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Comment by phyzix5761 | Hacker News Reader

I do financial coaching as a side business and I can tell you the main two reason why most people in their 30s can't afford a home is because they have no idea how to budget and they carry too much debt spent on things they don't need.

On average people spend about 30% of their income paying off non mortgage debts like credit cards, car loans, and student loans.

I teach my clients how to budget, cut back on unnecessary expenses, pay off their debts, and save up for their goals. On average, after 2 years they are debt free and can save up for a down payment on a home.

Image how much quicker you could come up with a down payment if you could free up 30% of your income plus cut out all the unnecessary spending that's holding you back from achieving your goals.

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You don’t have clients who are barristers/teachers/cooks etc in SF or NY.

It is literally impossible to own even if you save 200% of your income.

I don't work in those states but I've had plenty of clients who live in high cost of living areas and the solution is to move somewhere you can actually afford. It's not benefiting you in any way to work in a place you can't afford.

You're right in that it doesn't benefit them financially. Living in some of the few spots in the continental united states that allow for a more passively-active lifestyle (temerate enough to spend more time outdoors without making it an activity, reasonable transit/bike infrastructure, the ability to walk instead of driving everywhere) carries some pretty hefty health benefits, especially as it compounds over a lifetime.

Who do you think should be renting if not them? Students? Unemployed people?

Did you mean bartender? Barrister is a lawyer in the UK and makes a bit more.

Barrista, I'm guessing, as at Starbucks?

I know software engineers in SF that don’t even consider trying to buy a house there. I also know generationally wealthy folks who rent from the same building I do in NYC. NYC and SF are major outliers in this discussion - in my experience, home ownership isn’t as much of an inherent end goal there as it is elsewhere in NA.

Wow that's a cool side business.

> spent on things they don't need

Do you actually find people who pay you to teach them to stop buying crap? Like, when I get a Doordash I already know it's a waste of money that instead could compound as an investment, but I do it as a treat...

Almost every single client I meet has no idea how much is actually going towards eating out or entertainment every month until we sit together and look at the numbers.

Everyone knows how much their rent and car payment is but most other stuff people have no idea. A lot of people don't even want to look at the numbers on their own so they need someone they can trust to help them face the reality.

Having someone who can sit you down through the process of accounting for every dollar, calls out areas where you're over spending, and helps you create a realistic balanced budget is very valuable.

Plus, there's other things like understanding the most effective way to pay off your debts, how much you could actually afford if you wanted to buy a house or a car, and understanding how to build wealth. Most people lack these skills but are very successful once they learn them.

That was one of my "wait, doesn't everyone do this?" realizations: Most people do not regularly look at their own finances, know how much they spend on what, and even roughly know how much money they have in their checking account! I could tell you how much I've spent on groceries, gas, restaurants, clothing, and so on, to the penny, and how it tracks vs. my budget, accurate at least as of a particular day. I can tell you to the penny any of my current account balances, cash, investment, or debt. But when I mention this to people, they look at me like I have a horn growing out of my head, like it's really weird and obsessive.

I've been in an HN thread where people claimed that it's easy to lose track of your subscriptions and accidentally pay for a service for years that you don't use. Like, really? You don't even look at your credit card bill and see what you're paying for, even monthly??? You really just turn on autopay and never even look at your bills?

I could have written this comment myself. I was surprised to find out that it wasn't common to track every single thing you spend, to have multiple Excel sheets for your money, and to constantly look at how you are faring against your budget. Seems like a lot of folks look at their checking account and go "guess I still have some money left over to spend." Maybe it's because I grew up poor or because my mother was very careful with finances herself (in spite of hardship). I would be curious to know what your case is.

Honestly that sounds like not the whole picture. I think your perception might be because your clientele comes from the top whatever% of US society, where people make a ton of money.

Accoring to stats, the top 15% of households in the US has an income in excess of $200k - saving half of it and living like a king on the rest should be easy enough, while the median around $75k - even living frugally won't allow you to save a significant chunk of income.

Over the last 16 years I've worked with a wide range of clients. Most of my clients fall within the median but of course there are many that make more or less than the median.

An important thing to understand is that income is not fixed. There are many things you can do to increase it. But even those making below $75k can afford a down payment on a home if they free up the money that's going toward debt, make changes to their budget, and choose an appropriately priced house.

and save up a down payment. Easier in some places than in others.

This is what boomers actually believe in.

It's gonna be 16 years in February that I've been a financial coach and I've helped literally hundreds of people at all income levels and backgrounds achieve their financial goals. What I said is the truth and my clients can attest to that.

I believe you :) Simply refusing to play "keep up with the Joneses", seems to me can make the difference between being able to buy a home or not. Albeit it can take some inner confidence. I can't remember anyone actually asking me "why do you drive such a s*** car?", but they probably think it. ;) The key thing is not to care. Caveats - (1) this doesn't solve the problem if due to friends and family network you feel a need to live somewhere extortionate e:g London, NY, SF etc (although OTOH all of those have cheaper places 2 hr train ride away) (2) In USA, people can get randomly saddled with huge healthcare bills.

You're absolutely right. Lifestyle creep and keeping up with the Joneses is a real thing and once you can shift the clients perspective on what's actually important the rest is pretty easy.

Healthcare bills are just another debt. Health providers are almost always willing to work out some kind of payment plan and we tackle it the same way we would a credit card or student loan. Additionally, there are things like HSA contributions that can help you save some money on healthcare bills. Usually in the range of 10-20%.

> It's gonna be 16 years in February that I've been a financial coach

You mentioned doing this as a side gig? If you could give a few pointers to info on how you got started? Sometimes I think it would be rewarding to do something like this at a low-cost or volunteer basis for people who need help.

Before I was a software engineer I worked, full time, as a financial counselor helping people do pretty much the same thing. I used to do other things as well like housing and bankruptcy counseling which I don't do anymore.

You could get certified as a financial advisor if you want to give investment advice or look for some financial coaching training programs.

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