Deborah Owens:
When Melanie Lockert and her business partner Emma Pattee launched the Lola Retreat in 2017, profits were at the bottom of their list. So low they did not even try to get sponsors until just a few weeks before the event. What happened then was shocking. Plus a money tip for the luxury lover.
In Melanie’s money story you will learn:
-The behind-the-scenes decisions that went into the launch of the Lola Retreat
-Why the creators of Lola prioritized content over profit
-How the last-minute decision to reach out for sponsorship took Lola from a money-losing venture into a profitable ongoing business
-Why they chose not to outsource as they were building the Lola Retreat
-The technique Melanie Lockert and her partner Emma Pattee used to attract sponsors to her first-ever Lola Retreat
In Melanie’s money lesson you will learn:
-The importance of actually asking for what you want
-How to leverage your reputation to build a new business
-How positive thinking even in tough times helped Melanie achieve her goals.
-Melanie’s new approach to negotiation
In Melanie’s money tip you will learn:
-Where to get luxury beauty services at a fraction of the cost
In my take you will learn:
-Why you should aim high when asking for money
-How smaller,niche events can offer great marketing value for even the largest companies
-Ways to save money on services by going to students in places like cooking schools and design schools, in addition to the beauty schools that Melanie discussed
Follow Melanie!
Twitter @deardebtblog @LolaRetreat
Instagram @deardebt @lolaretreat
Facebook Melanie Lockert
Melanie’s Dear Debt blog
Get Melanie’s book Dear Debt
Learn more about lolaretreat.com
Fidelity.com
FinancialGym.com
Kristin Wong is at TheWildWong.com
Erin Lowry/Broke Millennial is at https://brokemillennial.com/
Transcription
Melanie Lockert:
Something completely shocking happened. We actually did get several thousand dollars of sponsorships within three weeks of the event, and we even got our last sponsor three days before the event. It was just a crazy experience for me.
Bobbi Rebell:
You're listening to Financial Grown Up, with me, certified financial planner, Bobbi Rebell, author of How to Be a Financial Grown Up. You know what? Being a grown up is really hard, especially when it comes to money. But it's okay. We're going to get there together. I'm going to bring you one money story from a financial grown up, one lesson, and then my take on how you can make it your own. We got this.
Bobbi Rebell:
Hey, friends. You guys know that song, "Whatever Lola wants, Lola gets." Well, the reality is sometimes Lola has to actually ask for it. That is the irony of the story you are about to hear from Melanie Lockert. She is well-known from her blog and her book, Dear Debt, where she chronicled her feelings about the $81,000 of debt that she was saddled with. Melanie is also the co-founder of the Lola Retreat, and yes, the name was inspired by that song, because it is meant to be about women getting whatever they want. While the event is meant to teach attendees how to empower themselves financially, when planning her first conference, Melanie had to learn some lessons of her own in that regard. Here is Melanie Lockert.
Bobbi Rebell:
Melanie Lockert, you are a financial grown up. Welcome to the podcast.
Melanie Lockert:
Thank you so much for having me. I'm excited to be here.
Bobbi Rebell:
People know you from your Dear Debt blog, your Dear Debt book, and your newest project, which we will talk about more at the end of the podcast. Just briefly, what is Lola Retreat, because I know it's happening very soon.
Melanie Lockert:
Yeah. Lola Retreat is a women and money event, and it is a weekend full of education and workshop and panels to empower women to rock their finances.
Bobbi Rebell:
I wanted you to explain what it is because the money story that you're going to talk about has to do with it, and it has to do with year one, which was just last year, and how you've monetized the event and what you did right and what you maybe would do differently and are doing differently this time.
Melanie Lockert:
Yeah, totally. I had such a great money lesson last year. With the retreat, there was so much going on in regards to programming and attendees, and I was so focused on getting the content really wonderful and making sure that we got the venue right, the speakers and everything that sponsors were not really on my mind. I really just wanted to make sure that it was the best even possible, right?
Bobbi Rebell:
Well, and when you say sponsors, you were just funding it purely on the admission that you were charging people?
Melanie Lockert:
Our ticket sales were really getting invested back into the event, so we didn't really know if we were going to make money on this event or not. Three weeks before the event, Emma, my colleague, talked to me, and she was like, "Melanie, we're going to breakeven right now, so if you want to make some money on this event, either we're going to have to cut back or be happy with breaking even." I was like, "I don't like either of those answers. I don't want to cut back because this is our first event, and it needs to be super amazing, and I also want to make some money, even if it's just one dollar." I really needed just that symbolic metaphor that I made a profit, so I was like, "How am I going to do this?" I was like, "I'm going to approach sponsors. People sponsor events all the time. I don't know what I'm doing. I don't know how to approach sponsors, I don't know anything about it, but I'm going to go find some money." In the back of my mind, I thought, "Oh my goodness. It's three weeks before the event. I haven't contacted anybody about sponsorship money. It's too late."
Bobbi Rebell:
Had you guys discussed the concept of sponsors at all? Had it ever occurred to you before this?
Melanie Lockert:
We kind of did, but it was really at the bottom of our list. We really were just focused on making sure the programming was amazing and making sure all of the programmatic details were really in place.
Bobbi Rebell:
So just to be clear, it's not that you were trying and sponsors were rejecting, you just literally had not tried. Did you think about outsourcing it to somebody else, or it just slipped through the cracks?
Melanie Lockert:
It slipped through the cracks. It was something that we didn't really focus on at all. We didn't contact anyone about it until three weeks, and in the back of my mind, I was like, "Oh my goodness. It's three weeks before the event. There's no way anybody's going to give us any money at this point it's too late." But I wanted to do it anyways just so I could cross it off my list and say that I did it, and be like, "Okay, well, I tried to get money. It didn't happen, whatever," but something completely shocking happened. We actually did get several thousand dollars of sponsorships within three weeks of the event, and we even got our last sponsor three days before the event, and so it was just a crazy experience for me.
Bobbi Rebell:
Can you talk a little bit about how much money you got in sponsorships and maybe speculate what you think you may have left on the table had you tried earlier?
Melanie Lockert:
We did get several thousand dollars worth of sponsorships. I don't want to get into specifics, but I definitely know we did leave some money on the table.
Bobbi Rebell:
You made a profit of more than a dollar first of all, to be clear.
Melanie Lockert:
Yes, we did.
Bobbi Rebell:
That's excellent.
Melanie Lockert:
We did.
Bobbi Rebell:
You think you left money on the table?
Melanie Lockert:
I do think we left money on the table because, first of all, we did give sponsorships at a discount because it was so late, number one. Number two, there's only so much you can do in three weeks, so we didn't have really the time to foster that kind of outreach and sponsorship beforehand, and I think if we would've had more time to dedicate earlier on that we could've had more sponsorship money and really been able to fund the event in a better way.
Bobbi Rebell:
What did you do differently in year two?
Melanie Lockert:
This year we've definitely worked on approaching sponsors earlier. I'm happy to say that we're going to be working with Fidelity on a welcome reception for Lola Retreat year two. I'm super excited about that. They are a wonderful company, and they've always supported women and money. We're definitely working with a lot of scholarship sponsors this year. That makes me super happy because the scholarship sponsorship is near and dear to my heart. Essentially people sponsor a lovely lady to come to the event who wouldn't be able to otherwise come, so they get to read over the scholarship applications and they get to pick who they think would be a good fit to come to the event. It's really interactive, it's really an affordable sponsorship too, and at the end of the day it's one less ticket that I need to sell, so we've been focusing on that a lot as well, which is fun for me, and I really enjoy that part of it.
Melanie Lockert:
Yeah, I think this year we've had kind of more time to focus and more outreach, and then really focus on big partners. We've loved to work with Fidelity this year and continue working with sponsors that really align with our values.
Bobbi Rebell:
What is the lesson now? I know that we are still a couple weeks away from Lola Retreat. What is the lesson for our listeners about this? What's the takeaway?
Melanie Lockert:
The lesson is that you should always ask, and you should really check yourself if you think there's no way that you can do something because in my mind, I had already made up the fact that, "Oh, no one's going to give me money. It's too late. It's three weeks before the event. Why would anyone take me seriously?" Mind you, it was scary because in year one, this was before the event, we had nothing to show for it. We had no photos, we had no testimonials, we just had a website essentially. We had nothing.
Bobbi Rebell:
Well, you also had your reputation. You had a very strong reputation, as does your partner.
Melanie Lockert:
Yes.
Bobbi Rebell:
You did have that. That's a lot.
Melanie Lockert:
Yes, we did have that, which is definitely helpful, but from an event standpoint we had nothing necessarily to show, "Here are the testimonials, here are what people said, here are photos, here's impressions from the social media from that weekend." We had nothing concrete to show, and so in my mind it was like, "No one's going to take us seriously. No one's going to give us money," and I just had already made up my mind, but I was so shocked kind of how easy it was. I mean, it wasn't super easy, but it wasn't that difficult either.
Bobbi Rebell:
People said yes.
Melanie Lockert:
People said yes more than they said no actually.
Bobbi Rebell:
Wow.
Melanie Lockert:
I think I was just so passionate about women and money and doing this event, and I think people could see the grit and the passion in my words, and they can understand the idea. People were willing to invest in that idea, and those initial sponsors, I'm so grateful for because they really believed in us and our idea from the beginning when we had nothing to show. I'm really grateful for them, and then it just proved to me, like what other areas of my life am I convinced that, "Oh, this isn't going to work out, or this wouldn't happen," but if I just try, maybe it will. Actually, this is a reoccurring lesson for me. I actually when I was a non-profit employee before becoming self-employed, I had never asked for a raise once. Not once. I'm so ashamed that I've never negotiated my salary until becoming self-employed, because as a self-employed person, you have to learn to negotiate or you will not survive. This is kind of a reoccurring money lesson for me is that I have to know what I'm worth, and I have to negotiate, and I have to ask, and really at the end of the day, the worst thing people are going to say is no. No one's going to laugh at your idea and say you're stupid and call you ridiculous and think, "Wow, you think you're something else," or "you think you're a bigshot."
Melanie Lockert:
No one's going to say that. They're just going to say, "No, we can't do that." It's really okay. I'm really trying to push my boundaries and figure out other areas of my life that I can push and really kind of change the game a little bit.
Bobbi Rebell:
Let me just ask you before we get to your money tip. In terms of the money, you made a few thousand dollars in year one. In terms of how much more you're going to make this year, can you give me some idea of how the results changed when you were more purposeful in asking for sponsorships?
Melanie Lockert:
That's a good question. That's still TBD because we still have a lot of expenses that are going to be in the queue in the next coming weeks, but projecting right now it looks like hopefully double what we made last year, which would be really amazing, but like I said, we're not totally sure because there are a lot of last minute expenses that come up towards the end. We will see how everything shakes out, but I'm feeling pretty good about everything right now.
Bobbi Rebell:
I want to talk about your money tip because this one is brilliant, and I never thought of this. This is really original, and it's something that can let us all have our luxuries and indulgences, but within our budgets, or even just to save money for other things that we want to do even if we're not on a tight budget, so it's nice to spend a little bit less for luxuries in life. Do tell.
Melanie Lockert:
Totally. Yeah. My money tip is to go to a beauty school for haircuts, pedicures, manicures, or massages or facials. When I was paying off debt, I didn't really have extra money to do anything, but I still wanted to treat myself at least once a year to something, especially when I hit a big debt milestone, right? I found this beauty school in Portland, and the rates were so insanely cheap because all of them were students, and before you get scared, they do have kind of more professional level people there working alongside the students to make sure they don't mess up. I remember I paid like $35 for a pedicure, a manicure, and a facial.
Bobbi Rebell:
Total.
Melanie Lockert:
Total, and I'm pretty sure the school had a policy that you couldn't tip either because it was a school, so it was super affordable. It was really affordable. My money tip is to find a local beauty school in your area and see what services they offer. It could be much, much cheaper and at a fraction of a cost, and at least in my personal experience, it was wonderful. If you have a specific person that you love or specific things then maybe that's not necessarily the best tip for you, but for me, the services were completely comparable and totally worth it.
Bobbi Rebell:
I love that. Let's talk about the Lola Retreat. It is in my hometown, New York City, this year.
Melanie Lockert:
Yay, I'm so excited.
Bobbi Rebell:
Tell us more.
Melanie Lockert:
Yeah, it's going to be at the Financial Gym, so Shannon McLeigh, the CEO and founder of The Financial Gym is one of my best friends.
Bobbi Rebell:
And she was on the podcast last week.
Melanie Lockert:
Yes, she is amazing, and she has graciously agreed to host us in New York city, so Lola Retreat is at The Financial Gym April 27th through the 29th, and we are going to have sessions on how to pay off debt, how to get started with investing, how to level up your money with Kristin Wong. We also have Get Your Financial Life together with Erin Lowry. We also have some really interesting panels on how to prepare and deal with financial disaster as well as this concept of F Off Funds. I won't curse on the podcast, but it's especially important for women, especially right now for women to have a separate stash of cash to be able to say, "F you," in a situation that is not healthy, whether it's a workplace scenario, a relationship scenario. I think it's so important, so I'm really excited about the content that we have, and so excited to meet our lovely ladies. Yeah, I think it's going to be a wonderful weekend.
Bobbi Rebell:
Where should I send people to sign up for Lola and to be in touch with you?
Melanie Lockert:
People can go to LolaRetreat.com and check it out. People can also find me at DearDebt.com.
Bobbi Rebell:
All right. Melanie Lockert, Lola Retreat. Can't wait to get there. It's going to be amazing. Thank you so much.
Melanie Lockert:
Yes, thank you.
Bobbi Rebell:
Hey, friends. Loved hearing how far Melanie and her partner have come in just one year of the Lola Conference. Here's my take, Financial Grown Up tip number one. Aim high. In year one, Melanie didn't think she would get any sponsors. She was shy just about reaching out to anyone at all, but here we are, just year two, just a second year, and she has incredible brand. She has Fidelity, guys. Sensei, Shopkick, and of course The Financial Gym, so don't write off a large company assuming they will only sponsor large events. They will find, often, a lot of value in smaller, targeted, specific events that have engaged and invested audiences as is the case with Lola.
Bobbi Rebell:
Financial Grown Up tip number two, be creative when it comes to treating yourself. If you're feeling deprived financially because you never get to do anything, you are much more likely to cheat, just like on a food diet. Melanie talked about going to beauty schools for things like manicures, massages, facials, all that good spa stuff, but sticking to the theme of students, you can also, for example, have a great meal at a cooking school, or if you're redoing your home or redecorating one of the rooms but have a limited budget, consider getting a student from a local design school involved, and just think, you could be someone's final graduation project. You never know.
Bobbi Rebell:
All right, if you enjoyed Melanie's story, please hit the subscribe button, and if you have just a few minutes, leave a review on Apple podcast. They really do make a difference in getting the word out. I am also working on getting better at sending out my newsletters, so if you are not already on the list, get on the list. Just go to BobbiRebell.com. While you're there you can check out previous episodes by clicking on Financial Grown Up Podcast, and of course, be in touch. I'm on Twitter @BobbiRebell, Instagram @BobbiRebell1, and my author page on Facebook is Bobbi Rebell. I hope you guys all head out and treat yourselves to some affordable indulgences just like Melanie, and that we all got one step closer to being financial grown ups.
Bobbi Rebell:
Financial Grown Up with Bobbi Rebell is edited and produced by Steve Stewart, and is a BRK Media production.
When model and actress Victoria Summer got her big break first in Saving Mr. Banks, which starred Tom Hanks, playing Julie Andrews, and then in Transformers 4, she was happy about the big upfront paycheck- but got really excited when she learned about residuals aka passive income.
In Victoria’s money story you will learn:
-About her first big breaks as a hollywood actress
-How the pay system in Hollywood works
-The similarities between acting and modeling and other “gig” economy jobs
-How Victoria manages to balance one-time paychecks and residual income
-What her one big spurge was after that big paycheck
In Victoria’s money lesson you will learn:
-How Victoria creates multiple income streams
-Why Victoria organizes her money in different bank accounts
-Her philosophy of acting like she is broke as a budget motivator
-Her goals to start a skin care line, a vegan handbag line and grow her production company
-Her strategies to promote herself as a brand
-The importance of top line income
In Victoria’s money tip you will learn:
-The danger of taking advice from the wrong people
-The warning signs to look for in advisors
-Why well-intentioned advice can often be off-base
In my take you will learn:
-The importance of choosing side hustles that complement, not contradict your primary career
-Why taking advice from well-meaning friends and relatives should be taken in context.
-The best way to find the right people to give you career and business advice.
Follow Victoria!
VictoriaSummer.com
Twitter: @VictoriaSummer
Instagram: @VictoriaSummer
Facebook: Victoria Summer Entertainment
Transcription
Victoria Summer:
Us as actors, we are personal brands. And all actors have to realize that you really are selling yourself. So for me it's work on promoting myself as a brand, and also, increasing the amount of income I can have from multiple streams.
Bobbi Rebell:
You're listening to financial grownup with me, certified financial planner, Bobbi Rebell. Author of How to Be a Financial Grownup but you know what, being a grownup is really hard especially when it comes to money.
Bobbi Rebell:
But it's okay. We're going to get there together. I'm going to bring you one money story from a financial grownup, one lesson, and then, my take on how you can make it your own. We got this.
Bobbi Rebell:
Hey everyone. So if you were to do a social media post about the gig economy, what kind of image would you use? Probably maybe an Uber driver, a millennial doing graphic design or coding or someone running errands at services like Task Rabbit.
Bobbi Rebell:
But take a minute to think about the business of acting. After the studio system ended, actors were in many ways pioneers in the gig economy. My guest today is a rising star. She is actress Victoria Summer, and she got her big break playing Julie Andrews in Saving Mr. Banks which starred, Tom Hanks.
Bobbi Rebell:
But the movie that gave her first really big payday, and key here is that it was more than just an upfront paycheck, was Transformers four. Here is Victoria Summer.
Bobbi Rebell:
Victoria Summer, you are a financial grownup. So great to have you on the podcast.
Victoria Summer:
Thank you. Great [inaudible 00:01:43] to be here.
Bobbi Rebell:
For those of you who don't know her work you will soon. She is a rising star, actually you've really risen, what am I saying. You were Julie Andrews in Saving Mr. Banks, you've been in Transformers Four, and you've also been with me on Bold TV, that's how I met you in New York City recently. And I'm so glad we're connecting on the podcast now.
Victoria Summer:
Me too, yes.
Bobbi Rebell:
And speaking of those roles, even though your big breakout hit was in that phenomenal role in Saving Mr Banks, your big money story actually has to do with really your biggest paycheck to date came from Transformers Four, and it was a big lesson to you, very eyeopening in something that is very relatable in what is becoming more and more of a gig economy, where we get sudden spikes of income. Tell us more.
Victoria Summer:
I actually remember when I booked that job, it was for me ... Even though I didn't say it in Mr Banks, it was the biggest job I'd ever booked, because it was such a big franchise, it was Michael Bay. I was going to be on set for three weeks with all these huge actors. And of course I knew, I was going to get residuals on that job. I was very excited about the passive income that I could make, not just the money that I got up front from being on set, but the passive income.
Victoria Summer:
At the time, I was living in a guesthouse, I'd not really been settled in LA that long, and it was just a big deal for me. So I thought, oh my God, wow, this big check upfront, three weeks of work which is a big deal for me at the time.
Victoria Summer:
So yeah, my lesson really was working out, how was I going to actually manage that money.
Bobbi Rebell:
Right. Well tell me a little bit more about how it works, because people may not understand how the payments work in Hollywood, you get paid very sporadically, really only when you work right. So most movies you just get a set paycheck and then they're done, at least that had been your experience up to this point.
Victoria Summer:
Yeah, but what happened to me on Transformers was they wanted me to be on set specifically for three weeks, so they bought me out for a three week period. And that was my deal, and then after that, once the movie aired, then I got residual income. So you get that four times a year. You get it quarterly.
Bobbi Rebell:
And one of are the challenges as an actress is that, you have income that is completely unpredictable. How do you manage that?
Victoria Summer:
Completely unpredictable, because for me, I'm doing auditions day in day out, and unfortunately, although I wish I did, I don't get paid for additions. And auditions take up a huge amount of my time. And when I'm working say on a movie like Transformers, you have a lot of money all at once and you tend to think, oh my God, I'm rich. What am I going to do with this money, oh my goodness.
Victoria Summer:
So for me, I've had to be careful and learn how to strategize in order to make sure that for the downsides and the down periods that I have with no work, that I have money set aside.
Bobbi Rebell:
One quick digression question. Did you buy anything, any little splurge Victoria?
Victoria Summer:
I bought a dog.
Bobbi Rebell:
You bought a dog. That's a necessity in life okay. That's not a [crosstalk 00:04:44] splurge. That's the best and I know you had your dog with you in New York, so that's not a splurge. That is always allowed. We advocate pet ownership here, they're the best.
Bobbi Rebell:
I want to get your lesson though because, it's important for our listeners to understand how ... You have ways that you manage having such sporadic income, and a lot of it is psychological. So share with us your lesson from that story and really from being an actress and learning to deal with what is it many cases 'cause you don't always get residuals. And even the residuals, you don't always know what they're going to be. These sort of spurts of unreliable income. Which again freelancers, the gig economy, we can all relate.
Victoria Summer:
Yeah, I mean with residuals you're absolutely right, you have no idea how much it's going to be. So whenever I get a check, it's always like oh, okay. But, you know, you can't predict that. So for me first and foremost is multiple streams of income, but also you know, when I do get these sort of big check windfalls, I make sure to put money aside. And honestly, from day to day, the best thing that works for me in my life particularly, is staying broke.
Victoria Summer:
I'm not saying poor, I'm saying convincing myself that I'm broke because I kind of ... For me as a person, I work very well on a highly necessity level. I tend to pull things in when I feel like I have to.
Victoria Summer:
So what I do is I have reserve bank accounts which are basically for future investments. So I move any money that's sitting around into these bank accounts to create passive income flows and also to use to set up other businesses. And so for me day to day, I do feel like I'm broke, and I work like I'm broke.
Bobbi Rebell:
And what kind of investments do you focus on?
Victoria Summer:
Well, for instance, I want to start my own skin care line, and I'm also wanting to start a vegan handbag line and that's important to me. Plus also my production company, I have to invest time in that. So that's really where my money goes is to start other businesses and to expand my brand really. I mean, honestly us as actors, we are personal brands, and all actors have to realize that, that you really are selling yourself.
Victoria Summer:
So for me it's work on promoting myself as a brand and also increasing the amount of income I can have from multiple streams.
Bobbi Rebell:
I think that's so smart and it's an interesting thing because, just like so many other businesses, the film business and the acting business has really evolved and is so much more driven by individuals and there's a lot of opportunity in that, but it also means that you have to be really smart about it. Yu have to be deliberate, as you are, and intentional, all those buzzwords.
Victoria Summer:
Yeah, you do. You have to be really smart and honestly, I focus on income. Every day I'm looking at okay, where's my money, where can I go and get money at this point, where is my next paycheck coming from, and how can I get more money from the different areas that I work in, and how can I expand? So I really do focus on income more than anything.
Bobbi Rebell:
Which is so smart, and that also brings us to the money tip that you brought because that really has to do with believing in yourself.
Victoria Summer:
Yes. Absolutely. To me, it's interesting. I didn't grow up in the kind of family where they were working in the theater or they were working on movies. My dad worked in the mail room of a bank, my mom worked in a school as a secretary, so I come from a prime middle class family, and I was always told, cut your cloth according to your means, never use credit cards, don't take any risks, that kind of thin.
Victoria Summer:
Honestly, I just had to get educated on the finance for myself. I think my money tip would be, don't take advice and don't listen to people close to you who really don't understand your business, or don't understand the actual area of money. They probably haven't had very much money, and they give you advice on money, but they really have given up on money themselves. So for me, just be careful of who you actually take advice from, and get educated.
Bobbi Rebell:
Yes, you have to own it yourself, which is what we're trying to do here at Financial grownup. So Victoria Summer, tell us where you can be found on social media, your website and what you're up to these days.
Victoria Summer:
Yes, you can find me on Instagram at Victoria Summer, on Twitter at Victoria Summer, and then on Facebook, Victoria Summer Entertainment. Then you can also, for more information go to my website victoriasummer.com.
Bobbi Rebell:
This has wonderful. Amazing advice, you are such a smart cookie my dear. I am so impressed with so many different things going on, and you're so smart with your money. I truly appreciate you joining us.
Victoria Summer:
Thank you very much for having me, it's great taking to you.
Bobbi Rebell:
So I think we all learned a lot about the acting business and how erratic the paychecks can be, so it's definitely part of the gig economy. So here is my take, financial grownup tip number one, Victoria talked about her multiple income streams and her business aspirations, which at first had me a little bit concerned about whether she was really focused enough on acting. But then when I really thought about what she was saying, it did start to make a lot of sense, because she was looking towards businesses that were complimentary to her skill set, and her primary career as a model and actress.
Bobbi Rebell:
So for example, she wants to have a skincare line. That makes sense. she's got a background in modeling and she's beautiful. She also wants a vegan handbag line, and she of course has a production company. As a model and actress, that can make sense. If she were an accountant who wanted to start a skincare line, maybe it makes less sense. Not that it couldn't be done, but you don't really have the same kind of synergies.
Bobbi Rebell:
Financial grownup tip number two, Victoria talks about being wary of advisors that aren't successful in your field. Basically she's talking about well meaning friends and family that don't really understand the nuances of the business that you're in. Because, they have ties to us, sometimes the people closest to us have complicated motivations. For example, and it's well meaning, but a parent may advise a child to be more cautious in their career because the parent may prioritize security over risk, when maybe it takes risk to be successful in some careers, many careers. But especially something like acting.
Bobbi Rebell:
Instead, maybe try to find a mentor that is in the business that you are in or aspire to be in, and then get advice from them. You'll get a more experienced vantage point, and maybe without the baggage of being a stakeholder in your life. Now we want to ask something of you. If you liked this show, help us get the word out. Tell a friend, write a review on Apple podcast, i Tunes or wherever you want, or just share this episode on social media. Be sure to tag me and then I can share it on that platform as well, and I love it by the way. A lot of you guys have been DMming me and, telling me how much you like different episodes. That's awesome.
Bobbi Rebell:
Victoria maybe a glamorous Hollywood actress but I found a lot of her story actually pretty relatable, and very relevant to a lot of the universal themes in our lives, and I hope you got a lot of value out of the conversation as well, and that we all got one step closer to being financial grownups.
Bobbi Rebell:
Financial grownup with Bobbi Rebell is edited and produced by Steve Stewart and is a BRK media production.
Kristin Wong laughs about it now but she literally cried and wanted to drown her sorrows at TGI Fridays when an unexpected tax bill hit her out of the blue. She fesses up to Bobbi that it never occurred to her that she would not get a refund. Ironically, her money tip is one for the budget conscious foodie in all of us.
In Kristin Wong’s money story you will learn:
-Why she did not pay her taxes when she started freelance writing
-How your tax responsibilities change when you switch from being an employee to being self-employed
-Why she owed money instead of getting her usual refund
-The benefits of having an emergency fund
-The emotional toll it took on Kristin
In Kristin’s money lesson you will learn:
-The big mistake Kristin made regarding money when she became a freelancer
-Ignorance is not bliss when it comes to taxes
-Kristin’s tips for managing major work changes
-How to find free resources online to manage and pay your taxes
-How to know when you need a professional for your taxes
In Kristin’s money tip you will learn:
-The high/low method for restaurant spending
-The most expensive/biggest splurge meal Kristin has had
In my take you will learn:
-What happens if you send in your tax returns without payment
-What to do if you do not have the money to pay your taxes on April 17th
-Strategies to use when you set up a payment plan with the IRS
-Why you should avoid paying your taxes with a credit card
Episode links
Pickup your copy of Kristin Wong’s new book Get Money
The book website is at: https://thegetmoneybook.com/
Get Kristin’s downloadable worksheets at https://thegetmoneybook.com/worksheets/
Kristin Wong’s website is https://www.thewildwong.com/
Follow Kristin!
Facebook- (and join her private facebook group): https://www.facebook.com/thewildwong/
Twitter @thewildwong
Instagram: @thewildwong
Pinterest thewildwong
YouTube The Wild Wong
Other links:
IRS.Gov
TurboTax.com
Vanguard.com
https://www.irs.gov/newsroom/what-if-i-cant-pay-my-taxes
https://www.irs.gov/payments/direct-pay
Cary Carbonaro
Stefanie O’Connell
Holly Hanson
Get Rich Slowly
JD Roth
Transcription
Kristin Wong:
So, I just cried. My now husband, who was my boyfriend at the time and he was like trying to calm me down. He was like, it's going to be okay. I just remember like I wanted to go to TGIF Fridays.
Bobbi Rebell:
You're listening to Financial Grownup with me, certified financial planner, Bobbi Rebell. Author of "How to be a Financial Grownup", and you know what? Being a grownup is really hard especially when it comes to money. But it's okay. We're going to get there together. I'm going to bring you one money story from a financial grownup, one lesson and then my take on how you and make it your own. We got this.
Bobbi Rebell:
Hey friends, spoiler alert, our guest Kristin Wong author of "Get Money" was crying because of something that happened to her at tax time. And I thought this would be a great time to hear her story about the time she, oops, forgot to pay her taxes. So her book, as I mentioned is called, "Get Money. Live the Life You Want, Not Just the Life You Can Afford." It makes learning about money feel like a game, which she really could have used her own book at this time because it was not a fun time.
Bobbi Rebell:
You've probably read Kristin's work in the New York Times, New York Magazine, Glamour, Life Hacker. Kristin got her start as a money writer at the fantastic blog, "Get Rich Slowly." This is a story you need to hear, especially right now at tax time. Here is Kristin Wong.
Bobbi Rebell:
Hey, Kristin Wong. You're a financial grownup. Welcome to the show.
Kristin Wong:
Thank you for having me on the show.
Bobbi Rebell:
I am loving your new book, "Get Money. Live the Life You Want, Not Just the Life You Can Afford." Full disclosure, I'm only about two thirds of the way through, but I will be finishing it very soon. Great job.
Kristin Wong:
Thank you.
Bobbi Rebell:
It's not easy to say something new in this space and you really did it.
Kristin Wong:
Yeah. And I've been writing about money for so long that it was kind of hard to say something new. So I really had to think about it for ... I had to take myself out of the money geek persona.
Bobbi Rebell:
You're not a geek. You're the cool money nerd.
Kristin Wong:
All right. I'll take it.
Bobbi Rebell:
You're the cool friend, talking about money and we have cool stuff to talk about. Your money tip is super cool, but before we do your money tip and that's a teaser for all the foodies out there, we're going to do your money story, which is so appropriate, because this is going to come out in April, which is our favorite month. Not. Because we talk about taxes and your money story is about the fun world of taxes. Tell us, Kristin.
Kristin Wong:
Oh man, I have a crazy tax story. When I first started freelancing six or seven years ago, I was full time freelancing and everything was going fine. I wasn't making that much money because I was new at it. I had no idea that you had to pay estimated quarterly taxes. It's just not something that I paid attention to. I was so used to having an employer take out taxes for me. So in April I decided to do my taxes, which usually I liked doing taxes because-
Bobbi Rebell:
Well, you were probably getting refunds. You were getting refunds when you worked for an employer.
Kristin Wong:
Exactly.
Bobbi Rebell:
So this was the time you would be getting like a bonus.
Kristin Wong:
Right. So I was looking forward to all this money coming in, thinking what I was going to do with it. But nope. I had a $5000 tax bill. And some of it was penalties but it was mostly, I hadn't paid any of my taxes. And the fact that my taxes were only $5000 should tell you that I wasn't making that much. I had an emergency fund, thankfully and it just depleted my emergency fund.
Kristin Wong:
I remember, I had just moved to Los Angeles and I was proud of myself for finding a job here and I was a writer and I was making it at work, and I had an apartment, and I just remember-
Bobbi Rebell:
You were very grown up except for one thing.
Kristin Wong:
Except for the taxes. Well I just cried. I remember it was a Friday night-
Bobbi Rebell:
Did you just literally cry? You actually cried?
Kristin Wong:
I cried. I did because it was just-
Bobbi Rebell:
Was there witnesses?
Kristin Wong:
My now husband, was my boyfriend at the time and he was like trying to calm me down. He was like, it's going to be okay. I just remember like I wanted to go to TGIF Friday that night.
Bobbi Rebell:
And spend more money.
Kristin Wong:
Yeah. I was like, I want to do it. Let's go to TGIF Friday.
Bobbi Rebell:
Now did you have everyone helping you? Did you just go to a tax preparer? What happened?
Kristin Wong:
No.
Bobbi Rebell:
How was this all discovered?
Kristin Wong:
I just wasn't prepared at all for it. I thought, you know I've always been when of those type of people, I'll just say yeas and figure it out later. And that can definitely work in my favor, but this time it did not. I was unprepared for the freelance life and the massive change. Like how different it is financially.
Bobbi Rebell:
All right, so let's talk about the lessons. What are the lessons, besides know whether you're paying taxes or not.
Kristin Wong:
Right. I'd say the lesson is just don't ignore money. Like I just ignored what it took to be a freelancer financially and I ignored all of that. And I think a lot of people do that. We don't like to think about money. We don't want to figure out the practical side of things. So we just kind of sweep it under the rug. I think a lot of people even take it further. They don't look at their budget or they don't look at their credit card statements, and that really was a game-changer for me because this was pre-writing about money days.
Kristin Wong:
But I really realized, nobody is going to care abut your finances. Nobody's going to hold your hand and walk you through it. And if you don't take care of it the somebody else will. Well if you don't care of your money somebody else -
Bobbi Rebell:
Somebody else will take it, somehow.
Kristin Wong:
They'll take it.
Bobbi Rebell:
It there like a checklist of things? So number one would be, be aware of taxes that you may owe. And if you're just starting out the truth is, you may earn so little money that you, especially with the new tax system, under a certain amount you may not even owe taxes. But you just need to figure out if you do.
Kristin Wong:
Right. And I would say, if you're going through a major work change like that, where your status is changing from full time to freelance, if you can afford it, go to a tax preparer and have them kind of walk you through the process. But at the very least, always research what your financial situation is going to look like if you have a major life change, especially when it comes to taxes. There are a lot of free resources on line, but I would say if you can afford it you certainly want to go to a professional.
Bobbi Rebell:
Are there some resources you can recommend?
Kristin Wong:
Yeah. The IRS.gov website is actually pretty great. They have a lot of resources for freelancers and independent contractors and that sort of thing. And Turbo Tax, their website actually has a lot of useful information. So I would check out those two resources.
Bobbi Rebell:
Let's go to the money tip because I teased it a little bit earlier. I love this Kristin. This is one for the foodies.
Kristin Wong:
Yes, so it is ... My money tip is the high, low method for restaurant spending. And I actually read this tip from a restaurant critic on line. And he or she, I don't remember, this was a long time ago, basically said don't go to any middle of the road restaurants. Save your budget. Spend it mostly on hole-in-wall, cheaper restaurants because they are usually mom and pop owned and the food is really good and they stay in business because the food is really good.
Kristin Wong:
You're going to save money going to those cheaper restaurants and then use that to splurge every now and then on a really high-end, nice restaurant that's known for their cuisine. So his or her tip was, basically just avoid any middle of the road restaurants. And so if you are going to go out six times a month on restaurants, go to the cheaper places five times and then save your sixth splurge restaurant meal for a nicer high end restaurant.
Kristin Wong:
The idea is, those middle of the road restaurants ... I mean there are some exceptions to this. This is a generalization, but they're usually like, the food is very mediocre, and your not getting the most bank for your buck.
Bobbi Rebell:
Right.
Kristin Wong:
But you will get the most value from the high, low method.
Bobbi Rebell:
Right. And you're usually just avoiding cooking at home because you just don't feel like it.
Kristin Wong:
Yeah.
Bobbi Rebell:
Hey, let me ask you ... So you talk about splurge. What is the most you've ever spent on one meal out, Kristen?
Kristin Wong:
Oh my gosh. I've told this story before but I ... I still I feel guilty about this but I spenT $40 on a steak once. And I don't know what I was thinking. I think that I had been ... My lifestyle-
Bobbi Rebell:
So the entrée was $40? The entrée. But that's not that bad.
Kristin Wong:
Yeah, but-
Bobbi Rebell:
Obviously there were other things to the whole meal.
Kristin Wong:
Yeah.
Bobbi Rebell:
What do you think the whole meal cost you, then?
Kristin Wong:
I was with a friend so we split it. But it was probably like $50, $60 for one person. And I had never spent that kind of money before. That's the thing. I grew up in a lower income household so $40 on steak. If my parent found out about that, they would slap me silly.
Bobbi Rebell:
All right. You haven't spent that much time in New York City, but maybe that's a good thing. New York City is not very budget-friendly. All right. We are never going out for steaks together. We are going to have some plain, simple coffee.
Kristin Wong:
I like the steaks, though.
Bobbi Rebell:
Yeah. Maybe we'll make steaks at home. That sounds like a good plan. All right. Thank you so much. I want to talk about your book quickly before I let you go. "Get Money." This is a good book. It is a paperback. I now carry it with me because it's like little nuggets of money tips and little things like what you just said about the restaurants. So many brilliant musings on money. Tell us a little bit more about it.
Kristin Wong:
Yeah. Well, it's a very actionable and interactive book so there area lot of exercises and there are a lot of assignments in it. You have to do work when you're reading it, so I would read it with a pen or pencil in hand. You can also go on line. There is an accompanying website to the book, called Thegetmoneybbok.com or you can find worksheets in like video tutorials for it, because I think sometimes with these money concepts, somebody tells you how to open a retirement account.
Kristin Wong:
And you're like, okay that sounds well and good when I'm reading it but when I go to the Vanguard website I have no idea how to get started. So I actually show you in some video tutorials exactly what you need to do to get started, so you have no excuse not to get your money in order.
Bobbi Rebell:
And there's a lot of value out of this book, because you quote so many of my favorite people, Cary Carbonaro. You quote Stephanie O'Connell, Holly Hansen, so many brilliant money minds are in here. It's great, so congratulations on the book. Where can people find you and what else are you up to?
Kristin Wong:
I am at the WildWong.com, is my website and all my social media handles. And I just sort of write about, of course personal fiance, but also resources for freelancers and that sort of thing too.
Bobbi Rebell:
Cool. And your background, by the way is so cool. You were a movie writer, a TV writer. So interesting.
Kristin Wong:
Thank you.
Bobbi Rebell:
Just quickly, how did you fall into the money stuff?
Kristin Wong:
Well I was actually writing full time freelance for about dating and relationships when I started writing about money. I actually started writing at "Get Rich Slowly', J.D. Roth's blog. I have always been fascinated with money. That's a longer story. But I would read his blog every morning and then one day he said that he was hiring writers, so I just applied to be a freelance writer and I started kind of blogging about ...
Kristin Wong:
Like I would write essays about my own dysfunctional relationship with money and I really just, I figured out how to get money through just writing about it for five years. So I wanted to share that knowledge with other people.
Bobbi Rebell:
Well, we appreciate it. Kristin Wong, thank you so much.
Kristin Wong:
Thank you.
Bobbi Rebell:
Much as we hate to deal with it, taxes are a reality of being a financial grownup. Here's the thing. Kristin was able to contain the damage of not filing quarterly taxes as a freelancer because she had the cash in an emergency fund. So great. There were some consequences, but all things considered, Kristin made the problem go away. In reality that is not always the case. In fact, I'm going to bet, very often it's not the case, so what do you do if you don't have the cash?
Bobbi Rebell:
Well, first of all, financial grownup tip number one. No matter what, you still have to file the paperwork on time. Now you can file an extension if you just want to procrastinate and not even figure out what you owe. But you got to figure out some kind of idea, because they're going to start penalizing you and you're going to be paying interest on what you owe. So when you do pay it, it's going to be so much more.
Bobbi Rebell:
The money is due April 17th. Now, as Kristin said, the IRS.gov website can very easily walk you through all of this. They even have an IRS direct pay area of the website, where you can easily pay tax estimates. I'm going to leave a link to that in the show notes.
Bobbi Rebell:
Financial grownup tip number two. Okay, let's say you literally do not have the cash. You need to get in touch with the IRS and you need to get on a payment plan. They can even give you extensions if you literally don't have the ability to pay anything right now. I'm going to give you a phone number to the IRS. 1-800-829-1040. 1-800-829-1040. Call them up, They will work out a plan.
Bobbi Rebell:
Be nice. The whole point is you're talking to a human being. You can be reasonable. They want to get their money and they want to get it consistently in a way that you're going to be able pay. So they're going to be flexible. In fact, they can often waive the penalties. Not only the interest on the money you owe, but the penalties. So ask.
Bobbi Rebell:
I do not recommend putting it on a credit card. In almost every case, unless you hae a 0 interest credit card, in almost every case the IRS, even with penalties will be less than the interest on a credit card. If you enjoyed this episode, subscribe and consider writing a review on Apple Piecasts, aka iTunes.
Bobbi Rebell:
It helps the show get discovered so we can share more money stories and tips and be in touch. On Twitter, I'm @BobbiRebell. On Instagram at BobbiRebell1 and Bobbi Rebell on Facebook. And to learn more about the program and to get on our mailing list for bonus content and more go to BobbiRebell.com/FinancialGownuppodcast. I hope you guys enjoyed this episode with writer and money expert Kristin Wong. Get her book, "Get Money" and here's to us all getting always bit closer to being financial grownups.
Bobbi Rebell:
Financial Grownup with Bobbi Rebell is edited and produced by Steve Stewart and is a BRK Media production.
Trade Bodge and her partners set out to build a business- that they knew was challenging before they even started. But they focused on funding, building a strong foundation, and learning from the past mistakes.
In Trae’s money story you will learn:
-The market opportunity Trae and her partners saw when they created ThreeCustom.com
-The challenges the new business faced, including the difficulty of scaling up
-The creative way they funded the business
-Why Trae left the business
In Trae’s lesson you will learn:
-The challenge in finding the balance between waiting until a business is “ready” and moving forward while there is the most excitement
-Why she believes entrepreneurs should pay as much attention to how time their launch, as how they spend their funds
-Specific ways to research markets ahead of time, and during the early stages of a business launch including trade shows and how to get competitor insights.
-How to use time to your advantage
In Trae’s money tip you will learn
-Where to find money, that is already yours, to fund your startup
-How they each saved $25,000 to put towards their business
-How to avoid feeling deprived when saving for a goal
In my take you will learn:
-The realities of start-up life
-What to do when you just aren’t that into your startup
-Tips to make sure you remain financially solvent even as an entrepreneur with a startup
Episode Links
Threecustom.com on Twitter: https://twitter.com/ThreeCustom
Traebodge.com
Follow Trae!
Twitter https://twitter.com/truetrae
Instagram https://www.instagram.com/traebodge/
Facebook https://www.facebook.com/Truetrae/
Transcription
Trae Bodge:
We had the best intentions. We wanted to get out there and start this business. We found out that customization is very difficult to scale, and so any business who has attempted to do bespoke or customized products can attest to this. It's very, very difficult to grow a business like that.
Bobbi Rebell:
You're listening to Financial Grownup with me, certified financial planner, Bobbi Rebell, author of How to Be a Financial Grownup, but you know what? Being a grownup is really hard, especially when it comes to money. But it's okay. We're going to get there together. I'm going to bring you one money story from a financial grownup, one lesson, and then my take on how you can make it your own. We got this.
Bobbi Rebell:
Hey, everyone. This is an episode about starting something really big, being all-in, and then finding out maybe it's not for you and having the strength to, well, exit gracefully. My guest and her partners were off to the races with what seemed like a genius idea: blend customer colors to replace makeup products that were no longer available. But, while the business is still chugging along, Trae Bodge left and is now a smart shopping expert that you can see all over the media and with her column in Women's Day. Here is Trae Bodge.
Bobbi Rebell:
Trae Bodge, smart shopping expert, you are a financial grownup. Welcome.
Trae Bodge:
Thanks so much for having me.
Bobbi Rebell:
Congratulations, by the way, are in order for your new Women's Day column.
Trae Bodge:
Oh, thank you so much. I'm really excited to be partnering with Women's Day as their financial expert. I'm covering everything from best buys month-to-month, how to maximize your tax return, how to save on your Amazon purchases, all sorts of things that savvy shoppers need to know.
Bobbi Rebell:
Awesome. We will definitely put a link to it in the show notes. I'm excited to hear your money story because, first of all, it has to do with the beauty business, it has to do with being entrepreneur, and it has to do with how much money do you really need to start a business? Do tell.
Trae Bodge:
Many years ago, two friends and I thought that we wanted to start a beauty business that specialized in the reproduction of discontinued colors. This is something that one of my partners and I had done for another brand that came on to the scene, blew up really quickly, and then fizzled out really quickly. Because, we found out, is that customization is very difficult to scale, and so any business who has attempted to do bespoke or customized products can attest to this. It's very, very difficult to grow a business like that.
Trae Bodge:
But we had the best intentions. We wanted to get out there and start this business and custom-blend products for women, and men, of course, and makeup artists. We started, for the first couple of years, creating our plan, saving our tax returns, saving our bonuses very-
Bobbi Rebell:
Saving the refunds from the tax returns.
Trae Bodge:
Yes, yes. Saving our tax refunds, and planning along the way. What this business was about was really about answering a problem that many women had, which was when you have a favorite product, like your favorite eye shadow or your favorite lipstick, and then that product is continued, we set out to reproduce those products as close as we could to the original color and texture. Then we kept that formulation on file so you can reorder it any time. Now, I [crosstalk 00:03:33]-
Bobbi Rebell:
I love that.
Trae Bodge:
It's such a helpful process for so many people because you finally find that thing that works, and then suddenly, you can't get it anymore. Forgive me, I do sometimes speak about it in the past tense because I'm no longer with the business. The business is still alive and well. You can find it at threecustom.com. My two partners are still running the business, but about four years ago, I decided that I needed to move on and do new things, which is where I landed as a smart shopping expert.
Bobbi Rebell:
Tell me, what is the lesson from that story? What is the takeaway?
Trae Bodge:
For me, and in terms of being a financial grownup, when we set out to start our business, there's this excitement and energy about getting the business out there right away. My recommendation to all potential entrepreneurs out there is I know you want to get out there and you want to get out there now; however, the time that it takes to save the money or to crowd-fund, for instance, if you're going to do Kickstarter or Indiegogo, or if you're going to look for venture capital or money from family and friends, the time that it takes to gather that money is time that works for you. You need the time to do your market research, to attend trade shows, to interview people and really flush out what you want this business to be because there are so many brands out there. How are you going to differentiate and set yourselves apart from the competition?
Trae Bodge:
For me, I would say to people, just take your time. Don't get frustrated by how long it takes to start a business, and use that time to your advantage.
Bobbi Rebell:
Give us a money tip, something tangible that people can literally do today.
Trae Bodge:
This is a tip that I think can apply to many things, whether it's going to be starting a business or paying off your student loans or any other debt is to take money that may feel like a windfall, and rather than spending it and going on a luxurious trip or buying a fancy handbag or even doing a renovation in your apartment, save that money. Save that money towards your business.
Trae Bodge:
What my partners and I did over the course of about two years is every tax refund we got, every bonus that we received, and then any extra money from if we inherited a little bit of money or anything extra like that, we did not take that money for ourselves. We put it in the bank. The three of us each saved over two years. We were in our early 20s at the time. We each saved $25,000. For the three of us, we were able to start our business with $75,000 after couple of years.
Trae Bodge:
That would be my money tip is that money that feels like something extra, instead of going to town with it and spending it, put it away towards your goal.
Bobbi Rebell:
But it's hard because you feel like it's found money.
Trae Bodge:
Yeah. It does. It is hard. It almost feels like you're on a diet. It's like you have that diet and you have the rules in front of you and everything you're supposed to eat and not eat, and you really, really, really want to eat that thing that you're not supposed to eat. To me, it's the similar feeling. You see that money, cross your hands, and you so want to go out and enjoy it and treat yourself because especially with, say, a bonus from work, it's like that's being given to you as a congratulations for work well done, and you want to enjoy that, but instead, put that away. You'll save money so much faster than you think you can.
Bobbi Rebell:
Trae Bodge, thank you so much. Wonderful story. Wonderful advice. We will all be checking out your column in Women's Day and visiting your website, which is traebodge.com, right?
Trae Bodge:
Yes, it's traebodge.com or truetrae.com, and definitely follow me on social. I'm truetrae or traebodge. I hope to see you all there as well.
Bobbi Rebell:
Wonderful. Thank you.
Trae Bodge:
Thank you.
Bobbi Rebell:
I loved Trae's story because it highlights the gray areas of startup life. Sometimes, a business is solid, but maybe not the future that you want. It's not a bad thing. It's just not your thing. Financial grownup tip number one: Leaving something that isn't right for you is like leaving a relationship with someone that you are just not that into. You could stay. It will probably be okay, but by staying with something that isn't for you, you're also not finding the business or career that is right for you. It's the missed opportunity cost. Don't get caught up in sticking something for fear people judging you or an idea that you are not a quitter. It's not about the exit. It's about what you find behind the door that you open as you leave.
Bobbi Rebell:
Financial grownup tip number two: As Trae says, whenever you start something new, don't rush in. Take the right amount of time to build yourself enough runway that you can be intentional when you do ramp up. You don't want to be scrambling for cash to fill an order. Be purposeful. Spend the time before you spend the money.
Bobbi Rebell:
Thank you all for your support. If you have not already, hit that subscribe button so you won't miss any episodes, and be in touch on Twitter @bobbirebell, Instagram @bobbirebell1, and of course, visit my website bobbirebell.com and sign up for our mailing list so we can keep you posted on what's going on at the show, and of course, spread the word. Tell a friend. Thank you also to Forbes for naming Financial Grownup as one of five podcasts that are getting it right. That was really cool. I hope you all enjoyed this episode with smart shopping expert Trae Bodge and that we all got one step closer to being financial grownups.
Bobbi Rebell:
Financial Grownup with Bobbi Rebell is edited and produced by Steve Stewart and is a BRK Media production.
John Schwartz, NY Times correspondent and author of the new book “This Is the Year I Put My Financial Life in Order” shares the story of his first home purchase, how it brought him to the brink of bankruptcy, and why he flosses every day.
In John’s money story you will learn:
-How John’s seemingly solid real estate investment went downhill
-How the rights of tenants can put owners in losing positions
-The specific financial steps John took ahead of a likely bankruptcy filing
-The factors that went into John’s decision about bankruptcy
In John’s lesson you will learn:
-Why John says failure is not the end of your financial life
-How John and his family rebuilt their life
-The specific steps John took to financially protect his second home
-What he would and would not have done differently in buying real estate
-The impact of a broad-economic downturn on individuals like John, and how you can create some protection as a home owner
In John’s money tip you will learn:
-The one health tip that John says will save you a ton of money
-The importance of daily health habits to avoid massive medical bills
-How his life informed his book “The is the Year I Put my Financial Life in Order” and how the book came together
-Why John did not have a will until his late 50’s
-John’s advice on retirement savings
In my take you will learn:
-Real Estate is a high stakes game, that should be entered into with eyes wide open
-My take on what John could have done differently
-The choice my family made to avoid investing in a property that would be hard to sell
-Why I still believe owning real estate is a great opportunity, despite the tax law changes
Follow John!
Twitter: @JSwatz
Facebook: This is the Year Schwartz
Buy John’s book!! : This is the Year I Put My Financial Life in Order !
Transcription
John Schwartz:
My father-in-law said, "You have to file for bankruptcy." I contacted a couple of bankruptcy lawyers and the one that I ended up with said, "You don't need to file for bankruptcy, you need to get out from under the single debt that's killing you."
Bobbi Rebell:
You're listening to Financial Grownup. With me, certified planner, Bobbi Rebell, author of How To be a Financial Grownup. You know what? Being a grownup is really hard, especially when it comes to money, but it's okay, we're going to get there together. I'm going to bring you one money story from a financial grownup, one lesson, and then my take on how you can make it your own. We got this.
Bobbi Rebell:
Hey everyone, before we get into today's interview, I want to do a quick thank you to all of you for supporting the show. Our numbers are going up, which is really cool. The show is being discovered and I have all of you to thank for it. I also want to thank some of our friends in the media that have highlighted Financial Grownup, including Forbes, which named Financial Grownup one of five podcasts that are getting it right. We were up there with some really big names like TheSkimm and Masters of Scale with Reid Hoffman and Powderkeg and a Rent the Runway related show, so it was pretty incredible to get that recognition.
Bobbi Rebell:
I also want to thank Business Insider for highlighting our recent episode with The Muse's co-founder Kathryn Minshew. Her story is pretty incredible, so I'm glad more people got to learn about it. Thank you to all of you and I hope you guys are enjoying the show. Okay. Now to the show. Many of us bring our A game to our professional lives. I certainly try to, but then we don't always make the effort at home. Think of the chef that whips up these gourmet, amazing meals at their fancy restaurant, then they go home and they can barely scrounge together maybe a grilled cheese or some leftovers. Who knows? New York Times correspondent, John Schwartz, is that guy. No, he's not a cook. He's obviously a journalist, but he does research for a living.
Bobbi Rebell:
He's written four books and he's also been a journalist at a number of prestigious publications. Right now, as I mentioned, he's at The New York Times, but in his personal life, he messed up and it cost him, and it kept costing him for years. It was really bad. But, the story of the author of his new book, This is the Year I Put My Financial Life in Order. Sensing a theme here, he got it together. Does have a happy ending. Just maybe not what you were thinking. Here is John Schwartz. Hey John Schwartz, you are a financial grownup. Welcome to the podcast.
John Schwartz:
Well, thanks it's great to be with you.
Bobbi Rebell:
Congratulations. Your new book, This is The Year I Put My Financial Life in Order is coming out right now. I whipped through this book by the way in a day and a half, which is pretty amazing, cuz I can be a bit of a procrastinator, but I couldn't put this down. It was a great book.
John Schwartz:
God, I'm glad to hear that. Thank you so much.
Bobbi Rebell:
How long did it take you to write it, by the way?
John Schwartz:
It was a little more than one year.
Bobbi Rebell:
I brought that up, because within the book is this gem of a money story that, I don't know, at first when you told me it I was disappointed in you, but when I read it in the context of the book, I respected you and I felt like, wow, this could happen to anyone. Tell us your money story.
John Schwartz:
Well, we bought an apartment in New York, which is either a success story or the beginning of a horror story. In our case, it turned pretty bad, because I got a job in another city.
Bobbi Rebell:
Which should be good-
John Schwartz:
Which should be good. Again, career advancement? Exactly. But, we got there and not only could I not sell the apartment in New York, because we had bought at the top of the market, but when we had a tenant, which also seemed like a pretty good idea, that tenant decided to stop paying. And, knew his rights, as he told me over the phone. I was either gonna have to spend a tremendous amount of money on lawyers to get him out or as the super in the building suggested, kill him.
Bobbi Rebell:
Yeah, no.
John Schwartz:
No, exactly.
Bobbi Rebell:
He is alive and well. Let's just make that clear.
John Schwartz:
Right. Well, at least, last I checked. Then, over time all our savings were gone. We were faced with near bankruptcy and ended up defaulting on the apartment and losing it. As a little side note, that apartment's worth more than a million dollars today.
Bobbi Rebell:
Wow. Can you give us some of the numbers involved and how this happened?
John Schwartz:
Well, it was $136,000. I believe, it might have been 138, my memories not perfect. We were able to pull together the down payment in part, because my wife had a little inheritance from her grandfather and I'd been making pretty good money at Newsweek. We were able to make the payments, but we were not able to make those payments and pay our rent in Washington. That's where the money really started to kill us.
Bobbi Rebell:
And the tenants weren't paying.
John Schwartz:
And the tenants were paying nothing. Well, we have the first tenant, I finally got him out at the suggestion of a very kind lawyer who said, "Send him a letter telling him that you won't pursue him legally if he just leaves."
Bobbi Rebell:
So, you forfeited money.
John Schwartz:
He was never gonna pay. I was gonna spend more money pursuing this guy in court and the lawyer, very intelligently said, "Don't throw good money after bad. Just see if this is enough of an incentive to get him out." It was and he left. Then we got the next tenants in. Again, just as with the first guy, we did a credit check, looked good. We tried to do eyes open transactions here. The second couple was very nice, but a few months in the woman called me and said, "My husband's left and I can't pay." I said, "Okay. Get out." That's when my father-in-law said, "You have to file for bankruptcy."
John Schwartz:
I contacted a couple of bankruptcy lawyers and the one that I ended up with said, "You don't need to file for bankruptcy. You need to get out from under the single debt that's killing you. Everything else, you're banking all your other payment. You're living right, but you have this one unsustainable debt, this mortgage." He walked me through the default process.
Bobbi Rebell:
What is the lesson for our listeners here?
John Schwartz:
The first lesson is failure, really crushing failure, as much as it hurts, is not the end of your life. It's not even the end of your financial life. We went through this, more than 20 years ago. You gotta imagine I was devastated by it, but over time we were able to rebuild. Before doing the default, I had been able to get a mortgage on a place in Maryland. So, we had a home that we could not lose.
Bobbi Rebell:
So you were smart with your timing. You did this very thoughtfully. You didn't just let it default. You thought, "Okay, before we let this happen, what financial things can we put in order?"
John Schwartz:
Right. How can I fix this to the extent that I can fix it? So, we were in the house. We went through the process on the other place. It was our new beginning and that's the message. That you can take failure and turn it into the next step of your life. In fact, when we sold that house five or six years later, we were able to sell it at twice the purchase price. Now, we bought it, it was a wreck and we really had to fix it up. That's-
Bobbi Rebell:
You put in the work.
John Schwartz:
... sort of the way we do things. We put in the work and we found a place that was seriously underpriced in the market. Largely, because it was such a wreck, but that turned around everything for us. We went from total failure to in a house, to a pretty good success.
Bobbi Rebell:
I love a happy ending. Looking back though are there things that you would have done differently or looking back, it just happened. Would you have not taken the job in Washington had you known what a debacle the New York apartment would be or really, it just happened and this is the way your life is?
John Schwartz:
I think I could have done things more intelligently. The way that I was looking for an apartment was more about feel than really working through the numbers and understanding what I was up against. I didn't know and might have been able to figure out that this apartment, which was part of a co-op conversion was happening in a building where the for rent apartments were not shifting to co-ops quickly enough.
John Schwartz:
One of our big problems was that we couldn't sell it, because banks didn't want to lend money in a down market in an undersubscribed co-op. Now, those were things I only learned after the fact, but wouldn't it have been smart to learn them before putting money down? Research counts. I mean, I do research for a living, right? I do the research and I type.
Bobbi Rebell:
Your job, but not your personal life sometimes. That's what happens to all of us, right?
John Schwartz:
That's right and that's the story of this book. Learning to do for myself what I do in my job.
Bobbi Rebell:
Part of my enjoyment in reading this book was getting some of your little tips in life. Tell me the money tip that you are gonna share with us that everyone can put in place. Hopefully, they're already doing it, but it actually is a money tip even though people may not think of it that way.
John Schwartz:
Okay. If you're ready for this, it's flossing. Now I sound like that dentist from Sesame Street. Could I just say a few words about flossing? Flossing's important not just because it helps keep your gums healthy and all that stuff, it is something that I started to do in my late-20s regularly, after I had a bout with a periodontal condition. I needed a procedure. After that, there was not a day I missed flossing.
John Schwartz:
What flossing does, more than helping your gums, but I'll get back to that. Is that it establishes a daily habit. Establishing daily habits is the foundation stone for all sorts of good things. If you can floss every day, then you can exercise every day, if you can find the time. Then you find how to make the time. If you can exercise every day, maybe you can save a little money.
John Schwartz:
You can show discipline in other parts of your life, but even more than that, your teeth and gums are gonna be healthy. You're gonna have a much smaller chance of running into the kind of mouth problems that I had in my late-20s, which are expensive. Even if you've got insurance, you've got deductible and everything else. It's part of using good habits to prevent, preventable problems.
Bobbi Rebell:
It all goes together. The book, This is The Year I Put My Financial Life in Order. I love it. Tell our listeners a little bit more about it.
John Schwartz:
Well, it's coming out on April 3rd. It is part guide and part memoir, which is a sort of weird blend, but you know. Reese's put together chocolate and peanut butter and that worked. The idea is that I put my financial life in order by applying research to the problems of my life and the issues that were still undone. Like, I was in my late-50s and I didn't have a will, which is idiotic. I hadn't looked at my retirement to understand whether I was gonna live comfortably, or whether I needed to do more, whether it was a disaster.
Bobbi Rebell:
But you are okay, by the way.
John Schwartz:
Yes.
Bobbi Rebell:
Spoiler alert. You're fine.
John Schwartz:
Yes, spoiler alert.
Bobbi Rebell:
Good to hear.
John Schwartz:
Largely because I started putting money away in my 20s. The first time I got a significant raise, I opened a 401k and put the money in. There are no financial secrets in this book, but there are a lot of fundamentals like, start early and make your contributions. These were the lessons that got me through. The idea behind the book is, I would hope that by reading what I went through, people could figure out what they can do too.
Bobbi Rebell:
Where can people find you, John?
John Schwartz:
I am on Twitter at @jswatz, J-S-W-A-T-Z. There's a Facebook page for the book, This is The Year Schwartz.
Bobbi Rebell:
Love it.
John Schwartz:
It's fun, but the Facebook page is there to talk about the book and for people to talk about their own financial issues. The book is gonna be in stores or you can get it anywhere.
Bobbi Rebell:
Awesome. Well, I am a huge fan, John Schwartz. I highly recommend everybody read it. It is a page turner, which is not typical of personal finance books. So, definitely everyone check it out. Thank you so much, sir.
John Schwartz:
Thank you.
Bobbi Rebell:
Here is my take on what John had to say. Real estate investment glorified in our society, but make no mistake, it is a high stakes proposition and sometimes life and the macro economy gets in the way. Financial Grownup tip number one, buy what you can sell later on. Always think, how will this sell? You can read more in John's book, but in short, that apartment that he bought, because he could afford it, to be fair, was not in a great family neighborhood. He got a good deal, he thought, but when the apartment went for sale in tough times and he needed to sell, it just wasn't selling.
Bobbi Rebell:
Case in point, when my husband and I went to buy our current apartment, there were two identical apartments for sale in the same building, same layout. You get the idea. One was a lot cheaper, like 25% cheaper, a lot. We could have really used the savings, but there was a catch. A giant flashing orange neon parking sign right across the street. You could see it through what would be our son's bedroom window.
Bobbi Rebell:
We rationalized a little bit. Many apartments in New York face brick walls, so this at least was facing open air, just at night there would be this giant flashing parking sign. We could get blackout shades though, right? You know what? We ended up going for the other apartment on a higher floor, not a great view, but an okay view and no parking sign, because we knew that the pull of buyers when we went to sell would be limited even in an upmarket and it could be nonexistent in a downmarket, if we went to sell that apartment where people just would not buy it. Some people, no matter what, they are not buying the apartment with a flashing orange parking sign that would be in their child's room their whole childhood. So, John found out that sometimes an apartment that's a deal, is not really such a deal.
Bobbi Rebell:
Financial Grownup tip number two, don't give up on real estate. John kept at it and had a great experience the second time around. I'm a big believer in owning your own home. The tax breaks are not as good as they used to be, but you're not gonna live in fear of a landlord raising the rent, or simply asking you to leave.
Bobbi Rebell:
Friends, be sure to check out John's new book, This is The Year I Put My Financial Life in Order. You will learn from John, but you will also laugh along with John. It is a fun and readable memoirish personal finance guide well worth your time. Thank you all for spending a little bit of your day with us. Keep up the great feedback. I am on Twitter @bobbirebell, on Instagram @bobbirebell1. I hope you enjoy this episode with John Schwartz and that it brought us all one step closer to being Financial Grownups. Financial Grownup with Bobbi Rebell is edited and produced by Steve Stewart and is a BRK Media production.
Retire Inspired’s Chris Hogan had a taste for expensive food at the grocery store- and it was was thinning out his bank account. But when he saw the true cost of his weekly habit he quickly hit the brakes and kept the change.
In Chris’ money story you will learn
-How Chris Hogan had money wake up call
-Why his spending was spiraling out of control
-How he curbed his grocery spending bill from $1500 a month to close to nothing
-How routine and habit was hurting his wallet
-The specific strategy Chris and his wife used to get back on track with their spending
-The crazy meals the Hogans had while cleaning out their food stash!
In Chris’ lesson you will learn
-Chris’s strategy to avoid mixing up wants and needs
-The importance of being intentional with how you spend your money
-How to curb spending even when you think you can afford it
-Chris’ saying: interest you pay is a penalty but interest you earn is a reward
-How to get debt out of your life
In Chris’ money tip you will learn
-Why he believes cash is the best tool to control spending
-How electronic payments can confuse you and cause you to spend more than you intend
In my take you will learn:
-While eating out can be a budget killer, eating at home can be expensive as well
-Be deliberate at the grocery store- have a list and don’t buy those impulse items!
-Don’t shop hungry
-Use apps like Grocery IQ and Grocery pal to help stay on track in the store and to plan better
-Avoid routine spends. But on purpose, and with purpose!
EPISODE LINKS
Chris Hogan’s website https://www.chrishogan360.com/
Chris Hogan’s book Retire Inspired
Chris Hogan’s podcast Retire inspired https://www.chrishogan360.com/podcast/
Chris Hogan’s Retirement calculator https://www.chrishogan360.com/riq/
Follow Chris!
Instagram @ChrisHogan360
Twitter @ChrisHogan360
Facebook https://www.facebook.com/chrishogan360/
Grocery apps to check out:
Grocery IQ
Grocery Pal
Here are some stories about Grocery apps:
8 apps that will save you real Money on Food- from Money
http://time.com/money/5095326/8-apps-that-will-save-you-real-money-on-food/
10 Best apps to save money on groceries 2018 from Frugal for Less
https://www.frugalforless.com/apps-to-save-money-on-groceries/
Best Grocery List apps article from best products;
https://www.bestproducts.com/eats/food/g1505/grocery-shopping-list-apps/
6 best grocery shopping list apps for iphone and ipad 2018 from appsdose
http://www.appsdose.com/2015/04/6-best-grocery-shopping-list-apps-for-iphone-ipad.html
7 Grocery List apps for iPhone and Android for best shopping experience
https://mashtips.com/best-grocery-list-app-iphone-android/
Transcription
Chris Hogan:
You would have thought I was getting ready for Y2K. I had food in the cupboards, the freezers. I had food everywhere, but yet I was still every Saturday morning going to the grocery store.
Bobbi Rebell:
You're listening to Financial Grownup with me, certified financial planner Bobbi Rebell, author of How to be a Financial Grownup. You know what? Being a grownup is really hard especially when it comes to money, but it's okay. We're going to get there together. I'm going to bring you one money story from a financial grownup, one lesson, and then my take on how you can make it your own. We got this.
Bobbi Rebell:
Hey, friends. We talk a lot these days in our society about being mindful. I'm working hard about bringing that into my life in a consistent and intentional way, but we also need to talk about mindlessness especially when it comes to our every day spending. I love the story that Retire Inspired author and podcast Chris Hogan is about to share with us because of its brilliant simplicity. We need to hear this stuff and know that even the people we look up to when it comes to money have not always been the role models for money mindfulness. He became aware, and once he saw the numbers, change came. Chris Hogan, you are a financial grownup. Welcome to the podcast.
Chris Hogan:
Thank you. It's a pleasure to be with you.
Bobbi Rebell:
It's an honor to have you. I am such a fan of all that you do for people from Retire Inspired, the book, to your podcast, to all of your good teachings and advice. It is truly a privilege, and we thank you.
Chris Hogan:
Thank you. It's a pleasure to be with you.
Bobbi Rebell:
You have brought with you a money story about spending and the grocery store, which is something that people don't always realize what's going on there. Do tell.
Chris Hogan:
Bobbi, I had an issue. I wasn't being a grownup at this time.
Bobbi Rebell:
Oh no.
Chris Hogan:
This is back before I had kids. I'm now the proud father of three boys, but no kids, double income household. We were just getting started getting serious about where we were financially and what we were doing. I sat down and was looking at bank statements. I wanted to add up, I wanted to know where was my money going? Where was our money heading? I started adding up the different categories, the eating out, but the grocery bill. This was one that was jumping out at me. I thought, this can't be correct. I went another month back, and yeah, $1,200 a month on groceries, a family of two.
Bobbi Rebell:
What were you buying?
Chris Hogan:
Anything and everything, meats, cheeses, anything and everything at any time. Again, we had the money. We weren't hurting anybody. I went back a third month and added it up. It was like $1,500. I was like, "Okay, let's go back to the $1,200," and it was just too much. Then I started realizing something. I was making the grocery store rich, instead of me building my own wealth. That became my financial wake up call, so to speak. Literally, looking at this, we got intentional. We got on a budget, and we set up a dollar amount that we were going to spend on groceries. That was the taking control. I'll never forget, we looked at all the food that I stockpiled. You would have thought I was getting ready for Y2K. I had food in the cupboards, the freezers. I had food everywhere, but yet I was still every Saturday morning going to the grocery store. I realized something. I was shopping out of habit, not out of necessity.
Bobbi Rebell:
It sounds like it was part of your routine. That was your weekend routine.
Chris Hogan:
That's exactly right. It was the routine. Regardless if we needed anything or not, I was going and buying things because I could. Stepping back and really looking at that, we put some parameters in place. We set up a dollar amount that we were going to spend on groceries, but before we did that we ate the food that we had. I'll never forget, that was a grownup moment for us, really starting to take a stand because the $1,200 to $1,500 that was normally being spent in that month, we didn't spend it that month. We actually sent it toward our debt.
Bobbi Rebell:
The entire amount?
Chris Hogan:
The entire amount. We had $100 for groceries. We built the milk, and eggs, and things like that. The other stuff, we ate the things that we had. Now I'm not going to lie to you, Bobbi, we had some interesting meals. It was interesting. Ramen noodles with corn. We did some stuff, but we made a stand at that point financially that we were going to be in charge, and our habits weren't going to take charge of us.
Bobbi Rebell:
I want to ask you something. Earlier you said you could afford it, but then you said you were putting that money towards debt. You could afford it in terms of cash flow, but yet maybe you should not have been spending that, clearly, because you could have put it towards debt, so your perception of afford has changed.
Chris Hogan:
Absolutely, it did, because my math changed. Looking at debt, it was one of those things that at that time we rationalized it, because why? Everybody had credit card debt, everybody had a car payment. As you start to look at it, and you start to run the numbers, you understand interest that you pay is a penalty. Interest that you earn is a reward. When you start to learn real math, as I call it, you start to see debt for what it is. It's a threat, and it's a thief. You want to get it out of your life.
Bobbi Rebell:
What is the lesson from this for our listeners?
Chris Hogan:
I'd say, "Be intentional." It's the lesson of wants versus needs, and we can get confused. We can want something so bad that we feel like we need it, but I want us to be clear. Set spending limits for yourself. Understand what you normally spend, but let's put some dollar amounts on there of hey, here's what we're going to spend on groceries. This is what we're going to spend eating out. Now you start to construct that budget. It puts you in control, and then you don't have to feel regret.
Bobbi Rebell:
Let's move on to your money tip because this is one, I know what you're going to say. It's so brilliantly simple.
Chris Hogan:
Yes.
Bobbi Rebell:
What is your money tip for everyone that they can use right away?
Chris Hogan:
Right away, my money tip is this. Use cash. I know it sounds crazy, but I'm telling you, when you have cash, and you go into the grocery store with that dollar amount, it helps you stay aware, and it helps you stay in control. Now when they say the total amount is $85, and you count out $85 you are feeling the spending of the money as you're counting out those bills as opposed to with a debit card, the swipe, we don't feel the pain there. It's just this swipe. Now there's a chip, and all these things going on. It doesn't become spending until you balance your checking account. Use cash in those areas that you struggle in, whether it's eating out. Get an envelope, write eating out on it. Put a dollar amount in there each and every pay period. When the money is gone, you're done. It's this great reminder, and it keeps us aware of where we stand financially.
Bobbi Rebell:
All right, Chris. Thank you so much. I want to hear more quickly about what is going on with you, and what you are working on at Dave Ramsey Solutions and at Retire Inspired. Do tell.
Chris Hogan:
Yes. We launched Retire Inspired in 2016. I'm working on my second book that we're going to have ready and available for the public in 2019, but I'm traveling all over the country doing smart money events where we walk people through the baby steps. I'm also doing corporate events where I'm talking about money and leadership. They can go check me out at ChrisHogan360.com, look at the events page, and they can find out where I'm at and where I'm going to be.
Bobbi Rebell:
One my favorite things about what you do in your books, and I hope you have this in your next book, is that you really as you travel you get so many unique stories that are relatable, or sometimes hopefully they won't be relatable because some of them can be pretty scary, but I look forward to hearing more of those stories. In terms of social media, always Chris Hogan 360?
Chris Hogan:
Always, everything, on Facebook as well as Twitter, Instagram. @chrishogan360 is where I'm at.
Bobbi Rebell:
Okay, there was a lot there that I could relate to and have definitely been guilty of. This is a case where I am right in it with you guys. Financial Grownup Tip Number 1: We think of eating out in restaurants as a big expense that has to be watched, and it does, but you can also buy quite expensive items at the grocery store, and have some very pricey home cooked meals, or even worse as in the case of the Hogan household, some expensive food just sitting in the pantry and the freezer. You have to watch that bill. It seems so simple, but make a list when you go shopping and stick to it.
Bobbi Rebell:
You've heard this before, but I'm going to remind you. Don't shop hungry. It happens, I do it. I always buy more than I should and fall for the impulse items. I'm working on it, and you should too. There are a ton of apps that can help you to be more organized and save money when you shop for groceries. I'm going to put links to a few articles with suggestions in the show notes, but a couple to check out just here, Grocery IQ and Grocery Pal. You make your list, and the app will sort out and show you discounts including those for other brands of the same item. While it may seem like it's okay if you can afford it to spend that extra money at the grocery store, it's not always as okay as it seems. For example, in the Hogan's case, they realized that they could be using that money to pay down debt. They thought that they could afford it, but maybe not so much. If you don't have debt, wouldn't it be more fun to do something else with the money, or more smarter, to invest the money? Savings is a good thing.
Bobbi Rebell:
Financial Grownup Tip Number 2: Ditch the bad money habits that are just there because they're routine. Chris Hogan was shopping at the grocery every Saturday because it was Saturday. He did not need the food. In fact, he probably didn't have room for it at a certain point. This comes back to things like lattes. If you want one because you want one, and you can afford it, that's fine, but if you're just buying one every morning because that's your routine, think about it. Maybe you want to do something else some days.
Bobbi Rebell:
I want to thank all of you for your ratings and reviews on iTunes. It is making a huge difference in helping others discover our new podcast. I also want to thank Forbes for naming Financial Grownup one of the five podcasts that is getting it right. It was amazing to be getting that kind of recognition less than two months after we started this project. Keep spreading the word, friends, and keep in touch. I am on Twitter, @bobbirebell and on Instagram at bobbirebell1, on Facebook. Check me out under Bobbi Rebell and learn more about the show at, you're getting the theme here, bobbirebell.com/financialgrownuppodcast.
Bobbi Rebell:
Chris Hogan is pretty much as grown up as it gets. I loved his episode, and I hope you did too, and that it got us all one step closer to being financial grownups. Financial Grownup is edited and produced by Steve Stewart and is a BRK Media production.
After 148 rejections in the first funding round, Kathryn Minshew co-founder and CEO of the Muse took note of what she did wrong and upped her game when she went looking for new financing. Minshew scored close to $30 million thanks to the new approach.
In Kathryn’s money story you will learn
-How Kathryn and the Muse team re-vamped their strategy the second time they raised money
-How Kathryn rebounded from the 148 rejections in the seed round of financing
-How The Muse raised $30 million from investors
-How they were able to ask for less money and come out with more than the original targets
-The way Kathryn structured her process when pitching investors
-How they organized their pitches and research to be more effective
-Kathryn’s investor prioritization strategy
-The specific thing Kathryn said to investors to get them to the table faster- and with more interest in her company
-How a second round of financing is different- and should be approached differently from a seed round
In Kathryn’s lesson you will learn:
-The advice Kathryn found most helpful from her networks and mentors
-How she got help from other entrepreneurs
-How to tell if the investors are wrong not to invest- or if your idea and pitch is missing the mark
-How to figure out who your end users are- and why it is important
-Strategies and specific things to ask in order to get honest input about your company
In Kathryn’s money tip you will learn:
-Negotiations can be about more than just cash
-How to ask for signing bonuses, signing bonuses, flextime, vacation time, better titles.
-Why budgets for professional training are essential and how to negotiate for them
In my take you will learn:
-How to learn lessons from rejection, and incorporate them in your next venture
-The importance of taking the time to throughtfully plan and customize presentations and pitches
-How to level the playing field even when the other party is clearly more powerful.
Episode links:
TheMuse.com
Kathryn’s book with Muse co-founder Alexandra Cavoulacos The New Rules of Work
Follow Kathryn and The Muse!
Instagram @kminshew @themuse
Twitter: @Kmin and @TheMuse and @TheNewRules
Facebook https://www.facebook.com/thedailymuse
https://www.facebook.com/minshew
Transcription
Kathryn Minshew:
If you tell someone you're the founder of a company and ask for their input, they are more likely to give you positive impact because they don't want to hurt your feelings. If you tell them that you're a consultant helping a company understand how its market positioning lands, or helping a company better understand what it's doing well and what it's not, people are much more likely to give you totally unfiltered feedback for the series A because I was running a process.
Bobbi Rebell:
You're listening to "Financial Grownup" with me, Certified Financial Planner, Bobbi Rebell, author of "How to Be a Financial Grownup". You know what? Being a grownup is really hard, especially when it comes to money. But it's okay, we're going to get there together. I'm going to bring you one money story from a financial grownup, one lesson, and then my take on how you can make it your own. We got this.
Bobbi Rebell:
Hey, everybody. This is an episode about rejection, and what you would do differently the second time around. How to tell were they wrong to reject you? Maybe your message could be a little bit more on point. The Muse founder and CEO, Kathryn Minshew has told the story many times of how she and her colleagues were rejected 148 times when they when to raise money for their startup, The Muse. Once the company got off the ground, it has been a massive success, and many people would say, "Well, those 148 people, they must be so sorry that they rejected it." And of course, that is true to some extent. But also, Kathryn looks back and realizes she had a lot that she would do differently the next time. And in fact, she did do it differently when she went back for the next round of financing, and that's what we talked about. Here is Kathryn Minshew.
Bobbi Rebell:
Kathryn Minshew, you are a financial grownup. Welcome to the program.
Kathryn Minshew:
Thank you so much. I'm so excited to be here.
Bobbi Rebell:
And you are well known as the founder and CEO of The Muse, the amazing job site, and also well known for being rejected when you went to raise money. Tell me how many, 140 something times?
Kathryn Minshew:
148 times. It was like rejection for breakfast, lunch, and dinner, with a few meetings and noes inbetween for fun.
Bobbi Rebell:
And you are the queen of resilience, and one thing that you talk about in your book, "The New Rules of Work", which I should have mentioned to everybody. She is the author of a fabulous career book called "The New Rules of Work".
Bobbi Rebell:
You talk about your personal brand, and how important it is to define it. That fundraising and the lack of it for so long became your personal brand. So you brought with you a money story that has to do with what happened next, after you finally did get the initial funding and you went back for me. Tell us.
Kathryn Minshew:
Absolutely. Well, first of all, I'll say it's much easier as we all know to talk about failure once you've moved past it. So it became much easier to tell the story of the 148 noes after we had already successfully raised our series A and B rounds. So we've raised almost $30 million in venture capital so far for The Muse.
Bobbi Rebell:
Amazing.
Kathryn Minshew:
It's been a totally wild ride. So my financial story involves what I set out to do, or rather what I did in the series A to ensure that we had an outcome that was very different than the seed round. Because, obviously, I knew how important it was for that next round, to get it right from the go-ahead. And so to try and condense the story into something very quick, we wanted to go out and initially we were thinking about raising six to $7 million. But actually given the advice that I got while preparing for a fundraise, we were actually told to start out saying we were thinking five to six or five to seven, and then slowly let the demand build. So instead of us going out for a big number and being less sure if the market would respond, start out with a smaller number. And then, if the market is really excited about our business, let the negotiations and the demand push it up, which ended up working really well for us because we ended up raising 10 million after we had overwhelming demand.
Kathryn Minshew:
I also was incredibly structured about the process probably because I was a little bit paranoid after having such a difficult time with our seed round. So ahead of time, I really worked the story, got all of our metrics out there. I thought about how best to position them, which numbers to lead with, what to put first so that we could really grab people's attention. We were obviously lucky in that we had really great revenue growth and a lot of very strong metrics.
Kathryn Minshew:
And then, I actually created a spreadsheet. I took all of the investors that I was even remotely interested in talking to. I put them in a spreadsheet. Divided it up by location, so that when I was in New York, San Francisco, Boston, Chicago, DC, et cetera, I could meet with people who were there. Then, I included information about whether they had invested in any similar companies, any competitors. Any companies that might give them a better understanding into what we did at The Muse. I would include notes from different meetings. I actually would also rank how excited I was after each meeting to continue conversations, so I could prioritize the ones that I was most excited about. I would say that really helped to keep me on track, and so we were also able to run a pretty tight process, where we pinned all of our first meetings with investors to the same two-and-a-half or three-week period.
Kathryn Minshew:
It was really interesting because in the seed round, we had a lot of trouble with investors saying, "Oh, I'm busy, right now. But how about in a month?" I wasn't confident enough in the business, so we would just take whatever we could get for the series A because I was running a process. I would write back to people and be like, "You know I'd love to talk, but unfortunately, I need to get all of our first meetings done by X date. So I can push it a few days, but let me know if you're going to be able to make it work. And if not, I'm totally fine. We'll keep in touch and maybe there'll be another round that you can participate in." And what was fascinating is a lot of people would say, "Oh, let me move around my schedule. Absolutely, I can make it work." And suddenly, we were negotiating from a more even position. And the ones that weren't able to or the ones that said, "No, sorry. I can't do it," they probably would have never backed the company to begin with.
Bobbi Rebell:
True. Do you think looking back, obviously when you were going for the most money, the second round, you were a stronger situation to begin with. But had you used the techniques that you were now using that you just talked about, would you have had more success the first time?
Kathryn Minshew:
You know, maybe. It's so hard to know because the seed round for a startup is really different than later rounds because people aren't necessarily looking at your metrics. They are to some extent, but they're really betting on you. And I think the fact that it was my first proper company that I was fairly young at the time, this was six-and-a-half years ago, so it was very early in my career. And I think that plus the lack of knowledge or understanding about what we were trying to do in the business were some of the biggest concerns. So I do think we could have had a better time and controlled the process a bit more, but I also think there were just some fundamental and structural things that we had to get through and really prove on very limited capital before we could really go out and successfully fundraise from bigger investors.
Bobbi Rebell:
So now, what is your advice to listeners and especially want-to-be entrepreneurs that are looking to raise money, start businesses, and especially to young women?
Kathryn Minshew:
I would say, firstly, you can't understate the importance of perseverance because it is so hard in the early days. But I think that doesn't mean that you just keep doing the same thing without adjusting your tactics and thinking about how you could be more strategic. I found it to be so invaluable to get the advice from others, especially other female entrepreneurs. Because sometimes we have a lot of great friends who are entrepreneurs, who are men, but sometimes the tactics or the approaches or behaviors that would work for them, didn't work the same when I did them because of unintentional or unconscious bias or other things. And so I found that it was really helpful to surround myself with a network of entrepreneurs of both genders to get a lot of advice, to test out different approaches to see what felt natural and normal to me. Because if it feels too unnatural to you, investors will probably pick up on that, and it won't help you communicate that confidence that you are looking for when you're starting to talk to investors about your business.
Bobbi Rebell:
So one last question about this for our listeners, how do you know the difference between maybe your idea just isn't that good, and that's why you're not getting funding and you should stop, or you should persevere as you did because your idea just isn't hitting the right people at the right time with the right message?
Kathryn Minshew:
Absolutely. So you've just gotten to the crux of what makes this so hard, which is that there is no silver bullet, and you will never have 100% confidence or certainty either way, which is incredibly difficult. However, I think there are a few things you can use to help you directionally get that sense of whether your business is likely to be successful. The first, and I think the most important is to figure out who are your end users and do as much as possible to get unfiltered feedback from them.
Kathryn Minshew:
For example, if you tell someone you're the founder of a company and ask for their input, they're more likely to give you positive input because they don't want to hurt your feelings. If you tell them that you're a consultant helping a company understand how its marketing positioning lands or helping a company better understand what its doing well and what it's not, people are much more likely to give you totally unfiltered feedback, and you need that unfiltered feedback when you're trying to ascertain if you really need to keep pushing forward on your business.
Kathryn Minshew:
So in my case, even though we were getting rejection, after rejection, after rejection from a lot of investors, we were hearing things from our users and from people who were signing up to use The Muse that indicated we had tapped a nerve and we were on a path that people love. They wanted us to use the product. They'd say I love The Muse, but can you do these five things? Make it better here. Change this. That's all positive feedback because that shows you that there is a need. You just have to keep getting better, and I think that is what gave me the oomph to keep going. But I will just call out it's not like I knew the whole time, oh my gosh, this is a great idea. I just have to keep going. I definitely struggled with whether I should accept that these people that were much more experienced than I, that were successful investors, maybe they knew something I didn't, and I just had hubris.
Bobbi Rebell:
All right. Let's do a money tip. You are the career guru, and you have so many amazing ideas and tips in your book. I wanted to pull some out of there and get maybe your favorite tips that people can use in their careers, and their ventures that they could maybe put to work ASAP at their next job interview or their next negotiation, what have it.
Kathryn Minshew:
I thought through a lot of different things I could share here, and the one I came up with that I wanted to talk about today is the fact that when you negotiate, it is not just all about cash and I think it can be really empowering to realize that because so many of us have anxiety about negotiating a salary, negotiating a raise. Whether it's at the beginning of a job search, or when you're getting a promotion. But I would encourage people, remember that there are a lot of other things you can negotiate for.
Kathryn Minshew:
So obviously, base salary is the thing that people talk about most. But what about signing bonuses, performance bonuses if you achieve certain things? You can also negotiate for flex time, for vacation time, for a better title that might help you in your career. One of the most creative things that I've heard is people negotiating for a budget for professional development and training.
Bobbi Rebell:
Specific money. In other words, not just saying, "Will you send me," in theory. It's very specific.
Kathryn Minshew:
Oh, very specific. In fact, there was someone at an organization that had mandatory salary bans that the leadership wasn't able to go beyond, and so she said great. Why don't you dedicate ... I think it was five or $10,000 towards training development conference that will include my travel, and that will help level me up to be a better employee for you, to let me do my job better, and it won't invalidate the salary cap. This will just be another way that you're investing in my growth, and they said yes, and I think that is such a great example of creativity when it comes to negotiation.
Bobbi Rebell:
Amazing. That's such great advice. Thank you so much. Tell us quickly before we wrap up, what are you guys up to at The Muse these day, and where can people find you?
Kathryn Minshew:
Absolutely. So people can find me at The Muse or @kmin on Twitter. As a company, we are doing a lot right now, but we have been really focusing on we rolled out a new feature called Discussions on TheMuse.com, where people can ask and answer each other's questions. So if you have a career question or you want to learn more about negotiating a raise, we've got a way now to get advice from our community and hear other people's stories. And then, I'm also just kind of fascinated down the road by continuing to explore this idea of how people make the best career decisions, how they find the right fits, and how we help companies tell their stories in a more genuine and authentic way that isn't about just come work here, we're great, but really shares the information people need to know to decide do I want to be part of that organization, or be part of that company?
Bobbi Rebell:
Hey, friends. Here's my take on what Kathryn had to say.
Bobbi Rebell:
Financial grownup tip, number one. Like she did, do your homework, including learning what went wrong the first time. Even if you think the companies or whomever you were pitching to were wrong to reject your idea, we all have room for improvement. Kathryn went out and asked for advice, for example, about how much money to ask for. She actually went for a smaller number based on the advice as a strategy, and ended up raising more money, so it worked. She was also much more organized and structured in her preparations the second time around. She was specific to each company, and deliberate in her presentation. She planned geographically, so she could be efficient with her time. Kathryn even ranked how excited she was about prospects, so she could prioritize and focus on her resources and the best alow there.
Bobbi Rebell:
Financial grownup tip, number two. Stand up for yourself, even if you need them more than they need you. In Kathryn's second round, when prospects said they didn't have the time to meet with her any time soon, she pushed back and was not only able to get them to the table faster when they were interested, but also to level the playing field for a stronger negotiating position.
Bobbi Rebell:
Thank you for listening to this episode of financial grownup. Please subscribe if you have not already. Reviews are great if you have just a few minutes. You can follow me @bobbirebell on Twitter, @bobbirebell1 on Instagram, and learn more about the show at BobbiRebell.com/FinancialGrownupPodcast. I hope that you all enjoyed this episode of "Financial Grownups" with The Muse's Kathryn Minshew, and that we all got one step closer to being financial grownups.
Bobbi Rebell:
"Financial Grownup" with Bobbi Rebell is edited and produced by Steve Stuart, and is a BRK Media production.
Psychotherapist Dr. Robi Ludwig was living a jet-set life, hosting her own reality tv television show and appearing regularly on The Today Show. But one day she got a phone call from a bill collector- that was literally a wake-up call and it changed her life.
In Dr. Robi’s money story you will learn:
-The wake up call she literally got while traveling to film her television show “One Week to Save your Marriage”
-Why money was a taboo topic in her house growing up - and how that impacted her adult life
-The solution she found to take control of the finances
-Why she is still struggling to avoid falling back on old habits
In Dr. Robi Ludwig’s lesson you will learn
-How to avoid well meaning but often unrealistic advice
-When to get professional money help
In Dr. Robi Ludwig’s money tip you will learn:
--The limitations of positive thinking when dealing with financial realities
-How she educates herself learns to better manage her money
-Her bill payment system
In my take you will learn:
-The importance of getting professional money help when you need it
-Specific resources to help you negotiate lower bills
Episode Links:
The Bachelor on ABC
The Today Show
The Secret
Star Studio talking live on Facebook
Bill negotiation resources:
Trim
TrueBill
Review of Trim from the Money Peach
Review of Trim from Money under 30
Review of TrueBill on Money
CNN Money - How to shave hundreds off your credit card bill
Follow Dr. Robi Ludwig
http://drrobiludwig.com/
Twitter @drrobiludwig
Instagram @drrobiludwig
Dr. Robi’s book Your Best Age is Now!
Psychotherapist Dr. Robi Ludwig was living a jet-set life, hosting her own reality tv television show and appearing regularly on The Today Show. But one day she got a phone call from a bill collector- that was literally a wake-up call and it changed her life. In this Financial Grownup podcast episode you'll learn how to know when you should seek out professional help with your money. #FinanceTips #MoneyTips
Transcription
Dr. R. Ludwig:
I was very much in to magical thinking. You know, if I said affirmations, if I thought from a wealthy mindset, that everything would be okay. And finally along the way I realized, you have to take your head out of the sand and look at reality.
Bobbi Rebell:
You're listening to Financial Grown Up. With me, certified financial planner, Bobby Rabbel. Author of How to Be a Financial Grown Up. And you know what, being a grown up is really hard, especially when it comes to money. But it's okay, we're going to get there together. I'm going to bring you one money story from a financial grown up, one lesson and then my take on how you can make it your own. We got this.
Bobbi Rebell:
Hey friends, today's episode is truly about becoming a financial grown up, even if it doesn't happen until you're in your 40's. My guest is nationally known psychotherapist, Dr. Robi Ledwig. She is also the author of Your Best Age is Now and the host of Talking Live with Dr. Robi Ledwig. You also probably know her from the Today Show and countless media appearances. She is often the calming and reassuring presence after tragedies, both in the real world and on reality TV. I say that because we do talk a little bit about the Bachelor at the top of the interview. She has seen it all. But she also admits, she doesn't like to live in her own reality when it comes to her finances. Here is Dr. Robi Ludwig. Dr. Robi Ludwig. You are a financial grown up now, I should say. Welcome to the podcast.
Dr. R. Ludwig:
Thank you so much for having me, I'm trilled, truly.
Bobbi Rebell:
And I'm so excited to have you. You are a psychotherapist. You are the author of Your Best Age is Now. And you are everywhere by the way. I have to thank you on behalf of America for calming us down about the Bachelor. I watched you on Nightline last night, you're amazing.
Dr. R. Ludwig:
Oh thank you. Yeah, you know, I think a lot of people had strong feelings about Ori and going back and forth and what's so interesting about the Bachelor is, I think everybody can relate to those nightmare dating stories or losing the guy you think is perfect. Or winning the guy you think is perfect. So it certainly stirs up a lot of different feeling.
Bobbi Rebell:
And you made us all feel so much better, so thank you. We're also going to feel better about our own shortcomings when it comes to money, when we hear your money story. And I was kind of shocked when you told me what you were going to share today, because Robi, I expected better of you. You had a come to Jesus moment in the bathroom. You were thinking, tell us what happened.
Dr. R. Ludwig:
You should have very low expectations of me Bobby, and then we'll be all good. No, this is really true. And this was a story I've never shared with anyone by the way. So you are first to-
Bobbi Rebell:
Exclusive here.
Dr. R. Ludwig:
I was experiencing a lot of professional success. I put a lot of time and energy and had a lot therapy and I was writing books that were getting published. I was on national TV, I'd be on Opera and Larry King and I was the host of my own show. I was on the Today show regularly giving advice. I was traveling around a lot of as the host of One Week to Save your Marriage and I was in somebody's home that I was trying to help save their marriage. And I was in the bathroom, where I have a lot of interesting insightful moments, but I had this kind of Jesus moment. I had my phone, and I got this phone call from a bill collector saying, "When you are going to pay your statement?" It was stressful to me and I was like, why am I this successful person professionally, and financially I'm just like this mess. And I don't want to be that person anymore.
Bobbi Rebell:
How old were you by the way?
Dr. R. Ludwig:
I was in my 40's.
Bobbi Rebell:
Wow.
Dr. R. Ludwig:
Yeah. And finances had always been an issue for me because I was raised with very poor role models in this way. My mother still sticks her head in the sand when it comes to money. She didn't want to know anything about it, my father handled everything. We never spoke about money in the home. So it was just kind of like, well just do well for yourself and everything will be okay. Or you're deserving of the best, and reality and money, they never went together. And so while I don't want to blame my background, because I certainly understand parents had their own philosophy and when discussing money with kids, I realize the way I grew up was really unhealthy in that area. And I had not done a thing to make it better, because it was just a taboo topic that felt too dangerous and uncomfortable for me.
Bobbi Rebell:
So what did you do?
Dr. R. Ludwig:
Well in this come to Jesus moment I said, "I got to fix this." I hired experts to help me take care of my money in a way that was on time and regular. And I wanted to develop self confidence in knowing that I could trust myself to figure out how to pay everything on time. To trust myself to know that I could bring enough in and spend that appropriately, without spending too much. It's a constant struggle for me quite honestly, because money is something that is still challenging for me.
Dr. R. Ludwig:
So, it's the one area in my life that I'm always really trying to a professional grown up and it's something I have to put a lot of effort in to, because I could fall back on old habits. But I wanted to trust myself and I wanted to know Robi, you are a person, you're going to pay all of your bills on time.
Dr. R. Ludwig:
You are never going to be late. You are going to know about money. You're going to familiarize yourself with how to ask for what you're worth and know that your time is worth financial dollars. So these are ways I didn't think. I just thought in this kind of naive way, just do what you like and the money will come in. Or if you think well of yourself, then your life will look pretty.
Bobbi Rebell:
Right. But the money was coming in. You were doing great. You just weren't paying your bills.
Dr. R. Ludwig:
I wasn't being a responsible adult. It didn't click. And I finally confronted myself and said, "This is not who you want to be. This is not okay. There is too big a disconnect between who you are professionally and how the world sees you." Now grated Bobby, I'm not you, I'm not giving financial advice. This is a true story. I was once asked to talk about, how to handle things financially for the Today Show. It was kind of a couples piece. And I'm like, hey I said to the producer, "How do you think I did?" He's like, "Robi, you didn't give any explanations on what to do." I was like, "Yeah, I don't have any explanations on what to do." I was like-
Bobbi Rebell:
So, let's talk about the lesson for our listeners. It seems to me, it's knowing when to ask for outside help right? Something like that.
Dr. R. Ludwig:
Yeah. You're not a one man band. So, if you have people who know how to handle money, ask them questions, read articles. There are companies out there that can also help you pay past bills or negotiate for you if you need to have someone help you with that. One of my favorite things on the planet is that I can pay my bills online now. It makes it so simple. I just figure out what date does something need to be paid, and I set it up so it happens and I don't even have to think about it. So I know that I can trust myself to pay my bills on time and it will get done.
Bobbi Rebell:
Because you're held accountable.
Dr. R. Ludwig:
Because I want to be that person. I wanted to trust myself. I did not want there to be such a grand disconnect in the various areas of my life, and I felt it was time, that it was not okay to be irresponsible in this way anymore. It just wasn't okay.
Bobbi Rebell:
So let's get to your money tip. I love this. You say, "Stop the magical thinking."
Dr. R. Ludwig:
I was very much in to magical thinking. You know, if I said affirmations, if I thought from a wealthy mindset, that everything would be okay. And finally along the way I realized, you have to take your head out of the sand and look at reality. And I'm not always a big fan of reality because it can be painful, but it is the best way to handle money issues. Look at the reality. Figure out what you need to do. It may not always be pleasant but if you put your head in the sand, what you resist persists. So it's not a good strategy when dealing with financial realities and how to protect yourself financially.
Bobbi Rebell:
Didn't Opera have a book called The Secret, that she recommended? And it would solve all your problems.
Dr. R. Ludwig:
Yeah.
Bobbi Rebell:
And I admit I never read it, so I don't know but that kind of seems like promising people that this one thing will solve everything.
Dr. R. Ludwig:
Exactly. And I loved The Secret, and while I think there's value in thinking positively and having high expectations of yourself and wanting the best, I think that's great. But when it comes to money, there's a different language I think everybody needs to subscribe to. Which is thinking more pragmatically. And that's what I constantly struggle in my adulthood with, figuring out what to do because it's hard for me. It's not always pleasant but I'm proud of myself that I have moved along those lines because it's the way one needs to be in order to be a financially responsible adult.
Bobbi Rebell:
All right. Well you are a financially responsible adult now, especially thanks to all those automated tools, which are actually great. I use a lot of automated bill paying myself. Let's talk more about you. Besides holding our hand when we get upset about the Bachelor, where else can people find you? What else are you up to these days?
Dr. R. Ludwig:
Oh my goodness. Well you find me on television again, contributing about various psychological things going on. But one of the most exciting projects I've worked on over the past year is producing and hosting my own Facebook Live show out of Starshop Studios. It's talked Talking Live. You can find it on Talking Live on Facebook. You can find me, Dr. Robi Ludwig on Facebook and Twitter and Instagram and I get to interview people who are making the world a better place, based on their talents and skills. And so it's been tremendously rewarding having people on the show who I respect, who have something important to say and can share that with the world. And so that's the type of person I want to be. It's like being a therapist but translating it as a producer and host.
Bobbi Rebell:
And where can people find you on social media?
Dr. R. Ludwig:
They can find me under Dr. Robi Ludwig, which is R-O-B-I-L-U-D-W-I-G, and it's D-R, on Talking Live on Facebook and you can find me just ... If you google Dr. Robi Ludwig you can find me all over the place on Twitter, LinkedIn, Instagram, Facebook. I don't do SnapChat, but I'm everywhere else.
Bobbi Rebell:
All right. Sounds good. Thank you so much Dr. Robi Ludwig.
Dr. R. Ludwig:
Thank you for having me. I adore you and I adore your show.
Bobbi Rebell:
Well Robi was pretty humble but as her friend, I'm pretty happy that she's in a better place now. So that brings us to financial grown up tip number one, which is it's okay to get professional help, just like she's a therapist and helps you with your mind. People are there to help you with your money. And once Robi came to terms with the fact that she couldn't manage her finances herself, she reached out for professional help and that was really the key for her. She also educates herself and takes ownership of paying her bills. By involving professional people, she was externally accountable. As she says, "You are not a one man band."
Bobbi Rebell:
Financial grown up tip number two, Robi mentions that there are places that you can go to help negotiate your bills. Here are a couple of resources to check out and see maybe one will work for you. Trim and Trubill are personal finance assistants, virtual ones. They will analyze your credit card bills, identify recurring charges and then you can either cancel them or they actually have features where they will go in and try to negotiate lower bills for you. They do get paid. They often take a cut of what they negotiate, so nothing is free in life as I always say. But you can check them out.
Bobbi Rebell:
I'm going to put some links in the show notes and also some reviews from some of my favorite websites so you can see what other people have to say about those services. And just a reminder, I have no financial affiliation with these companies and if I ever do, I will let you guys know.
Bobbi Rebell:
Thank you all for your support. If you have not subscribed, please hit that button, so you don't miss any episodes. And be in touch. Follow me on social media at Bobbi Rabbel on Twitter and at BobbiRabbelone on Instagram. I love hearing all of your comments and thank you for the reviews. Please keep them coming. I hope this episode delivered value for you, that you're going to go out right now and do something to better your life financially. We're in this together. I hope you enjoyed Dr. Robi Ludwig's interview and it helped all of us to get one step closer to being financial grown ups.
Money expert Lynnette Khalfani-Cox admits she was “young and dumb” when she owed money and could not pay it back. Instead of facing her reality- she hoped if she ignored it, it would go away. It did not.
In Lynnette’s money story you will learn:
-Why she decided to borrow money from family
-The reason she was not able to pay it back despite having a plan
-Why she hid from several creditors- and her creative cover ups
-The devastating consequences of not paying her debt
In Lynnette’s lesson you will learn:
-Strategies to identify in advance when you are buying to impress others at your own expense
-No one who loves you is going to want you to go into debt for them
-You can run but you can’t hide from debt
In Lynnette’s money tip you will learn:
-The 3 questions Lynnette and her husband ask each other before taking on debt
-How to borrow strategically
In my take you will learn
-The importance of facing up to your debt
-The danger of getting creditors involved
-Strategies to lower your obligations including meeting in person and negotiating lower payments
Episode Links
MoneyCoachUniversity.com
Askthemoneycoach.com
https://themoneycoach.net
Follow Lynnette!!
Instagram @themoneycoach
Facebook The Money Coach
Twitter @themoneycoach
Money expert Lynnette Khalfani-Cox admits she was “young and dumb” when she owed money and could not pay it back. Instead of facing her reality- she hoped if she ignored it, it would go away. It did not. In this Financial Grownup podcast episode you'll learn how to strategically borrow money. #DebtFree #FinanceTips #BorrowMoney
Transcription
Lynette K. Cox:
I was mortified that my sister had to literally call me out and call me on the carpet, and just tell me how raggedy I was being, and how irresponsible.
Bobbi Rebell:
You're listening to Financial Grownup with me, Certified Financial Planner Bobbi Rebell, author of How To Be a Financial Grownup. You know what? Being a grownup is really hard, especially when it comes to money. But it's okay. We're going to get there together. I'm going to bring you one money story from a financial grownup, one lesson, and then my take on how you can make it your own. We got this.
Bobbi Rebell:
Hey, friends. Well, the only thing worse than having debt you can't pay back is having debt and just ignoring it. That will only make it worse. Actually, wait. There is one thing that is actually even worse, and that is, of course, owing money to family and trying to duck it. My guest is Lynette Khalfani-Cox, known as the Money Coach. She is also the force behind Money Coach University. Her sister's loan wasn't the only one she was hiding from. Let's just say there's a guy she wants to impress involved, cars get repossessed, and all kinds of chaos ensues. I can't believe she told us this story. This is definitely unbelievable. Here is Lynette Khalfani-Cox.
Bobbi Rebell:
Lynette Khalfani-Cox, welcome to the show. You are a financial grownup.
Lynette K. Cox:
Hey, thank you so much for having me.
Bobbi Rebell:
Well, it's great to have you, especially because I am such a fan of yours. We've met through friends a couple of times at different events, and of course you were a superstar at the last FinCon, which was fantastic.
Lynette K. Cox:
I am so looking forward to FinCon 2018.
Bobbi Rebell:
Orlando.
Lynette K. Cox:
Exactly. What is not to like about Florida?
Bobbi Rebell:
Exactly. I love the money story that you are going to share with us. You did a little bit of hide and seek in college. You weren't always the superstar that you are now, to say the least.
Lynette K. Cox:
Yeah. That's putting it mildly. The story I want to share is about the time that I hid in college, not just from one creditor, but actually from two. One of the creditors, surprisingly enough, was my sister, Cheryl. I have five sisters, and Cheryl's the oldest one.
Bobbi Rebell:
Oh my.
Lynette K. Cox:
Never a good look there, to hide from a family member that you owe. But also from my car lender. Here's kind of what happened with both situations. I was totally young and dumb when I was in college. Honestly, I didn't borrow wisely, but-
Bobbi Rebell:
What did you borrow for? What were these loans for?
Lynette K. Cox:
With my sister, I had my very first internship, a college internship with ... I'll never forget. With WEAR-TV in Pensacola, Florida, and my sister lived right nearby there at the time, and I was in school in Southern California. I went to University of California Irvine for undergrad. I had this internship, but guess what? It didn't pay. They actually said, "Oh, we'll give you a stipend at the end." What happened was, I asked my sister to borrow money in order to go out there to Florida, to get a plane ticket from Southern Cal into Pensacola area. I had all the best of intentions, and I really did plan to pay her back.
Lynette K. Cox:
Well, what happens? I go back to Southern California after the internship, then I don't. I just don't immediately pay her back. Life got in the way. My tuition, and fees, and books, and supplies-
Bobbi Rebell:
Oh, yeah.
Lynette K. Cox:
... everything else. Then she called me. She was like, "Oh, hey." And she left me a voicemail, and I didn't make a speedy beat to call her back, and then the next week she called me again, and then I didn't call her back, and boy, the third time she called me did she let me have it.
Bobbi Rebell:
Ooh.
Lynette K. Cox:
She said, "Lynette, I don't want you to treat me like you would treat a Visa or a MasterCard, a creditor." She said, "You borrowed from family. I'm your sister and I love you, but you have to be financially responsible. Don't duck your obligations, and most importantly, don't duck me." She said, "If you don't have the money, just say, 'I don't have it.' Or, 'Here, let me pay you back a month from now.' Or, 'Let me work out a payment plan for you.' Or let ..." It was such a wake-up call, Bobbi, I'll tell you, because I was so embarrassed. I was mortified, frankly.
Bobbi Rebell:
Then there was also this car loan.
Lynette K. Cox:
Oh, yeah. There was the car loan. I had a 1987 Hyundai Excel. It was my very first car. Don't you know, that car got repossessed.
Bobbi Rebell:
Oh my gosh.
Lynette K. Cox:
I only missed two payments. I don't know why they did that to me.
Bobbi Rebell:
Is that standard, that they repossess so quickly? Is that the norm?
Lynette K. Cox:
Wait, or was it three? I don't know.
Bobbi Rebell:
But still, that seems ... I don't know. Did you talk to them and say, "Can you cut me some slack?" Was there any dialogue, or you just shut them down?
Lynette K. Cox:
Absolutely not. I was such a bonehead. Again, very quickly, here's what I did. I had a boyfriend at the time. Doesn't it always involve a guy?
Bobbi Rebell:
Uh-oh. Uh-oh.
Lynette K. Cox:
Very nice, sweet guy. We were totally into each other. We're walking through the mall one time in Southern California. We go into a leather store. It was around the holidays. He sees this leather coat, this brown leather coat. I see him look at the tag at the end of the sleeve, on the arm of the coat, and he looks at it quickly and goes, "whew," and just flips that tag back around, as if, "Whew, that's too expensive for my taste." He just keeps walking, but what do I do? Young and dumb. I'm like, "Ooh, note to self. I see that he really liked the coat. I'm gonna come back and buy it."
Lynette K. Cox:
Sure enough, I go back to the store. I spend like $500, which I have-
Bobbi Rebell:
What was your car payment? Do you remember?
Lynette K. Cox:
Yes. It was about $225, $250.
Bobbi Rebell:
We're talking about two months' car payments, which would have prevented the car from being repossessed.
Lynette K. Cox:
Exactly.
Bobbi Rebell:
Oh my gosh.
Lynette K. Cox:
I totally, I just blew it. I mean, I did not even attempt to contact Hyundai Motor Credit Corp, and yes, they did come and take that car, rightfully so, of course.
Bobbi Rebell:
Did the boyfriend drive you around everywhere then?
Lynette K. Cox:
You know what? I learned an even bigger lesson, because I had to fess up. One day I walked out of my apartment that I had. You would have thought I was Halle Berry. I was such an actress, okay? I was like, "Where's my car?" He was like, "Oh my god. Did somebody steal your car? Where's your car?"
Bobbi Rebell:
"You're wearing it."
Lynette K. Cox:
Yeah, exactly.
Bobbi Rebell:
Did he have the jacket on? Oh my gosh.
Lynette K. Cox:
Finally, I fessed up. I was like, "No. You know what, honey? Actually I think my car got repossessed." He was like, "What?" He was like, "What do you mean?" I said, "Well, to be honest, I didn't pay my car note." He was like, "What?" He was so shocked. He looked at me. He said, "If you didn't have the money for it, how come you didn't just ask me? I would have given you the money."
Bobbi Rebell:
Oh my gosh.
Lynette K. Cox:
He was a very sweet guy, and I said, "No, no, no." He knew that I was working at the time. I was a dispatcher for AAA at the time, in college. He says, "Well, can I ask, what did you do with your money?" I was like, "You know that brown leather coat that I got you for Christmas?" He was like, "Yeah." I said, "Well, I kind of spent two car payments on that."
Bobbi Rebell:
See, he wouldn't spend his own money on that.
Lynette K. Cox:
Yeah. But he told me something, Bobbi, again, that I never forgot. He said, "Lynette, I would have never want you to put yourself in the hole for me." It was a wake-up call. I mean, nobody who loves you is really gonna want you to just ... You don't have to spend to impress somebody. You don't have to buy someone's love. You don't have to try to dig yourself in the hole, quote-unquote, to make somebody else happy. It just doesn't work that way.
Bobbi Rebell:
What is the lesson for our listeners? What could you have done differently, looking back with all of your wisdom now?
Lynette K. Cox:
Unquestionably, the biggest lesson that I got is that you can run, but you can't hide, and that literally as much as you may try to duck your responsibilities ... Believe me, I tried to hide that Hyundai. Like, I parked on the side, not right in the front of my apartment complex. But as much as you try to shirk or duck your financial responsibilities, in the end, it always catches up with you.
Bobbi Rebell:
For your money tip, I love that you're going to talk about debt, because sometimes you do need to borrow money.
Lynette K. Cox:
What my husband and I do, before we borrow now, we first ask ourselves three questions. Question one is, "Can we afford to pay cash instead of borrowing?" If the answer is "no," or "not comfortably," then we say, "Is this something that's worth borrowing for?" We love to travel, but is it worth just going into debt, putting it on a credit card, and really, the answer is "no" for that. But the third question is, "If you say yes, it is worth borrowing for, what is the lowest cost source that we can tap to borrow and pay off the debt?" When you do that, at least you're borrowing strategically. You're borrowing wisely, giving it some serious thought and consideration before you just sign on the dotted line.
Bobbi Rebell:
All right. Before I let you go, let's talk about MoneyCoachUniversity.com.
Lynette K. Cox:
Well, I'm doing courses, and I'm teaching people everything under the sun about money, about budgeting. I have a course on there, Negotiating for Women. I have a course about paying for college, credit courses, debt courses. It's really teaching people the nuts and bolts about personal finances, in what I hope is an engaging way, and they get lessons. I give them homework assignments, and we kind of make it fun, but it's all video-based. You know, I write a lot. You know I've written 12 books, but everybody doesn't want to read a 200, 250 page book. Watch a video instead, and learn.
Bobbi Rebell:
You are prolific. Oh my gosh. I mean, 12 books, all these video courses. Amazing. Where can people find you?
Lynette K. Cox:
Well, my free financial advice site is AsktheMoneyCoach.com. A ton of videos on there. 1600 plus articles. You mentioned that I've written 12 books. I'm super proud about that. Then the latest is MoneyCoachUniversity.com. We're all on social media. Everything is just @TheMoneyCoach. Facebook, Twitter, LinkedIn, YouTube, all that good stuff. Instagram too, now.
Bobbi Rebell:
Instagram too. Everything.
Lynette K. Cox:
I'm on the Gram.
Bobbi Rebell:
I know. I don't know how you do it all. Thank you so much for joining us. This has been great. Thank you so much.
Lynette K. Cox:
Thank you, Bobbi.
Bobbi Rebell:
This episode was a tough one. My friends, I truly hope you do not have an experience anything like Lynette. Financial Grownup Tip number one: Do not duck and cover. If you can not pay a debt, find a way to work something out. No creditor wants to get zero paid back. They want to work with you, and you do not want them sending your case to a collection agency. No one wins there, and it will wreck your credit score. There's nothing more not grownup than just hoping if you ignore the debt it will go away. It will not.
Bobbi Rebell:
Financial Grownup Tip number two: Make a phone call to the person or business to whom you owe money. Even if you can, make an appointment and go in person. I say that because if you just email, there's no human touch. If they can sense your goodwill and your honesty, and see you as a person, not a bill to be collected, it could make them want to help you more, because you're a person, not a piece of paper. While you should be prepared to tell them what you can pay- in other words, do your math in advance and come prepared- before you actually offer anything, tell them your story and say, "I want to work something out. I value your service, and you do deserve to be paid, but can you help me out a little here? What can you do for me?"
Bobbi Rebell:
Just give it a few minutes. Let them think about it. They may reduce the overall bill. They may propose some kind of payment plan that works for you better than you even would have proposed to them. Even if they don't, move forward. Set up something. Find a way to pay them something. If you are really tight, a small payment, even if they have to increase down the road.
Bobbi Rebell:
Thanks to all of you for supporting Financial Grownup. If you like the show, take a minute to rate and review us, and if you have not already, please hit the subscribe button so you won't miss any episodes. I want to hear from you guys. Get in touch on social media, @BobbiRebell on Twitter, @BobbiRebell1 on Instagram, and don't forget to leave me comments. Go to my website. Please sign up for my newsletter so I can keep you posted on everything going on with the show. No more hide and seek, my friends. I hope you guys enjoyed Lynette's story as much as I did, and that we all got one step closer to being Financial Grownups.
Bobbi Rebell:
Financial Grownup with Bobbi Rebell is edited and produced by Steve Stewart, and is a BRK Media production.
The Afford Anything podcast’s Paula Pant wanted to travel the world- but on her own financial terms. The Vegas-based real estate entrepreneur gamified her savings strategy to score enough money to live her DIY travel dreams.
In Paula’s money story you will learn:
-How Paula saved money to travel on a $21,000 salary
-Paula’s strategies to travel on a budget- even when it is not budget travel
-Her side hustles that helped boost her incomes
-The behavioral games she would play to incentivize herself for saving money
-Paula’s strategy to avoid having to delay gratification
-Her specific ‘games’ to make saving fun and rewarding
-Her strategy to travel to places where the cost of living is lower to stick to a $1,000 a month budget.
In Paula’s lesson you will learn
-How to have a more authentic experience when you travel.
-How to balance saving money with your travel interests
In Paula’s money tip you will learn:
-How to “gamify” saving money
-How to avoid feeling deprived when saving money
-the importance maxing out every retirement account
-How to buy individual stocks without a fee
-How to divert money from your bank account into savings automatically
-How to use Acorns to round up savings when you buy things.
In my take you will learn:
-Specific resources to "gamify" your finances
-Specific resources to improve your travel experience
EPISODE LINKS
Robinhood
Acorns
Digit
SmartyPig
Qapital
The Points Guy
Scott’s Cheap Flights
Hotel Tonight
Paula’s podcast Afford Anything
Paula’s website Afford Anything
Follow Paula!
Twitter @affordanything
Instagram @paulapant
Facebook Afford Anything
The Afford Anything podcast’s Paula Pant wanted to travel the world- but on her own financial terms. The Vegas-based real estate entrepreneur gamified her savings strategy to score enough money to live her DIY travel dreams. In this Financial Grownup podcast episode you'll learn strategies to travel on a budget and how you can balance saving money with your travel interests. #Travel #TravelTips
Transcription
Paula Pant:
Never delay gratification. I hate the concept of delayed gratification, because if you get into this mindset of, "Oh, my life is going to suck now so that it can be better later," well, later is just going to be disappointing.
Bobbi Rebell:
You're listening to Financial Grownup with me, Certified Financial Planner, Bobbi Rebell, author of How To Be a Financial Grownup. And you know what? Being a grownup is really hard, especially when it comes to money. But it's okay, we're going to get there together. I'm going to bring you one money story from a financial grownup, one lesson, and then my take on how you can make it your own. We got this.
Bobbi Rebell:
Hey friends, let's talk about travel and seeing the world. Authentic travel within a budget, which is not the same as budget travel. One of the top reasons people want to have financial resources is to travel, and that is something a young Paula Pant, the force behind the Afford Anything website and podcast, wanted to do.
Bobbi Rebell:
Rather than do it through her school, she decided to explore the world on her own terms and her own budget. Her plan, make it a game. Here is Paula Pant. Paula Pant, you are a financial grownup. I'm so excited to have you on the podcast.
Paula Pant:
I am excited to be here, and I don't think I've ever been called a grownup before.
Bobbi Rebell:
You are very much a grownup. Oh my gosh, you have a website and a podcast called Afford Anything, which is sort of everyone's financial fantasy, because we all wish we could afford anything. But as you say, not necessarily all at the same time, right?
Paula Pant:
Exactly. You can afford anything, but not everything.
Bobbi Rebell:
That's the best tagline, I love it. All right, so you brought with you a story that has to do with your love of travel, which makes total sense to me, because I love following your Instagram and all of your fantastic photos of you on all of your various adventures, but you didn't always have the money to fund those adventures.
Paula Pant:
That is totally true. Travel has always been a passion of mine. When I was in college, I really wanted to study abroad, but those programs were prohibitively expensive, like 15 to 20 grand for a single semester. I thought about it and I realized, "I don't really want to study, I just want to go abroad."
Paula Pant:
I realized that if I graduated, I worked, I saved up some money, and then I just went off on my own, if I DIY'd it, so to speak, I could do it for like a much cheaper price tag.
Bobbi Rebell:
Without the university as a middleman, basically.
Paula Pant:
Exactly. So that's exactly what I did. I graduated, I started working. Like you, I was a journalist. I became an entry level newspaper reporter at a very small paper.
Bobbi Rebell:
Where?
Paula Pant:
In Boulder, Colorado. The paper was called the Colorado Daily. It was owned by E.W. Scripps, so it was a part of the Scripps family, but it was the smallest paper, I think, in the Scripps family, and we had a circulation of 40,000. My salary, my starting salary, was $21,000 and this was in 2005.
Bobbi Rebell:
Ouch.
Paula Pant:
So adjusted for inflation, that's like still pretty close to 21,000. I think I did the inflation adjustment, and that's $26,000 per year in today's dollars.
Bobbi Rebell:
Yeah, we actually have not had that much inflation is the truth of it.
Paula Pant:
Yeah, exactly. Between 2005 and now-
Bobbi Rebell:
The last few years, we really didn't. Thank you, Fed. That's changing, but anyway.
Paula Pant:
So yeah, so I made a starting salary of 21,000 in 2005, and then in 2008, which was when I quit that job, I was earning 31,000 at the time, so that was the highest amount that I made during that three year period, and yet during those three years, I, because I was so interested in traveling, I was saving money as much as I could. In order to do that, I did a couple of things. Number one, was I had a side hustle, and I saved all of the money that came in from that side hustle.
Bobbi Rebell:
What was the side hustle?
Paula Pant:
Freelance writing. I freelance wrote for both websites and magazines.
Bobbi Rebell:
And they allowed you to do that? That's nice.
Paula Pant:
Oh yeah, yeah. There was no restriction.
Bobbi Rebell:
Nice.
Paula Pant:
My paper had no restriction against me taking on any outside work. I think they probably knew that we all had to.
Bobbi Rebell:
Yeah, I guess they got away with paying you so little because they knew that.
Paula Pant:
Yeah.
Bobbi Rebell:
So anyway, so okay. So you saved a lot from the side hustle, but still. What else did you do?
Paula Pant:
Because so much of finance is behavioral, so much of it is psychological, I would find ways to spend just a little bit less than I otherwise would. For example, I would go to the grocery store and I'd walk around the store, and I'd fill the cart with whatever was on my list, and then at that last moment before going to the checkout aisle, I would take a look at my cart, and I would find two or three things to put back.
Paula Pant:
Orange juice, for example, you know? Because we don't need, quote unquote, "need," orange juice. You can have water and fresh fruit. Or like potato chips, or Oreo cookies, or whatever. I would pick a couple of things, I'd put them back, and then I would figure out how much money I had shaved off my grocery bill by virtue of doing so, and I would literally pull that money out of my wallet and stick it into an envelope that I kept in the glove compartment of my car.
Bobbi Rebell:
Brilliant, I love it.
Paula Pant:
Yeah, so just little things like that forced me to save money, and it kind of turned it into a game a little bit. If you think about a big goal like saving $25,000, that can seem daunting. But if you think about, "All right, I'm at the grocery store. How can I shave 10 bucks off of this trip?" and you do that consistently over time, A, it's fun, because it's a little bit of a game. It's a bit of almost like a detective ... not a detective, sleuth thing, that's not exactly the right analogy, but you know what I mean. It's like-
Bobbi Rebell:
Yeah.
Paula Pant:
Yeah, it's a kind of challenge.
Bobbi Rebell:
How much did you save in those years, if you have kind of an estimate of how much you saved doing those kinds of things, and give us some travel highlights, where you went.
Paula Pant:
In total during those three years, I saved $25,000.
Bobbi Rebell:
On a salary of 31,000 at most.
Paula Pant:
Exactly. And again, I'll emphasize that I was freelancing during the evenings and weekends, and everything that I made from freelancing after taxes went into my travel savings, so that was where the bulk of those savings came from.
Bobbi Rebell:
And where did you travel?
Paula Pant:
I flew at first to Egypt, and I spent six weeks in Egypt. From there to Israel, and then from there I went to Southeast Asia where the dollar exchange rate really worked in my favor. Hanging out in places like Cambodia, Laos, Vietnam, places that just have a much lower cost of living, and where the U.S. dollar goes a lot further. That was a big part of how I was able to travel.
Paula Pant:
During that time, I lived on a budget of $1,000 a month, which again, if you're traveling slowly, like if you're not moving around very often, so you're saving money on transit costs, and you're eating local food, you're not going to restaurants, like you're eating street cart food, or things like that, and you're not drinking much alcohol, if any, that's how you can really make your money stretch quite a ways.
Bobbi Rebell:
What is the lesson for our listeners? I mean, obviously we want to be traveling kind of like locals, I guess, is live like locals, don't just stick to the resorts and the resort food, and the hotels and all that stuff, right?
Paula Pant:
Yeah, exactly. Have a more authentic experience. If you're going to go to all of the trouble of going all the way out to Myanmar, then why would you stay at a four star hotel, if instead you could have a very authentic conversation with somebody there who has just a roadside, street side little ... I can't even call it a café, that's too fancy of a word. Just a little tin ... you know, a couple of pieces of corrugated tin under which they have a little stove through which they can cook you some food.
Paula Pant:
It's a much more real experience. It's just much more authentic, and the fact that it saves money is I think, also a bonus. But don't do everything for the sake of saving money, do it because it gives you an authentic experience.
Bobbi Rebell:
Give us a money tip, something that people can put to work right away. Maybe let's stick to the gamification theme, because that's fun. I like playing money games, because you don't even feel bad when you're saving money. It actually makes you feel good, like you're winning.
Paula Pant:
Exactly. A big part of my philosophy is never delay gratification. I hate the concept of delayed gratification, because if you get into this mindset of, "Oh, my life is going to suck now so that it can be better later," well, later is just going to be disappointing.
Paula Pant:
I'm a big fan of when you're saving money, gamify it, have fun with it. When I tell the story of going to a grocery store, and then right before checkout putting the orange juice back, that was not an act of deprivation, that was a fun challenge, like it was a game that allowed me to save. You could think of it as like scoring points on the leaderboard.
Paula Pant:
I continue to do the same thing today. I want to put as much money into investments today as I possibly can. My core investing strategy is of course, max out every retirement account that I'm eligible to contribute to. Those are like my core strategies, and through those, I put money in an index funds. On top of that, I have this app, it's called Robinhood, that allows you to buy individual stocks fee free.
Paula Pant:
Through Robinhood, I will put extra money into individual stock picking. Now, this is not my core investment strategy whatsoever. This is just extra money. It's money I otherwise would have spent on beer and shoes that instead, I kind of think of making it an in-app purchase in a game. I'm playing this game, and if my budget to play this game is $100 a month, that's the cost of like maybe a fun night out.
Paula Pant:
So for me, instead of having that quote unquote, "Fun night out on the town," I put that money into a game that I'm playing on my phone, and I'm buying some individual stocks that I think are kind of fun. Well, that's a way to put more money into investments than I otherwise would. So that's my money tip, is gamify it.
Bobbi Rebell:
Are there other apps that you like to incorporate that are also kind of on the game theme?
Paula Pant:
Sure, yeah. There's an app called Digit, and that's more of an automated system, so you link it up to your bank account, and it will divert really small sums of money, like three bucks here, four bucks there, into a separate account that then accumulates into a pretty substantial amount of savings over time. That's kind of a fun little automated, gamey sort of way to save more, to hide some savings from yourself.
Paula Pant:
There's another one called Acorns that rounds up every purchase that you make, so if you buy something for $7.36, it will round that up to eight bucks, and put the change into a separate account. It's like another way to gamify it a little bit. Any way that you can take care of the margins in a way that's fun, it's a way to make compounding work in your favor.
Bobbi Rebell:
Oh, great. Paula Pant, you are so much fun. Where can people find out more about you, and follow you, and of course, hear more about your podcast Afford Anything?
Paula Pant:
Sure, well as you mentioned, the podcast is called Afford Anything, and you can find it wherever finer podcasts are sold. So yeah, just head to your favorite podcast player, whether it's Apple, or Overcast, or Stitcher, and just search for the Afford Anything podcast. Then you can also find me on the web at affordanything.com.
Bobbi Rebell:
And your social media handles?
Paula Pant:
Oh, on Twitter I am @AffordAnything. On Facebook I am Afford Anything, and on Instagram I've broken the pattern. Instagram I'm @PaulaPant, so that's P-A-U-L-A P-A-N-T.
Bobbi Rebell:
Putting yourself out there, Paula Pant. Thank you so much. You're so wonderful, and thank you for coming on.
Paula Pant:
Oh, thank you for having me.
Bobbi Rebell:
What would you take out of your grocery cart to save a little money? I know I have a bad habit of throwing extra things into the cart that I was not originally planning on buying, except unlike Paula, I usually don't take them out.
Bobbi Rebell:
All right, let's do Financial Grownup tip number one, listen to Paula. Gamification of good money habits works. Money is psychological, and little wins can inspire us to keep going when we get that positive reinforcement. You can go totally retro and just put your spare change in a jar and watch it add up, or you can use apps like Paula mentioned, including Acorns, Digit, and Robinhood.
Bobbi Rebell:
Other names to help you save and feel like you're playing a game and reward good money habits include Qapital, that's with a Q, Qapital. You get rewarded for things like working out. SmartyPig, which helps you set up little piggy banks for different things. By the way, just so you guys know, I have no financial affiliation at this time with any of those names, and I will always let you know if I do.
Bobbi Rebell:
Financial Grownup tip number two, be strategic with your travel, and do what's right for you. I am not a big fan of street food the way that Paula is, and I don't want everyone to feel like they have to travel quite that lean, but if you do want to go the higher end route, put the time in to looking into what the right resources are before you put your money in.
Bobbi Rebell:
I love the Points Guy blog, for example. There are great travel deals, and ideas, and even things at the higher end to help you save money. Another website for deals is Scott's Cheap Flights. If you are willing to wait close to your trip, or in some cases, and I've done this, when you're already on your trip, I've had some great experiences with the app Hotel Tonight. I also think there is great value in literally asking friends, and neighbors, and even virtual friends in Facebook groups that have something in common with you, for their recommendations. Happy travels.
Bobbi Rebell:
Thank you for listening to this episode of Financial Grownup. I truly appreciate everyone who has subscribed, rated, reviewed the podcast and all that good stuff, and thank you in advance to any of you who will now take the time to review it on iTunes or Apple Podcasts, as it is now known.
Bobbi Rebell:
I want to hear from you guys. Follow me on social media @BobbiRebell on Twitter, BobbiRebell1 on Instagram. Leave me comments as well. Go to my website, sign up for my newsletter, so I can keep you posted on everything going on with the show. Paula's story has inspired me to start traveling more, so maybe send me some suggestions.
Bobbi Rebell:
Where should I go? Not just for business. If she's inspired you, let me know that as well. Where are you guys traveling? I hope you got some great takeaways from Paula. I certainly did, as you heard, and that we all got one step closer to being financial grownups. Financial Grownup with Bobbi Rebell is edited and produced by Steve Stewart, and is a BRK Media production.
Growing up with dad Tony Robbins taught Josh Robbins the value of the intentional and unapologetic splurge. Josh Robbins shares the no-regrets story of his 11-year old self blowing a huge sum of money on one of the most memorable days of his life.
In Josh’s money story you will learn:
-The lessons Josh learned being behind the scenes at his dad, Tony Robbins events
-How at age 11 Josh started his own business
-Josh’s sales strategy
-The unexpected way Josh spent his profits
In Josh’s lesson you will learn:
-Josh’s philosophy on material goods vs. experiences
-His thoughts on whether he should have invested his profits in the market
-Josh’s take on side-hustles
-Josh’s advice on how to find more time to accomplish your goals
-Josh’s warning about social media and Netflix
In Josh’s Money Tip you will learn:
-How to find out what fees your are paying in your 401(k)
-How the law concerning 401(k) fee disclosure has changed
-What level of fees is considered too high
-What to do if your plan is costing you too much
-The financial consequences of even a 1 percent increase in fees
In my take you will learn:
-Why I at first disagreed with Josh’s financial decision, and how he changed my perspective
-The value of shared experiences and the memories from them
-The financial impact of how you choose to spend you time, not just your money
-Strategies to invest in yourself
Episode links:
To check what you are paying in your 40 (k) go to showmethefees.com
To learn more about Josh Robbins and America’s Best 401 (k)
AB401k.com
Tony Robbins donates all of his book proceeds to Feeding America.
To learn more about Tony Robbins Feeding America: http://www.feedingamerica.org/
Follow Josh Jenkins-Robbins
Twitter @jenkinsrobbins
Facebook: Josh Jenkins-Robbins
Growing up with dad Tony Robbins taught Josh Robbins the value of the intentional and unapologetic splurge. Josh Robbins shares the no-regrets story of his 11-year old self blowing a huge sum of money on one of the most memorable days of his life. In this Financial Grownup podcast episode you'll learn how even a 1% increase in fees can have consequences and the ways you can invest in yourself. #InvestInYourself #Money