10 Provident Principles - simple wisdom from past generations

Old Providence Mortgage Company
is founded on simple financial wisdom that has
been around for generations.

The following 10 principles detail this philosophy,
and explain how we can help our clients
apply the principles and find financial security
and peace of mind quickly.

1. A Plan Brings Peace of Mind Today
2. The 5 Benchmarks of Financial Success
3. The Best Financial Product is Knowledge
4. Budgeting works
5. Save a Little for a Rainy Day
6. For getting out of debt, there’s no magic pill!
7. You Can’t See the Jones’s Credit Card Bills
8. Don’t Turn Short-Term Problems Into Long-Term Debt
9. The Time Value of Money!
10. Set Aside Some “Seed Money”

A Plan Brings Peace of Mind Today. 
All of us can remember a time when life was filled with simple joys, and laughter seemed so natural.  Somehow those feelings can seem harder to find when our finances are not in order.  Ever-increasing debt and low personal savings have put many Americans in a position where they are no longer free to feel at peace.  For many, instead, there is disappointment and an unsettled fear of the future.
 
At Old Providence Mortgage Company, we intend to do something about that!  We believe that the home buying and re-financing experience affords families a unique window of opportunity to make decisions that will profoundly affect their finances for years to come!  Because of that, we view ourselves as life-long partners and educators for our clients, so we start by listening, and seeking to understand your long-term financial goals, only then can we recommend loan options and help you understand simple, proven methods to help you get there. 

Are you looking to eliminate debt?  Are you wondering if your insurance and savings plans are adequate?  Are you trying to pay off your home as quickly as possible?  If so, no-one is better equipped to help than Old Providence Mortgage Co.
We are knowledgeable professionals who are not trying to sell you insurance or investments,  we simply offer sound techniques and common sense financial wisdom—not costly or risky gimmicks.  In the process, we’re proving that the best way to reach your financial goal is to adhere to the time-tested principles of prudent & provident personal finance.

The result is extremely powerful!  You can walk  away from our office with a sense of confidence, knowing exactly how and when you’re going to reach the end you seek—and you don’t have to wait until you get there to find your peace of mind!  Call  today and see for yourself how having a plan in place for the future makes all the difference today!

By helping our clients define basic long term goals through their own provident plan, we help them see how the choices they make effect the end result they seek.  In the process we’re proving that you can offer today’s diverse mortgage products without abandoning time-tested principles of prudent personal finance.

The 5 Benchmarks of Financial Success. 
Our Loan Officers are specially trained and certified to help clients understand and reach the 5 benchmarks to financial success.  As you’ll see, they are simple steps that anyone can understand and achieve.  Following these steps in their proper order, a family can eliminating debt, and get quickly on track for a comfortable retirement with a home that they own free and clear.

Benchmark 1 - Emergency Account
You must set something aside for unforeseen costs - without this step, emergencies will continually derail you from the plan.  Put away $1,000 as quickly as possible…and we mean quickly!  This should take days or weeks, not months.

Benchmark 2 - A Successful Budget
It is important to write your budget down each month and, as famous author Dave Ramsey says, “Spend your money on paper first.”  You should make sure your budget includes 1) basic insurance coverage for your home, cars, and the life of the bread-winner, and 2) enough disposable income to make a debt elimination plan work.  We have some worksheets to help you with this step if needed, and many tips on our web-site to help you finally live according to your budget!

Benchmark 3 - Consumer Debt Eliminated
Commit to an aggressive plan to pay off all consumer debt within 3 - 5 years.  This is not as difficult as some might think.  We have free tools to help you estimate how long it will take you to pay off your debt using the time-tested principle of the “debt snowball.”  We can also provide a workbook that will walk you through the process yourself. 

Benchmark 4 - Professional Financial Plan in Place
At this point it’s time to sit down with a qualified financial planner.  A good advisor will know exactly what to do with your new-found cash-flow!  You should probably increase your emergency account, review your insurance needs and begin saving aggressively for retirement.  You should also put in-place an estate plan - because you’re about to start accumulating assets!  If you need the names of some qualified professionals, we have worked with many trusted advisors and estate planners!

Benchmark 5 - Mortgage Eliminated
We can show you many ways to pay off your mortgage faster - but as long as your home is on schedule to be paid off by the time you intend to retire, we recommend that you focus your extra dollars on retirement planning. On the other hand, if your mortgage term is longer than your retirement horizon, you must recognize that the mortgage will stand between you and true retirement.  If this is the case for you, I am specially trained to help you look at all of your options including: refinance, downsizing to a retirement home, reverse mortgages, and accelerated payment schedules.

The Best Financial Product is Knowledge. 
Have you ever had someone try to talk you into an investment or mortgage product that you didn’t understand? Have you ever felt uneasy about a decision because you were leaning on the advice of another person rather than your own values and decision-making power?

When it comes to your finances, we believe that you should never feel this way! Unfortunately, investment planners, loan officers, insurance agents and other financial sales agents don’t get any commissions for pushing knowledge - so there is a tendency to only give enough knowledge to close the deal, leaving the buyer feeling uneasy.

This comes into play a lot more than you might think in the mortgage industry. Many mortgage companies are still selling exotic loan programs, expensive software, and/or risky refinances. They’re often full of promises, but short on details, and because there is very little government regulation on what a loan officer says or does, it is very common for people to spend a lot of money on promises that never materialize.

Here are a few tips that will help you understand your finances before you sign something you could regret:

Choose professionals with the heart of a teacher
Does your loan officer or investment advisor have the heart of a salesman, or the heart of a teacher? Do they take the time to make sure you understand all of your options (even the ones that pay a lower commission)? Once the options are explained do they let you decide? If you find an advisor using words like “magic” or “miracle” or who encourage you not to waste your time trying to understand something, you should run the other way fast. Look for those who will work at your pace, and are careful to understand your goals and values.

Study up a bit
It doesn’t take very long to find information these days. Before you commit to anything, a good advisor should be willing to give you some time to research and think about it. If they’re pressuring you to decide quickly, you should be even more concerned about hidden details.

Keep it simple
One of the best rules of thumb in the financial world is not to get involved in something that you can’t understand, and that you can’t explain to someone else. Most of the financial products and techniques that the average American needs are extremely simple, and they have been around for a long time. Chances are your parents and grandparents understood them—and so can you!

Budgeting works. 
For most people, creating a budget is not difficult. Actually following the budget is the challenge.  If this is your case, perhaps these tips can help you find success in your worthy goal.

Successful budgets begin with goals
What is your reason for budgeting?  Do you need to get out of debt, save for retirement, emergencies, etc.?  The first thing you should do is decide how much money you need to put toward these goals each month.   Work the rest of your budget around these goals and track your progress towards them as the weeks and months go by.  Seeing this progress will help you stay motivated.

Spend every penny on paper first
National radio host and author Dave Ramsey is famous for telling his readers and listeners to spend their entire pay check on paper first.  This only works if you write down your spending plan  BEFORE pay day.  If pay day comes and you haven’t written up a budget, chances are all the money will be spent before the weekend is over none of the money will have made it into a savings account.

Prioritize and automate!
The most important things on your budget (based on your goals above) should be top priority and in order to make sure they get done every month, I recommend automating these payments.  Any bank or credit union can set up a scheduled transfer from checking to savings on pay day.  Every creditor has the ability to automatically draft your account for a specified amount.  Automation can provide excellent discipline to help you reach your most important goals.

The more often you look, the better!
Budgeting is not a “set-it and forget-it” process.  The more you look at your budget and track your progress between paydays, the more likely it is that you will keep you budget!  This may be one reason why people who use envelopes and paper money to separate their budget into categories find so much success.  You can always see how much money you have left in your “grocery” envelope, and you can plan your spending accordingly.

The first month will be terrible!
If you’re starting a new budget, expect to have a difficult first month.  In fact, it may take as long as 3 – 6  months until you have your budget figured out.  A lot of adjustments will be required — keep adjusting until it works.  Keep in mind also that it’s not always the budget that needs adjusting!  Sometimes you’ll need to make attitude and behavior adjustments, which are much more difficult.

Involve your spouse and others
Everyone who has an opportunity to spend the family money should be involved in the budgeting process.  They should be equally committed to the goals you set at the beginning of the process, and together you should decide on spending limits for each category of your budget.  As time goes by, revisions will be needed, and in all cases, it’s best to involve everyone involved in the execution of the budget in the decisions.

Save a Little for a Rainy Day.  Experts agree that having an emergency account is key to personal financial success.  If you want to learn how to save, the key is to learn to pay yourself automatically...and first.  In the absence of discipline, there’s always automation!

For getting out of debt, there’s no magic pill!  Despite what some in our industry will tell you, there is only one way to pay down debt—it’s by more toward the principle balance of what you owe.  We can help you put together a debt elimination plan based on the proven method of “snowballing” your debt—and we can help you find the discipline you need to succeed quickly!

You Can’t See the Jones’s Credit Card Bills.  Many people appear wealthy, but in reality are not!  It’s surprising how few people achieve both.  By looking at the cars they drive or their home, you can’t tell who’s in debt and who’s wealthy!  It’s dangerous to keep up with the Jones’s, and especially dangerous to keep up with someone who spends more than they earn.  

Don’t Turn Short-Term Problems Into Long-Term Debt.  Before you consolidate everything into a 30 year mortgage, consider ways to take care of the debt quickly without over-burdening your home.  We have tools to help you resolve short term problems, which may or may not involve a  refinance.

The Time Value of Money!  If you think it’s hard to start saving for retirement when you’re young, consider that if  you wait 7 years you’ll have to save twice as much each month to accumulate half the cash.  We encourage everyone to get in the habit of saving as early in life as possible.

Set Aside Some “Seed Money”  The early pioneers who crossed the plains of our country had a hard and fast rule “no matter how hard things get, don’t eat the seed corn!”  Lots of people save for big purchases, but you should also aim to have “seed capital” that you intend to invest rather than consume.