I was reminded of a couple that we helped some time back in Georgia. Let’s call them Rachel and Ross. Both in their late 40’s with two kids approaching high school.
Through a series of unfortunate events & bad timing, they just weren’t where they hoped to be financially.
- Real estate commissions grinded to a halt
- Work bonuses became few and far between
- Orthodontics for the kids
- Unexpected home improvements
- Unplanned need for a new car
Before long, their expenses outweighed their paycheck. Quickly they became interested in seeking a fresh perspective on their “new” financial situation.
One of their family members (also a client of KMP), referred them to us.
A few things that we uncovered quickly:
Ross still owned a small home from his bachelor days before he married Rachel. Together, they rented the property to long-term tenants and claimed the rental income was “Okay.”
Financially, it was breakeven from a cashflow perspective. The rent was enough to cover the cost of the mortgage, property management, and typical maintenance.
Also, while not necessarily spectacular, the home had appreciated slightly over the years.
The answer seemed obvious…
Just sell the house and start over with a clean slate?
- Pay off credit card debt
- Pay off their HELOC
- Pay off the car
- Set aside money for an emergency fund
- Fund a much-needed family vacation that they’ve been dreaming about
In addition, this would free up cash flow that they could immediately reallocate to high-yield savings and a brokerage account to fund their family’s future goals.
What held them back?
Often, the answers we need are right in front of us.
Deep down, they knew it was the right thing to do, but they just needed the nudge from a trusted 3rd party. How often do we know what we need to do but it’s the confidence gained from hearing a professional tell us that “yes, that’s the right thing to do.” that moves us?
If you or someone you’re close to could use help aligning their finances and establishing a financial plan, please reach out to us, we’re accepting new clients and eager to help.
Cheers,
Nic
