The reality of being a REALTOR® is that you’re in constant motion. You’re regularly trying to show houses, marketing to bring in new clients, closing on sales and purchases, and maintaining relationships with your associates and clients. It’s easy to neglect the future when you’re constantly trying to keep up with the present.
As a result, REALTORS® across the country find themselves in a tough place when it comes to savings and financial planning. On Tuesday, May 5 we brought together financial experts from a wide range of fields to share the things that have helped them create financial stability. They broke down the seemingly simple goal of “build your reserves” into its complexities, and they offered insight on how to approach these challenges individually. These are their tips.
Begin by taking your financial inventory
First, our experts advise that you keep business and personal expenses separate to easily track where your money is going. They suggest creating separate accounts for your personal life and your real estate spending.
Reduce expenses
Start by taking an inventory of where you are. Evaluate what types of income you have and where it’s coming from. Do the same with your expenses. As you begin separating your expenses, patterns will emerge. Keep an eye out for recurring expenses that you can live without.
What to do about debt
If you’re in a position where you feel you cannot begin saving for the future because you’re paying for debt from your past, there are a few things you can do. Consider shopping for a low-interest loan to consolidate your credit card debt. This can turn what seems like a big problem into scheduled, consistent, and finite payments that are easier to manage.
Start saving now
Saving a small amount every day can add up to a lot. One panelist pointed out that saving $11 a day turns into $1,000 after 90 days. Now, $11 a day comes out to $333 dollars a month, which may be more than you are willing to set aside, but even saving a small bit each paycheck adds up to a significant amount over time.
How to save when working on commissions
Create separate accounts for your taxes and savings. Organize your business the same way an employer would. Once you’ve separated your business expenses from your personal expenses, you can break that down even further. If you create an account dedicated to your taxes, you won’t have to dig into your savings come April 15. This way you can keep track of exactly how much you are saving without having to worry about accounting for taxes – you’ve already done that in a separate account.
Make use of experts
Accountants exist for a reason. The more types of income you have, the more room there is for income to be wasted. Likewise, the more types of expenses you have, the more room there is for money to be lost frivolously. Make use of different industry experts to help you save money. Saving a bit of money on your internet, car insurance, home insurance and more can add up to a lot of money that can go into retirement, savings or back into your business.
Think long term
Benjamin Wozniak is a wealth management advisor. He says, “Plant trees. If you want to eat for a season you’ll plant tomatoes. If you want to eat for a lifetime you’ll plant trees.” Ben advises that you utilize the business you’ve already acquired to lay the foundation for business further down the road. Put another way, buyers become sellers. Maintaining relationships with your clients now will yield business down the road through referrals, reviews and future business from your clients.
It’s never too late to start
Regardless of your income, there’s always room to save. You can’t start saving yesterday, the best time to save is right now.
Our panelists have graciously offered to answer any questions you may have. If you’re looking for more information, consider reaching out to them directly.
- Mariah Hudler | Financial Therapist, Koru Financial Therapy | mariah@korufinancialtherapy.com
- Dory A Rodriguez | Wealth Advisor, HighPoint Planning Partners | Dory.Rodriguez@hiptpartners.com
- Kasey Stewart | Director, Member Development; National Association of REALTORS® | KStewart@nar.realtor
- Benjamin Wozniak | Wealth Management Advisor, First Midwest Financial Services | ben@firstmidwestfinancial.com