How To Pay Off a Mortgage When You’re Poor

It is ok to struggle with your money, and it’s ok to talk about it. But most of us don’t talk; most of us struggle in solitary silence. This is a story about my friend Anne who struggled for years, and then she started talking about it. Next she started doing something about it.

Anne is having a parade, socially-distanced, on her 55^th birthday this summer. Friends, family and colleagues are walking with her to Wells Fargo to make her final payment on a mortgage she took out in her 20’s; a mortgage she could barely afford.

Paying off a mortgage when you’re financially comfortable is celebration-worthy, and 55-year-old Anne is financially comfortable. But paying off a mortgage when you’re poor? That is parade-worthy. The parade isn’t just a celebration of her last payment; it’s also a celebration of a younger Anne who struggled through years of barely being able to make ends meet. Years of beans and rice, driving old cars, and do-it-yourself home projects because that’s all she could afford.

When 20-something Anne first bought her home, she was making mid-$30,000’s. It was a tight stretch to make her mortgage payment. Two years later it became even tighter when she shifted her career to urban forestry, choosing a job she had passion for, but at a nonprofit that paid significantly less than her former job. Suddenly, her $35,000/year struggle was a $23,000/year struggle. It was a career shift that aligned with the impact she wanted to have on the world, but it came at a steep price. Maintaining a mortgage and home maintenance on a $20,000, or even a $30,000 or $40,000, annual salary is draining.

I met Anne about a dozen years into her home ownership struggle. She loved her home, but she did not love the struggle. We spoke about it a lot because she was trying to figure out how to stop struggling, and because I talk about money a lot. I talk about money a lot because I’m an accountant, but more so because I had my own period of life where I struggled rather spectacularly. For me, that struggle turned my accountant-background into a passion for financial coaching, and eventually led to publishing a creative workbook on personal finance.

So it’s through that lens that I tell Anne’s story of how she stopped struggling, stopped living paycheck to paycheck, became financially comfortable and paid off her mortgage six years early.

Most people think that if they could figure out how to spend less, pay off their credit cards, or some other magic balancing of their financial picture, then everything would be ok. All too often the people I’ve worked with aren’t focused on the one thing that would make the most difference: earn more. If Anne was to stop struggling, she needed to make more money.

When you ask Anne how she accomplished paying off her mortgage, she’ll say that my book gave her the roadmap she needed. I appreciate her testimonial. Indeed, the book was written for people just like her: people living paycheck to paycheck; people that are ready to make a change. In a way, Anne helped me write it - much of the book came from evenings sitting on the porch drinking a bottle of wine and talking about money, the struggle, the dreams and the goals.

However, it is rarely just one thing that changes our finances. Rather, it’s a synergy of intention, tenacity, consistency and a dedication to oneself and one’s future. She’ll say it’s the book, but I’ll tell you that before the book, there were other milestones that prepared her for the guidance in the book:

• She began a habit of selecting annual personal and professional goals, a suggestion from a few life coaching sessions. She shared them with those close to her.
• She continued to gather certifications that would make her more valuable in the workplace.
• She courageously joined a financial mastermind group – a small group of peers that met monthly to deeply discuss the challenges they were having and make commitments to tackle those challenges.
• She began a habit of investing - small amounts, but it was the habit that mattered.
• She began a habit of philanthropy. Again, small amounts, but habit matters.
• She made another career shift, still doing the urban forestry work that matters so much to her, but this time, earning more, not less.

By the time she began reading my workbook her financial world had already improved. However, this is where many slack off. Once they get beyond the struggle, they don’t have the same urgency to focus on their money. They don’t take advantage of their newfound extra money. They don’t spend as much time working on their money. They don’t use their newfound extra money with focused intention.

Not Anne. Anne is intentional, tenacious, consistent, and dedicated to herself and the world around her. Now that she had more money, she focused more than ever. She paid off a second mortgage and she began in earnest building her emergency reserves and retirement (though she’s still playing catch up for her many years of working without a robust retirement program.) She’s also traveled more and started driving a car that cost more than $200.

Then she set her sights on the prize: her mortgage. She set a goal to make her final mortgage payment on her 55^th birthday and have a parade to celebrate. I’m so proud of her; she has met her goal.

I asked her what she’s going to do with her extra money. Her answer shouldn’t be a surprise to those that know her: “Two things – philanthropy and retirement savings. When I was young, I always wondered who those people were whose names were on donor walls. As a lifetime community volunteer and small-dollar contributor, it means a lot to me that I can now make a difference financially. Sacramento’s LGBT Center’s capital campaign will be getting a chunk of my former mortgage payment for the next few years.”

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Anne Fenkner is an ISA Certified Arborist/Municipal Specialist making a difference in our world through urban forestry.

Stacey Powell is founder of Finance Gym and Creating Answers, a CFO and financial coaching firm, and author of The Finance Gym Action Plan for a Better Life with Money.

Saving $46,728 by Bucking America's New Car Norm

My friend recently sold her 1992 Volvo that she’s owned since 1996.

I’ve had countless conversations with people trying to balance their financial life, and when the conversation turns to their transportation expenses, excuses pop up faster than a Ferrari. The most common excuse: “I don’t want to deal with the high maintenance cost of a used car.” I sketch out the math for them, I explain that if they set aside half of their current car payment for maintenance, all but the most serious of problems would be paid for, and I tell them how much I’ve saved by my car choices. Still, it’s a rare instance I convince someone that they can reach their goals by ratcheting back their transportation costs.

It’s under this context that when my friend, also a financial professional and frugal by nature, told me she kept a maintenance cost spreadsheet on her 1992 Volvo that I got excited. I knew that someday I was going to have a treasure trove of data to share with clients and readers. Well, this year is the year. In her spreadsheet calculations, after 22 years of ownership, the math no longer penciled out on getting the Volvo fixed. She’s moved on to a Prius.

I set about researching the historical average expenditures by U.S. households on transportation and calculating how much she saved by bucking the American norm of getting a new (or new to you) car every 6-7 years. The grand total she saved over the 22 years she owned her Volvo? $46,728.

She’s likely saved a lot more, perhaps $10,000 to $15,000, on insurance costs and registration. Most people, when considering the cost of buying a new car, only look at the monthly payment. They don’t take into consideration all the other factors that they’ll be paying for: interest, higher insurance, higher registration, warranties, and for those leasing, the “turn-in fee.” The largest “expense,” though, is depreciation. A new car loses 20% of its value in the first year, and 15% each of the next nine years.

American’s love their cars. I get that. Personally, I don’t care about cars, so it’s easy for me to choose to spend less on transportation so that I can meet other goals. And if you’re meeting all of your financials goals, then how much you spend on a car doesn’t really matter. But if you’re struggling, living paycheck to paycheck, not funding your retirement, or having constant financial emergencies, perhaps it’s time for you to take the Volvo approach.  

If you'd like to learn more about spending money, and saving money, Stacey's book is available on Amazon and at thefinancegym.com, and videos available at You Tube.

My Dad and the Value of having an Appointment with a Financial Advisor

Welcome to "The Finance Gym Action Plan for a Better Life with Money" video series. My name is Stacey Powell and if you're ready to not just know better, but do better your money, then you've come to the right place.

The last several videos, I've been focusing on Chapter 7 in my book, which is the grown up stuff.

All the stuff which is for most of us not really fun to do. Making decisions about insurance. Hiring a financial planner. Do I hire a tax accountant or not?

One of the things I try and do in that chapter is I try to help people make a decision about: is this something that I can learn on my own, and make decisions for myself? Or is this an area where I should go hire a professional?

And so today I'm going to share a story with you about my Dad, may he rest in peace, and sorry Mom, if you're watching this, but you know it's true.

I love my Dad, and anyone in my family will tell you: I'm just like my Dad. He was super smart, he was highly capable, and he loved learning. It's really unfortunate that he lived in a time mostly before the advent the internet until he got into his later years. He was also a little mistrusting of salesmen, even though he was kind of a salesman.

What all of that meant for him was he would not seek the advice of a financial planner until he had studied everything he needed to study to learn to make his own decision. Then, maybe, he'd go see someone. The same thing about insurance. And not just simple things like car insurance, but complicated insurances like long term care insurance.

When I started getting more and more into financial stuff and realized my parents had two long term care policies, I asked "Why do you have two long term care policies?" His answer? "I haven't done all the research I need to decide which one to keep." So he just kept them both. There's many of those stories that my brothers and I chuckle about from time to time.

Why didn't he make decisions? Because he hadn't fully studied everything he needed to study to make a final decision.

Here's what I like to teach people using my Dad as an example: sometimes the best reason to hire professionals is to have an appointment and a deadline.

For my Dad, a deadline would have changed everything. He put stuff off because he was such a perfectionist and he was so smart that he wouldn't get to the point of making a decision. If he had just hired a financial planner and put a little bit of trust in that person, or simply had an appointment he had to show up to, it would have been an impetus for him to get all that reading done, go see that person and make a decision.

Left to our own devices, we all walk around thinking, "Hmmm, I should get my estate planning done; I should probably buy life insurance; I should probably take care of that long-term care insurance." But we don't have a deadline.

Hiring a financial planner provides you an appointment and a deadline to get it done.

On any given day, what are we going to do? Do you want to go to swim practice with your kids or stay home and make decisions about insurance? It's a no-brainer.

When I started the firm Creating Answers, a financial coaching company, providing consistent accountability was one of the core objectives. Once a month, clients have an appointment to get on the phone or walk in the door and talk to us about their money.

Are they getting value from that conversation? Absolutely. But I'll tell you what they're really getting value from: every single month having an appointment to talk about their money.

So take a lesson from my Dad. If you don't have an appointment with someone in your world to talk about your finances, go make one.

If you'd like to talk about this more, come join us over at our Facebook group, Team Do Better, signup for the videos below, or go sign up for our weekly newsletters at Finance Gym. 

How to Decide the Right Level of Insurance For You & Your Family





Hi, welcome to the Finance Gym Action Plan for a Better Life With Money video series. My name is Stacey Powell and if you're ready to not just know better but do better with your money, then you've come to the right place. 

Today we're going to talk about insurance, like oh my gosh, and all of the stuff around insurance. I'm going to show you a little visual that I have in the book of the cogs around you and all the kinds of insurance and related types of things there are. Everything from health insurance which is kind of one of those things that we should all have to auto insurance to the smaller things like flood insurance, renters insurance, dental, disability, long-term care. Oh my gosh! The list can go on and on and on. The chapter of the book that that graphic is in is called the grown-up stuff. Dealing with it sometimes is like uhhh.. it feels a little like drudgery. A few videos back, I talk about adulting. When we finish a task like making a decision about insurance it's like good job Stacey, you did it. You sat down, you read, you talked to a professional and you made a decision. You know some of those are easy, like auto insurance it's kind of illegal to not have auto insurance right. Health insurance, it's kind of illegal to not have health insurance or at least it's very costly. But how do you make decisions about all the other kinds of insurances that yea it would be great to have it when you're trying to get your budget right sized with your income and your spending and if you buy all those insurances, are you going to have enough money left over to you know put food on the table or take a vacation? Where do you draw the line? Where do you draw the line? And that's the cruz of what I want you to walk away from this video. I can't tell you where to draw the line. You have to do a lot of reading, a lot of studying, you have to talk to professionals and you have to follow your own intuition about where you draw that line. But here's the thing is in the book I have you respond to each one of those. Do I want it? Do I need it? If I had enough money, would I just go buy it? And at what point does it become important? Life insurance, like here's my truth about life insurance - you've all hear me talk about how much I used to struggle when my daughter was little. But the truth is like life insurance isn't even a choice because if something happened to me it WOULD NOT be okay that I didn't leave something to help her become an adult. It's not okay. And the truth is I didn't need a one million dollar policy. I brought what was for years a $25/mo policy that would have left her with enough money to at least get her through college and help her get on her feet after that. And you know I was really looking forward to being done paying for life insurance at some point I thought you know when she turned eihgteen maybe. But now I realize no no no no, it's still for me that line is still no. I need to have life insurance. I'm older so I don't get to pay $25/mo anymore but no matter how challenging our financial situation was in those years, that is a payment that I never missed. And so that's what I want YOU to think about in this conversation about insurance is what is it that you know that there's a line that you should have. Go do your homework, go see how much it costs, if you think you can't afford it an you have kids like just go find out how much it is because you can at least maybe get half way there. And half way is better than nothing. So that's what I have to say about insurance. There's a lot more in the book and the truth is theres a never ending amount of information about this. I encourage you to learn, read and seek the advice of a professional who's going to teach you and not just sell you a product. 

If you have anymore questions or what to chat about this, come over to our Facebook Page group we have called Team Do Better, sign up for our weekly newsletter at www.TheFincanceGym.com or sign up for our video series below. And have a great day going and making decisions about insurance!

Finance Gym Weekly Workout - Should You Do Your Own Taxes or Hire an Accountant?

Hi, welcome to The Finance Gym Action Plan for a Better Life with Money video series. My name is Stacey Powell and if you're ready to not just know better but do better with your money then you've come to the right place. 
Lately we've been talking about the grown up stuff around our money. Today's grown up stuff? Taxes... Sorry, we all have to like what's that saying? Death and taxes. We all have to do it! So today I'm going to teach you a little bit about how to choose how to get your taxes done. I get asked that question all the time.. Should I do it myself? Who should I hire? Where should I go? And for me, it's about how complicated are your finances? How complicated is your world? If you're not married, you don't have kids, you don't have a house yet, you don't have anything unusual going on then you absolutely should do your own taxes. And here's why.. Simply by doing them, by buying Turbo Tax or whatever tax software product it is out there, letting it walk you through the questions, seeing where it puts the answer and really kind of paying attention, hitting the little help button, the little question, googling things you don't understand, you're gonna learn, you're gonna get a little tiny tax class and have a more comprehensive understanding and that's good for you and then as you add complications on, have a kid, well you've learned then you're gonna be able to learn what that means. Get married, you're gonna be able to learn that. Buy a house? Maybe you're gonna be able to learn it. Then it starts to get a little complicated. Did you get stock options at work? Did you have to like sell back some stock options? Then it starts to get super complicated. Did you become a business owner? Then it really starts to get super complicated and that's the point. The point at which you kind of start going, maybe I should really seek the advice of someone who is experienced. You'll know when it's time I think. And then who do you hire when it's time? Do you go to one of the big box tax places? Maybe. Um.. Well.. Maybe but I'm often hesitant to send people there because, not always but often the people there they're well trained, they're well supervised they are often not very experienced. So I'm always hesitate to send people to a big box place. That's not to say there aren't some good ones, there are. Shockingly enough, they aren't that less expensive than a good tax accountant. I have for years sent a number of my clients to just a few people, I like to talk about Mike. I send people to Mike because when I send people to mike, theres a couple of things I know, one I trust the man personally, two I know he's going to teach people about their money. Not simply hand them a 50 page questionnaire, have one his staff people enter it into their tax software and spit a tax return back out without actually talking to you about it. I think that's what it really comes down to, is that when you're hiring somebody, you want to hire somebody who's going teach you a little bit. Somebody who has been doing this for a while and is trustworthy and is going to get your stuff done. You don't want to hire the person who just has the best tax strategies in the world. Unless you're in a unique situation there are very few best tax loopholes in the world. If you have the kind of money that can afford you that, you're not watching this video and there are very few tax strategies for you. It's simple, we earn money, we pay taxes, that's the truth of the matter and any reasonable tax account will tell you the same thing. 
Hopefully I've taught you a little bit about how to get your taxes done. If you would like to ask me some more questions, come on over to our FB group Team Do Better and you're welcome to ask questions in that forum. You can sign up for our newsletter at www.TheFinanceGym.com and subscribe to our video series below. Now go have fun doing your taxes!

Finance Gym Weekly Workout - Questions to Ask When Hiring a Financial Advisor

Welcome to the Finance Gym Action Plan for a Better Life With Money video series. My name is Stacey Powell and if you're ready to not just know better but do better with your money, then you've come to the right place.
This little series that I'm doing right now is on Chapter 7 in the book, the grown-up stuff. I call it the grown up stuff because when you're done doing the stuff in this chapter, you're going to feel like an adult. If you want to hear more about that go listen to the first video in this little series. Today the adulating that we're going to talk about is hiring a financial planner. I get asked this question all the time and frankly this was one of the hardest parts of the book for me to write. I wanted to concisely explain to people how to make the decision of what kind of financial advisor to hire. If you've paid any attention then you know that the field is this wide. It's crazy, there's everything from somebody that works for your local bank to somebody who works at a big huge brokerage and really is just an investment advisor to brand new people who are just starting out and are calling themselves financial advisors and they're certified but they don't really have any experience yet to people who have put the time and effort in to become a certified financial planner or an equal certification. 
When people ask me, when my friends ask me who to hire, one of the first things that I always say is you want to hire somebody who is a certified financial planner. There are some other certifications that are equal but that's kind of my favorite go to. If someone has put the time and effort in to go to that level of knowledge, then they're somebody who's really committed to giving you the best financial advice possible. And i'm not saying that somebody just as a simple license or two sell you you financial products don't care I'm sure lots of them do care but if you're really kind of looking at  what is being offered out there you want somebody who has been through life cycles with their clients, emergencies and how that played out. Somebody who's walked through retirement, who have seen what financial decisions on this side of your life, how they impact that side of your life, and so you don't necessarily want somebody new out of the gate. The truth is some of you watching this video can't necessarily afford somebody who has ten years of experience. So then you're just gonna have to go with a little but of intuition. If you look int the book I have a list of eleven questions that I recommend you ask whenever you're interviewing a financial advisor. One of the base pieces of advise I give to people is interview three before you make a decision so that you kind of get a good feel for what's out there. I think my last piece of advise is you want to hire somebody who you feel like is going to be a teacher for you. You don't necessarily want to hire the person who was you know the math wiz and has a degree in business. Frankly, my go to advisor, the one that I sent my mother too and my closest friends - she was a i think anthropology major and museum studies like minor something like that. She's smart, she wasn't necessarily a numbers person, but what she really is is a teacher. She has learned everything she had to learn to become an excellent financial planner but more than anything she is patient and takes the time to teach people that i send to her what they need to learn. And so I hope for you when you go out looking to see who it is you want to hire that you find somebody like that.
So, this stuff isn't easy to do, if you want a partner in all of this, please come over to Facebook and join our private group called Team Do Better also sign up for our weekly newsletter at www.TheFinanceGym.com or subscribe to this video series. Thanks!

Adulting: Achieving Financial Security For Yourself & Your Family



Welcome to the Finance Gym Action Plan for a Better Life with Money video series. My name is Stacey Powell and if you're ready to now just know better but do better with your money, you've come to the right place. I'm getting ready today to film Chapter 7 which is call the "grown up stuff". When I was picking out chapter names everybody said, "you can't name it that". I actually wish that I would have used a word that my daughter uses. She's 21 and she uses the word "adulting", and I wish I would have just named the chapter adulting. Let me tell you a little secret if you're like under the age of 40, the truth is you learn this when you get to be 50 and then 60, I think that we all think that when we grow up, somehow it's going to be easier to go see a financial planner or easier to make decisions about insurance or easier to do estate planning. Maybe I just don't hang out with the right people but let me tell you, it doesn't get easier. And almost everybody that I know when they do one of those kinds of tasks that we all kind of dread and don't really want to get done, we all feel this like wow good job Stacey you got that done! And I don't care who it is that I've worked with, whether it's been somebody struggling on a $40k salary or one of my multimillionaire clients, they've all still felt the same way, the uncertainty, the dealing with professionals and you know not really feeling like ah man I don't know as much as this person and I have to trust this person, am I trusting the right person and just the general drudgery and then the complication you know. I'm a finance person but sometimes some of these conversations about insurance is complicated and somebody who's an insurance agent knows a ton more than me even though I know a lot! So I like the word adulting and in my next series I'm going to be talking about the stuff of adulting. My take away for today is, I don't care about how old you are it's alright to smile at yourself it's alright to laugh at yourself a little bit. Just roll up your sleeves and get it done be a little easy with yourself and you can give yourself a little prize at the end in whatever adulting thing you're putting off doing. As always, if you want some support come over to our Facebook and join our team Do Better Group, you can sign up for our newsletter at www.TheFinaneGym.com and subscribe to our Youtube series below. Have a great day!

Today's Second BIG Announcement!

We told you today would be BIG and we meant it! We're thrilled to be hitting the road for a 36-city Piggybanks in the Park tour, a grassroots campaign where we'll talk about the REAL stuff of money, teach how to have a better life with money, and leave you with some serious "ah-ha's about the next thing you can do right to be better with your money.

Visit www.thefinancegym.com for tour dates and information.

Today's First BIG Announcement!

I'm excited to announce what so many of you have been asking for --- today A Better Life with Money officially launched on Amazon! If you loved the book, let your friends know, or get a second copy!

Laugh with me a little and go watch the Better Life with Money commercial below.

Purchase The Finance Gym Action Plan for a Better Life with Money on Amazon by clicking on the image below.

Video Transcription:
Do you ever feel like you aren't on top of your money like you should be? Like you just don't know what to do next? Do you ever get sick and tired of living paycheck to paycheck and all the struggles that come along with it? If any of that rings true for you, then The Finance Gym Action Plan for a Better Life With Money is the book for you.  My name is Stacey Powell and I'm going to tell you a little bit about why I wrote this book for you. Be assured, if any of those statements ring true, you are not the only one, there are millions of other people just like you who struggle with their money walking around every day with this nagging little voice "hey! you can be better with your money" or that really not so nice voice saying "are you ever going to get your money shit together?" For me, those voices came like the peaks and valleys of a roller coaster and they would never ever stop. If you're ready for your little voice to whisper "hey, you're good with your money" and "hey you handled that like a champ!" then I want you to start working on this book. You can make that happen, I did! In this book I walk you through every step that I took.  Why should you learn from me? Other people have degrees and credentials too, so what makes me different from other experts? I've been where you are. I've struggled to stop living paycheck to paycheck. I know what it feels like to have debt payments that you can't make. I've sworn off credit cards only to have a huge car repair bill that I didn't have any way to pay for! I let year after year go by saying "next year I'm going to start a savings account or a 401k" but next year never came.  The cycle became routine for me until the day that I got sick and tired of living the way I was living. On that day I chose to stop relying on my financial know how and start using a holistic approach to tackling my money issues and you know what happened? I began to breathe easier and I stopped feeling broke even though sometimes I still was. I started to feel like I was making good money decisions. My money got stronger and working on my money started to actually become fun.  To this book, I bring my life experiences of changing something that felt like it was completely unchangeable. I also bring the lessons of countless people that I've financially coached through highs and lows. For many people, money carries this huge emotional punch, it impacts our lives our hopes and our dreams. If you're ready to find yourself at peace in feeling strong about your money then take this journey with me. Get your copy of the Finance Gym Action Plan for a Better Life With Money. Start here, start now. Don't just know better but do better. 

We have an announcement coming! Stay tuned to find out where the pig is headed...

Develop Good Money Habits BEFORE You Win the Lottery

Welcome to The Finance Gym Action Plan for a Better Life with Money video series. My name is Stacey Powell, and if you’re ready not just to know better but do better with your money, then you’ve come to the right place.

We’ve been talking about our relationship with money and today’s topic is going to be about winning the lottery or getting a large inheritance.

Have you ever heard that 70% of the people who win large lotteries, 5 years after they win, are in a significantly worse financial position than before they won the lottery?

It’s crazy! Willie Nelson, Cyndi Lauper, 50 Cent, MC Hammer all have bankruptcies. Wynonna Judd, and I love how she talks about it rather famously, had a ton of bad money habits!

So when she became popular and was making just a ton of money, it didn’t matter. Her problems got worse because she had exponentially more money to make problems with.

What really, really matters in our financial life is our habits. I had clients tell me before we started, “Oh when I make it, I’m really going to take what you’re teaching me and implement.” No! What you really need to do is implement now when you have nothing. The person that puts $5 in a savings account when they have nothing is the person who will then put $50 in his savings, $100, $500, $1000.

When you practice how to do something and create healthy habits, even when you feel like you have nothing, it has a huge impact and exponential growth on your financial life. You don’t need to wait to win the lottery. You don’t need to wait to get an inheritance, to start creating good habits.

I’ve had a number of clients over the years come to me, really disappointed in themselves and what they called frittering away an inheritance. I have this – one client, in particular, had a really sizable inheritance, and she specifically came to work with me because she wanted to honor the money that her mother left her.

She worried whether she was going to be able to honor the money her mom left her and that was the subject of our financial coaching. She looks back on the decisions she made and even though – I’m not saying that she didn’t fritter here and there. She did, but she did it mindfully and by using really good habits around her money.

So that’s what I’m going to leave you with today. A little more serious than the typical “I won the lottery” conversations might be but it’s true. Work on your habits and then when you get that next pocket of money, do something great with it.

If you want to talk about this anymore, come join us over on Facebook. We have a private group called Team Do Better. Ask to join. We'll let you in. Subscribe to these videos below right here on YouTube or sign up for our newsletter at TheFinanceGym.com. Thanks and have a great day.

Financial Literacy for Kids: Teaching Teens About Money

Welcome to The Finance Gym Action Plan for a Better Life with Money video series. My name is Stacey Powell, and if you’re ready not just to know better but do better with your money, then you’ve come to the right place.

So lately we’ve been creating videos about our relationship with money. Today, we’re talking about teenagers and their relationship with money and how we can have an impact on it.

I have long been a proponent of “money date night”. It’s what I did to help myself pull myself out of the horrid financial mess I was in years ago. My last video talked about couples having money “date night”. So today we’re going to talk about this thing that I started doing with my daughter when she was a teenager called “teenage money date night”.

When she was young – I was in the midst of my financial nightmare – and because of that, I think I probably gave her a lot of mixed messages and wasn’t a great teacher about money.

By the time she became a teenager, I had come quite a long way in my own learning and doing. I felt like I had a lot of time, which I needed to make up for.

So we started doing teenage money date night. Part of it was to make up, and part of it was because I was writing a book and I wanted to test things out on her to see how they would work.

So we would get gelato, go to a coffee shop, and have teenage money date nights. I was honest. The dates weren’t all sunshine and roses. There were tears at some of them. But we did it. We created this conversation. I did my best to be non-judgmental about her financial decisions. I did my best to teach, but not lecture her. I did my best to listen to her fears and say, “Yeah, I have those fears,” and I did my best not to sound like a know-it-all even though I know a lot about money.

Here’s how I did it. I was honest with her about the mistakes that I’ve made. It became more of a joint effort than me saying, “This is how you should take care of your money, and you aren’t doing this.”

Can you think about a time when you were teaching your kid to ride their bike and took the training wheels off their bike? They probably fell once, twice, maybe more. Did we yell at our little kids when they fell off their bike? Did we look disappointed? Did we try to act like we weren’t disappointed, but they could see through the fact that we were?

When it comes to money, we want so badly for our kids not to suffer the same things we suffered. So our judgment sometimes comes through, even if we’re trying not to show them. I think that’s one of the really important things about teaching your teenager about money.

Teenage date night changed a lot for my daughter and her money. I like to look at things still with training wheels. I have this deal with my daughter. She’s 21 right now, and I have what I call “training wheel savings” for her. I require her to give me a certain amount of money every month, and I put it in a separate savings account. It’s her money, but she doesn’t have control over it. I'll tell you what. Every time something goes wrong with her car, she’s so grateful for having those training wheels.

So when you think about your kids, no matter what age they are – she lets me call it “teenage money date night” even though she’s no longer a teenager. Think about what kind of things you could do to help your kids have a smoother path than maybe you had with money.

If you would like to talk about this more, come on over to our Facebook group Team Do Better. You’re welcome to ask me questions there, and I will answer, and everybody else will appreciate watching as well. Sign up for our newsletter at TheFinanceGym.com or subscribe to these videos right here. Now, have a talk with your teenager.

#1 Money Rule for Couples: You Must Play Together to Stay Together

Welcome to The Finance Gym Action Plan for a Better Life with Money video series. My name is Stacey Powell, and if you’re ready not just to know better, but do better with your money, then you’ve come to the right place.

Lately, we’ve been talking about our relationship with money and how it impacts our financial life. Today, we’re going to be talking about one of my favorite pieces of advice for couples, and that is to have monthly money date night.

I don’t care if you’ve been married for 50 years, if you’re a newlywed or if you’re thinking about getting married. Having a money date night every month can make a huge impact on your financial life.

Here are a couple of reasons why:

1. The only time you talk about it is when you’re trying to solve a problem, a big enough problem that requires the both of you to talk about it. It’s usually frustrating, stressful, ugly. So that’s your framework for how you show up to any conversation about money because most of your conversations are kind of icky, and frustrating without any simple solutions.

If you consistently talk to your significant other about money, your goals, and your dreams, you’re laying a framework in your head that that’s your money conversations are good. Not just icky stuff.

Then when the icky stuff happens, you’re much better equipped with a shared language and know how to work together. So that’s reason number one.

2.  It’s a stereotype, but I think it’s a true stereotype. In most couples, you’ve got the person that loves spreadsheets, loves accounting software, loves all that stuff and figuring out. Then you’ve got this person over here who wants absolutely nothing to do with any of it and is so happy that the other person is going to do it all. So there is one person making the vast majority of the decisions and actions around your money. While that might be convenient, it isn’t best. Here’s why.

I tell my clients all the time. Imagine I’m your accountant. I’m going to give you a ton of advice. I hope you’re going to take most of it. But I also hope you’re not going to take all of it because my framework – I’m conservative. I’m not always going to take risks. I’m not always going to go for the quick path. I’m going to spend 6 hours on a spreadsheet when I should have only spent 1 hour on a spreadsheet trying to make a decision. I should have followed my intuition more, right? That’s my framework.

Another person’s framework brings great value to your financial decisions and so bringing your two heads together is actually important and better. You might think you’re not good at money, but that’s not true. That’s the story you tell yourself. You have great value to balancing out your partner.

It’s not the end-all-be-all to fixing your money situation. It’s only part of the equation. So those are my top 2 reasons why it’s really important to have money date night with your honey. Keep your marriage together, going strong, and being fun.

So if you would like to join me and more of these conversations, you can Subscribe to these videos. You can join us over at Team Do Better on Facebook whenever you can come in and talk about money, and you can also sign up for our newsletter at TheFinanceGym.com. So I want you to sign off and schedule your first money date night.

Start Treating Money Like Your Favorite Hobby

Welcome to The Finance Gym Action Plan for a Better Life with Money video series. My name is Stacey Powell, and if you’re ready not just know better, but do better with your money, then you’ve come to the right place.

Lately in these videos, we’ve been talking about our relationship with money and so today, we’re going to talk about hobbies. In the book, I asked you, “OK, what if you’re really into fishing? What if you knew nothing about fishing but all of a sudden you got this great passion for it?”

So I scoped around. I have this friend Maya who is a bass fisher, not a fly fisher, bass fisher, and she watches bass fishing TV shows. She gets magazines. She has friends that are her peeps but then she has these bass fishing friends. She goes to tournaments, classes and bass stores.

I make fun of her because I come from a fly fishing family. But the thing is that she’s really good at fishing. And she loves it, and she enjoys it. So one of my points in the book is, “Wow, what if we approach money as if it was a hobby?” because you know how most of us are with money. And we’re like, OK, Saturday morning in between laundry and taking the kids to soccer, maybe I will get around to looking at my bank balances, filling out all my bills as fast as I can and then moving on, right?

We spend as little time as possible dealing with our money. So are we really good with it? Would we ever become great bass fishers or gardeners or cyclists or whatever it is you’re into? Think about your favorite hobby. What are the kinds of things that you would do to become really good at that hobby? What if you did that with money? What if you read a book, watched a video?

So you’re already doing something. You’re watching a video. What if you joined a group? What if you did the kinds of things one needs to do to become good at our hobby? Sit down and write a list of everything you did to become really good at your favorite hobby and then do the same thing around money.

Here’s my list in the book:

• Who could you talk to?

• What kind of equipment do you need?

• Do you have the right equipment?

• Are you using the right apps, the right software?

• What friends would be into learning about this with you? So it would be fun.

• Any TV shows or books? - There's my book. It’s called The Finance Gym Action Plan for a Better Life with Money that you could read.

• How much free time do you think that it would take to become really good with your money?

These are some ideas about making money one of your hobbies and becoming super good at it.

So as always, you can Subscribe to these videos below. You can join us on Facebook at Team Do Better. Great place to spend some time worrying about money and you can sign up for our newsletter over at TheFinanceGym.com. So go find yourself a new hobby.

Do You Have a Good Relationship with Money?

Welcome to The Finance Gym Action Plan for a Better Life with Money video series.

My name is Stacey Powell and if you’re ready to not just know better but do better with your money, then you’ve come to the right place.

And I'm really excited about today's video and the next few videos that are rolling out over the next two weeks. They're all about our relationship with money.

I'm an accountant, so I'm a huge believer that you can't just magically change your money mindset, and everything's magically going to be okay, like a lot of guru's say. You've got to do the work. You've got to roll up your sleeves; you've got to actually put money in a savings account. You actually have to pay down your debt. There's all this droll, boring, technical stuff you have to do. But, where I differ from a lot of accountants is that the money mindset piece, I think it's half the equation.

Part of what's wrong with money in this society is that we don't talk about it. I call it the big scary. Oh my gosh, do not make me talk about what's wrong with my money, about my debt. Admit to other people that I'm frustrated. Admit to other people that I've had points in my life that I couldn't put $5 of gas in my tank. We also don't like to brag about our money wins because that's just not done. So we end up not talking about money at all which is a huge mistake.

Back in 2008 when everything came crashing down, it was a horrible time. I know for some of you, it was a really horrible time. You might have lost your house. You might have had some family, friend that lost their house. Everybody knew somebody that was on the brink of losing their house or lost their house.

All of a sudden, keeping up with the Jones … We could see driving down our streets that a bunch of the Jones, there was nothing to keep up with because they were not on solid ground to begin with. They might have had a shiny new car. They might have gone to Europe on vacation. But the truth is, they were underwater in their house, and, unfortunately, lost it. It was a horrible time.

The silver lining? We started talking about real money issues, together. Together with friends, family our nation, the media. And I think there was a lot of benefit from that. It gets us out of our own head and working as a community together.

So my big point of today's video is, talk about your money with your kids, your family, your parents, your friends, your mentors. Get a financial coach. We've got great financial coaches at CreatingAnswers.com. Join a money Mastermind group, which we have at TheFinanceGym.com.

If you really want to impact change in your money find someone to talk to. Join a group. Get a coach. Make a difference with your money. And if you're really, really struggling, and you don't have any money, I have some free stuff to help you too.

Subscribe to these videos below. Come to Facebook we have a group called Team Do Better where we talk about money on a weekly basis, join there; it's free. You can sign up for our free newsletter at TheFinanceGym.com. And whatever you do what I will leave you with is, find somebody to talk to about your money. Don't be scared. It won't kill you, it will help you. Have a great day.

When is Your Credit Score Not Important?

Welcome to The Finance Gym Action Plan for a Better Life with Money video series.

My name is Stacey Powell and if you’re ready to not just know better but do better with your money, then you’ve come to the right place and today we’re going to be talking about your credit score.

Today’s video, it’s actually really just meant for the people who are so strangled by the debt in their life that it’s time to take some drastic measures.

Credit scores are important. They’re absolutely important. You not only need them to get good interest rates when you buy a home. Sometimes you need them when you’re going to be renting an apartment or taking a lease out for a commercial building space or for some people, when you’re trying to get a job or government clearance or something. Credit scores are important. What I’m going to talk about today is when credit scores aren’t important, when you become more important than your credit score.

So I’m going to do a little play today about a conversation that I had with a client once and I’ve had many similar conversations but here is the way it went.

She came in. She was like under water. She was drowning in credit card debt. She couldn’t pay them and she didn’t know what to do.

Her solution up to the point of coming to see me was take more credit card debt out to pay the credit cards because she could. She had this great credit score. It was like how – it was close to 800. It was really a good credit score and she was not going to give that thing up. So here’s the way this went.

“Well, what would it look like if you stopped paying your credit cards?”

“Oh my gosh. I couldn’t do that.”

“Why couldn’t you do that?”

“Well, because if I stopped paying my credit cards, then I couldn’t get more credit to pay my credit cards.”

“Well, what would happen if you stopped paying your credit cards?”

“My credit score.”

“What do you need your credit score for?”

“To get more credit.”

Back and forth and back and forth. I kid you not and it took some time to – for me to teach her, for her to step back and really realize that she was in a loop that there was no solution to.

In the end, her solution was to stop paying her credit cards for a while and like I said in the beginning, this is really for those of you that are really just in the most dire circumstances. I don’t take this lightly but for some people, this is the right solution. When you’re so strangled and worried about your credit score, that you’re making crazy decisions and digging yourself a bigger hole because you’re trying to keep that credit score alive, well, then it’s time to give your credit score up for a while. It will rebuild. I promise it will rebuild. It rebuilds after bankruptcy. It rebuilds after short sales. It rebuilds after periods of not paying your credit cards.

With integrity, you want to circle back and get all that stuff done and you want to rebuild it. But if you’re really to the point where you’re struggling to that level, I suggest you get my book and read it and I talk a lot more in detail about this. It’s another one of those things that you probably don’t want to do alone. I would love it if you would come join us over at Team Do Better. There’s a group of us that will support you on your mission. You can also sign up for our newsletter at TheFinanceGym.com or subscribe to our videos right here on YouTube. Thanks for watching!

The One-Third Money Rule

Hi! Welcome to The Finance Gym Action Plan for a Better Life with Money video series. My name is Stacey Powell and if you’re ready to not just know better but also do better with your money, you’ve come to the right place.

The last few weeks, we’ve been showing videos on the four letter word “debt” and as I’ve looked at them, I realized, oh my god, they’re really serious. Like, I’m really serious when I’m talking about and telling you to stop using debt in this very serious tone.

Maybe I shouldn’t have been quite so serious. But you know what? It’s a serious issue. But today we’re going to talk about something a little bit more fun around debt and that’s how you can accelerate your debt payments in kind of a fun way.

So one of my very favorite money tips that I ever got and now it’s the favorite money tip that I give, I like to call the one-third rule. Whenever you get extra money, no matter what kind, you divvy it up in thirds. One-third goes toward your debt. One-third goes into savings because we do that equally and then one third goes towards something fun, something that you’ve really wanted, something that you haven’t let yourself buy because you’ve been so busy paying down debt over here.

So whether it’s a tax return, a bonus at work, birthday money, yeah, even birthday money, like if you’re serious about getting out of debt, even birthday money, an inheritance. Now if you get some huge inheritance, I’m not suggesting that you use the one-third, one-third, one-third rule. I’m suggesting that you go talk to a certified financial planner.

But if you get a $5000 inheritance, $10,000, $20,000, even something small, still sit down and think about this one-third, one-third, one-third concept because I think like with everything in life, if we do things in a more balanced approach, it benefits us. It benefits the mission we’re on. I see so many people get their tax refunds every year and use it to pay down debt and then they use their credit cards all year long and then they get another tax refund and they use it. It’s just this ongoing cycle.

What would it look like if you had a tax refund and you had no debt to put it down towards? You can do a one-half rule. Half of it goes towards savings and half of it goes towards fun.

So this is a tip that I’ve seen really accelerate people’s mission to pay off their debt. I’ve seen it accelerate their mission to build their savings and the other great thing about it is that you also kind of remember that when these little pockets of money come up, instead of just immediately shoveling all of that money off here towards paying down debt, it in a way motivates us. So that’s my favorite tip to get yourself out of the four-letter word “debt”.

So, as always, I would love it if you would come join us over at Team Do Better on Facebook. You can sign up for our newsletter over at TheFinanceGym.com. Subscribe to our videos right here and the next time you get some extra unexpected money, sit down and think about where you would like to spread that out to.

Should I Save or Pay My Debt Off First?

Welcome to The Finance Gym Action Plan for a Better Life with Money video series. My name is Stacey Powell, and if you’re ready not just to know better but do better with your money, you’ve come to the right place.

Lately, we’ve been talking about the four letter word “debt”. How to stop using debt. Today I’m going to talk about how to, both, stop using debt and how to pay off your debt. I get asked this all the time. Now should I pay all my debt down first and then start saving? And in fact, if you watch Dave Ramsey, he says to save $1000 and then do nothing but pay down debt whether you have $5000, $20,000, $60,000.

I disagree. I think that it’s really important that you pay your debt down at a rate somewhere equal to what you’re saving. Because if you don’t have savings set aside, it’s like Groundhog’s Day all over again. Emergencies are going to happen. They are always going to happen, and you’re going to need a way to pay for the emergency. If you made a commitment to stop using debt, but you have an emergency, and you have to keep going back to the credit card, energetically, it just doesn’t work. We all think a lot harder about what our options are when we have to take money out of our emergency savings account than if we just pull our credit card out.

It’s something like needing a root canal and you don’t have savings. Well, I’m certainly not going to tell you that this is the moment to absolutely stop using your credit cards. But if your TV breaks, stop watching TV for a while. If your tires go bad, well, you know what? Maybe it’s time just for a couple of months to put used tires on or take public transportation or borrow somebody’s car. There are always options out there and we look at the situation differently when we're using our savings account rather than our credit card or getting the help from some other place.

So my recommendation when it comes to paying down debt and saving is: if you’re paying $500 to bills, put $500 into savings. Make sure you’re building your savings at a rate somewhere equal to the amount that you’re paying your debt down.

As always, these things aren’t easy to do on your own. If they were, you would have done it by now. I would love it if you would join us. We have a support group on Facebook called Team Do Better. It’s private. The only people that are in there are people just like you who are ready to do something different with their money life.

You can also sign up for our newsletter at TheFinanceGym.com or subscribe to our YouTube video series right here and be sure to watch next week when I give my one last final great tip about how to get out of debt.

5 Strategies to Stop Creating New Debt

Hi. Welcome to The Finance Gym Action Plan for a Better Life with Money. My name is Stacey Powell and if you’re ready to not just know better but do better, with your money, you’ve come to the right place.

In last week’s video, we talked about the four letter word “debt” and I promised over the next few weeks I was going to be showing everybody videos with my favorite tips about how to stop using debt. If you’re really ready to stop, I’m going to share with you my favorite few tips about how to do that.

The first one is very important. Cut up all your credit cards. Cut up your credit cards. Let people know that you borrowed money from in the past that you’re not going to do it anymore. Every single avenue you have, to take that easy path of borrowing money, stop. Make sure you just don’t even have access anymore because it’s too hard otherwise and I know maybe you don’t want to do it. I understand that. But if you’re really ready to make a lifetime change, you’ve got to do it.

If you absolutely refuse, then secondarily take them all and put them somewhere where it’s really hard to find, in a bank safety deposit account, with a friend that you know isn’t going to just hand them over to you because some important emergency happened, someone who’s going to talk through things with you, which is my next tip.

Find an accountability partner. Not your best friend who you commiserate with when you run out of money and blah, blah, blah and they make you feel better and they’re going to talk about their money problems and you talk – no, no, no. An accountability partner is somebody who you respect about how they handle their money. You know they aren’t going to judge you. You’re not going to feel judged. Somebody to mentor you and tell them what you’re trying to do. They will be thrilled for you. They will want to help. You have someone in your life like that. Think about who that person is and tell them, “I want to stop using debt. Will you be my accountability partner? Can I check in with you about how this is going?” It’s so much easier to do it with somebody by your side, cheering you on and rooting for you.

Then the last thing is when you think you absolutely have to use credit for some important emergency, I want you to stop and I want you to journal about the thing that you want to buy and I want you to list six reasons that maybe you wouldn’t have to do it, six ideas of things you could do other than using that credit card.

This is on page 109 if you’re following along the book and if the only way you can buy this book is with a credit card, don’t do that. Just go to the store at TheFinanceGym.com. It’s on there under the free downloads. Download that page. Every time you think you need to use a credit card, fill that out and if you make that commitment alone, I promise you you’re like not going to be using your credit card at least half the time because you’re not going to want to take the time to fill that sheet out.

That little thing right there will make a difference and an impact on your life and then my fourth tip is sleep on it. Sometimes our subconscious can come up with solutions that we can’t come up with.

So, if you’re ready, I’m here to support you. We have a group called Team Do Better over on Facebook. Come join us. We will be your accountability partner if you think you can’t find one. You can also sign up for our newsletter at TheFinanceGym.com. Subscribe to our videos right here on YouTube and if you’re ready to do this, do it with us. I would be thrilled to support you.

3 Ways You Can Stop the Debt Cycle

Hi. Welcome to The Finance Gym Action Plan for a Better Life with Money video series. My name is Stacey Powell, and if you’re ready to not just know better but do better with your money, you’ve come to the right place and today we’re going to talk about the four-letter word “debt”. Not a word that most people like.

There are a lot of you that are watching today that are really clear that you got a problem with debt. You’re living paycheck to paycheck. You struggle to pay your credit cards off. You’re using them most months. You get sick to your stomach when you see your interest charges.

Maybe you’re even using credit available from one card to pay off another. It can be really crazy making – and shameful and all that comes along with it. If that’s you, you know who you are but I know there are others of you out there that probably aren’t using credit to that level, but you still have that feeling in your stomach that you want to do something different.

You’re using it more than it feels in integrity for you and you would just rather not. I’m going to be talking to you today as well, and then there’s a few of you out there who you don’t have any credit card debt right now because you’ve paid it all off with your home refinance that you did last year, or you had a bankruptcy.

Your debt is gone, and it’s never coming back, right? Well, in my experience, the people that I’ve financially coached, when they’ve wiped the slate clean like that, it comes back slowly, but then not so slowly. So what I’m going to be doing over the next few videos is I’m going to be teaching you how to stop using credit cards, payday loans, loans from your friends and family, the equity that you work so hard to build up in your house. I’m going to teach you how to just stop. You know, and the thing is, is that when we use debt to pay for things, we make different decisions and if we’re using credit, then there’s some other problem in your life.

If you need to use credit, there’s something else you’re not doing, and it’s such an easy fix. We don’t notice it as much, right? Like oh, just you need a new alternator without that credit card. You think harder when you have to whip the money out of your savings account.

So if you’re using credit, it’s very likely that you’re not earning enough, you’re not saving enough, you’re spending money on things that really isn’t in a balanced spending plan for you and the minute you stop using credit is the minute when where your real problem lies becomes more clear. I want to help you find that. Make sure you tune into the next few videos where I’m going to be giving some of my very best tips about how to get out of debt.

As always, I would love to help you through this. Come on over to Facebook to our Team Do Better group or sign up for our newsletter at TheFinanceGym.com or sign up right here on YouTube to subscribe to our videos. Now take a big breath and get ready to stop using your credit cards.

Buying a College Education - Weighing the Costs

Welcome to The Finance Gym Action Plan for a Better Life with Money video series.

My name is Stacey Powell, and if you’re ready to not just know better but do better with your money, you’ve come to the right place.

Lately, we’ve been doing videos about buying stuff, and a lot of people will say that a home is the most valuable thing that you can ever buy. But there’s one thing that I think is far more valuable than even a home, and that is your education. Whether it’s college or a trade school or grad school after your college, even your junior college education, it all comes with a price.

I think what happens with a lot of people is they just try to figure out, “Well, OK, what scholarships or student loans? How can I make this work? How much do I need to work every week, to kind of make it through? How much can my parents help or other people in my family?” And they kind of squeeze it into how they can make it happen instead of really looking at how much it’s all going to cost.

Now, part of me doesn’t really want to tell you to sit down and budget it all out and look at the total cost. It’s kind of like having a kid. You don’t necessarily always want to pencil that out because a logical person maybe would never really have a kid if you look at the total cost and the cost-benefit ratio. But with education, there are absolute statistics about the value of getting an education for the rest of your working life.

There is absolutely return on investment for every hour you put into your education, for every dollar you put into your education. But I will tell you to sit down and pencil it all out. In one of the last videos, I talked about sitting down and comparing prices. Compare prices of the three. Do your research. Do your homework especially if you’re looking at going to some trade school or online school. There are a lot of programs in the news right now, art institutes and chef institutes that promise you’re going to get this great $60,000 job right out of school. Well, a lot of times that’s not true. Maybe there are a few people that get out of those types of programs and make that kind of money.

But make sure that you read, Google, do your homework, look at the total cost and think about, “Well, am I the person who’s always at the top of my class and then going to be the one that gets that best job, that best money or am I maybe oftentimes a middle of the road person or am I somebody that struggles"? And I know those are harsh questions, but the thing is, is that I just want you to think hard before you sign up for $20,000 worth of student loans, $40,000 or if you’re an attorney, $100,000 of student loans. Do you really want that? If you do, absolutely go do it. Go get it. But think hard about what you’re buying before you make those decisions.

Go look in your field at what average salaries are. There’s a great website at Bureau of Labor Statistics, BLS.gov. Go look up what your options are. It might be really enlightening for you. And let me know how it goes. If you want to know where to let me know how it goes come into our Facebook group, Team Do Better. And you can chat with me in our private group. You can also sign up for our newsletter at TheFinanceGym.com. And subscribe below for our YouTube video series. Now go out there and practice some mindful buying.

How Much House Do You Really Need?

Hi. Welcome to The Finance Gym Action Plan for a Better Life with Money Video Series. My name is Stacey Powell and if you’re ready to not just know better but do better with your money, then you’ve come to the right place.

Today we’re going to be talking about buying a home. I could go on for hours about buying a home but I’m going to just talk about one concept today and that is how much of a home do you really need. I think we’ve all seen what happened in the big mortgage meltdown and hopefully you’ve gone to see The Big Short. Great movie to really help you understand some of what happened. A lot of people bought houses but they didn’t really know how much of a house they were buying.

If you don’t have a good mortgage banker or good realtor really helping you walk through this, it can get really complicated. Most professionals will say you should take out a mortgage that’s somewhere between maybe 26 percent and 37 percent of your total monthly income and that that’s doable. Yeah, 26 to 37 percent is doable. But one of the things they don’t talk about is the price tag that comes along with that because if you’re taking out a mortgage that’s 26 percent and that’s including property taxes, insurance, mortgage insurance if you need it, one of the things you’re not kind of thinking about is all those seaming costs for the new roof or landscaping or putting new window coverings on. Any of us that have bought a new house know exactly what that goes like.

So all of a sudden, when you take this dollar and you thought that you were just shaving off 26 percent of it to buy a house, well, it’s actually kind of more like this. That’s all of your dollar bill every single month, of every dollar that you have left to spend. If you make that decision to buy a house where 37 percent of your monthly income goes towards your mortgage and your property taxes and your insurance, and then you have all of the other stuff you have to spend on your house, you’ve only got half of every dollar left to spend to live the rest of the way you want to live, to go on vacations, to buy healthy food, to send your kids to summer camp. All the other things to fund your retirement, to have emergency reserves.

So in the book I go into much greater detail and I encourage you this is a page – if you’re getting ready to buy a home, go invest in buying my book and read the couple of pages around this because it’s really important if you want wiggle room to live your life. You don’t want every single dollar to be cut in half. It’s really an unsustainable way to live and I encourage you to think a lot harder about how much home you can afford.

If you would like to chat with me about any of this, I would like you to come on over to our Facebook group Team Do Better group and join us. We can have conversations that only people in that group get to see. You can also sign up for our newsletter over at sign up for the newsletter and subscribe to our videos down below.

Money Management Tips - Are You Frugal or a Spendthrift?

Welcome to The Finance Gym Action Plan for a Better Life with Money Video Series. My name is Stacey Powell and if you’re ready to not just know better but do better, you’ve come to the right place.

Today we’re going to be talking about how we all spend money. Are you frugal or are you a spendthrift? I am always fascinated by the spending decisions that we all make. I have lots of clients over the years that it doesn’t matter what they buy. They’re going to buy the most expensive thing they can possibly afford.

I also have a lot of clients that it doesn’t matter what they buy. They’re going to buy the cheapest or the best deal and just be frugal about all of their spending decisions. Then there are some people right in the middle. It just depends on what they’re buying. Some things are really important to them. So they buy the best. Other things aren’t really so important. So that’s where they go and find the best deal.

I illustrate this on page 81 in the book, if you’re following me along. It’s two shopping carts full of the same six things – a couch, a watch, a TV, a necklace, a vacation and a car. These people over here, they have to have the best of, $311,000 price tag. These people over here, $16,000 price tag. It’s the same six things. When you sit on a couch, maybe it makes a little bit of a difference what kind of couch you’re sitting on. But in the end, you just need a place to sit.

So if you’re buying a $4000 couch or a $300 couch, why are you making that decision? I’m not placing the judgment on either decision. If you can afford a $4000 couch and you’re fully funding your reserves and your retirement and taking care of everything else, then by all means go buy that $4000 couch. But I also know there are a lot of people that buy that $4000 couch on credit and pay for it over many years and then they pay more for it. Why are you making those decisions? So in this video, I’m really just asking you to spend some time thinking about which side you’re on. I’m going to ask you to spend some time writing about some of your spending decisions.

In the book, page 78 and 79, I ask you to talk through your spending habits. There’s a worksheet that has a bunch of questions for you to fill in. You can go to TheFinanceGym.com and in the store, there’s a whole area of free pages of the book and we’re going to put these up there for you to go and download and fill them out even if you don’t have the book. I’m going to help you, so head on over there.

While you’re there, be sure to sign up for the newsletter. You can also go to Facebook and join our Team Do Better group, a great place to talk about your spending habits on there, you can chat with me. And also you can sign up for our video series down below so that you can catch every single one of these as they come out. Now go do some thinking about what kind of spender you are.