Clifton Corbin is a financial expert and author of the book "Your Kids Their Money" and responsible for the revised version of "The Richest Man in Babylon".
The interview was filled with such useful advice! We talked about his personal history with credit, and his own path to home ownership.
You learn first hand:
If you are thinking of buying your first home then you need to listen to this thought provoking episode!
Join the The Financial Moment community on:
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Website
Email: info@thefinancialmoment.com
Grab this FREE guide with 10 easy tips to keep your budget on track!
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Clifton Corbin is a financial expert and author of the book "Your Kids Their Money" and responsible for the revised version of "The Richest Man in Babylon".
The interview was filled with such useful advice! We talked about his personal history with credit, and his own path to home ownership.
You learn first hand:
If you are thinking of buying your first home then you need to listen to this thought provoking episode!
Join the The Financial Moment community on:
Instagram
Facebook
Website
Email: info@thefinancialmoment.com
Grab this FREE guide with 10 easy tips to keep your budget on track!
Submit guest suggestions HERE
#23: Clifton Corbin's Essential Advice for a First Time Home Buyer
[00:00:00]
Hello everyone. My name is Carolyn. Welcome to the saving for your first home podcast. I am the CEO of the financial moment. We offer money coaching for those who are ready and willing to make financial changes in their lives. For the most of us, there comes a point in time where we think to ourselves, it will be really nice to own property, but it sometimes can feel like a pipe dream, and not very easily obtainable. So I created this podcast to give you all the information and tools you need to take the steps forward toward home ownership. Take it from me, my husband and I started our lives together, working part-time jobs with a young child, fast forward through many hiccups and failures. We stepped our feet into our very first home.
For us it was a pile of dirt, but eventually our family home was built on that dirt. Now we are in the midst of growing our investment property portfolio. I created the savings for your first home podcast to give you easy, [00:01:00] actionable tools for you to do the same. If you have that same gut feeling that I did and want to create a life for yourself and your growing family, but don't know where to start.
You are in the right place. Let's do this.
Hello everyone. Thank you so much for joining us for this episode of Saving for Your First Home. Today we are gonna welcome an author and a financial expert, Clifton Corbin. I'm so excited for our conversation because we have a shared passion for financial literacy. So what, better combination . So Clifton, welcome to the show.
Thank you. Thank you so much for having me. I'm excited to have this convers.
That's great. So tell me a little bit about yourself and where your financial passion kind of came from.
Sure. my passion for learning about money started when I was really young. So from an early age, I was really curious about money, couldn't learn enough about it. You know, had all those early jobs, you know, the lemonade stand, the paper route. So I was [00:02:00] always interested in getting more money and earning more money.
And then I went off to university and like way too many young adults, I made a mess with my credit. I got those early credit cards. Didn't know what I was doing. Totally messed my credit score up and I'm, I'm sure we'll get into that in a moment. Once I kind of got back onto solid footing and I realized, you know, there's a need here for education.
There's a big gap between what young adults need to know and , what they're told with regards to managing credit and just managing finances in general. So it's the space that , I've been trying to focus on just to help young adults and kids and parents really get a handle on, you know, understanding, having these conversations and just feeling more confident to manage their money. Once those young adults and those kids are off on their own.
Yeah, I know it's so important. I mean, this is where the foundation is, right? Like, you know, you build the foundation when they're young so that when they're young, a adults and going into adulthood, they can make better decisions and they've actually prepared themselves for these big, big life choices, right?
So it's real. I think it's [00:03:00] great work. That that you're doing to really talk to the young people and get them to understand. It's not an easy task, let me tell you. I have two kids of my own so , but
Yeah, no, it's a challenge and it's, you know, they don't ever, it's not about, you know, that first conversation. It's about having lots of conversations and, I really try to equip parents with, you know, the tools and resources to really help. Foster those conversations , and give them, you know, what they need so that they can help, like you said, prepare those young people for when they're off on their own.
Mm-hmm. for sure. So tell me a little about your story. Like how and when did you start saving for your home? Or what it was, your process to create the goal? Actually save for it, and then how, what was the feeling like after you purchased the home and went through the whole entire process?
Sure.
So our first home was a condo. I'm in Toronto, so it was, you know, a shoebox on the sky. But it was with my wife and myself. And we took a lot of what we received as gifts from our wedding to put towards the down payment. So that really helped get us [00:04:00] started. At the time.
You know, rates were reasonable. So, and again, it was a small, when I say it was a shoebox, it was, I think it was less than 450 square feet. So it was tiny for two people. So it, the nice thing about it is it was smaller as cozy. We were newly wet. So it worked for us but it was also very affordable.
We didn't have to have a, a long period of saving up to contribute to what we already had from gifts, from wedding gifts. So that helped. But when it came time to buy our next home you know, we're looking for more space. We're starting our family. That's when we needed to actually save up.
And what we did, and we kind of wish we would've came to this realization sooner, we basically just lift off one income. So we cut our expenses way down and we, I can't remember whose income it was. It was probably my wife's. Now I think I'm. Trying to remember exactly, but it was one of ours we were making about the same amount.
So it really, it came out to about the same amount, but we just lived off of one income. So, you know, we'd get a paycheck and that would go to all of our living expenses and the other one would go straight into savings. And that's how we [00:05:00] came up with the down payment to buy our home.
It went relatively quickly just because again, we're putting so much of our income directly into a saving account just for this. So it only took us, you know, I would say four to five months, maybe six months, to come up with the down payment. We already had some money saved away as well, so it wasn't like we're starting from zero, but by just going down to one income and we're already a dual income family without any kids at the time.
I think that also, Critical and, and helpful, we could afford to do that. So that's kind of how we came up with the down payment for our home.
That's a good strategy because a lot of people especially, and I'll, I'll go back to your wedding really in general, you know, you get wedding gifts and people think, oh, vacation, oh, let's buy this and that. And so, you know, you can kind of get distracted for when big lumps of money come your way.
And so it's good that you exercised some discipline and said, okay, no, you know what, we have this goal, this is what we're gonna do. And it probably launched off your ability to be able to purchase a home and then the next home, [00:06:00] obviously, you know, having that equity and as well as the additional savings.
I mean reducing your lifestyle expenses down to one income isn't an easy challenge. Right? Like, it, it requires some sacrifice. So it's a great strategy and it actually, I think, speeds up the process, like you said. Right?
Oh, it definitely did. And you're right, like it was being able to manage the expenses and I think that just goes even after you have the home, right? Like it's so easy to have, you know, that lifestyle creep where you make a little bit more and you use that money to, you know, get a new subscription or you end up, you know, upgrading some membership or what have you.
You just end up spending. Based off of how much money you have coming in as opposed to being very intentional about where your money's going. So yes, , the fact that we're able to take , our wedding gifts definitely expedited. But I think , like you said, the goal was there, so it would've, it might have taken a little bit longer for us to come up with the funds, but because the goal was there, and at the time, especially because we didn't have kids, it was a lot easier to be flexible with our expenses.
You know, we didn't have to pay for [00:07:00] tutoring. We don't grow out of our clothes every four
you know,
it was a little easier for us. As a, as a family with kids, it, you know, there's expenses that you just can't, you know, you can't shut down as easy as an adult. So it required some discipline, but we were in a position where we could do that, where we had that flexibility in our life.
That's great. So yeah, making it a priority really is, I guess the, the key to that, right.
Mm-hmm. exactly.
Yeah. So what do you think are some of the key financial requirements when you're thinking about purchasing a home? I think that young people, they are not looking towards the future all the time.
They're just thinking about today, right? So what are some of the things that they need to kind of concern themselves today that will set them up to be in a better place for tomorrow?
Oh gosh, if you're asking me it's gonna be credit, like you got , I already gave you my origin story, I'm gonna stick with credit. Like you need to be able to manage your credit score. You need to understand what your credit score is made [00:08:00] up of, and then actively make sure that you're doing the things that you need to, build your credit score.
So that means, you know, having some credit. So getting those first credit cards, they're not bad. But using them responsibly, that's the key. So don't use it to, you know, purchase consumer consumerables things that are gonna depreciate immediately. Try to use it for things that are gonna put you in a better position later.
If you have to use, you know, a credit card, use it only for emergencies. Make sure you're paying it off at the end of the month. There's a lot of, you know, Myth basically around keeping a balance to build your credit score. You don't need a balance on your credit card. To build a credit score, you really need to show that you're paying your credit to build your credit score.
So paying off your credit at the end of the month, paying extra fees with interest, et cetera. Establishing that
that credit early. So one of the big factors of what your credit score is, is how old or how long have you had established credits? So getting those credit cards early isn't necessarily a bad thing.
Again, you [00:09:00] just have to make sure you're managing them. And yeah, and it's not just your credit, it's all of the bills that you pay. So if you've got a phone bill, you've got a internet bill or a cable bill, all of those things can have an impact on your credit score. So you need to make sure that you're paying your bills.
On time, every time. So I like to, you know, whenever possible set up automatic payments or automatic withdrawals or whatever you can do. So it's not something that you now need to remember. It's something that happens automatically. We're at a time now we don't need to just rely on our memories to pay our bills.
So don't rely on your memory. Use your memory for, you know, remembering something that's more critical than a bill. Cause your bills can just happen in the background. Like you could have that kinda happening in the background. So if your end goal is to, you know, purchase a home and you know you're going to need to finance that with a mortgage, then you know, then you should be working right now to, build that credit score.
The other part of it that I would advise is checking your credit report. So credit agencies are notorious for making mistakes on credit [00:10:00] reports. Your credit report directly impacts your credit. So if someone happens to have the same name as you or a similar name, or maybe they just made a mistake, someone made a mistake and put something on your credit report that is incorrect, that will impact your credit score.
And the last thing you want is to go and apply for your credit. Let's say you're applying for a mortgage and find out there is an error and now everything's delayed. And depending on where you are, sometimes you know, one delay like that could kill a deal. So you really need to be on top of it so that those are the steps you should be doing.
All the time anyways. Like those are the, those like checking your credit report. That's just a good practice to do periodically to avoid, you know, identity theft or what have you. But if you're getting ready to purchase a home, even before you try to get pre-approved for a mortgage or anything like that, you want to check that credit score, check your credit report, make sure everything that looks.
Good before you even approach, you know, our financial institutions to start looking at mortgages because like I said, that could, that could really kill a deal. I remember once I was [00:11:00] trying to, I can't remember if I was trying to find, I was trying to, I was looking at a condo. I didn't end up buying it, but I was looking at it and I went to get pre I, I thought I'd be able to get pre-approved.
I, you know, I'd done all the work to get my, my credit score back up and going and get everything back on track. And then I went to get preapproved and I was denied and I went and looked at my credit score after I applied, which was a mistake, and I realized that something that I had already paid off, something that had come off of my credit report was back.
So it just kind of popped back on. I contacted the credit agency. I showed them the proof that it had already been paid off. They took it off, but at that point, you know, the, everything had been soured. So, you know, the moment to purchase had passed. The bank had already, like, they'd already dinged me, and they were already like, Nope.
So I'd have to approach a new institution. So just do all the pre, do all the work in advance. Just don't, don't wait until you're, you're ready. Do those steps now.
Yeah. So, so many key points there because just going back to what you were talking about, you, you use of credit cards. Now there's a big debate out [00:12:00] there, right? Like, do you use debit to keep yourself on track and on budget, or do you use credit to try and develop the credit score? And a lot of them people will say, well, you know, we need a credit card because I, you know, I wanna develop the credit rating, which is great, like you said, right?
But at the same time, They have to understand that there's a discipline to it. They need to actually pay the bill. You can't spend more than what you have. And I think that is the constant struggle between the two. And I'm glad that you brought up the thing about paying the bills on time because that is also a key way to, to improve your credit score as well.
So, they really need to hear that and hit that home because, you know, that's where you kind of spiral outta control. I remember when I was going to university and. You know, I remember the, I could actually visualize the first credit card that I had. It was like silver and it was shiny
And, you know, and , to be honest with you, I was like, wow, you're giving me credit on, you know, amazing. Right? And you know, here I am, tap, tap, tap.
A special. Oh yeah.
like you're, you know, important and [00:13:00] you're an adult. So it, it's just trying to get that discipline down alongside of that is, is really the key.
I like how you're using the word discipline. The word discipline, I think it's the exactly the right word. It's, it's knowing that you can't just, you know, spend with abandon and to the point that you made, you know, credit versus using cash. Like, I still, as you know, About 40 something year old man who's already been through credit challenges in the past.
I still have times, you know, just staying on top of my credit card. Like, there's times where it's like, wait a minute, did we put that on our credit card? So we owe this now. So there's still, that still happens. So to be honest, I, I actively avoid using my credit card whenever possible. Like it's not a device I tend to use.
I avoid my credit card if I could use debit just because it's, for me, it, I know it's so easy, like you said, to spiral, to grow to, to kind of get outta control. For me, everyone's different. I like to, you know, preface most of my conversations by saying personal finances, personal first.
So I've talked to [00:14:00] some folks who are like, I'm all about those credit card points, and I pay off my bill at the end of the month. Every month I carry no balance. And they, they've got it like that and I commend them. I'm like, if you can do. Do it, but if you can't, if you know you're the type who can't manage that, then you don't need to.
Having the credit card alone is good.
Use it for a flight, you know, make sure you've got your flight insurance on your credit card and use it for the flight, and you are gonna pay off the flight anyways. Pay it off right away. Don't wait for the bill, just pay it off.
Or if you have a reoccurring bill that you know you're going to be paying, let's say it's a I don't know, a. Phone bill or something that it's reoccurring. So you can put that on there and then have an automatic payment that pays it off right away. So again, it's not something that has that variability to it, like it's, it's being used, but it's also being paid off at the same time because it's, it really is about being disciplined with a credit card because if, if you don't have that discipline, it spirals outta control so quickly.
Exactly. Another question for you. How do you balance [00:15:00] short-term goals versus long-term goals? So, like, for instance, you know, we all wanna take the vacation at least once a year, but we know in our, in the back of our minds that we have this goal maybe to purchase the home or do something like, you know, major range of innovation can be anything.
Right. How do you balance between the two? Like, what do you do?
That's a great question. I don't think I have a magic bullet for that one. It really is. You have to prioritize what is the thing that is a priority in your life. If your priority is big. You know, like purchasing a home and you know it's going to take X amount of dollars for you to save up for the down payment.
It's gonna take X amount of money to furnish what have you. So you have that. So now we're, we're, we're talking about budgeting basically, but you need to budget for your long-term and your short-term goals, and you prioritize To determine how much you're going to allocate to either one of them. So you know, if it's important to you.
And trust me, I don't, especially with what's gone on over the last couple of years, if someone's saying I need a vacation right now, or I need a vacation every year, or I need a vacation every four months, I get [00:16:00] it. But that just means, you know, those longer term goals are gonna get. Pushed out. So for, for myself, for example, like we wanted to have at least one parent at home, so I stopped working, which just means my wife and I are pushing out retirement.
If you're anything like I was staying on top of your budget is not an easy task. Paycheck to paycheck would go by and you're no further ahead. For my listeners, I am giving you this free guide that is going to take you to the next level. It's got 10 easy tips to follow. To help you stay on track with your budget, just head to the financial moment.com/budget dash.
Enter your information and you can download this guide right now.
We knew that if one of us was going to stay home for a period of time, it meant that we can't put as much towards retirement, which means we won't be able to retire early. We'll probably retire. You know, there's no [00:17:00] correct date for when you retire now, but we'll probably retire closer to our sixties.
But we made that decision consciously and said that's what we want for our families so that we can give the kids the attention that we think they need right now, which is why I am home. I'm also trying to make income as well, but we know that, you know, there's a difference between if I was working full-time versus working, you know, part-time when the kids are at school.
So it's all. Prioritizing not just your goals, but your values. So what is it that you're, you find valuable? So like I said before, if you feel like a vacation is what you need to sustain you for the year but you want to have a home, well, What's the thing that's more valuable to you in that moment? If it's the vacation, just because it's for your mental health, then you know the home can wait.
The home has to wait because your mental health takes priority. So it's, it's prioritizing, it's budgeting, and it's determining what are your values, what are the things that you value more than, than other things.
whatever. Exactly. And I can't agree more. You know, and [00:18:00] everybody's different. Right? So you, there is no magic formula for this. You just have to kind of assess yourself and see what it is that you really want to get out of life. And then allocate accordingly, right? Exactly.
Exactly.
That's great.
So a question that I always ask, my guests what is something that you wish you could teach your 20 year old self and how would that have had an impact on your life? Well,
already mentioned managing credit, so I won't, I won't belabor that one because we kind of, we've kind of already dove into that one. So I was very aware at a young age of you know, the power of compound interest and in investing, like I understood that, but I don't think I. Recognize how to take advantage of it, even from those early ages.
So instead of, you know, I think the adage that you'll get from like the books, the Richest man in Babylon is Pay yourself first. So even when I started to get myself out of my credit card debt, I didn't. [00:19:00] Save. Right. So I, when I finally said, okay, it's time to fix my credit card debt. I'm going to pay as much as I can to get this debt off of my back.
And I did. But when I finished paying off some of that debt, I had nothing in the bank. And I wish from an earlier age, I recognized the need to pay yourself first and use that to start investing. Cause I really. If you can, like, we know investing is all about, you know, maximizing the amount of time you have to, you know, reap the rewards of those investments.
So I wish I would've done that earlier and that would include, you know, potentially that first condo that I told you about that I didn't buy. It might have included purchasing something a little bit sooner. I think I've seen a lot of young folks now who are doing like the house hacking, you know, where they buy something and then they get a roommate to to pay for some of that mortgage and then they leverage that first home to get their second home.
So all of these investment strategies, all of these ways of finding out how to build your wealth from an early age, including saving, including investing, including real estate, [00:20:00] investing, all of those things are pieces of the puzzle that I wish I would've known from an earlier age and I wish I would've dove into.
Cause there's a bit of. . There was a bit of trepidation on my part cause I'd already, like I said, that first condo I was looking at, I was like, am I ready for this? You know, am I old enough to have my own condo? Like there was just a lot of hesitancy. It didn't work for financial reasons, but I was even afraid to jump in.
But I wish I would've had those, those conversations with myself back then to say, no, jump in now. Because the market's not gonna get any better for you. So buy it now, start building that equity and then, you know, from there you grow and you.
Right. Gold nuggets. I hope you're listening. . Do it when you're young.
Exactly. Exactly.
So tell me what you're, , what you're doing. You have a book, I know that you've released, but I know you're working on new projects, so let me hear it.
Oh man, I've got so many projects on the go. So my first book, your Kids, their Money is available anywhere you can get a book. [00:21:00] So Amazon is the place, it's available on audible, Amazon, or it's paperback. It's a Kindle. I'm working on a revised version of The Richest Man in Babylon that's gonna be released in November.
So probably by the time you're listening to this, that book will also be available. So for those who don't know, the Richest Man in Babylon is a phenomenal personal finance book. But it was written in 1926, so it was a little bit dated, very exclusive. Every pronoun was he himmed. And I, I tried reading it to my son and he just, his eyes glazed over and I was like, no, this isn't gonna work.
So between he and I, we kind of rewrote it. Revised it so that it's a lot more inclusive and a lot easier to read. So, I'm releasing that book in November. And I just earlier today released a workbook. It's a free workbook. You can go to my site, clifton corbin.com slash workbook, and it's a free workbook for kids.
It's got activities in there and it's, I think it's a lot of fun. So you can go to my site, clifton corbin.com/workbook and you can get that.
Oh, that's [00:22:00] great. Thank you so much for sharing that. I appreciate it. I think all these resources are just, you know, one more ticket to, you know, getting financial success. So I appreciate you sharing.
Oh, it's my pleasure. It's my pleasure.
Yeah, thank you again for coming on our show and we hope to connect.
Oh, it was my pleasure and thank you so much for inviting me, and thank you for the show. I think home ownership, it's, it, like I said in the be a moment ago, it can be daunting. But if you get the resources and you get the support from shows like yours it doesn't need to be. And it's, like I said, it could be those early steps to the wealth building that could, , set you up for success for years down the road.
So thank you for doing what you're doing. I appreci.
Aw. Thank you very much, . All right, take care then.
You too.
Thank you for listening. We are committed to helping you place your very first steps into your new home. See you next time