Ok guys I guess this is the forum I should be posting this in. I am 25 years old and im going to meet with a financial planner/consultant/ whatever. I have had a steady job out of school for the past two years. I make 45k a year and to basically sum it up im bad with the money I make. Im meeting with this guy to talk about making a plan for me so I can buy a house in the next year or two. So naturally I feel the need to consult arfcom before i do to get its views.  I have about 3500 in savings and a little over 5k in a Roth IRA which I put 100 dollars a week in. I also have 1400 in credit card debt which I am currently paying off. As far as spending I know I spend more than I should. I love guns and shooting and I am pretty hardcore into fishing which is where some money goes. Also me and my gf go out alot with friends and spend more than we should on booze/eating/partying ect. I do have an apartment which I pay for in total as well. Basically I guess im asking what you guys think this financial consultant is going to tell me I need to be doing other than stop partying and going out and watch my spending. This guy has been my moms financial manager for years so I do trust him and on top of that the trip is free because I am one of his clients children. So what say arfcom

See above

 

If you want to get some eye opening statistics on your financial life got to mint.com and open an account.
Mint is a compiler.  You load all of your bank accounts and they pull data automatically.  They will attempt to assign budget categories to each transaction and compile in to easy to read reports.  It will try to build a budget based on past spending, you can tweak it from there.  You can keep an eye on your progress from their website or smartphone app.

You might be surprised where some of your money is going.

If the guy even mentions "investing in yourself" or insurance you should immediately stand up, thank him for his time and walk away - don't worry about being rude, he's a con-artist.

I agree with the first poster, of the things you listed partying/boozing is probably one of the worst things standing between you and a house.

That being said, we all need a "release" or something we enjoy doing to wind-down from a hard week at work etc. The key is to find releases that don't cost so much (or at least pay you back a little bit for the cost you put into them).

1 of my releases is investing and paying down debt. I'm not kidding, I find great satisfaction in doing it. I've conditioned my brain to perceive paying down debt or investing money as a "good thing" and even though I don't immediately get a high/buzz/euphoria etc from it, just knowing that I saved a great deal of money by paying off debts early, or making a bunch of money on investments gives me great satisfaction.

Other releases for me: I like to tinker and do things myself. I do my own home maintenance, car maintenance etc. I also bought a mill/lathe/welder for my garage. All of these things "pay me back" for the costs that I put into them. I save money on home/vehicle maintenance by doing it myself. I do sidework in my garage for a little cash on the side.

The key is finding ways to "have a good time" without "blowing a bunch of money"

FWIW, I've been this way all through high-school and into my 20's. I'm 28 and have a $200k house nearly paid off ("bought it" when I was 23), have nearly $100k in investment, and can't remember the last time I was in a bar or bought a new gun. I'm not telling you this to brag, I'm telling you this to demonstrate what is possible if you put your nose to the grinding wheel and reign in your spending habits.

Just wanted to add that not ALL financial advisors are con-artists. My parents had used a guy for a number of years and he was very old school salesman/con-artist type. He always wanted to sell them on a product whether it be an insurance policy or an annuity etc etc.

They finally switched their financial advisor over to a guy through Edward Jones and I really like him. I haven't been there for a lot, but he doesn't seem to really push anything and gives very good advice to my mom concerning her finances.

I have no idea what either of them costs though, but YMMV.

I would like to subscribe to your newsletter sir

 

Lol, I remembered the last time I was in a bar for the explicit purpose of going to the bar (I have to admit that I've eaten in a few bars more recently but I stay away from the alcohol except maybe a beer or something with my meal). About 4 years ago the band that one of my wife's sorority sisters plays in was at a local bar. We went to see her play because we had never seen the band play. It greatly pained me to pay a cover-charge to go into a bar, but I did it because it was for a close friend of my wife. We didn't drink anything except some freebie stuff (there was a liquor company there giving out free samples of a new product that night).

Prior to that the last time I was in a bar for the specific purpose of drinking has to have been in college probably 7 or 8 years ago.

Damn it's good to find people similar to me financially. I just turned 25 and am a little ways behind you, but it's nice to see other people being tight with finances.

So you are describing several friends of mine from our twenties that I am still tight with. There are a couple outcomes -

1. You start living life differently - within your means, not going out partying all the time, and committing to the future, and then you get there.
2. You keep living the way you do, and you will ALWAYS live the way you do. A buddy of mine (who is almost forty, and a successful attorney) lives in a crappy apartment and drives a used base model mustang (6 cyl, automatic, hard-top...). Because he spends ALL of his money drinking and travelling to sporting events and drinking with a few friends. He could have paid cash for a VERY nice house, in our high cost of living area, with what he has blown in the last decade. He may have money saved, but it is a fraction of the long-term progress he could have made.

My wife and I both started saving early, even when there wasn't much of it. But those accounts that are now 20 years old and started small are now worth real money. Investing early pays for itself many times over compared to investing later in life. You never get a chance to make up for that lost time, so you make up for it by saving much higher percentages than if you had started small.

-shooter

It's certainly nice to know other people "get it". Don't sweat being "a little ways behind" anybody. It isn't a race, we're not all headed to the same finish line, we didn't all start at the same place, and we're not all driving the same car. You do the best you can and wherever your best gets you is more than likely the best place that you could ever be. See what I did there?

That being said, a few of the things that helped me out a lot were nothing other than just being in the right place at the right time under the right circumstances. My dad helped me start a business when I was 13. If dad hadn't been able to help my business never would have made it off the ground. If dad didn't have a few key pieces of equipment that I could borrow/rent from him I never would have made it. I got a good scholarship for college. I worked a job that allowed me to take a temporary job in Afghanistan making $$$; that propelled me forward than anything else, but it was also a huge sacrifice for me and my family.

That being said, the selfish part of me wants me and mine to be the only one that "gets it". Why? Our economy is driven by people spending money. I want our economy to flourish, and for that to happen people need to spend money, I just want everybody else to spend theirs while I save mine. Ok, maybe a little bit of me wants that, but I do want people to make wise financial decisions. The vast majority don't, and by the time they realize they are making poor decisions (if they ever realize it at all) it's WAY TOO LATE for them to take advantage of the biggest opportunities they will ever have in their life.

People that blow their money all through their teens & 20's will NEVER get that money back. Yet that money was the most valuable money they could ever have. It's early in their life so they have numerous chances to grow that money in big ways. They are quite often single with no kids and very low living expenses; a large part of their paycheck is free to be spent however they see fit. The wise ones put that into wealth building or other wise investments, the others blow it on stuff that will be gone in a heartbeat.

He'll probably formulate a budget to help you achieve your goals (maybe tell you your goals aren't realistic based on your income), or he'll try to sell you a whole life insurance policy and an annuity.  He may provide you with techniques to pay yourself first to limit the amount of boozing/partying you do.

He may look at your insurance and suggest combining types of insurance if there's a premium discount.  He may suggest raising or lowering your insurance coverage based on risk and what you could absorb.  Some people seem to think a low car deductible is some kind of bragging right but if you're a safe driver and you have enough in emergency savings it's probably more beneficial to raise your deductible which in turn lowers your premiums.

He may look at your investments and provide alternate investments or allocations based on your goals and risk tolerance.

He may educate you on what your options are for buying a home within your time frame.  He may say the FHA route is the one of the few ways you'll be able to get into a home in your time frame.  This is because FHA requires a lower amount of money down, therefore you don't have to save as much.  The downside is having to pay mortgage insurance premium (MIP).  There's other options like 80/20 mortgage to avoid MIP.  Then if neither or those appeal to you he may give a projection of when you'd be able to buy a house if you were to stick to the budget.

Just don't commit to paying, or moving, any money until you feel educated enough about what you're doing.  It's alright to say you need to research the option more.

Rich people play with their money - you need to become a student of money.

Go to the library and check out books on money

The first one that I will recommend is - untapped riches - never pay off your mortgage

buy things that grow and do not buy the things that depreciate (like cars).

Red
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For OP's reference, what Gixxersixxer is referring to is more commonly known as private mortgage insurance (PMI) around here in MI. It may be a geographical terminology difference, but if you hear someone talking about PMI, it's the same as Gixxersixxer is talking about here.

My parents have had their mortgage for ~35 years now. It's at 3.5% with a monthly payment of like $350. They're just paying the minimum. Absolutely no reason to pay more.