clerk asks her how she’ll pay, she responds with: credit card!! Then another lady is getting married and her & her fiancé are fighting about money …and it hits me…
The only difference in them and us is the price of their stuff: their income is bigger, but so are their payments. They still don’t save for purchases – they still depend on credit, they just have higher limits on their cards than the rest of us do.

Most people think that if they only made more money, THEN they would save, THEN they would pay off some debt. This is why we look at people who once made a lot of money and have lost it and we wonder how that happened. The truth is… if you don’t make wise decisions on a $10,000 income, then you will never make wise decision on a $60,000 income, or on a $150,000, or on a $2.3 million income.

God calls us to be good stewards of what we are given – and He doesn’t put income limits on it!

Will helps a client save $1,500!

Yesterday, I went with Will, a Debt Buster on my team in Knoxville, to meet with one of his clients. We have been working with her for a few months, helping her rebuild her credit so that she can refinance her home. She had a debt that was charged off and we were able to walk her through coming up with the money and then “held her hand” as we settled it. We were able to show her how save her $1,500 on that bad debt.
It’s a good day when you help someone save $1,500! Good job Will !! Thanks for making a difference in people's lives!

Practing what I preach

I was telling this to a client the other day, and thought I'd share...

We have several large bills that are due on the 1st - as many people do: Mortgage payment, HOA dues, childcare, utilites, plus we still have to eat and put gas in the car. My husband gets paid every 2 weeks, so the pay dates aren't the same each month. This month, he gets paid on the 3rd of the month.

A year ago, we would've waited until the 3rd to pay the bills due on the 1st, because technically they aren't late yet becuase of a grace period.

And here's where we've gotten to - The bills that are due on the 1st are already paid. We paid them out of the last paycheck. The paycheck that we get on the 3rd, goes toward bills that are due after the 3rd. We are now paying our bills ahead instead of behind. We are no longer floating our checks to make sure they don't clear before a paycheck posts.

This is what we are teaching our clients, and this is what we are doing ourselves.

... and let me tell you friends... that feels good!

One reason my "job" is such a blessing!

I met with a client last week, who I have been meeting with for about 3 months now. When I first met her, she was late on several of her debts and monthly bills and felt tremendous pressure from her creditors. She also had several large expenses coming up that were causing her additional stress. This is what she told me when I met with her last week...

She said she no longer dreads getting out of bed to face the pile of bills & notices. She no longer stresses when her phone rings and the number is unidentified, because she knows she is current on everything. She said that when the her lights flicker, she knows it's something to do with the electricity because she knows she paid the utility bill, in full, on time.

I mean, I knew that I could make a difference in someone's financial world. I know that what I teach works, becuase it's what I do in my own life. I guess it never occured to me that my coaching would help my clients sleep better at night. What an incredible blessing to get to be a part of someone else's change for the better!

Here’s How Refinancing Can Be a Great Idea!

I am doing a refinance for a family right now and here is their situation. They bought their home 9.5 years ago. They have paid 112 months of payments at $751 a month. So far, $11,202 has gone to principal and $72,910 has gone to the lender, in interest. They still owe 248 payments. The total of those payments is $186,248. This is how much they will pay if they stay in their current mortgage and make no additional payments.

So, I looked at their current amortization schedule and compared it with their proposed schedule, and here’s the new plan: We have converted them to a 15 year mortgage. Their new payment will be $735, which is only slightly less, but instead of making 248 more payments, they will only make 180 more payments. This refinance will save them $54,066. And they will skip their December payment – Merry Christmas Smith family!!

I don’t know about you, but $54,066 is a lot of money to me!
If you are curious to know if refinancing your home is a good idea, please give me a call and we’ll look at your situation!

Thanks for taking the time to read my blog!!
~Leslie


865.789.6229
Lsweet02@comcast.net

Why Refinancing Can Be A Bad Financial Decision

Let’s say you have a $150,000 mortgage on your home and your interested rate on it is 6%. When you bought your house, you put it on a 30 year term – this is by far the most common term, mostly because it gives you a lower payment. I pulled up an amortization schedule, and here’s what I found out:

If you have paid on your home for 5 years, you will have paid $53,959.80 in total payments to the bank in principal ($10,418.72) & interest ($43,541.04). Your principal balance at the end of 5 years is $139.581.24. Let’s say that in those 5 years you have accumulated $6,500 in credit card debt that you want to “convert it to a lower interest rate.”

If you refinance back into a 30 year mortgage at $150,000 - at this point, you have just THROWN AWAY $53,959. I don’t know about you, but that is a LOT of money to me! Even if I can save $150 a month, I still wouldn’t pay $53,959 to save $150 monthly. And like I said yesterday, if I haven’t paid extra on my mortgage for the last 5 years, it is very unlikely that I will start now.

Even if I did accelerate the mortgage by the amount I save every month for the remainder of the loan, I would only save $38,063 in interest at the end on the loan. I still didn’t save as much as it cost me to create the deal in the first place. It still cost me $15,896 more than I saved.

Here’s the other point I want to make… If you paid on that $6,500 credit card debt at 25% interest, at $190 a month – that would take you 5 years to pay it off. It would cost you a total of $11,400 ($6,500 balance and $4,900 in interest). Now, obviously you don’t want to pay $4,900 in interest on that debt, but isn’t that still a lot less than paying $53,959.80 ?!?!

So, yes, in theory, refinancing high interest debt into lower interest debt is a good idea. The problem is… a theory does not equate to real life! The other problem is that the math doesn’t makes sense… Would you rather pay $4,900 or pay $53,959?

In my next blog, I’ll tell you about one of the families that I am helping with a refinance on their home right now. After looking at their amortization schedules we were able to determine that we can lower their interest rate, save them thousands in interest and knock several years off of current mortgage loan. They are an example of a great way to take advantage of the current low rates.

Thanks for taking the time to read my blog!~Leslie