Advantage Home Plus Blog

Do You Need a Financial Health Checkup?

It’s never too late or too early to assess your financial health. If you are considering a major purchase in 2019, the best thing you can do is evaluate your financials for potential barriers.

Financial health checkups are really important, and yet, we tend to just let them run on auto-pilot.  If it’s not broken, why fix it? There are two ways to look at this.

The first way  is “what’s the worst thing that could happen” by just letting it run on auto-pilot?  If you take this approach, you let things ride, and if something comes up, you’ll deal with it at that time.

The second way is “am I getting the most out my long and short term financial health goals?”  This is a much more proactive approach with prevention and optimization as the goal.

3 Reasons Why You Need a Financial Health Checkup

You need to carve out some time over the next 30 days if any of these things are important to you:

• You want to be proactive, and be in the best possible position for avoiding or preventing financial surprises.

• You want to improve monthly cash flow.

• You want to maximize protection and transference of your long term assets.

I’ll  share a few thoughts with you here, and you can decide for yourself whether or not this would positively impact you and your family.  Fair enough?

What are Your Financial Health Goals?

Assessing and addressing your financial life doesn’t have to be approached with dread. There are simple tactics that can improve your financial life.

An example of one simple tactic is to eliminate unnecessary subscriptions.  Those small monthly subscriptions add up fast. Eliminate the ones you don’t really need.  

• Maybe you’re not really listening to those audio books the way you thought you would.

• Maybe you don’t need 3 music streaming subscriptions

• Maybe there are some small monthly charges on there you don’t even recognize

Financial health goals for the purposes of this article include minimizing your monthly payments, which means you’re saving money, and protecting your short and long term financial health.

Asset Review – Annual Mortgage Review

In most cases, your financial health checkup will reveal that there are very few adjustments or actions required  to get back on track.

Your home mortgage loan is a key pillar of your long term wealth strategy that offers some degree of liquidity.

If you find yourself in a position to invest in the improvement of your current home, purchase an income producing property, or eliminate high interest debt, access to your equity could put you in a very good long term position.

Having sufficient equity in your home to make investments that result in short term cash flow or long term wealth building is a blessing.  Keep in mind that most missed opportunities come from simply acting too late.

Here’s the absolute truth. Staying on top of opportunities like low interest rates, home prices, home values, access to equity, and short term cash flow always works in your favor.

The perfect time to take advantage of an opportunity to improve your financial health is worth considering.

5 Common Strategies for Leveraging your Accessible Equity

Reduce Credit Balances – The reality is, it wasn’t just the holidays if you’re carrying a significant amount of revolving debt.  Credit card balances are unbelievably expensive if you’re only making the minimum monthly payment. If your credit card balances are higher than $10,000, running the numbers on a consolidation strategy would be worth your time.

Address Credit Profile Concerns – If your interest rates and credit opportunities are costing you because of low credit scores, you could be suffering from maxed out revolving debt.  Paying down revolving debt to $0 (or close to) can result in a very quick boost to your credit score. This strategy should NOT be looked at as a “bail out”.  It is important that when you pay off debt that you do not replace those balances in the future.

Complete Deferred Maintenance – These are the repairs that you’ve put off for many years.  The most common reason for deferred maintenance is that many homes had been upside down in the past 10 years.  If you’ve put off home improvements, it’s definitely worth your time to review the numbers on this investment. It might help increase the value of your home when completed!

Leverage Home Equity Wisely – Using your home equity as an investment strategy can be a risky endeavor if you are without the right people in your corner. As long as you understand the risk, you can use your equity to purchase income producing property or other other vehicles.  My opinion is that 2019 is going to be a great year to purchase income producing property.

Remove Solar Lease / Property Tax Lien – It sounded like a good idea at the time.  You thought you were doing your part to be more energy efficient.  You didn’t completely understand that your property taxes, and your monthly mortgage payment will increase as a result.  It is now possible to pay off HERO and PACE loans using “no-cash out” underwriting guidelines.

Your Employee Homeownership Program can Help

Remember, you have access to a special program through your employer.  Your Employee Homeownership Program is team of experts in your corner who can help guide you with your financial health in mind. When you contact your benefits advisor you’ll gain access to the financial health and mortgage review at no cost to you.  

Our mission is to provide you with the knowledge, tools, and network to help you achieve your goals.