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!

June 30, 2013  
00:0000:00

Highlights of today's show:

  • What does financial independence actually mean?
  • Should one strive for financial independence?
  • How financial independence is all relative
  • Becoming independent from debt
  • Becoming independent from work

The term "Financial Independence" gets thrown around a lot and it can mean different things to different people. With this being the first week in July, since the United States is getting ready to celebrate the nation's birthday and independence on July 4th, I thought it would be great to talk about achieving financial independence.

Wikipedia defines Financial Independence as: a term generally used to describe the state of having sufficient personal wealth to live, without having to work actively for basic necessities. While that is the technical definition and what you will hear most financial planners use, I feel that there are different stages of becoming financially independent. They are:

Independence from Debt. A lot of the listening audience is already experiencing this feeling and the rest of us are trying to get there. But becoming debt free is an amazing feeling; as hard as I try, I can't fully describe the feeling it brings upon you. But when you are independent from debt you are actually able to control your cash flow instead of simply giving your money to the bank.

Independence from work. I'm not talking about retirement here, rather I'm talking about being able to do what you want to do with your career regardless of income. So often we feel like we are chained to jobs we don't like and we are just working for money to pay the bills. But when we are independent from debt, we are able to become better workers, take "risks" in our career that could have a bigger long-term payoff, and work a career that fits our lifestyles.

Independence from earning an income. This is the classic definition of becoming Financially Independent. This is where your assets are producing enough income to cover your expenses. If you have $500,000 in assets producing a 10% return or $50,000 a year and you have $40,000 worth of expenses you are able to cover your expenses without having to earn extra. This is a basic retirement calculation and I've shared my opinion on retirement before, but once you have reached this point you are now in position to stop earning an income.

But that still begs the question, is financial independence something to aim for? I share my opinions and thoughts on that as well. But as for you: Is financial independence a major goal for yourself? How close are you to reaching that milestone?

I also have special news for those listeners who have an iPhone. The JW's Financial Coaching app is now available to download. The app allows you to choose a lesson, view its show notes, and listen to the show, all right from your iPhone without having to browse the web.

You can subscribe to future podcasts through Feedburner, Stitcher SmartRadio, or iTunes. Or you may listen to the podcast on the JW's Financial Coaching Facebook Fan page. In addition, if you have enjoyed the show for a while now, please leave a review of the podcast on iTunes. For a step by step video of how that works, please watch this video on how to leave a review in iTunes.

If you have any comments, questions, or ideas for future shows you can send them to me and I will integrate them into a future show. There are two ways to get in touch with me: 1.) Email me at JWFinancialcoaching@gmail.com - Please put “podcast” in the subject line and keep your questions brief so they are readable on air. 2.) Simply fill out the form on the contact page. Please fill out your name, email, and your question/comment/suggestion and we will read it on air.

You can find prior editions of the podcast at the podcast archive page.

 

00:0000:00

Highlights of today's show:

  • What Financial ADD looks like
  • Why we are susceptible to it
  • How Financial ADD is like cleaning your house
  • The power of focusing on your finances
  • What is the order you should focus on?

Attention Deficit Disorder (ADD) is when a person has a hard time concentrating on a particular situation for a short period of time. It is believed that 4% of Americans today have ADD. In my experience coaching individuals and couples, a far greater percentage suffer from what I call Financial ADD.

Financial ADD is simply trying to do many things with money at once, and therefore not getting any traction and failing to complete any of them. These things can be all good things such as:

But when we try to do all of these things at once we fail. That's because our money is finite and we can only do so much at a time. One of the reasons Financial ADD is so prevalent today, in my opinion, is due to the personal finance blogs and podcasts out there. Yes, I'm including myself. Often we write articles on the importance of avoiding debt, saving for retirement, saving for a home, having an emergency fund, and enjoying your money. However they are read out of context and we can think that we need to do all of these things today. That is simply not true; instead I recommend focusing on one or two things at a time.

There is a power to focusing on one thing instead of being all of the place. That's because if you stay focused and complete a task, you are more likely to start and finish another task and ultimately reach your goal. To avoid Financial ADD, I recommend doing the following steps in order with your money:

  1. Save $1,000 in an emergency fund
  2. Pay off all non-mortgage debt
  3. Save 6 months worth of expenses in an emergency fund
  4. Then start to save for a house, vacation, or other major purchase
  5. Start to invest 15% into retirement
  6. Focus on saving for your child's education and paying down your mortgage

The more I see Financial ADD, the more I see how it can harm us financially. We get frustrated that we aren't seeing our goals completed, we give up and say things like, "It's impossible to win with money." However if you stop trying to do everything at once and focus on one thing, you will start to see progress.

My hope is that this will get you thinking about if you have Financial ADD going on in your life or not, and, if so, figuring out what you need to cut out of your life to reach your financial goal.

You can subscribe to future podcasts through FeedburnerStitcher SmartRadio, or iTunes. Or you may listen to the podcast on the JW's Financial Coaching Facebook Fan page. In addition, if you have enjoyed the show for a while now, please leave a review of the podcast on iTunes. For a step by step video of how that works, please watch this video on how to leave a review in iTunes.

If you have any comments, questions, or ideas for future shows you can send them to me and I will integrate them into a future show. There are two ways to get in touch with me: 1.) Email me at JWFinancialcoaching@gmail.com - Please put “podcast” in the subject line and keep your questions brief so they are readable on air. 2.) Simply fill out the form on the contact page. Please fill out your name, email, and your question/comment/suggestion and we will read it on air.

You can find prior editions of the podcast at the podcast archive page.

June 16, 2013  
00:0000:00

Highlights of today's show:

  • We can all sometimes get lethargic when it comes to our finances
  • Whether you are rich, poor, struggling, doing well, 20 years old or 70 years old
  • To get out of netural, try establishing a new goal
  • Do something new in your budget, whether spending or giving
  • Look at what your lack of attention and focus is costing you

No matter how much money you make, how old you are, how well you are doing financially, or how long you have been working on your finances, there will be times when you hit the wall.  You don't want to budget, you overspend, and you put your finances on cruise control. Today we talk about three situations where you might shift into neutral with your finances.

  1. You are doing OK financially. Having OK finances is dangerous because the average financial stats are pretty depressing. Often we get stuck in neutral in this situation because that's all we know to do and we don't believe we can change. This might be the hardest situation to get unstuck from because it takes a lot of effort and desire to change.
  2. You just get out of debt. You've had this intense period of your life where all your focus and extra money was going toward your debt. Now that you are debt free, you kind of exhale and ask yourself, "now what?" Well, becoming debt free is not the end; it's only the beginning because often we can struggle with getting the momentum going again to tackle our next task.
  3. You have been working your financial plan for at least five years. You are doing great financially; you have no debt, do have an emergency fund, and are saving for your future. But you have gotten bored with your finances. In fact you are on cruise control so much that you don't budget, you are overspending a little here and there and aren't really thinking when it comes to your overall long term goals. This isn't going to kill you financially, but you could be missing out on something better.

If you are stuck in neutral in these situations, I recommend trying the following to get unstuck:

  1. If you are doing OK financially, I recommend taking a deep look at your situation and realizing that it isn't working. Often we can think that if we keep doing what we've been doing we'll get different results this month. Then we're surprised when things don't change. For ways to get motivated and to get out of the rut you are in, I recommend listening to the following lessons of the podcast:
      1. Money management is about behavior, not about math
      2. Do you have the power to control your finances?
      3. How to get Big Mo on your side
  2. If you just got out of debt and don't know what to do next, I recommend setting a new goal. By focusing on one big goal you were able to pay off your debt. Now it's time to make similar goals to keep improving your finances. Some goals may include saving an emergency fund, saving up for a big purchase like a trip or car, saving money for your child's education, giving a certain percentage of your income, or paying off your mortgage.
  3. If you have been winning with money for a while now and you just can't seem to find the energy to keep it up, I suggest changing the way you budget. Yes, sometimes we can take saving money too far and if all you are doing now is saving money you need to loosen up your spending and enjoy your money. You can do this by changing your budget, perhaps for the first time in years, to include more giving and spending.

So the next time you get stuck in neutral, try the above to get unstuck and back into high gear. But what about you? When have you found yourself in a rut with your money? I'd love to hear your experience in getting unstuck by leaving a comment below.

You can subscribe to future podcasts through FeedburnerStitcher SmartRadio, or iTunes. Or you may listen to the podcast on the JW's Financial Coaching Facebook Fan page. In addition, if you have enjoyed the show for a while now, please leave a review of the podcast on iTunes. For a step by step video of how that works, please watch this video on how to leave a review in iTunes.

If you have any comments, questions, or ideas for future shows you can send them to me and I will integrate them into a future show. There are two ways to get in touch with me: 1.) Email me at JWFinancialcoaching@gmail.com - Please put “podcast” in the subject line and keep your questions brief so they are readable on air. 2.) Simply fill out the form on the contact page. Please fill out your name, email, and your question/comment/suggestion and we will read it on air.

You can find prior editions of the podcast at the podcast archive page.

June 9, 2013  
00:0000:00

Highlights of today's show:

  • Going through special limited offers I've receive in my mail lately
  • How a reward credit card that helps pay off your mortgage might cost you more in the long run
  • Don't pay the bank money for something you can do yourself
  • Avoid reverse mortgages like the plague
  • Indecision can impact your finances

Have you gone to your mailbox and found some junk mail from your local bank offering you a special limited time offer? After you open it up you are about to throw it in the recycle pile, but you keep reading and say to yourself, "this actually might be a good deal for me."

If so, don't worry; I've done it too. But often we forget to read the fine print and once we do we realize that special deal isn't that special, in fact it can actually cost you more money in the long run if you aren't careful. Today I share three different special offers that I personally have gotten in the mail in the past few months. I share what each offer is and why it isn't as good of a good deal as it seems. The three offers we cover are all related to mortgages:

  • The Home Rebate Credit card. This credit card is a rewards program that pays down your mortgage with each purchase. As I've said before on the show, I'm not a huge fan of credit cards but even if I was, this program can actually cost you more in the long run.
  • Mortgage accelerator programs. Hey, the bank is offering me a way to pay off my mortgage sooner. That can't be bad, right? Yes, paying off your mortgage sooner is wise, but you don't have to pay the bank to do that; you can do it yourself!
  • Reverse Mortgage-You can't do a reverse mortgage until you're 62, but if your parents or grandparents ask you about them, tell them to avoid them! That's because they have high interest rates and have a lot of fraud associated with them. In addition they aren't all they're cracked up to be and have backfired on a lot of senior citizens.

I also share my thoughts on indecision and how it can impact our finances. As Robert Schuller said, "Indecision is the greatest thief of opportunity." My challenge to you is to look at a decision you have upcoming in your life and set a deadline to make a decision.

In addition, I have finally created a newsletter for JW's Financial Coaching. This newsletter will be published once a month and will have exclusive content, allow you to learn of new products and features from JW's Financial Coaching first, and let you know about other good personal finance information around the net. You can register for the newsletter here, and in addition to receiving the newsletter, those who sign up will receive a free download of "JW's Manifesto on Money." This is a 20 minute audio recording sharing my views on money including the topics of spending, debt, saving, marriage and money, where money fits in your life, and how you can win with money. I'm excited to share the manifesto with my newsletter subscribers.

You can subscribe to future podcasts through FeedburnerStitcher SmartRadio, or iTunes. Or you may listen to the podcast on the JW's Financial Coaching Facebook Fan page. In addition, if you have enjoyed the show for a while now, please leave a review of the podcast on iTunes. For a step by step video of how that works, please watch this video on how to leave a review in iTunes.

If you have any comments, questions, or ideas for future shows you can send them to me and I will integrate them into a future show. There are two ways to get in touch with me: 1.) Email me at JWFinancialcoaching@gmail.com - Please put “podcast” in the subject line and keep your questions brief so they are readable on air. 2.) Simply fill out the form on the contact page. Please fill out your name, email, and your question/comment/suggestion and we will read it on air.

You can find prior editions of the podcast at the podcast archive page.

June 2, 2013  
00:0000:00

Highlights of today's show:

  • Talking about the one person other than yourself that can help your finances
  • How to build momentum with your finances
  • Just getting started with something new is 70% of the battle
  • You'll be amazed at how far you've come if you track your progress
  • Connecting with others and talking about your journey will keep you focused

Obviously when it comes to your finances, the person who will help change your finances the most is yourself. But is there another person who will help you change your finances? There is and it's not the financial guru on the TV or the radio and it's not even me. The person who can help your finances is called Big Mo.

But seriously, Big Mo isn't a real person. Big Mo is short for momentum and today we are going to discuss how to build momentum with your finances. When you get good momentum going you are going to be hard to beat. We see this all the time with sports teams where they get momentum going towards the end of the season and they ride it all the way to a championship. If you read self-help books you will realize that setting goals and building momentum is one of the main things they talk about. In my opinion, one of the best books for learning how to build momentum in your life is The Compound Effect by Darren Hardy.

But when it comes to building momentum with your finances I recommend doing the following:

  • Just Start-I'm convinced that 70% of changing is just getting started. Making changes in your finances is like any other habit; it won't just happen magically, you have to work at it. But once you get started it becomes easier and eventually it becomes second nature. A good example of this is every spring when I start to go running. It isn't easy at first and I make every excuse in the book not to run. But once I get going, I get more comfortable doing it.
  • Track your progress-It always amazes me how much we want to continue with something when we can visually see the progress we've made. Think about those who lose weight. Looking at your before and after pictures is a great motivator to keep you going. For your finances one way I help track my progress is doing a monthly net worth statement.
  • Get connected-Whether you are single or married, quite often we get discouraged because we think we are the only ones attempting to change our lives. You aren't, not by a long shot. By getting connected I mean telling your friends and family what you are doing, commenting in forums and blog posts related to the changes you are making, and joining other communities such as JW's Financial Coaching on Facebook. By being connected you will receive pick-me-ups that will keep you going through the hard times whereas it's pretty easy just to give up when it's just you attempting to change.

Momentum can work two ways. When you have bad momentum, it seems like everything you do is wrong and  you feel trapped, like this is your destiny for the rest of your life. It's hard to get unstuck and heading in the right direction. But when you have good momentum, it's hard to go back to where you were because you have built up so much discipline and good habits. That doesn't mean you won't have any hiccups along the way but what it does mean is that you will be able to get past them.

How have you gotten Big Mo on your side and how do you keep him there?

In addition, I have finally created a newsletter for JW's Financial Coaching. This newsletter will be published once a month and will have exclusive content, allow you to learn of new products and features from JW's Financial Coaching first, and let you know about other good personal finance information around the net. You can register for the newsletter here, and in addition to receiving the newsletter, those who sign up will receive a free download of "JW's Manifesto on Money." This is a 20 minute audio recording sharing my views on money including the topics of spending, debt, saving, marriage and money, where money fits in your life, and how you can win with money. I'm excited to share the manifesto with my newsletter subscribers.

You can subscribe to future podcasts through FeedburnerStitcher SmartRadio, or iTunes. Or you may listen to the podcast on the JW's Financial Coaching Facebook Fan page. In addition, if you have enjoyed the show for a while now, please leave a review of the podcast on iTunes. For a step by step video of how that works, please watch this video on how to leave a review in iTunes.

If you have any comments, questions, or ideas for future shows you can send them to me and I will integrate them into a future show. There are two ways to get in touch with me: 1.) Email me at JWFinancialcoaching@gmail.com - Please put “podcast” in the subject line and keep your questions brief so they are readable on air. 2.) Simply fill out the form on the contact page. Please fill out your name, email, and your question/comment/suggestion and we will read it on air.

You can find prior editions of the podcast at the podcast archive page.