BudgetingCreditDebtReal Estate

Talking Financial Coaching with Matt Hornaday!

Financial Coach Abby Stafford and Realtor Matt Hornaday on IG Live discussing personal finances and the importance of a budget.

I just finished my first guest spot on my friend and referral partner Matt Hornaday’s series “Boca, Bourbon and Real Estate” on Instagram Live last Wednesday night. Our discussion was a blast! Matt is an incredible Realtor here in South Florida. I have referred several of my clients over to him and am confident in doing so, because I know they’re getting one of the best in the biz when working with Matt! We wanted to give our audience a little more insight into why having a financial plan (aka budget) is so important, how financial coaching can help with that, and how Matt was able to develop his own plan as he became a full-time Realtor.

“Mocktails”

Our conversation began with the question Matt starts each week with – what was our drink of choice for the evening?!? Matt was sipping his usual, an Old-Fashioned. I, being the teetotaler I am, mixed up a Pomegranate, Orange and Ginger “mocktail” for the occasion – you can find the recipe HERE. Matt then gave a brief update on happenings in Boca and greater Palm Beach County. Soon after, our discussion got into the meat and potatoes – financial freedom!

How Matt and I Became Referral Partners – a Financial Coaching Success Story

We started our discussion off with the story of the first client Matt referred to me. The client had originally approached Matt with an interest in purchasing a condo. Unfortunately, the client’s credit score was low, and couldn’t qualify for financing. Matt referred the client to me for financial coaching, we met, and quickly put a game plan together for finances.

This client’s issue was not income – the client was in a high-powered career and made a good salary. However, there was a lot of “lifestyle creep” going on. High rent, a large car payment, and quite a few credit card balances. These items, coupled with significant student loans and some general disorganization (which sometimes happens when you’re in the middle of a demanding career), it was a bit of a recipe for disaster.

The first month of working the budget was TIGHT. Like, return a recent purchase just to get the refund tight – but the client followed the budget to a T. We both knew it would be tight, but the second month would get better. And the second month was a little easier. The month after that, a little bit more. And so on. Today, the client has paid off all credit cards, stashed money in savings, and has steadily improved their credit score! Even better, they’re still working with Matt’s team for real estate needs. This is always the goal with referrals – to return them back to the referral partner in a much better position to work with them!

Matt and I decided to highlight that success story because of what it shows. You have to know your numbers in order to start making changes in your finances, and establish a game plan to accomplish your goals. It allows you to track and measure your progress as you go, and celebrate wins! If your goals seems too big and overwhelming, that’s the beauty of establishing a plan. You can also break those bigger goals into smaller, more achievable milestones, so you can celebrate the small wins along the way.

Matt’s Story

Matt commented that good planning and preparation is good for everyone, but reiterated that it is especially true for professionals like realtors, whose income can be highly variable. He stressed the importance of putting a plan in place, even before you really launch your career. You also have to track and measure your numbers, so you can know if you’re on track to make what you need to provide for yourself and your family. Matt then shared a little of his story, about how he made the transition from a full-time, salaried (aka stable) paycheck to 100% commission-based pay as a realtor.

The most common question he was asked was, how do you make a plan when you don’t know how much you’re going to bring in every month? The answer is…making a plan. Even before you leave the comfortable salaried job! You have to plan ahead and put in the hard work ahead of time, so you can make that jump as small as possible. You can do this in several ways. One way is to establish a “peaks and valleys” fund, to help you in those initial lean months. Also, know your lean budget – the minimum you need to paid your bills each month. This goes back to tracking and measuring. As a self-employed individual, you have to find ways to maximize your income and hone in on historically lean months to find ways to increase income during those months.

Getting on a Budget – and How Financial Coaching Can Help

From there, we dove a little deeper into the mechanics of monthly cash flow planning, AKA budgeting. I explained how I coach my clients to budget based on what is known as the zero-based budget; for every dollar of income you bring it, you assign it a job – whether it’s paying a monthly bill, going to savings, or paying down a debt. Income – expenses/debt/savings = zero. I also shared some of the different budgeting tools and apps I’ve personally used, as well as coached clients on.

Matt also asked me to share a little bit about what my coaching process looks like, and why just about everyone can use a financial coach. I explained how my coaching practice is a one-on-one, tailored experience. Each client’s program has slight variations, depending on their most urgent goals. Whether it’s building a budget for the first time, or walking them through negotiating with debt collectors, or even guiding an entrepreneur on how to build a cash flow plan for his or her business, I can help. I also guide clients on how to better align their spending with their values and goals.

FICO Score Discussion

Our final topic of discussion was one that is very pertinent to Matt’s audience and potential clients – the FICO score. While I do not usually focus heavily on repairing client’s FICO (credit) scores, it is often a byproduct of the work we do together. I also explained that it’s not often an overnight process – you have to do the work to see real change. We reviewed the components of the FICO score; almost two thirds of the score is composed of two main factors, payment history and credit utilization. If you can manage these two factors, it will positively impact your credit score.

I also recommended taking advantage of the free weekly credit reports on Annualcreditreport.com between now and April 2021 (thanks, Covid). This give you access to the three main credit reports each week, if you want to access them that frequently. If you have any discrepancies or errors in your reports, you will want to dispute those. This will also help your FICO score. Finally, most agree that a FICO score of 740+ will get you the most competitive interest rates. So, if you’re looking to buy your first home, that is the score you are aiming for.

Wrapping Up

This sums up our good conversation, and it truly was like a conversation. Matt and I were friends long before we became referral partners, and the discussion just flowed! We both hope that the topics we discussed are beneficial to both of our audiences. We welcome any chance to answer any follow-up questions that may have arisen. Feel free to contact me here on my website, or if you’re interested in financial coaching, head over to my calendar HERE to set up your complimentary consultation. You can find Matt (and all of his contact information) over on Instagram @matthornaday. You can also find our IG Live session archived there!

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