JW’s Financial Coaching Podcast Lesson #111-How to Pay Off $120K of debt in two years with Guest Monica Louie

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  • Guest Monica Louie joins us to talk about how her family paid off $120K in debt in two years
  • What motivated them to pay off so much debt
  • Why they sold their house to reach their financial goal
  • The power of having a common goal in your marriage
  • Quote of the lesson from Dave Ramsey

The JW’s Financial Coaching Podcast_111

Today we continue with our series of guest interviews by welcoming Monica Louie from OurDebtFreeFamily.com to the show. Monica is a fellow financial coach and today she shares how her and her husband paid off $120,000 dollars in exactly two years.

They always wanted to become debt free, but something really clicked when Monica heard a story of how another couple had become 100% debt free including their home. After Monica heard that story she felt like her family could do the same thing.

When hearing the Louie’s story, what stuck out to me was the extreme sacrifice they made to reach their goal. Not only did they downsize from the home they bought right when they got married, but they also sold a car, a motorcycle, and lived away from each other for a while to earn extra money.

Also listing out all of their debt and sticking to a budget each month went a long way towards keeping them motivated to pay off their debt.

Today the only debt they have is the one on their home and their goal is to pay that off by the time they are 40. Monica says that having a common goal and being on the same page with her husband has greatly impacted their marriage.

“If you want something bad enough, then you will do whatever it takes to make it happen” ~ Monica Louie

For more information on Monica please check out the following

This lesson’s quote is brought to you by Audible.com.

“You’ll only truly sacrifice when you passionately believe in the outcome” 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, 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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JW’s Financial Coaching Podcast Lesson #110-Taming the High Cost of College with Guest Brad Baldridge

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  • Guest Brad Baldridge joins us to talk about taming the high cost of college
  • When parents need to prepare for college
  • Common mistakes parents make when planning for school
  • What’s more important the name of the school or going to school you can afford?
  • Quote of the lesson from Satchel Paige

The JW’s Financial Coaching Podcast_110

Today we are joined by guest Brad Baldridge of TamingTheHighCostOfCollege.com to talk about how to plan for college.

Brad Baldridge, CFP®, is a College Funding Consultant specializing in late stage college funding planning and the chief podcaster of Taming The High Cost Of College.  He provides customized planning using the latest financial aid, tax, cash flow and academic strategies.

Brad is based out of Milwaukee, Wisconsin and about 10 years ago started to help people in late state college planning.

Brad and I discussed about what you need to do as a parent and as a student to get ready to pay for school. Both from an early planning point as well as a late staging perspective.

Brad also shares what are some of the common mistakes people make when planning for college and why it’s important to start early when preparing to save for college.

We also discuss topics such as how your college choice is an important step of the college selecting process, should your child work in college, and whether or not you should you should help your child pay for college in the first place.

For more information on Brad please check out the following

For more information on college planning please check out the following podcast I’ve done in the past on the subject.

Today’s quote of the lesson is brought to you by Podbean. To

“Don’t go to college, unless to get information” Satchel Paige

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, 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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JW’s Financial Coaching Podcast Lesson #109-Ways to become a better giver

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  • If giving isn’t a priority, it isn’t going to happen
  • We won’t give unless we are first content with what we currently have
  • How to become a giver year round
  • Why giving works best when the money is set aside to do it
  • Quote of the lesson from Anne Frank

The JW’s Financial Coaching Podcast_109

I think giving is something we’d all like to do a better job of, but usually don’t. There are a lot of reasons for that but today’s lesson is about encouraging us to become better givers.

Because let’s face it, when was the last time you gave and didn’t enjoy it? I think when we truly give money, not out of obligation or of guilt, it is one of the best things we can do with our money.

Then how come we don’t give as much as we’d like to? Today we’re going to discuss four ways to become a better giver. Now normally when we talk about giving, we’re talking more than just money, but today we’re talking about money.

The good news is that anyone can give! There isn’t a certain income threshold that prevents us from giving. Of course the more you make, the more you can potentially give, but don’t let a certain dollar amount prevent you from becoming a giver.

Being thankful for what you got

We won’t give unless we are first content with what we currently have. Sometimes we forget that we have so much and instead compare ourselves to what we don’t have.

But the mindset of being content means we free ourselves to give. Being discontent holds us back a lot of time with giving. I think that’s because we fee like we’re missing out on something if we give. But when we are in a state of thankfulness and contentment, we’re able to give without worries.

Doing it the whole year

When we think of giving most of the time it is around the Christmas season. There’s nothing wrong with giving at Christmas, but if that is the only time we give, I think we’re missing out.

Lisa and I have personally found that we give more when we do it consistently through the year. It builds up that giving muscle of discipline and giving has now become something that would crush us if we had to give it up.

Budget for it

Giving works best when you set aside the money to do it. When I coach people the first thing I have them do with their budget, after taking care of the four walls, is to put an amount in the giving section.

Putting giving in the budget works a lot better until waiting towards the end of the month and giving what is left over. That is because when you budget giving you are making it a true priority.

If you don’t have much to give, still budget for it. What if you are someone who likes to give more spontaneously based on need? No worries, you can still budget for that. Lisa and I did that last year and it has been a blast to give when needs arise.

Visit a place you want to help

Finally to help encourage your giving, I suggest visiting or volunteering to help causes that you are giving to or want to give to. For example if you want to give to your place or worship such as a church or synagogue, go ahead and plan a visit. Or if you are interested in a inner city or homeless program, make a trip down there.

By visiting and seeing what your money is actually doing and how it is helping your cause or impacting lives, that will be enough motivation to keep giving. Which will ultimately leave you to become a bigger giver and leave a bigger impact.

Today’s quote of the lesson is brought to you by Podbean. To

“No one has ever become poor from giving” Anne Frank

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, 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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Get a free copy of "The JW Manifesto on Money"
We respect your privacy.

 

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Friday Financial Tidbit-Why 401(K) loans make me cringe

One of things I keep hearing and reading about more and more is the 401(K) loan. It seems like they are becoming more common in the past few years and that people are even recommending them to help with paying off other debt or buying a home.

Why 401(K) Loans make me cringeThere are a few reasons why I disagree with this advice and actually think that 401(K) loan can be quite harmful to your overall financial life. The reasons are:

  1. Risky downside
  2. Lost opportunity to grow money
  3. Not really paying off your debt

Risky Downside

The main reason I do not recommend them is because they have a very risky downside. If for some reason you leave your job, you have 60 days to re-pay the loan in full or the IRS considers the loan an early withdrawal.

This means you will be charged a 10% penalty, plus your tax rate! So you are probably looking at the government taking anywhere between 35-40% if you lose your job, either expectantly or unexpectedly.

I know, I know, your job is secure and you will not leave. But layoffs as well as unexpected illness do happen and the last thing you need is a $10,000 tax bill from the IRS when you are out of a job and have no money.

Lost Opportunity To Grow Money

Another reason to avoid them is the lost opportunity cost to grow your money. By loaning the money out to yourself, you are unplugging money from a fund that has the ability to grow more than the interest you are paying back to yourself.

If you take a $20,000 loan out over five years and pay yourself back 4%, you will have ~$24K at the end of the five years. But if you leave them in good fund that average 10% over the time frame, you will have ~$32K at the end of the five years. That’s about $8K or 33% more than if you had borrowed your own money and paid it back!

Never Paying Off Your Debt

401(K) loans are sometimes marketed as ways to help pay off your high interest credit card debt or borrow for a down payment. But in doing that are you ever really getting out of debt?

Not really, instead you are just shifting the debt to another source. Yes you may have paid your debt off at a higher interest rate or used the loan to help purchase a house with “good debt.” But the debt is still there. When it comes to debt, the interest rate is not the problem, it’s the debt that is the problem. All of the maneuvering in the world doesn’t pay off the debt, it just puts it someplace else.

My point is that I think the 401(K) should be used for its original purpose, saving for retirement. Using it as a vehicle for loans or emergency savings is a poor use of the 401(K).

Treating our 401(K) like a savings account will likely derail us in reaching our retirement savings goals because we will be constantly unplugging good funds and your growth will become stagnant.

I personally cringe when someone tells me about taking out a 401(K) loan knowing that there are probably better options out there. Today it might make it easier to take out a 401(K) loan but I’m worried about how that decision today will impact tomorrow’s balance.

Want to learn more about my views on money?
Get a free copy of "The JW Manifesto on Money"
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JW’s Financial Coaching Podcast Lesson #108-Three things to do after you graduate college

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  • What recent college graduates can do to put themselves in position to succeed financially
  • How to know where you stand financially
  • Why developing a spending plan is a process, not an event
  • Why having a map when you are trying to get out of debt is extremely important
  • Quote of the lesson from Karl Pearson

The JW’s Financial Coaching Podcast_108

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JW’s Financial Coaching Podcast Lesson #107-How the credit score is the most overrated measure of financial success in the personal finance world

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  • The role that the credit score plays in the financial industry
  • What role should it play in your finances?
  • What a credit score can’t do for your finances
  • Build up other financial disciplines in your life, credit score won’t matter
  • Quote of the lesson from Tony Robbins

The JW’s Financial Coaching Podcast_107

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Friday Financial Tidbit-Three tips for budgeting your next raise

When was the last time you got a pay raise?

Did you handle it well?

After a few months did it even feel like you had gotten a raise?

3 tips for budgeting a raiseNo matter if a raise was scheduled, or a surprise, if it was a $100 month raise or a $2,000 month raise it still feels good to be recognized with a pay increase. However, often we can end up spending more on lifestyle than our raise if we are not careful. If for example after getting a $300 month raise, you go out and sign up for a brand new car payment of $385, in real term you did not receive a raise; you took in essence a pay cut! To help avoid that situation in the future below are three tips for budgeting a raise Continue reading

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JW’s Financial Coaching Podcast Lesson #106-How close to the debt cliff can I get before I fall off?

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  • Based on the article ‘How Much Student Loan Debt Is Too Much?
  • That question is a game of how close to the edge of the cliff can we get to before we fall off
  • What question should we be focusing on instead?
  • Rather focus on getting away from debt as much as possible
  • Quote of the lesson

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JW’s Financial Coaching Podcast Lesson #105-The Morality of Debt

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  • How are creditors and borrowers supposed to act
  • What a debt agreement actually is
  • Viewpoint from the borrower and the creditor
  • How to avoid the rat race all together
  • Quote of the lesson

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JW’s Financial Coaching Podcast Lesson #104-How to get back up after a financial setback

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  • We love to share our success, shy away from our setbacks
  • Financial setbacks occur frequently
  • How to recover from a financial setback
  • Financial setbacks are painful in the short run, but can be beneficial in the long run
  • Quote of the lesson

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