JW’s Financial Coaching Podcast JW’s Financial Coaching Podcast-A show devoted to answering your personal financial questions and covering current events in personal finance. Giving people a new perspective on their money!

July 23, 2017  
00:0000:00
  • Question I've pondered lately
  • Why do we look at our money on a "per month" basis?
  • What is the right question to ask instead
  • What long term thinking with money does to our actions
  • Quote of the lesson from Dick Bove

When it comes to our finances, a lot of us look at our finances on a “per month” basis. How much is the car payment per month? The student loan? The credit card? The monthly membership dues? Our house payment or rent?

Have you ever stepped back and ask why we do that? On today’s lesson we will discuss why that is and attempt to answer if asking ourselves “How much a month” is the right question to ask

It’ important to discuss this topic because most expenses and debt options are presented through the month payment. This can include things such as our mortgage payment, car payment, credit card statements, store financing options, etc. But there are others things as well that we look at per month, life insurance premiums, phone bills, Netflix/Hulu subscriptions, etc.

These payments are presented on a “per month” basis because it is easier for our minds to digest. We can related to “per month” payments a lot easier than the whole amount. Take for example an automobile. Often when I suggest paying for things in cash, like a car, the pushback I receive is “I wouldn’t pay $25,000 for a car.” However if asked if they could “afford” a $380 car payment the answer is usually something along the lines of “Yeah I could probably do that.”

That’s because we associated a lot of financial “pain” with the $25,000 purchase but as much with a $380 payment. Even though over time those $380 payments include interest and add up to a few thousand over $25,000 payment. When looking at “How much a month?” we rarely look at how long the payments will last.

To me looking at “How much a month?” is not the right question. The right question is simply “How much?” Asking “How much?” forces us to look at the long term and ask ourselves if this purchase fits where we want to be instead of seeing how we can fit this payment into our budget. It’s a really powerful way to look at money.

When I stared to realize this and put this concept into practice my beliefs, attitudes, and my bank account had drastic changes. I had a more long term view on money. When we have a long term view of money, instead of week to week or month to month, we're less likely to make long term mistakes as well.

What Lisa and I try to do then with our monthly payments is to look at those payment and compare it to our monthly income. Instead a lot of times we look at our annual income and compare our monthly payments against that. But when we look at our monthly payment compared to our monthly income we get a better understanding of what this purchase will cost us.

Other resources mentioned in today's lesson

To send in your questions email me at Jon@JWFinancialCoaching.com

Today's quote of the lesson is brought to you by the JW's Financial Coaching Newsletter

“It is a kind of way to play games with monthly payment. Stretching out the mortgage maturity is simply a way to lower monthly payments and stimulate sales. ”  ~ Dick Bove

Enjoyed this lesson? If so, please consider taking a few minutes to leave a review of the show either in Stitcher SmartRadio, or Apple Podcasts. For a step by step video of how that works, please watch this video on how to leave a review in iTunes.

You can subscribe to future podcasts through Stitcher SmartRadio or Apple Podcasts, Google Play or by downloading the iPhone app. Or you may listen to the podcast on the JW's Financial Coaching Facebook Fan page.

June 18, 2017  
00:0000:00
  • Wrapping up our series on employee benefits
  • How some employers are helping with adoption costs
  • What health and wellness benefits are and how they can help
  • Save on hotels, car rentals, office supplies, and phone service
  • Quote of the lesson from Henry David Thoreau

 

 

 

 

 

 

 

On today’s lesson we are wrapping up our series we’ve done on looking at employee benefits by focusing on some obscure benefits that not every company offers or that you even think about as a benefit.

Child care

Now when it comes to child care there are different federal, state, and local programs out there for child care. But we’re talking about today is child care provided by the employer.

There is a program called the Dependent Care Assistance Program (DCAP) that offers tax favored status when your employer either reimburses the employee, pays the provider directly, or offers a day care center on site.

The most common way is money is put into a dependent care flexible spending account (FSA) which the employee then uses to pay for dependent care. Currently the tax code is written that employees don’t pay taxes on this money up to $5,000 per year.

Adoption Assistance

The more and more I research this topic, the more I realize that some form of adoption assistance is becoming more common. There are also a growing number of folks who want to adopt, so this seems to be a win-win situation.

Now like all benefits, this will vary by employer but how most adoption assistance plans work is the employer will reimburse, up to a certain dollar amount, for the cost of an adoption. This can include the payment of fees including court cost and legal fees, foreign adoption fee, and medical care for the mother.

There are also programs that help get you in contact with adoption agencies and support groups as well as adoptions for children with special needs.

Health and Wellness programs

There are a lot of different examples that fall under the umbrella of Health and Wellness. They can range from things that encourage exercise and good health such as providing a physical work out center in the office and encouraging employees to joins smoking cessation programs.

Or it can also including providing programs for health monitoring, alternative modes of transportation to work, to getting in touch with a counselor.
The thing is to look and see if any of these programs work for you or fit a need and they might be able to encouraging you to join an activity that promotes your health or wellness.

Employee discounts for services

This is something you might not think of as an employee benefit, but employers, especially large ones work with a lot of other vendors to provide services. That leads to these vendors giving the employees some discounts on some of those services.

So check and see if your employer partners with any other business. Some of these discount services include discounts on

  • Hotels,
  • Car rental
  • Airline travel
  • New car purchase
  • Phone provider

I know through my employer, we receive a 20% discount off of our data on our phone plan each month.

I also got a discount on the closing cost of my mortgage through an employee program.

These things aren’t going to make you a millionaire but they are ways to save money on stuff you are already consuming or are going to consume in the future.

Overall my hope with this series is to encourage you to take the time and look through your employer benefits and see if there is anything you are missing out on that can either save you money or enrich your life.

Depending on your situation you might be leaving hundreds or even thousands of dollars on the table by simply not taking the time to look at your benefits.

To send in your questions email me at Jon@JWFinancialCoaching.com

Today's quote of the lesson is brought to you by Jeff Goins' new book titled Real Artists Don't Starve

“The price of anything is the amount of life you exchange for it.”  ~ Henry David Thoreau

Enjoyed this lesson? If so, please consider taking a few minutes to leave a review of the show either in Stitcher SmartRadio, or iTunes. For a step by step video of how that works, please watch this video on how to leave a review in iTunes.

You can subscribe to future podcasts through Stitcher SmartRadio or iTunes, Google Play or by downloading the iPhone app. Or you may listen to the podcast on the JW's Financial Coaching Facebook Fan page.

June 4, 2017  
00:0000:00
  • Elle Martinez joins Jon to discuss her book "Jumpstart Your Marriage & Your Money"
  • Why she is passionate about helping couples with their money
  • The importance of knowing your "Why" when it comes to money
  • How to have the hard conversations with your spouse
  • Quote of the lesson from Dave Ramsey

I have the privilege of welcoming guest Elle Martinez to the show to discuss her new book titled Jumpstart Your Marriage & Your Money.

I wanted to have Elle on the show because her podcast is great and I couldn't wait to pick her mine on a topic that most of will face at some point in our life, if we haven't done so already, and that is money and marriage.

51womDBRUHL.jpgIt was a blast interviewing Elle and I could have asked her questions all night, but some of the topics we discuss included

  • How Elle and her husband got on the same page financially
  • Why couples struggle with money so often
  • The importance of focusing on your "Why" and not the "What"
  • What Money Dates are and why they are important to take
  • How to have the hard conversations with your spouse on money
  • What motivated to write her book
  • What she learned about couples and money through years of podcasting and writing the book

Elle's book, Jumpstart Your Marriage & Your Money, will be released on June 13th and can be found on Amazon.

In addition I recommend you subscribe to Elle's podcast, Couples Money, if you haven't done so already.

Other resources related to today's lesson:

To send in your questions email me at Jon@JWFinancialCoaching.com

Today's quote of the lesson is brought to you by Audible.com

“Money is an opportunity to reach unity in marriage. When couples work together, they can do anything.” ~ Dave Ramsey

Enjoyed this lesson? If so, please consider taking a few minutes to leave a review of the show either in Stitcher SmartRadio, or iTunes. For a step by step video of how that works, please watch this video on how to leave a review in iTunes.

You can subscribe to future podcasts through Stitcher SmartRadio or iTunes, Google Play or by downloading the iPhone app. Or you may listen to the podcast on the JW's Financial Coaching Facebook Fan page.

May 28, 2017  
00:0000:00
  • With college tuition prices skyrocketing, tuition reimbursement and student loan repayment programs are great ways to attract talent
  • What a tuition reimbursement can do for you
  • What a student loan repayment plan can do for you
  • Things to consider before doing either once
  • Quote of the lesson from Arthur Ashe

With the ongoing burden that student loan debt has become in our country employee tuition reimbursement and student loan repayment programs are a great way to either increase you education while paying nothing or a fraction of the cost, or reduce your current outstanding loan balance.

Today we continue our series we started last lesson looking at employee benefits that you are missing out on. While they might seem similar tuition reimbursement programs and student loan repayment programs are two different things.

Tuition Reimbursement

Tuition reimbursement programs work like this: you go to school to further your education and knowledge in a particular subject. After you prove that you passed the class, your employer will pay for some or all of the tuition.

This can be a great way to increase your value in the market place for a lot less than what it would cost you if you did it on your own. It also ties you closer to your employer as they are investing money in not only your future success but the company’s future success as well.

Before you consider going back to school because of tuition reimbursement consider the following things:

  • How much does the company cover?-Not all plans are 100% covered. Some are a lot less than that and others are tied to the grade that you get.
  • What will be the method you pay?-Your company will reimburse you once you can prove that you passed the course, but it is usually up to you to pay the institution upfront for the class. How will you come up with the money to pay? I would never recommend a student loan but what can you do to come up with the cash up front?
  • Is this something you want a degree in?-You can’t just get any old degree that you want. It has to be a degree that your company deems as beneficial to the role you are in. So if you aren’t really excited about what you are doing now, how is a degree or certification going to change that?
  • Is there are time period you have to work at the company after the reimbursement?-Your company is going to be investing a lot of money in your pursuit of this degree, and often there is a time period in which you need to stay with the company or you will have to pay back all or a portion of the tuition reimbursement. So do you like the company? Do you plan to be there regardless of whether you get a degree there or not?
  • If the tuition is not 100% covered, is this still a good deal for you?-Just because you are getting a tuition discount, it doesn’t necessarily mean it might still be a good deal for you. Again if you don’t want to stay with the company or are thinking about a career change to another field, spending the money and time to get the degree might not yield a proper payoff.

Student Loan Repayment

But what if you already went to school, and got your degree or not, and ended up with any kind of student loans? There are a small but growing number of firms that are offering that are trying to attract employees by offering to repay part of their student loans directly to the student loan servicer.

Now before you get too excited, realize that as of now the amount they are offering to pay is very small, often between $1,000 to $2,000 a year with a lifetime limit. So if you are drowning in student loan debt, working for one of these companies will not take you totally 100% off the hook.

But here are some other things to consider as well:

  • This is basically another form of compensation-This just takes the place of some other kind of benefit including momentary compensation, 401(K) contributions, health insurance premiums, etc. In fact any money that they put towards your student loans is actually considered taxable income for you. So if you get an offer of $40,000 with a student loan repayment of up to $2,000 a year, it is the exact equivalent of getting $42,000 from another offer. Except you are guarantee to use the $2,000 towards student loan repayment.
  • You still have to pay your minimum payment-The money they pay towards your student loan won’t get you out of making your monthly minimum payment. This is actually a good thing in that it will help to pay your loans off sooner, but it won’t free up any more money in your monthly budget, at least in the short term.
  • Lifetime limits-A lot, but not all companies that I researched who offer this benefit, have lifetime maximums on how much you can payoff through this program. Most were around a $10,000 maximum cap. But some companies had no cap, but only paid off about $1,000 max a year. Which means you really can’t count of this program to pay off a significant amount of student loan debt. Only you can do that.

I think that these are a great benefit for employers to offer to their employee’s, however I don’t feel that it is a long term plan to pay off your student loans as mentioned earlier. But I think it can be helpful and we’ll see this becoming more and more popular as many college graduates continue to graduate with large amounts of student loans.

Other resources mentioned in today’s lesson:

To send in your questions email me at Jon@JWFinancialCoaching.com

Today's quote of the lesson is brought to you by Jeff Goins book "Real Artists don't Starve

“When bright young Americans can't afford college, America pays the price” ~ Arthur Ashe

Enjoyed this lesson? If so, please consider taking a few minutes to leave a review of the show either in Stitcher SmartRadio, or iTunes. For a step by step video of how that works, please watch this video on how to leave a review in iTunes.

You can subscribe to future podcasts through Stitcher SmartRadio or iTunes, Google Play or by downloading the iPhone app. Or you may listen to the podcast on the JW's Financial Coaching Facebook Fan page.

May 21, 2017  
00:0000:00
  • New series on looking at your employee benefits
  • What is an Employee Stock Purchase Plan
  • How I use mine as a way to earn some quick cash
  • What to consider before you participate in your companies plan
  • Quote of the lesson from Warren Buffett

One of the most overlooked areas when it comes to our finances, is the area of benefits supplied by our employer. The reason is it is overlooked is because they are usually discussed very briefly on the first day you start the job, and all the information is in a packet that you just put in the corner of your desk . . . never to be seen of again.

But depending on your employer the benefits package can be a big boost to your overall finances. Some of the things that could potentially be included in your benefits package are:

  • Health Insurance
  • Life Insurance
  • Long Term and Short Term disability
  • Adoption assistance
  • Retirement funding
  • Employee discounts for services like phone, moving, car and hotel rentals

Today on the show we are going to start a new series on looking at some of those benefits and make you aware of other one’s that you may have overlooked.

This lesson we are breaking down Employee Stock Purchase Plans or ESPP.  I did a recap of my experience with ESPP’s back in 2011, but I thought today I would do an updated one and discuss the pro’s and con’s of each and if they are a good fit for you.

ESPP’s are company run programs that allow employee to purchase shares of that company at a discounted rate, usually anywhere between 5-15%. The employee contributes money through payroll deductions each pay period. After a specific period that money that you have been accumulating is taken and purchased shares of stock at a discounted rate.

They can be a benefit to you in either one of two ways. The first is through a long term investment tool and the second as a way to earn some quick cash, as long as there are no restrictions on when you can sell your stock.

What I currently do at my employer is I contribute $5,000 a quarter ($1,667 a month) into my ESPP. At the end of each quarter (4 times a year) that $5,000 is taken and used to purchase shares at a 10% discount. So for example is the stock closes at $20 at the end of the quarter the $5,000 will buy 277.78 shares of company stock ($20 x 90% prices equal $18 a share, $5,000 divided by $18). After it is posted to my account, I then turn around and sell the stock for a profit.

So for example I sell the 277.78 shares at $20 and have a gross of $5,555.56 (277.78 X $20). After you take out my basis of $5,000 you are left with a nice $555.56 profit. I then take that original $5,000 and put it back in my operating account, so in essence I’m really not contributing $20,000 of my pay into the stock, it is really $5,000 continually recycled.

So that’s how my companies program works, but what are the downsides. The first you need to know is what the period between when you can buy and when you can sell. For me it takes about 3 business days for the stock to be purchased to when it posts to my account and I can sell it. That is a small enough risk that there isn’t a lot of volatility. But I do know of some companies that require a holding period in terms of months of when you can sell. For me if that period is anything more than a week, I’m passing because I don’t want to take the risk.

Also the higher the percentage discount the better. Since my discount rate is 10% that is not as bad of return. But at 5% the return isn’t worth the risk in my opinion.

Before you consider whether or not this is right for you, take into account these considerations:

Investment Tool

I use my companies ESPP as a way to get quick cash, but theoretically I could use this as an investment tool. In that case I wouldn’t sell right away, I would just instead lower my contribution amount, I can’t afford to purchase $20,000 worth of stock a year, and just let the stock value appreciate.

But for me that is too much risk. I don’t like having investment in single stock as they are usually pretty volatile. But if you do go this route, I’d recommend it being no more than 10% of your total investment portfolio. Also depending when you sell you may be taxed on any gain so make sure you understand the tax consequences before you sell.

Be out of debt

You are contributing money up front in advance of the purchase, so if you are in debt I wouldn’t recommend doing this because the money could be better used towards paying off any debt you may have.

In addition you are also balancing money so I’d be out of debt and make sure I had a strong control of my finances before trying to juggle money around.

Have an emergency Fund

Like I mentioned earlier, you are contributing money upfront before you make a purchase and I don’t want my emergency fund hung up in the stock market. I want it where I can get it if a financial emergency actually occurs.

If you do participate in an ESPP, this should be taking a risk money, not emergency fund cash.

The key in all of this is to know the type of plan your companies ESPP is. Find out what the discount rate it, the amount of times a year you purchase stock, and how long before you can sell the stock without penalty are key things to determine before you do any work.

With that being said, I normally make an extra $2,000 a year in cash by doing this. Yes I have to sit aside $5,000 but the ~$2,000 a year gain equals out to be an approximate 40% return on that money. You really can’t beat that. But again it is because my companies ESPP works for my situation, we don’t have any debt, and we have a full emergency fund.

Other resources mentioned on the show:

To send in your questions email me at Jon@JWFinancialCoaching.com

Today's quote of the lesson is brought to you by Audible.com

“Don’t put all your eggs in one basket” ~ Warren Buffett

Enjoyed this lesson? If so, please consider taking a few minutes to leave a review of the show either in Stitcher SmartRadio, or iTunes. For a step by step video of how that works, please watch this video on how to leave a review in iTunes.

You can subscribe to future podcasts through Stitcher SmartRadio or iTunes, Google Play or by downloading the iPhone app. Or you may listen to the podcast on the JW's Financial Coaching Facebook Fan page.

May 15, 2017  
00:0000:00
  • In research for my upcoming book, been looking at statistics on credit card debt
  • Why credit card debt is not just an income or age issue
  • 3 ways to avoid credit card debt
  • Why I don't own a credit card
  • Quote of the lesson from Mark Cuban

In doing some research for my upcoming book, on how debt free people think, I’ve been doing a lot of research lately on debt statistics. Recently I did some research on credit card debt and the recent surveys and statistics coming out in regards to credit cards and their usage are quite startling.

  • Gallup found in 2014 that 71% of Americans own at least one credit card [1]
  • As of March 2016 38.1% of households that have a credit card have a balance at the end of each month with an average debt of $16,000 [2]
  • Among all US households the average credit card debt as of 2016 is $6,184.16 [3]
  • Among those who carry a credit card balance the average household will pay $1,292 in interest [4]
  • Total Outstanding US Credit Card is $762 billion[5]
  • Credit card ownership by Age:
    Age Range    Percent that own a credit card
    18-24               67%
    25-34               83%
    35-49               76%
    50+                  78%
  • 56% of Undergraduate students owned a credit card in 2016
  • Credit Card Debt by Age as of 2016
    Age Range    Average Credit Card Debt
    18-34               $5,808
    35-44               $8,235
    45-54               $9,096
    55-64               $8,158
    65+                  $6,351
  • Average Credit Card Debt by Income as of 2016
    Income Range           Average Credit Card Debt
    < $25,000                    $3,000
    $25,000 to $44,999    $3,900
    $45,000 to $69,999    $4,900
    $70,000 to $114,999  $5,800
    $115,000 to $159,999 $8,300
    $160,000+                   $11,200
  • Average annual credit card interest cost by household income in 2016
    Annual Income Range    Average annual interest paid
    Less than $21,432                   $677.43
    $21,432-$41,186                     $839.60
    $41,187-$68,212                     $1,135.91
    $68,213-$112,262                   $1,303.76
    $112,263-$157,479                 $1,882.85
    More than $157,490                $2,515.05
  • Annual credit interest paid by employment status in 2016
    Employment Status        Average annual interest paid
    Employee                                $1,210.58
    Self-employed                        $1,630.84
    Retired                                    $1,321.84
    Other, not working                  $1,554.57
  • Average Credit Card Debt by Gender
    Gender        Average Credit Card Debt
    Male            $7,407
    Female        $5,245

What does this information tells us? What I noticed was that credit card debt isn’t just a thing for those who don’t make a lot of money or are young. There are people in their 50’s and 60’s and those make well over six figures that have credit card debt.

The fact that we as a nation have $762 Billion in credit card debt is absurd. So today’s show I share ways to avoid credit card debt in the first place. On the surface they might seem basic, but a lot of times when it comes to personal finance, basic is usually the best answer.

  1. Don’t have a credit card in the first place.
  2. Do a monthly budget
  3. Have an Emergency Fund

We break down each of those ways further and share why whether or not you carry a balance on your credit card is not a good measure of whether it is wise for your to use one.

Other resources mentioned on today’s show

To send in your questions email me at Jon@JWFinancialCoaching.com

Today's quote of the lesson is brought to you by Audible.com

“Credit Cards are the WORST investment you can make” ~ Mark Cuban

Enjoyed this lesson? If so, please consider taking a few minutes to leave a review of the show either in Stitcher SmartRadio, or iTunes. For a step by step video of how that works, please watch this video on how to leave a review in iTunes.

You can subscribe to future podcasts through Stitcher SmartRadio or iTunes, Google Play or by downloading the iPhone app. Or you may listen to the podcast on the JW's Financial Coaching Facebook Fan page.

[1] http://www.gallup.com/poll/168668/americans-rely-less-credit-cards-previous-years.aspx

[2] https://www.valuepenguin.com/average-credit-card-debt

[3] https://www.nerdwallet.com/blog/average-credit-card-debt-household/

[4] https://www.nerdwallet.com/blog/average-credit-card-debt-household/

[5] https://www.valuepenguin.com/average-credit-card-debt

May 1, 2017  
00:0000:00
  • Three signs that you are worshiping at the altar of money
  • Why the worship of money is not a physical worship
  • How we can worship money no matter what our financial situation is
  • Money just makes us more of what we already are
  • Quote of the lesson from Andrew Carnegie

On today’s lesson we go into the topic of money worshiping. Now more than likely you aren’t sitting in your home each night and physically worshiping money. But there are thoughts and actions we do with money that lead to an unhealthy relationship with our money.

Now the thing with worshiping money is that this isn’t thing that only the wealthy of filthy rich can do. You can still worship money if you are struggling financially. Now worshiping money will look different to each person and there are many signs that you might be worshiping money. But below are three of the main reasons:

  1. You are afraid of losing money

No one I know enjoys losing money, so this should probably be better worded by saying you are obsessed with the possibility of losing money. We’re not talking about losing a $20 bill out of your pocket, but I’m talking about looking at your online ticker when the stock market drops or if certain geo-political events are occurring it keeps you up at night.

Also do you have a fear of living at a certain level or lifestyle? Are you saving or investing money to reach a certain goal? Or is it because you feel you will never have enough saved? If so it might be a sign you are putting too much trust in your money

  1. You are stingy with it

Take a look at your checkbook. Are you able to spend money and not worry about it? Can you enjoy the fruits of your labor? Now spending is all about ratios depending on a variety of factors including your goals, income, and debt load. But if you can’t enjoy spending *some* of your money on yourself there might be an issue.

 

Are you able to give money to charities and other noble causes? If you can’t and you have to see money leave your account that might be a sign you are worshiping money. Because if you’ll never have enough saved if you can’t enjoy spending and give some of it as well.

  1. You constantly think about it

What are you thinking about when you think about money? Do you think about having money so you can do all kinds of enjoyable things with it? Do you imagine what it would be like to have money? Do you dream of the power and “easiness” of life that you would have if you had more money? Do you think about money all the time?

I teach about money, but I don’t think about money all the time. Now granted there are some points in your life where you are thinking about money a lot more than others. But overall if money captures our thoughts, it might be a sign that you are worshiping money.

 

Now with that being said, I’m not saying that you shouldn’t be thinking about money at all. If you have a plan, you need to know where your money is going. Having a plan, budget, and goal with money is *NOT* worshiping money.

But if the thought of losing it, being stingy with it, or obsessively thinking about it is a constant in your life. You might have an issue of how much of an impact money has on your life. Granted money is nice, but it is not the be all, end all. It’s not a magic pill, and having more of it doesn’t guarantee anything in life. Money just make us more of what we already are already.

Other Resources mentioned in the show

To send in your questions email me at Jon@JWFinancialCoaching.com

Today's quote of the lesson is brought to you by Audible.com

“There is no idol more debasing than the worship of money” ~ Andrew Carnegie

Enjoyed this lesson? If so, please consider taking a few minutes to leave a review of the show either in Stitcher SmartRadio, or iTunes. For a step by step video of how that works, please watch this video on how to leave a review in iTunes.

You can subscribe to future podcasts through Stitcher SmartRadio or iTunes, Google Play or by downloading the iPhone app. Or you may listen to the podcast on the JW's Financial Coaching Facebook Fan page.

00:0000:00
  • Are bi-weekly mortgage programs worth it?
  • Why you don't need to pay a fee to have your mortgage paid off sooner
  • Getting your spouses head out from the sand when it comes to money
  • Why it is important to focus on the why and less on the what
  • Quote of the lesson from Charles A. Jaffe

 

Today we answer a few more questions from that you had for the show. Like the last time we did this in lesson #136, I always appreciate answering your questions on the show.

Question #1

What are your thoughts on biweekly payments on mortgages? I think it will be good for budgeting but have heard many negative things against it.

In short I love the concept of paying off your mortgage early and paying extra on it each month will definitely help it. But I’m against paying a fee to make that happen, especially when it is pretty easy to do it yourself.

A biweekly plan is where your bank has a program that does auto withdrawal from your account every two weeks, instead of once a month.

So if your payment is $1,000 a month, it is going to withdrawal $500 from your account every two weeks. Over the course of a year this equals to making 26 half payments (52/2) or 13 full payments. So basically you are making an extra payment once a year.

This will equate to paying off your mortgage a lot sooner, sometimes up to six years sooner. It does help with budgeting because you know that every two weeks your half payment is going to be sent to the bank.

The thing is that a lot of banks that do this charge a fee for this service. I’m not against paying fees if it helps me reach my goals. However I am against paying fees for things I can do easily myself and bi weekly payment programs are something you can easily do yourself and save the fee.

To make an extra payment a year, simply divide your monthly payment by 12. Take that number and add it to your monthly payment. If you are on a budget this is a simple thing to do, because you have control over your spending. Also over time you’ll start to add more additional money to your payment and pay off your mortgage sooner.

Now I wouldn’t pay extra on my mortgage until I was completely clear of any other debt and have an emergency fund. I want you to pay off your mortgage as much as anyone, but I don’t you to pay needless fees to accomplish that.

Question #2

How does one inspire their spouse to get their head out of the sand and begin to study money?

The age old question-how to get your spouse on board. This topic has been covered before on the show, most recently in lesson #137 but I’m always glad to cover this topic again. Because if you and your spouse agree on your spending, you’ve essential agreed on your life.

The first thing I would try to do is to attempt to answer the questions why do they have their head in the sand? Now this is probably going to take a few conversations to accomplish, but why don’t they want to participate in the finances?

Is it because of a previous bad experience with money? Perhaps a divorce from a previous marriage and/or a bankruptcy?

Is it because they are overwhelmed with your current financial situation? Are they so worried about the debt or lack of savings that they don’t want to think about it?

Or is it because they don’t consider themselves a math person or good with money? Well the good news is that few people are, and it’s something you just need to work on.

But take some time first and instead of hitting them over the head on why you need to work together, focus on their insecurities and why they want to put their head in the sand in the first place. After determining the cause of that then you can attempt to have the other conversations necessary.

The other thing to help with your spouse is to focus less on the what, and more on the why you want to work together.

Share why working together is important to you. Sometimes we can focus so much on the what, getting on a budget, reducing our spending, working extra, selling some of our possessions, etc. But we forget to mention the why a lot of times, and all they heard is the what and how it is going to impact them and they turn off real quick.

Instead share why you want to learn about money together. Is it for your future? Your children? Are you just tired of living the same old life over and over again?

These should be serious discussions, not during a commercial break while you are watching your favorite show or at the dinner table when the kids are running around.

But offer to work together so that you are both on board. This may be reading a personal finance book together, or listening to a podcast, taking a class, and eventually the big one, doing a budget together.

So instead of focusing on the what to do, first take the time to see why your spouse feels about money the way they do and share more of why this is important to you in the first place.

Other resources related to today's lesson

To send in your questions email me at Jon@JWFinancialCoaching.com

Today's quote of the lesson is brought to you by the JW's Financial Coaching Newsletter

“It’s not your salary that makes you rich, it’s your spending habits” ~ Charles A. Jaffe

Enjoyed this lesson? If so, please consider taking a few minutes to leave a review of the show either in Stitcher SmartRadio, or iTunes. For a step by step video of how that works, please watch this video on how to leave a review in iTunes.

You can subscribe to future podcasts through Stitcher SmartRadio or iTunes, Google Play or by downloading the iPhone app. Or you may listen to the podcast on the JW's Financial Coaching Facebook Fan page.

 

April 2, 2017  
00:0000:00
  • What are some small things we can do to have a big impact on our finances
  • Why physical de-cluttering saves us money
  • How much of a refund are you receiving this year?
  • Are you diversified enough
  • Quote of the lesson from Charisse Ward

 

 

 

 

 

Personally, I don’t know about you, but spring cleaning is one of those things that I know I need to do every year and that I will be glad I did once it is over. But in the end I procrastinate doing it and usually don’t get around to doing it.

Truth be told we do similar things our finances. There are some small stuff that we know we should do each year, not major things. But in the end we don’t do them or push them off until when we’ll have “more time”.

Since it is that time of the year to do actual spring cleaning, I thought it would be fun to discuss four things that come to mind when I think about doing spring cleaning with our finances

1. De-Clutter

Yes it can help our finances to do some actual, physical spring cleaning. I’m amazed at how demotivating clutter can be for us.  Currently we have three children under six so I know how it happens. You clean up your house and like 10 minutes later it somehow looks worse than when you originally started. So instead you just put stuff into our “get to later pile” and we never get around to it.

But it is good to take a weekend every once in a while to put stuff away where it belongs or actually to get rid of the unwanted stuff. The benefits are we get to make some money. By selling or donating things off of Craigslist, having a garage sale, or donating toys or clothes to charities.

De-cluttering can also help us by stopping the need to spend money in the future. How much we spend each year on a storage unit or storage bins to use in our home? How much are we paying to store that 3rd car we hardly use or to storage the boat we take out once in a while?

It also helps our energy to give stuff to people who will use it a lot more than we will. In addition to helping our creative energy by simply eliminating the stuff in our lives.

2. Life Insurance

Life insurance is never a fun topic to discuss. But now is as good of a time as ever to review your life insurance needs and current coverage and determine if you need to add or eliminate certain types of coverage.

When it comes to life insurance you need to remember why you need it in the first place. Life insurance is needed if someone depends on you financially. This often is a spouse or if you have children still at home. Also if you aren’t independently wealthy there is a good chance you need some kind of life insurance in place.

You don’t need life insurance as a way to invest for retirement or your children’s education. You also don’t it if you don’t have anyone who depends on your financially for their support. You also may not need it if you are independently wealthy.

As for how much coverage you need, well a good place to start is 10x your income. Some might need more or some might need less depending on your situation. But I would only recommend purchasing term life insurance, as hopefully there will be a point in your life where you get to a point when you won’t need life insurance any longer.

3. Taxes

You know with it being April I had to sneak in a section about taxes. Are you getting a huge refund this year? Do you need to adjust your W-2? The W-2 is where you claim how many dependents you expect to claim on your taxes and that determines how much money is withheld from you paycheck each month. The more dependents you claim, the less $$ is withheld.

The thing is that you don’t need to match the real number of dependents you actually claim. For example we have five dependents in our home that we claim each year on taxes. I claim 20 on my employer paycheck . . . . and we still got a $800 refund for 2016’s taxes.

Now everyone’s situation is different and please consult a tax professional for specific advice in your situation. But I see so many people struggling to make their minimum payments each month but they are still getting a big refund each April. Instead have that amount come to you in your paycheck throughout the year so you can manage it better and not get in the predicament in the first place.

4.) Investments

Investment are not a fun thing for us to do. But take a hour or two and look at what your investments are and how they are performing. You’ll also want to check your fees that you are paying on your investment to see if they aren’t too high relative to their performance.

You’ll also want to see if you are contributing enough. I recommend after you are debt free to work towards contributing 15% of your pay into investing for retirement. If you don’t like to do this stuff on your own or you feel that it is intimidating than I would recommend working with a professional to help teach you the basics and get you comfortable with investing.

Again these are four small things to do and there are other similar smaller things that you can do as well. They aren’t going to be earth shattering moves like starting an emergency fund or becoming debt free, but they will help your finances and you’ll be glad you did them once they are completed. I recommend just taking one of these a week and try to accomplish the task.

 

Today's quote of the lesson is brought to you by the JW's Financial Coaching Newsletter

“Clutter causes stress, and clutter is one of the main barriers of productivity” ~ Charisse Ward

Enjoyed this lesson? If so, please consider taking a few minutes to leave a review of the show either in Stitcher SmartRadio, or iTunes. For a step by step video of how that works, please watch this video on how to leave a review in iTunes.

You can subscribe to future podcasts through Stitcher SmartRadio or iTunes, Google Play or by downloading the iPhone app. Or you may listen to the podcast on the JW's Financial Coaching Facebook Fan page.

March 26, 2017  
00:0000:00
  • Coach Greg Pare is back on the show
  • Why he is doing a 5 Day Money Challenge
  • Who will benefit from the program
  • The common money issues Greg sees when he is speaking and coaching
  • Quote of the lesson

Today’s lesson I want to welcome Coach Greg Pare back to the show. I wanted to have Greg on the show to discuss an event he is rolling out soon titled the 5 Day Money Challenge.

When Greg mentioned to me the 5 Day Money Challenge I knew I had to have him on to discuss what the challenge is actually and why he developed it.

The challenge starts on Monday April 3rd and encompasses notifications from email, Facebook Live, and the Private Facebook group.

In addition we also talk about what the #1 takeaway someone will get from going through the challenge. Can anyone in any financial situation take the challenge? Finally what happens after the 5 days are over.

We also ask Greg what are some of the common financial mistakes he see’s people make when he is talking about finances to a group or in individual coaching. Get his take on why we struggle so much as a culture with our money and the difference it makes in our life when we get our money under control.

Other resources mentioned on today's lesson:

Today's quote of the lesson is brought to you by the JW's Financial Coaching Newsletter

“He who buys what he does not need, steals from himself" ~George Horrace Latimer

Enjoyed this lesson? If so, please consider taking a few minutes to leave a review of the show either in Stitcher SmartRadio, or iTunes. For a step by step video of how that works, please watch this video on how to leave a review in iTunes.

You can subscribe to future podcasts through Stitcher SmartRadio or iTunes, Google Play or by downloading the iPhone app. Or you may listen to the podcast on the JW's Financial Coaching Facebook Fan page.

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