5 Types of Financial Roller Coasters

There are many reasons people get in trouble with their finances. If any of these describe you, reach out for help. There are solutions to each of these types that anyone can implement in their lives. Take a look.

Feast or Famine

Financial Roller Coaster

Have you ever met those people who are on an extreme rollercoaster ride with it comes to their finances? The type that seems to be doing fine one day, and the next day you hear they are barely scraping by.

Maybe it’s the people who buy a new home and they are all excited so they go out and buy a whole bunch of new furniture on credit. They are euphoric until the first bill comes in and then they are in panic mode.

Or it could be the person who pays off all their debt and the next thing you know, they are bringing stuff to the pawn shop to get to the next payday. Suddenly, the sell and buy scenario is a regular thing at the pawn shop.

The Slow Death

Financial Roller Coaster Wilted Flowers

These are the people who consistently live above their means. Unfortunately, a lot of Americans live this way. They spend $1.22 for every dollar they make. It’s a slow death because they overspend just a little but over time, that extra $0.22 adds up.

Maybe it’s the couple who is living vicariously through their children and can’t say no to them. You here them say stuff like “I’ll never let my kids go without like I did when I was a kid.” Whenever they go to the grocery store, they have to buy their child a toy – because – well, that’s just what they do. Right? Their kids are in all kinds of sports through school and other after school activities. It’s exhausting!

The Train Wreck

These are the ones you feel sorry for. This is the couple who has the breadwinner that has a heart attack. The person survives but is told they must retire right now! Of course, they planned on working for another ten years but now they have to figure out how to live on $35,000 per year instead of the planned $55,000.

The divorced couple. Neither one makes out ok from this situation. They both end up broke in the process due to lawyer fees, split accounts, etc. All their accounts are frozen during the process so they have limited funds to work with while they are going through the divorce. When everything is finally done, they both struggle for years trying to make all their finances work again on an individual basis.


Here the spouse has died and there is no more income. Maybe they have been diagnosed with a disease that will take all their finances. A natural disaster takes place and they lose everything only to find out that their insurance won’t cover half of it.

Living on Prayer

This is the person who makes a decent living but never saves any money. When they turn 65 (or whatever the retirement age is for them) they talk to a financial planner only to hear that they can’t retire because the only money they have to live on is what they can sell their house for. If they sell their house, they will have a little money but that won’t last long. No planning was ever considered.

Steps to Avoid Tragedy

Financial Roller Coaster Money

Here are a few steps you can start to take now so that you don’t become one of the people described above.

  1. Live beneath your means. This means putting something from every check aside for later in life.
  2. Don’t make compulsive purchases. 50 years ago, if you didn’t have the cash, you didn’t get the item. It can still work that way today
  3. Make sure you have some type of medical insurance. Sure, the cost is out of control right now but if you don’t have it and something happens, all your plans go out the window.
  4. Have some life insurance. There’s nothing worse than seeing someone lose a loved one and not have enough to live on going forward. It’s a gift for your spouse and your family.
  5. Save. Save. In our current society, it’s all about instant gratification. Believe it or not, you can live with less stuff and still have a happy life.

If you need help with your finances, reach out to local organizations that help in this area. A good place to start is Consumer Credit Counseling. Find support groups and courses that can help turn things around.

What are some ways that you have avoided these tragic scenarios? Comment below.



Personal Finance Can Be Scary

Learning about Personal Finance

I learned a lot of what I know about personal finance in the 1980’s while serving in the United States Navy. While stationed overseas, I had the opportunity to take a college course. The course I chose was Personal Finance.

Most people don’t learn anything about personal finance growing up. Either their parents never took the time to discuss it or their school never taught it. Although my parents taught me some things about finances, I probably learned more in this one class than at home.

Personal Finance College

Why are people afraid of their finances?

It’s Embarrassing!

No one wants others to know they are having financial difficulties. After all, what are other people going to do? Most of the time, people are not going to hand over money to correct the situation. So not only is it embarrassing, but now others know that I can’t handle my finances.

But maybe it has nothing to do with handling my finances. Maybe it is an unforeseen event that changes everything. Is it a divorce situation? Did your spouse pass away? An automobile accident can radically change someone’s circumstances. What about a medical diagnosis?

All these situations have the potential of placing someone in a financial situation that is not optimal. Sometimes, these situations can lead to bankruptcy or foreclosure.

Personal Finance Wallet

It’s Scary!

If you have ever looked at your checkbook and wondered how you were supposed to pay for everything before you ran out of funds, it can be terrifying. I can recall at times in my life where I had to choose between paying a bill late or buying food. It was after a divorce situation when all the financial information came out. Making decisions like that adds a tremendous amount of stress to someone’s life and in my case, those late fees took months to catch up on again until the financial situation improved.

It’s Lonely!

No one likes to talk about their finances to others. Some feel it is none of the other person’s business. Others are just too embarrassed to talk about it. Either way, it places us in a position where there is no one to talk to about it. We tend to suffer with massive debt, added stress, and not knowing what to do about it.

People are afraid of judgment!

“Well, you should have paid attention more.”

“If you didn’t overspend, you would be fine.”

There are probably a thousand different things you can hear from others about all the ways you may have handled your personal finances poorly. There are another million things you can tell yourself about things you’ve done wrong. It sure is easy to beat ourselves up over things. You don’t need anyone else judging what got you in trouble with your finances.

I have been through a rollercoaster of events in my life. There have been times when my financial situation has been really good and other times when I didn’t know how I was supposed to make it another week.

One way to avoid those feelings of judgment is to get involved in groups and counselors who are there to offer suggestions on how to improve the situation. Sometimes, family and close friends are the wrong place to look for that and that is ok.

There are a ton of people that can beat you up about it. Instead, find those who will support you.

Solutions are Out There

I know that I don’t have all the answers but here are a few resources to consider when trying to get your finances under control. For immediate assistance, check with your local church. They may not be able to give you money or pay your bills all the time, but they can refer you to other resources that may be able to help.

Personal Finance Grow Your Money

The Little Debt-Free Book – This is a book I wrote that takes you through my financial journey after a divorce. Check out the website for some free resources and ways to order the book online. It not only tells you some of my story of becoming debt-free but offers tools to help organize and budget.

Financial Peace University – This study is offered through Dave Ramsey. Check out the website for information on when and where these classes are available. This is a 13-week course with specific goals for each week to change your way of thinking about finances.

Crown Ministry Financial Classes – These studies vary in length and walk through the financial process with a heavy emphasis on faith. Check out their website for information on when and where classes are available.

Personal Finance can be scary but you don’t have to deal with it alone. I’d love to know if you have tried any of these resources and what the outcome has been.

What Is Your Home Worth

Why Get More Credit?

Credit, Bad – Debt-Free, Good

Credit Cards

If you’ve read any of my previous blog posts about credit, you know that I’m not a fan of people getting all kinds of different credit. I am a firm believer that being debt-free is an amazing way to live. You never have to worry about where your money needs to go, how much you need to make to pay all those various bills, or worry about what will happen if something happens like a job loss or a medical diagnosis.

You may also know that I am now a REALTOR®. I want to help people learn about that process so they can get into a home that they can afford without stressing about the increasing costs of ownership.

My Friend Paul

Paul Nolte

As a REALTOR®, a trusting and honest relationship is established. If you are a seller, I represent you in any negotiations once a Listing Agreement is signed. If you are a buyer, I represent you in any negotiations once a Buyer’s Representation Agreement is signed. Without an agreement, you are on your own when it comes to navigating the contract paperwork and any negotiations.

Paul Nolte is one of the partners and a preferred Mortgage Loan Originator from Home Team Mortgage at our Ebby Halliday, REALTORS® office in the Plano/Willow Bend area.

We’ve had several conversations about clients who need help getting a loan. One reason a contract will fall through is an issue with credit. That’s why it is so important to start working on your credit immediately, preferably six months before you want to purchase a home.

Paul has provided an article on how to improve your credit when preparing to purchase a home.

My Take


Although I can appreciate having a variety of credit avenues open to show credit worthiness, sometimes, that is not a good thing for people.

If you have a habit of keeping a balance on your credit cards, then maybe a better way would be to keep one credit card and maintain control of your spending.

I was divorced in 2002 after an almost 15-year marriage. After six years, I managed to pay off my debts and only kept one credit card. Over time, I had several car loans for various lengths of time and maintained a zero balance on my credit card. With a credit score over 800, I had no problems qualifying for a loan for a house.

Everyone needs to decide their own path when it comes to finding a great home. If you choose wisely, your credit can help you achieve the goals you want. However, if you neglect what is happening with your credit, it may prevent you from getting that house.


Here’s a brief list of things that can trip you up when trying to purchase a home.

  1. Missed payments on loans.
  2. Late payments on credit cards
  3. Late utility payments
  4. Eviction
  5. Bankruptcy
  6. Foreclosure
  7. Too much debt-to-income ratio. If you owe more than about 36% of your income towards bills, you may not qualify for a loan.

There are also ways people can sabotage the loan process.

During the contract period, you start to purchase items for your home:

  1. Riding mower
  2. Refrigerator
  3. Washer and dryer
  4. Vacations

Once you are under a contract, do not make any changes that could affect your credit or your debt-to-income ratio. You’ll have time to purchase those items after you move into your new home.

Reach out to me so we can work together to make sure any credit issues are addressed before trying to purchase a home. Visit my business website for contact information.

Get the Pre-Underwritten Brochure!


3 Ways To Immediately Start Improving Your Credit

Credit Catch 22

Catch 22 Loan

Your credit score is a double edged sword. On the one hand, you need it in order to get loans for things like cars and houses. You will also need it to qualify for a lease. On the other hand, if you aren’t careful with your credit choices, you can end up in a credit crunch. This can make it very difficult to qualify for loans and leases.

I’ve been on all sides of the credit issue and have even written a book related to that experience. When it comes to buying a home, your credit is the first thing that gets looked at when you need to take out a loan for a home. Lenders will look at every aspect of your credit to determine if they will back a loan for you to purchase. In today’s market, it is so important to get pre-approved or even pre-underwritten for a loan so that when the house you want comes on the market, you are ready to go.

Here are three things you can start doing today that will begin to improve your credit score without resorting to debt-consolidation plans or filing bankruptcy.

Pay Every Bill On-Time

Fix My Credit

Nothing screams at your credit louder than missing payments on credit cards and utility bills. They are red flags to lenders. If you fall into this category, start paying your bills on-time. It may take six months to fix your credit this way but it’s an easy fix if you want to change your situation.

Don’t Use Credit

Don't Use Credit Cards

It’s ok to have credit. It’s not ok to have so much debt related to credit that your debt-to-income ratio gets so high that no one will loan money to you for a purchase. Typically, if you have 35% or more of your income dedicated to debts – and that includes your rent, then it will be more difficult to get that loan. The best option is to simply stop using your credit cards and don’t open any new accounts. Lenders will also tell you not to close any accounts. If you are paying all your bills on-time and no longer using your credit cards, then it just goes to say that your debt-to-income ratio will start to go down the longer you pay.

Start Saving

Piggy Bank

You’re going to need a down payment for that house you want to buy unless you are using a VA loan. Do you need 3.5%, 5%, or even 20% down when you purchase? Your decision will determine if you need to secure mortgage insurance on your loan. VA loans are for military – active duty and veterans – as a way to say thank you for your service. Other programs are available such as the Military On The Move program.


Take care of your credit and it will take care of you when it comes to larger purchases. Reach out to me if you are ready to search for a home or if you need more information about fixing credit issues so you can purchase.

Request a free brochure on steps you can take to get ready for pre-approval of your loan.


Can’t Afford To Buy?

The Issues

Buy A Home

So you want to buy a home?

The only problem is that your credit isn’t where it should be, or you don’t have enough for a down payment, or you filed bankruptcy, or you’ve been late on some bills.

But the cost of renting is so high right now!

Rent is as much as a mortgage.

A Way Forward

Home Partners Of America

Let me tell you a little about Home Partners of America.

Home Partners of America works with you to get you where you want to be.

Here’s how it works:

  • Search for your dream home
  • Home Partners of America will purchase it for the fair market value
  • They own the home now so they lease it to you
  • You work out any financial issues while leasing the property for up to three years (renewable on an annual basis)
  • You get the Right to Purchase that home at any time during the lease period

If you decide after moving in, that it isn’t the dream home you had hoped for, simply finish out your lease for that year and move out. Simple.

What’s the catch?

There isn’t much of a catch. Up front, you already know all the numbers. Your rent will be slightly higher than what you can rent a comparable home in the area for but don’t forget you have the right to buy the home.

Each year for the three years, the rent goes up a little as well as the price of the house. However, if the market causes the surrounding homes to go up quicker than your schedule, then you get the home at a discount. And – if the market starts to drop, again, you can simply finish out your lease and move on. That seems like a pretty good win-win situation.

You have one shot at it so make it count. This isn’t a program you can repeat. For one time, you get to find your dream home, lease it for a while and then have the right to purchase it. If you choose not to purchase, you can’t do it again.

How does Home Partners make money?

They are purchasing the home when you are ready and approved to lease it. That’s a fixed price for them. They charge you rent which cannot be used towards a down payment so they get that income. When you purchase the home, the price is appreciated at about 5% per year. Finally, if you back out of the lease, they turn around and lease the property to someone else as a regular lease property. It becomes part of their leasing inventory.

Next Steps

Simple. Send me an email requesting information about Home Partners of America. I’ll send you a link to register with them and then we can get together and find that perfect home for you.


Unplug! Take Off! See Ya Later!

Beach Vacation
Beach Vacation

I don’t like vacations – said no one – ever!

Who doesn’t like a vacation?

Vacations can be whatever you want them to be.

I’ve had vacations that last 36 hours and others that have lasted ten days.

Either way, it is a way to unplug from our hectic lives and receive some renewal and much needed rest.

If we do it right.

Different Strokes

Vacation To Do List
Vacation To Do List

Some people like to go on vacation where everything is planned. Think about those trips you can get that have everything scheduled for you. You go from one place to another and it is a nonstop show to cram in as many things as possible.

Some people don’t plan a single thing on their vacation. They get to their destination and wing it.

My wife and I are “wing it” people. We don’t like the idea of rushing from one thing to another to see how much we can see. Instead, we schedule time off.

The best vacations we have been on have been the one’s were we rent a condo at the ocean, get there and then spend our time walking up and down the beach, figuring out where we want to try and eat, watching the sunset and not being on a schedule.

The Financial Piece

Cash Only Vacation
Cash Only Vacation

My wife and I do not go on vacation unless we can pay for the whole trip with cash. There have been occasions where we have spent more than we planned and taken some money out of savings but for the most part, we go when we have the money for it.

Right now, we are vacation deprived. We haven’t been on one in a while and it sure would be nice to go now but we can’t.

Paying for vacations with a credit card is like paying for Christmas with one. You end up with a huge balance on your credit card that is adding interest and you end up spending a whole lot more for your time away than you may have wanted to in the first place.

How cool would it be to go on vacation, spend time doing the things you enjoy and coming home, realizing that there are no additional bills to pay?

That’s how we roll. What about you?

Retirement Savings

The Reality

Reality Bites

Let’s face it. There are no more pensions being offered by companies that will maintain an income for employees once they retire. Pensions started going away in the 1980’s. Very few companies offer any kind of retirement package anymore.

Instead, companies are offering a 401k savings plan and maybe, if you are lucky, they will match part of it.

So the bottom line is that if you aren’t saving for your own retirement through a 401k or other investments, then you are setting yourself up to live on social security. The government has slowly been increasing the age when you can begin to receive social security.

If you were born before 1954, then your retirement age for social security is 65 years old. Between 1954-1960, the retirement age is 66. After 1960, the retirement age is 67. If you retire early, then you get a percentage of what full social security would be.

Oh, one more thing. If you were born on the first day of a given month, they calculate your social security based on the previous month. I guess it is better to be born on the 2nd rather than the 1st.

It’s Never Too Late To Start

Saving Retirement
Saving Retirement

So, where are you now with your savings for retirement?

Several years ago, I spoke with a high school friend of mine who is a certified financial planner. He told me that on average, people who are 50 have retirement savings of about $10,000.00.


When you think about supplying money for your personal lifestyle, $10,000.00 doesn’t go very far.

What can you buy with $10,000.00?

  • A decent used car
  • 10 months of rent on an apartment for $1000 per month but that does not include utilities
  • A few gaming computers
  • 2-3 years of food for two? Not really sure there

Certainly, you cannot afford to maintain anything close to the standard of living you might be accustomed to living.

No matter what your age is, it is important to start saving right now for retirement. I have a saying.


“Retirement is a financial state.” ~Patrick O’Connor


You cannot retire and expect to live in your current standard of living until you have enough money put back so that you can live off the interest. At least that would be the ideal.

If your savings does not allow you to live for decades, you don’t have enough saved.

$10,000.00 is better than nothing. $1M is better.

Break it down

The average person can expect to take about 4% of their IRA per year and not affect the principle in the IRA. In other words, if you take out more than 4%, you will slowly deplete what you have in your IRA and each year you will ultimately have to live on less or you could run out of money before you expire from the planet.

Here’s what it looks like.

If you have $1M in an IRA and you remove 4% – that gives you $40,000.00 that you can add to your income in retirement. If you add social security at a pretty high rate, say $22,000.00, you would have $62,000.00. You would have to pay taxes out of that as well but it still gives you a decent amount of money to live on. Hopefully, you won’t have a mortgage or credit card debt to worry about in retirement so that should be pretty good.

What happens if you only have $500,000.00 in your IRA?

Well, 4% of $500k is $20,000.00. Add in that large social security again and your total is $42,000.00 before taxes. Now it’s getting pretty tight.

But what happens if you insist on having the $62,000.00 each year?

That would be taking 8% of the $500,000.00 the first year. That’s fine but you are eating into your principle that way.

Retirement Withdrawal
Retirement Withdrawal

The first year you would be fine but then the balance in your IRA would no longer be $500,000.00. Instead, your balance would be $480,000.00.

Doing the math, another 8% would not be $40,000.00. Instead it would be $38,400.00.

Still doing ok but now your IRA balance is $441,600.00.

As you can see, you will be pretty good for a while but as you remove the principle from your account, you will see the balance decrease at a more rapid rate each year.

Here is what it looks like each year starting at $500,000.00

Year 1 – $500,000.00 – 8% = $460,000.00

Year 2 – $460,000.00 – 8.7% ($40,200) = $419,800

Year 3 – $419,800.00 – 9.6% ($40,300.80)  = $379,499.20

Year 4 – $379,499.20 – 10.6% ($40,226.92) = $339,272.28

Year 5 – $339,272.28 – 11.8% ($40,034.13) = $299,238.15

Year 6 – $299,238.15 – 13.5% ($40,397.15) = $258841.00

Year 7 – $258,841.00 – 15.5% ($40,120.36) = $218,720.64

Year 8 – $218,720.64 – 18.5% ($40,463.32) = $178,257.32

Year 9 – $178,257.32 – 22.5% ($40,107.90) = $138,149.42

Year 10 – $138,149.42 – 29% ($40,063.33) = $98,086.09

Year 11 – $98,086.09 – 41% ($40,215.30) = $57,870.79

Year 12 – $57,870.79 – 69.5% ($40,220.20) = $17,650.59

Year 13 – $17,650.59 – 100% ($17,650.59) = $0.00

As you can see, by the middle of the 13th year, you will be broke and relying on social security for your entire income. Talk about a limited lifestyle.

Having more money in a retirement account means that you can set your standard of living, live worry free about running out of money, and leave something for your children and your grandchildren.

You can review a ton of other sites that talk about how much money you need to retire. I don’t claim to have all the answers and maybe the numbers I am using are way off. I hope that the numbers I am using are extreme and that a more conservative decay in your savings is more the reality.

My wife and I would rather have plenty of savings so that we don’t have to worry about it.

What about you?