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!

April 14, 2017  
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  • 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

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