As the year counts down, and the bustle spins up, many of us are focused on setting goals for the New Year. Whether in 2025 you want to get ready to buy a new home, save money on the home you have, or put yourself in a different financial position, we are all ready for some quick and efficient tips and tricks that can be done to achieve success as the calendar turns the page. And since most everyone’s attention is most likely on a sugar rush, let’s focus on a few simple things you might also be able to use as fodder for awkward holiday parties no matter where you are in your financial journey.
- The best way to determine if you can really afford that new payment is to pretend like you have to pay it now. Considering buying a home, or maybe even a car? Go ahead and set up an automatic savings plan that transfers that exact payment difference to a new, earmarked savings account on pay day. This will get you used to the cadence and level of payments, and figure out what may need to be adjusted for success.
- Schedule out a 30-minute, recurring block to “touch” your finances. Maybe it’s Wednesday morning before the coffee brews, or Sunday as the weekend winds down; either way, put a recurring time on your calendar and be sure to list in the notes what you want to accomplish. Things such as, “Check credit card balances,” “Plan meals for the week,” or, “Move $$ to savings,” can all prompt you to stay on track. You can use this time to educate yourself on products and services as well.
- Hit the ATM. The best way to stay on track with your budget is to spend cash, not tap, swipe, or click for payment. Taking out your spending money in cash keeps it top of mind and avoids overspending because when it’s gone, it’s gone. Also, if you’re in a relationship, giving each of you cash to spend versus reviewing what the other spent their allowance on can reduce friction.
- Compare the 10-Year Treasury (US10Y). Buying Treasury Bonds is investing in our nation for a decade at a time, and giving you a mortgage is investing in your home for a decade at a time. The US10Y is the best way to watch how rates are truly moving. If that goes up, rates go up, and vice versa. Considering a refinance? Check to see where this index was when you got your loan and compare to now — you most likely want it down by 0.5 in order for it to make sense if you’ve gotten a loan in the past few years.
- Divide your credit card balance by that credit card’s credit limit. The best credit scores are generated by folks that use debt, but not too much of it. While data adjusts all the time, your actual score of judgement is most likely going to be based on the balance-to-limit ratio established on the ending date of your billing cycle. So, by keeping the balance — say, under 50 percent of the limit — right before the cycle ends, you will see a higher score than if not.
- Pay things off faster by some simple math. Forget paying a servicer to do biweekly payments for you! Take the monthly payment, multiply by 13, then divide by 12 — and make that payment monthly. This can take years off your installment debt (like a mortgage, car, or student loan) and save tens of thousands of dollars in interest.
- Delay send is your friend. Most of us have the functionality to “delay send” emails from your email server. Look ahead — are there times you may want to be reminded to save for vacation, stay on budget to get new digs, or perhaps any of the tactics above? By emailing yourself today, yet configuring the email to be sent in the future, you’ll set yourself up for success even if the New Year’s resolution starts to wear thin.
You’ll notice this article is focused on tactics rather than forecasts and projections. Real estate is always an adjusting industry, and economic data, policies, and procedures will impact it far beyond what anyone can reasonably predict (house prices in COVID, anyone?). No matter what happens externally, the best thing we can do is formulate a personal plan and take action accordingly. These tips can work for financial goals far outside of the mortgage landscape, and I hope they help you get one step closer to achieving yours. Be merry, be bright, and remember that one step forward gets you closer than thinking about it ever will.
Austin Lampson is a licensed mortgage professional and branch manager of Movement Mortgage. She has spent the last quarter-century helping her clients balance math and emotion to achieve their financial goals. Reach Austin at (805) 869-7100 or austin@austinlampson.com, or visit austinlampson.com.
