JW’s Financial Coaching Podcast Lesson #141-Lessons Learned from coaching: Trying to do 10 different things at once

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  • Continuing our series on lessons learned from coaching clients
  • What happens when we attempt to do several things at once with our money
  • The power of focus with our money
  • Why I love the Baby Steps so much
  • Quote of the lesson from George Horrace Latimer

 

 

 

 

 

 

The Problem

When it comes to the way we handle our money most of us are trying to manage it the best way we know how. I rarely run into someone who is just flying by the seat of their pants when it comes to how they handle money.

However a lot of us are trying really hard but feel stuck in our current situation. That leads to feelings of frustration, embarrassment, and shame that we can’t figure this whole money thing out.

The Cause

Now there is no one size fits all solution to everyone’s problem. But I have noticed that a lot of times we feel stuck with our finances because we’re trying to do ten different things at once. That is the reason why we feel stuck and hopeless.

Some common examples of the many things we are trying to do include

Now after going through the list, you’ll notice those are all good things to be doing! In fact I encourage you to do all of those things. But it is really hard to do all of those simultaneously and impossible to get all of those done at once.

That’s because money is finite. It’s hard to get traction when you are doing a little bit here and little bit there. You never see any wins or improvement and getting wins is a big key in getting the momentum necessary to keep going.

It also leads to not being very consistent with your money as you are constantly jumping from one money fire to the next. This easily leads to you becoming derailed in the pursuit of your goal.

The Solution

Rather than do ten things at once, I coach people to step back and reflect on what’s truly important in the moment and focus all your attention on that one thing.

By focusing on one thing at a time you are going to see improvement in that area right away. That will keep you motivated to continue to pursue it. It will also lesson the time you are actually doing that goal and soon you’ll be able to move on to the next item on your list.

There is an incredible power to having your money focus solely on one or two main goals. We often think slowing down and doing just one thing at time doesn’t help out. But there is actually a multiplier effect when a singular focus is present.

Baby Steps

That’s why I love the baby steps so much. It sets clear guidelines on what to focus on and in what order. In case you aren’t familiar with the baby steps here they are in order.

  1. Save $1,000 in an emergency fund
  2. Pay off all your non-mortgage debt using the debt snowball method
  3. Save 3-6 months’ worth of expenses in an emergency fund
  4. Begin to invest 15% of your income into retirement
  5. Save for your children’s education fund
  6. Pay off your mortgage
  7. Build Wealth

You start with saving $1,000 as your first goal. You don’t do anything else with any extra cash. You don’t pay any extra on your debt, you don’t invest, and you don’t go on vacation. You save $1,000.

Then you pay off your debt, one at a time. You don’t still don’t invest, go on vacation, or save up a down payment on a home. You put all your extra money on your smallest debt. Then the next smallest debt, and on down the line until you are debt free.

Now are you going to be doing just one thing with your money for the rest of your life? No, eventually once you are debt free and have an emergency fund that is when you can do things like invest in your retirement, save for your children’s education, and travel.

We have good intentions when we try to do 10 different things at once, we really do. But that is not the way to get control of your money. It’s a good way to get frustrated and become frustrated.

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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JW’s Financial Coaching Podcast Lesson #140-Lessons Learned from coaching: Financial decisions today impact our available options tomorrow

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  • Continuing our series on lessons learned from coaching
  • How are decisions impacts our future
  • Why it is hard to look forward in our instant gratification culture
  • What our options will look like if we make these decisions today
  • Quote of the lesson from Nathan W. Morris

 

 

 

 

 

Yes we’ve all heard how our decisions today impact our future. But in our instant gratification culture it’s hard to look ahead and make decisions for tomorrow while seemingly hurting our ability to enjoy life in the present.

But our decisions today do impact our available options for our future. Today’s lesson we are continuing with our podcast series on lessons learned in coaching by sharing where this is an issue, why we put certain things off, and why ultimately we should do them today rather than later

The decisions we tend to want to put off

There are a lot of examples that come up when I’m working with clients and they are pretty broad issues but here is a list of the common ones.

  • Taking control of our finances-realizing the impact money has on our life
  • Doing a monthly zero based budget
  • Paying off debt
  • Starting to invest
  • Starting a side hustle

Why we put them off

We put them off because we look at our life how it is today, instead of how it will be 10 years from now. Chances are your life will look different from either a family, friends, career, or lifestyle perspective.

We also put them off because currently we might not have much in terms of assets to manage so we don’t take control of our finances.

We might be scraping by on $20,000 or $200,000 (seriously) and don’t think we have any extra money, so why bother budgeting?

Our debt might not be impacting us because the minimum payment is “comfortable” and everyone else has debt.

Maybe we can only afford to invest $50 into our 401(K) a paycheck so why bother as it won’t add up to much?

We’re so busy so we never get that side hustle off the ground.

Why do it then

How will doing this then give us future options? It will in a variety of ways:

It will start to develop habits that will last a life time and those habits will lets us take control of our finances. This will enable us to weather the storm during life events such as marriage, children, job loss, etc. It will also open doors to more success and those habits will allow us to handle the bigger success.

The decision to pay off our debt now, instead of later, will allow us to prosper which in turn will stop us from going further into debt in the future.

When we invest for our future, we look up and one day we actually have money in our account that gets our attention. That money in turn continues to get greater and then we’re able to put ourselves into position to live the retirement we want to.

Having ownership in an asset that creates income either passive or normal, like from a side hustle gives you a variety or career and income potential.

There will always be a reason to put off something. Your age, relationship status, children or no children, income, too busy, etc.

But instead of finding reasons why not to do something, instead make a financial decisions today that might not improve your life next week. But will make your life easier, less stress, help your spouse or family, and give you more options in the future.

Other resources mentioned in the show:

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

“Everytime you borrow money, you’re robbing your future self.” ~ Nathan W. Morris

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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JW’s Financial Coaching Podcast Lesson #139-Lessons Learned from coaching: You want me to cut back on retirement?

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  • Continuing our series on lessons learned from coaching
  • When to cut out retirement savings
  • What to do with the money instead
  • Why the key word is TEMPORARILY
  • Quote of the lesson from Mark Twain

 

 

 

 

 

Every time I suggest it to a client, I get a weird look from across the table or there is an awkward pause on the other end of the phone line.

Them-You want me to cut back on retirement?

Me-Yes I do

Them-But what about my age? The match? Compound Interest?

Me-Don’t worry it is only temporary and you’ll more than make up the lost interest gained, match, and contributions in no time.

Today’s lesson in the lessons learned while coaching series is about cutting  back on retirement temporarily to reach goals. This lesson is a little different than the first two in the series because investing for your retirement is a good thing. That is why I get weird looks from people when I suggest that they do it.

Now I don’t recommend you do it 100% of the time, but on certain occasions I do push the suspension of retirement contributions issue.

When?

Typically the only reason why I would temporarily postpone retirement savings is when you have a special financial goal you want to accomplish and you are going to be super focuses on completing that goal.

Basically the money must be used for good, not for life style inflation, self-indulgence, or making yourself look good. It’s when you are going to use every dollars not put into investing and instead put it towards you goal.

With that being laid only, I recommend that when you have debt (excluding your mortgage), to halt any retirement contributions and instead put that money towards your debt.

That is regardless of how much your employer matches, how old/young you are, or if the market is hot or not.

Why?

With that being said I still get funny looks and comments like “You mean stop ALL retirement savings?” Which my answer is yes.

It’s a tough thing to do because we’ve been told that we need to save diligently to have enough money for retirement and that in our country a lot of us are under prepared in that area. Also by stopping retirement you’ll lose out on the power of compound interest and you’ll also miss out on the match.

While I can’t argue any of those points, because they are true, I can try to shift the focus a big. I do believe that the power of being out of debt supersedes retirement contributions.
What I’ve found is that by being focused on one singular task you are able to get that task done better and faster than if you are trying to do three other things at once.

Also by getting control of your money and paying off your debt you’ll more than make up for the temporarily loss of compound interest and the company match by having more money to invest in the long run.

My recommendations

I look at this as a two year thing. Often if you are super focused and intense on paying off your debt, you can become debt free or close to being debt free in two years.

So if you stop funding your retirement and take ALL that money and put it towards your debt, not using that money for lifestyle you will gain control of your income.
Now with that being said you need to be serious about it. If you are ‘kind of” going to get out of debt, then it probably isn’t worth it.

But what if you have a ton of student like student loans and it is going to take your longer than two years. Would you still recommend holding off on retirement savings? The answer is yes, I would give it two years and see where that takes you. If you are still a long ways off then I might consider starting contributing to retirement to get the company match. But no more than that.

Bottom line is that investing is important, but so is being debt free.

Other resources mentioned in the show:

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

“The secret of getting ahead is getting started”. ~ Mark Twain

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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JW’s Financial Coaching Podcast Lesson #138-Lessons Learned from coaching: The impact of debt on our life

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  • Continuing our series on lessons learned from coaching
  • Learning the impact of what debt does to our life
  • The normalization of debt in our culture
  • Actions to take the realize the impact of debt on our life
  • Quote of the lesson from Publilius Syrus

Part of the job of a coach or mentor is the ability to shed light on an area or issue that needs to be improved upon.

The Impact of Debt on our Lives

One of the common areas I get to shed light on when I’m coaching with clients is the impact of debt on that individual or families life.

It’s very rare that I work with someone who has no debt what so ever. Often the client knows how debt is impacting their lives but that isn’t always the case 100% of the time. Sometimes I work with clients who don’t realize how much stress, negativity, and financial loss their debt is costing them.

On today’s lesson I’m going to continue with a series I started last lesson on lessons learned in coaching and today’s topic is about the impact debt has on our lives.

Part of the reason why we don’t realize how much our debt is impacting us is because debt itself has become so normalized that often we can’t imagine life without it.

The problem with that line of thinking is that if we think debt is normal, we’ll never look for ways to get out of it and instead use debt as a way of life.

How it Impacts Us

But debt does have an impact on our lives. Some more so then others and most of the time debt is negative. Debt impacts mostly through the following five ways

  1. Pre commits future income
  2. Increases the amount we have to cover for our “needs”
  3. Reduces our options
  4. We’re paying interest, not earning it
  5. Opportunity cost

Recommendations to Better Understand and Quantify the Impact

With that being said what do I recommend people do to realize the impact of debt in their life?

First I recommend you take the time and sit down and write down your down. Every single one. If you have 13 different student loans, break each one out. Then list them smallest to largest as you’ll use the debt snowball method to eventually pay them off. Often when you write down your debt you get that “ouchie” moment of realization instead of having a general idea of your debt floating around in your head.

Second, then take all your debts and add up the monthly payment amounts. Separate the mortgage debt, if you have any, from your non-mortgage debt.

Next determine how much interest you are paying a year. A good quick and dirty way it to take your latest statement from Dec of the previous year and it should list the total interest paid. If you want to be more advance, take that total and divide by 365 to determine your daily interest charge.

Finally doing the three steps above should give you a better idea of how much your debt is impacting you. You can then ask yourself the question what you could be doing instead with that money each month. It is every eye opening to see how much money is going out each month and how much interest you are paying a year and it can be a good motivational tool to pay off the debt.

Other resources mentioned on the show:

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

“Debt is the slavery of the free”.“ ~ Publilius Syrus

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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JW’s Financial Coaching Podcast Lesson #137-Lessons learned from coaching: How to get your spouse on board

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  • Kicking off a new series
  • Getting on the same page with your spouse on your finances
  • Why this is important to do
  • Why it is initially hard, but worth it in the end
  • Quote of the lesson from Dave Ramsey

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JW’s Financial Coaching Podcast Lesson #136-Answering your questions on balance transfers and taking vacations while on debt

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  • Answering listeners questions
  • How to ask for a balance transfer
  • What the biggest issue is with your debt
  • Should you take vacations while in debt?
  • Quote of the lesson from Rory Vaden

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JW’s Financial Coaching Podcast Lesson #135-How you can take more risk when you’re winning with money

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  • What financial risk is . . . and isn’t
  • How we took a risk with our health insurance
  • Why we were able to take that risk
  • Reasons to get your financial house in order
  • Quote of the lesson from Tony Robbins

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JW’s Financial Coaching Podcast Lesson #134-How Debt Free People Think

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  • In what ways debt free people think differently about money
  • The demographics of those who are debt free
  • Why giving plays a big role in those who are debt free
  • How you can help confirm my observations
  • Quote of the lesson from Wayne Dyer

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JW’s Financial Coaching Podcast Lesson #133-How to determine and achieve our goals in the upcoming year

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  • Why goals work
  • How to create SMART goals
  • The power of writing your goals down
  • Where to determine what your goals are in the first place
  • Quote of the lesson from Earl Nightingale

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JW’s Financial Coaching Podcast Lesson #132-Why my wife and I spent more than we made in 2016

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  • How Lisa and I spent more than we made in 2016
  • Why I felt that we were throwing money away left in right this summer
  • Why Savings is our future goal
  • What are goals are for 2017
  • Quote of the lesson from John Maxwell

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