Author Ron Lieber returns to the Financial Grownup podcast to preview his new book "The Price You Pay for College”and share tips on the best ways to control college costs, including debunking some big myths about why college is so expensive and who gets how much aid, and why. 

Tip #1:

There is now a whole separate parallel track of the financial aid system called Merit Aid. Rich people can take advantage of it just as much as low income people can. Figure out whether a school offers it at all and in what volume and for the more selective schools that do offer merit aid, it is often quite difficult to figure out what is going on behind the scenes. You have to go hunting for data that is usually publicly available, but it is not kind of digested or regurgitated in a way that's useful. You have to look at something called the common data set and do a search for section H-2A and there you will figure out, you will see what percentage of people who have no demonstrated financial need, still get scholarships anyway and in what amounts. With merit aid, it's more likely to be a kind of haggling where you go to the admissions office and say, "Look, you're my first choice, but this school that you compete with down the road that I would actually really rather not go to has offered me $6,000 more per year. Can you help me out please? Did I make a mistake in my application to you that maybe may have made you value me less than your competitor."

Tip #2

You can appeal the financial aid package you receive from these colleges. The need-based financial aid packages come from the financial aid office. You may need to make different sorts of arguments because with the need-based crew, you generally need to prove that your financial circumstances have changed since you originally applied for financial aid. That's going to give you the best chance of success.

Tip #3

Save the “right” way. There's this idea out there that you need to make a choice between saving for your retirement and saving for college for your kids. You can do both. Borrowing for college may not be for some families. This idea also implies that you can't borrow for retirement, which is not true. You can borrow for retirement using reverse mortgage if you have equity in your home. Then there's this other one that's more directly college-related, which is that if you save money for college, you will be penalized for that come financial aid time. The financial aid formulas have much more to do with your income than they do with your assets. It is true that your assets will be tapped. And some people think that that means that they will be taxed. But, I would argue if you've got assets, it's only fair that you should have to use them before the school uses its own resources to support you. I have never run into a family that regrets having saved for college. And I know personally that when that 529 statement comes every quarter, opening it up, makes me feel great about myself. It makes me feel great that whatever other failings I may have as a parent or as a human being this I am doing right for my kids.

Tip #4

You can control the way that you frame a college and where you present the choices to your children. We do not have to cede decision-making authority on college to our children. It is not the case that just because they work hard, they should be able to go wherever they want. You don't get, make that kind of choice all by yourself when you're 17 years old. So, we do have some control there and we have some control over how, and when we introduce these concepts to them, because to me, it's only fair that a rising ninth grader ought to know what their parent or parents ability to pay for college might be. What their willingness to pay for college might be too and also, how the system of wheeling and dealing and discounting actually works so that if they so choose, they can position themselves to be in the best possible spot as an applicant.

Tip #5

What we tend to miss as parents is that we are not having emotionally honest conversations with ourselves, our spouses, or even our exes. We're not talking about fear that our kids will go tumbling down the social class ladder if we make the wrong choice or they make the wrong choice. We don't talk about guilt. The guilt that we have, that we didn't save more, or we don't want to spend more, or we're not doing what our parents were able to do for us. We don't have those conversations out loud. And we certainly don't talk about our own elitism and snobbery and how we feel about these institutions. The way we think that an admissions offer might reflect back on us and our family or even about the snobbery and elitism of the institutions that will be in the market for our 22 year-olds when they graduate. And the way in which those elitist institutions might look down on one school as opposed to another.

Full Transcript of Episode:

Bobbi Rebell:

Part of being a financial grownup is making sure you have a plan for how you spend your money and how you pay your bills. And now we have a new tool for that. It is called Splitit. It will take a lot of the stress away from those big purchases and really allow you to plan ahead. Here's how it works.

Bobbi Rebell:

You shop online and when you're ready to pay, you just choose Splitit at the checkout to split your payment on your credit card and pay over time. There's no interest, no application, no fees. It is fast and easy. So if you buy something for $500, you can split it into five smaller payments of $100 a month without any interest or fees, much more manageable and you're in control of your costs. By turning your payments into smaller installments over time with no interest Splitit gives you more spending power.

Bobbi Rebell:

I know I don't like to have to pay interest if I can avoid it. And I also don't want to always be opening new lines of credit, split your payments and live big with the credit cards you already have go to splitit.com today. That's splitit.com. Financial grownup guide, five things you can control about the price you pay for college with author Ron Lieber.

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:

Hello, my friends, for all our talk about budgeting, spending, penny pinching in some cases, looking at the prices of everything we buy. Most of us, our parents, our children, friends, we buy one really big ticket item that we shop for without actually getting to see the real price that we will pay. I am of course, talking about college. And while yes, we can see the full retail price on many university's websites, the majority of us actually, aren't going to pay that price.

Bobbi Rebell:

In fact, I learned in Ron Lieber's new book, "The Price You Pay for College" that only 11% pay that price. So then the question is how much of a discount can we get, and how is that decided? Welcome everyone here on the Financial Grownup podcast, we talk about money issues that matter to us as we move through adulthood and college certainly qualifies.

Bobbi Rebell:

Ron Lieber, the New York Times Your Money Columnist, who was first on the podcast in 2018, talking about how he got into school is now back to give us a peek at his very grownup book, "The Price You Pay for College," an entirely new roadmap for the biggest financial decision your family will ever make. Yeah, that's the truth. Like so much of our lives these days, there are lot of things that we can't control. So I asked Ron to tell us what we can control, and he did a little myth-busting along the way. Here is Ron Lieber.

Bobbi Rebell:

Ron Lieber welcome back to the podcast and congratulations on your new book, "The Price You Pay for College."

Ron Lieber:
It's great to be back. Thank you for having me.

Bobbi Rebell:

What inspired this book before we get into your tips about the things that we can control about the price that we all pay for college?

Ron Lieber:

Well, this book is both personal and professional. It's personal because, I have a 15 year-old ninth grader and a five-year-old kindergartener. I live in New York city with extremely high costs and it's a two journalist household. So we're not exactly rolling at it. So this is going to be hard for our daughters to have the same kinds of choices that my wife and I had albeit for me with a whole bunch of need-based financial aid.

Ron Lieber:

So it's personal, but it's also professional because readers kept getting in touch and expressing marvel, but also alarm at the fact that the rack rate for the most expensive colleges in the country had passed $300,000 for four years and even the flagship state universities.

Ron Lieber:

Many of them are now more than a hundred grand for four years. So you've got a $200,000 gap between them and these readers were saying to me, "Hey, we live in the era of big data, where's the big dataset that explains why NYU is $200,000 better than SUNY Binghamton." I did not know and it felt like a new question to me.

Bobbi Rebell:

Well you answer a lot of the questions in the book? And unfortunately there is a lot about this process that we simply cannot control, but I want to focus for our grownup audience on the things that we can control. And we've got a list of a few things we're going to go through. What is the first one? What can we control when it comes to the price we pay for college?

Ron Lieber:

Well, you can control what you know, right? You can learn how the system works. One of the things that continues to amaze me is the number of sophisticated people who are extremely successful in their own chosen fields of employment who show up in my inbox or in my text messages in March or April of their child's senior year in high school.

Ron Lieber:

And they have no idea what has hit them. They have no idea that there is now a whole separate parallel track of the financial aid system called merit aid. And that rich people can take advantage of it just as much as low income people can.

Bobbi Rebell:

And that's kind of one of the reasons why college has gotten so expensive in fact, is that it's become the sort of vicious cycle.

Ron Lieber:

One of the things that's made it also complicated for the people who run these schools, it's not just the pricing wars going on in the background, although that certainly helps drive down revenue and the net tuition revenue per student. But one of the things that we can't control as individuals and the schools have a lot of trouble controlling, is that people good ones, well trained people cost money, right?

Ron Lieber:

Professors spend, a minimum of five years in graduate training and Economics 101 suggests that, people who need to spend that long learning and training ought to be compensated at an above average rate. There are also more administrators than there used to be for every 1000 undergraduates. But that's mostly because we like it that way, right?

Ron Lieber:

We want disabled kids to have access. We want kids with mental health issues to have access. We want there to be a good counseling center on all of that. So, we get the administrators, we demand in the marketplace. But it is not cheap to run these places and if we made them more efficient, we might not like the result.

Bobbi Rebell:

So for parents that want merit aid, how can we control merit aid and how much we can get for our child or for kids going to college, if you're a teenager listening to this?

Ron Lieber:

Well, the first thing you have to be able to figure out is whether a school offers it at all and in what volume and for the more selective schools that do offer merit aid, it is often quite difficult to figure out what is going on behind the scenes.

Ron Lieber:

I think of schools like, Oberlin or Connecticut College, relatively Tony Brand’s private schools. A lot of fancy kids go there. They don't really want to talk about this. They're ashamed that they've got to, get in there and slug it out in the marketplace.

Ron Lieber:

And so you have to go hunting for data that is usually publicly available, but it is not kind of digested or regurgitated in a way that's useful. You have to look at something called the common data set and do a search for section H-2A and there you will figure out, you will see what percentage of people who have no demonstrated financial need, still get scholarships anyway and in what amounts.

Bobbi Rebell:

Another thing I was shocked about that you talk about in your book that people can control is if they do get a financial aid package, they can appeal it.

Ron Lieber:

It's true. There are a lot of people who don't know that this is the case as well. And it gets a little messy, right? Because the need-based financial aid packages come from the financial aid office. But the merit aid awards come from admissions. So depending on which awards you have, you may need to file your appeal to different people.

Ron Lieber:

And then when you do, you may need to make different sorts of arguments because with the need- based crew, you generally need to prove that your financial circumstances have changed since you originally applied for financial aid.

Ron Lieber:

That's going to give you the best chance of success. With merit aid, it's more likely to be a kind of haggling where you go to the admissions office and say, "Look, you're my first choice, but this school that you compete with down the road that I would actually really rather not go to has offered me $6,000 more per year. Can you help me out please? Did I make a mistake in my application to you that maybe may have made you value me less than your competitor."

Bobbi Rebell:

Let's get into other things that people can control. There's a lot of myths about how to save, where to save and how much to save to get the best opportunity in terms of support from the college. What should people be doing? What can they control there?

Ron Lieber:

Well, let's go through a couple of the maxims here that are repeated as truths in financial planning and in personal finance, journalism, by people who ought to know better that are not actually true. First of all, there's this idea out there that if you need to make a choice between saving for retirement and saving for college, you should save for retirement because you can't borrow for retirement. That implies a couple of things.

Ron Lieber:

First of all, that borrowing for college is necessarily and always a good idea, and it may not be for some families. But it also implies that you can't borrow for retirement, which is not true. You can borrow for retirement using reverse mortgage if you have equity in your home.

Ron Lieber:

So, I hate things that are presented as maxims. They're actually based in factual inaccuracies. Then there's this other one that's more directly college-related, which is that if you save money for college, you will be penalized for that come financial aid time.

Ron Lieber:

So there's a whole bunch of problems with this. I mean, first of all, the financial aid formulas have much more to do with your income than they do with your assets. It is true that your assets will be tapped. And some people think that that means that they will be taxed. But, I would argue if you've got assets, it's only fair that you should have to use them before the school uses its own resources to support you. And let me also say this, right?

Ron Lieber:

I have never run into a family that regrets having saved for college. And I know personally that when that 529 statement comes every quarter, opening it up, makes me feel great about myself. It makes me feel great that whatever other failings I may have as a parent or as a human being this I am doing right for my kids.

Bobbi Rebell:

And speaking of your kids, that's also something you can control. You can control the way that you frame a college and where you present the choices to your children.

Ron Lieber:

It's true. Look, I mean, we do not have to cede decision-making authority on college to our children. It is not the case that just because they work hard, they should be able to go wherever they want. That's not how it works when this thing that they are chasing costs today, as much as $325,000 for University of Chicago at the rack rate, right? You don't get to make that kind of choice all by yourself when you're 17 years old.

Ron Lieber:

So, we do have some control there and we have some control over how, and when we introduce these concepts to them, because to me, it's only fair that a rising ninth grader ought to know what their parent or parents ability to pay for college might be. What their willingness to pay for college might be too and also, how the system of wheeling and dealing and discounting actually works so that if they so choose, they can position themselves to be in the best possible spot as an applicant.

Bobbi Rebell:

And the final thing I want to talk about is our own emotions. There's the cliche, "Keeping up with the Joneses" and everyone says, "Oh, I just want what's best for my child." But people get pretty emotional. This for many parents, it's a reflection on, it's almost like, did they get an A+ in parenting, depending on where their child goes to school. They want that sticker on the car, right?

Ron Lieber:

I am so glad you bring this up. Obviously the students have a tendency to be emotional. They're getting ready to leave home, they feel like it's competitive. They want to be able to hold their head up in the community. They want what they want and that's normal for adolescents.

Ron Lieber:

But what we tend to miss as parents is that we are not having emotionally honest conversations with ourselves, with our spouses if we have one, with our exes, if we have some of those about the feelings that all of this invokes and evokes, right? We're not talking about fear that our kids will go tumbling down the social class ladder if we make the wrong choice or they make the wrong choice. We don't talk about guilt, right? The guilt that we have, that we didn't save more, or we don't want to spend more, or we're not doing what our parents were able to do for us.

Ron Lieber:

And so therefore we should borrow $150,000 per kid, right? We don't have those conversations out loud. And we certainly don't talk about our own elitism and snobbery and how we feel about these institutions. The way we think that an admissions offer might reflect back on us and our family or even about the snobbery and elitism of the institutions that will be in the market for our 22 year-olds when they graduate. And the way in which those elitist institutions might look down on one school as opposed to another.

Bobbi Rebell:

Very interesting. And it's true in schools, one of the myths that you dispel in the book is that schools, they have all these things you joke about the lazy river and the rock climbing wall. I mean, that is something that is eye candy for students. That's not the reason that schools are so expensive by the way.

Ron Lieber:

No, I mean, these are really fun things to go gawk at and talk about and old school types will snicker and think that everything's gone to rot. But I don't blame the schools for this. I mean, these 18 year olds want to continue to live in the manner to which they become accustomed.

Ron Lieber:

And all of a sudden in a generation we've gone from, having a VCR in your room and a private phone line, and your own camcorder, being a luxury to everybody walking around with this little rectangle that like does all of those things and then some, right?

Ron Lieber:

We just have a way higher standard of living that we used to. And so it doesn't surprise me that a bunch of institutions would want to raise the quality of the lived experience for their undergraduates. I would argue that this is market driven. It's not driven by the institutions and it doesn't actually cost a ton. Again, it's the people who cost money at the schools, not the amenities.

Bobbi Rebell:

Right. And that's a big, big myth that you bust in the book. I loved your book. I hope lots of people pick it up because it is eye-opening about so many things that I thought were true that are not true like that last example. Ron, where can people be in touch with you?

Ron Lieber:

Yeah, I am itching to get back out on the road again, but it's probably not going to happen until November at the earliest. So I will be all over the internet. The best way to catch up with me is to sign up for my newsletter, which I promise I don't send out all that often. But if you go to ronlieber.com and just drop your first name and your email address in there, you can keep up with me and I will continue to send notes and notices about where I will be appearing via zoom. And I'm on all the usual social channels @RonLieber.

Bobbi Rebell:
So wonderful. Thank you so much.

Ron Lieber:
Thank you for having me.

Bobbi Rebell:

Okay my friends. I was pretty surprised about how little at a relative basis, all those luxuries amenities costs, but I guess overall, it is a good thing that the money is going in large part to educators. Right? I would love to hear about your experiences with paying for college. You can DM me at @BobbiRebell1 on Instagram, @BobbiRebell on Twitter, and please join the grownup list.

Bobbi Rebell:

We share recommendations of books, podcasts, and other fun things to level up your grownup life, plus we are doing giveaways of books from the authors on the show and exclusive financial grownup merchandise. Just go to my website, Bobbirebell.com to sign up. Big thanks to, "The Price You Pay for College" author, Ron Lieber for helping us all be financial grownups. Financial grownup with Bobbi Rebell is edited and produced by Steve Stewart and is a BRK media production.

Author Erica Keswin returns to the Financial Grownup podcast to discuss her new book Rituals Roadmap: The Human Way to Transform Everyday Routines Into Workplace Magic. Erica shares specific, free and low cost ways to use rituals to improve productivity, increase a sense of safety and belonging, as well as purpose both for work and for life.

Tip #1:

Begin and end with intention. Beginnings and endings are prime rituals real estate. So be aware of how you start and end your day, and do something that makes you feel most like you.

Tip #2:

Take breaks. We need to build in rituals to actually get up and move.

Tip #3:

Make sure that you're staying connected. We are all feeling isolated and lonely and we're really wired for connection. This may look like scheduling a phone call with a friend. We can build that ritual in once a week or once a month for us to stay connected.

Tip #4:

Give back. If there's ever a time to building a ritual around gratitude, it's 2021. I do believe it's something that many of us started in 2020 that we need to really focus on. There's a lot of data around the impact of gratitude on performance and how we feel in general.

Tip #5:

Build in some rituals to have fun. These days can feel long and heavy and just because it's 2021, that doesn’t mean the pandemic went away. So we need to build in some time for fun, some time for silliness and not feel guilty about it.

Get Erica’s new book, Rituals Roadmap, here

Get all of Erica’s books here

Full Show Transcript:

Bobbi Rebell :

Part of being a financial grownup is making sure you have a plan for how you spend your money, and how you pay your bills. And now we have a new tool for that. It is called Splitit. It will take a lot of the stress away from those big purchases and really allow you to plan ahead. Here's how it works. You shop online and when you're ready to pay, you just choose Splitit at the checkout to split your payment on your credit card and pay over time. There's no interest, no application, no fees. It is fast and easy.

Bobbi Rebell :

So, if you buy something for $500, you can split it into five smaller payments of $100 a month without any interest or fees, much more manageable, and you're in control of your costs. By turning your payments into smaller installments over time with no interest, Splitit gives you more spending power. I know, I don't like to have to pay interest if I can avoid it. And I also don't want to always be opening new lines of credit. Split your payments and live big with the credit cards you already have. Go to splitit.com today. That's splitit.com.

Bobbi Rebell :

Financial Grownup Guide. Five ways to use the power of rituals for a fresh start in 2021 with author Erica Keswin. 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 :

Okay, my friends, if ever there was a time we really need to find ways to cope with chaos, total chaos, things we never thought could possibly happen, it is now. And so the timing could not be better to bring back my friend, Erica Keswin to give us some really powerful ways to use rituals, to help get a fresh start and really a better sense of control as we move into 2021, which so far has not been as boring as many of us had hoped it would be.

Bobbi Rebell :

Here in the Financial Grownup podcast we have two formats, one in which we share money stories and the lessons from those stories, but sometimes we like to mix things up. And we have something called Financial Grownup Guides, which focus on tips and strategies for you to live your best financial grownup life. And as Erica shared with me the details of her latest book, it was perfect for that. And even more so, given the events of early 2021.

Bobbi Rebell :

Rituals Roadmap: The Human Way to Transform Everyday Routines Into Workplace Magic, got me thinking about the rituals I already have and brainstorming new ones to try out. And spoiler alert, not just for the workplace. Now, before I roll the interview, I also to invite everyone to join the Grownup List. We have amazing giveaways coming, including free books from our financial grownup authors. We're also building out some grownup merch, but it's not yet available for sale. You can only get it if you were on the Grownup List and win. Go to my website, bobbirebell.com to get on the List for free. We'll also leave a link in the show notes, and when you get the next newsletter, you will learn how to win the prizes.

Bobbi Rebell :

Speaking of show notes, don't feel you need to take notes on all of the great Intel Erica is going to share. We'll have it all for you in those show notes, which are available under the financial grownup dropdown again, on my website. Okay. I'm really excited for you guys to hear the interview here is Erica Keswin giving us some highlights of Rituals Roadmap. Erica, thanks for coming back to the Financial Grownup Podcast.

Erica Keswin :
Thank you for having me.

Bobbi Rebell :

Big congratulations on your next bestseller, Rituals Roadmap: The Human Way to Transform Everyday Routines into Workplace Magic. You're going to be giving us five ways to use the power of rituals for a fresh start in 2021. But before we get there, first of all, tell us about the book a little bit. And then I'm going to ask you a couple of quick questions.

Erica Keswin :

Sure. I had a book in 2018 as you know because it was on your show called Bring Your Human to Work. And one of the things I realized after it came out that rituals are a tool to create a more human workplace, and to feel more connected. And I know we'll get into some of that. We can use rituals at home. We can use them at work. Right now, working home are pretty much the same thing, so they're even more important. But rituals are very accessible and there's something that we can all use in our lives. And one of the things I found over the last nine months is that they really do help us during turbulent times, especially now.

Bobbi Rebell :

Especially now, and as much as we turn the page and we're now in 2021, the reality is 2021 is likely to be full of so many surprises just as 2020 was. I want to quickly ask you a couple questions about the book and some things that you say in there that I think are particularly relevant to Financial Grownups. The first one is you say in there, the cost of rituals is minimal, but their value is priceless.

Erica Keswin :

Yes. When I started studying rituals, I came up with an equation called the three Ps. The three Ps of rituals. Rituals give us a sense of psychological safety and belonging. They give us an opportunity to connect to purpose. And if you add those two together, it equals performance. And so when I think about performance, it could be that rituals impact how our team feels more connected. It could be bottom line performance, but also performance in our personal lives, that when we have rituals in our lives, our cortisol, our stress goes down, our oxytocin, our feel good hormone goes up. We're more engaged at work. We're more engaged in life. And the book has tons of different studies and science and stories of how rituals impact our lives in really positive ways.

Bobbi Rebell :
And one thing I really enjoyed about the book is that there were a lot of specific examples of that. That we can sort of emulate in our own lives. You call rituals magic, expand a little bit on that.

Erica Keswin :

So people will say, "Well, what is a ritual?" To me, a great example is, if I'm lighting a candle, that may or may not be a ritual. If I'm sitting here lighting a candle because my lights went out, I'm just lighting a candle because I need light. A ritual is something that goes beyond its practical purpose. So if I light a candle every Friday at five o'clock to signify the transition from the workweek to the weekend, I'm almost elevating that act of lighting a candle.

Erica Keswin :

And again, it's not to give me light per se, but it does give me a sense of meaning and connection to myself and to what's going on around me. So that's really that magical element of bringing awareness and intention to what we do.

Bobbi Rebell :
And it's different from something like habits.

Erica Keswin :

Yes. I mean, I believe so. A ritual is something that if you missed it for a day or for a week, something would feel really, really off in your life. It could be if you meditate every morning, for me during the pandemic, we started quarantining on a Thursday I believe, and the following Tuesday I said, "You know what? Our family ritual is to have taco Tuesday, I'm going to do it." I saw the look on it, and my kids are older, they're they're teenagers, but the look on their faces and they were able to smell the same smell and the things that we did pre pandemic. And I was able to see firsthand the impact of maintaining some of those rituals, and how it gave them a sense of psychological safety and belonging.

Erica Keswin :

And rituals also create some order out of chaos. And so I think for everyone now, we need to think about how do we maintain some of our old rituals, but also think about, given that things are so different right now, what are new rituals that we also can add to our lives.

Bobbi Rebell :

Which leads us to the five ways to use the power of rituals for a fresh start in 2021 that you have brought to us.

Erica Keswin :

Great. Begin and end with intention. Beginnings and endings are what I call prime rituals real estate. So be aware of how you start your day, and do something that makes you feel most like you. It could be meditation, taking a few deep breaths or having coffee at Starbucks, which is as many people know my favorite ritual. So that's a really important place to start. It also could be how you end the day. It could be how you transition from work to home, especially when we're all doing that in basically one room. So, transition rituals are important as well.

Erica Keswin : Number two is take breaks. For me if I learned anything in 2020, it's that it's really hard to be in front of your computer all day. And so we need to build in rituals to actually get up and move. And a really fun ritual a woman just share with me recently, she calls 20 by 20 by 20. Every 20 minutes, she takes a 22nd break, 20 feet from her computer-

Bobbi Rebell : Oh I love that.

Erica Keswin :

... and stretches. And again, it's not a box check. It's this elevation of, I know this is important, it's giving me a moment, 20 seconds to connect to something outside of myself. So something that your listeners can try.

Bobbi Rebell :

Yeah. And I think that you wouldn't do that if you didn't have the ritual, because you would feel like if you were taking a break, you are interrupting your workflow and it's not going to help your productivity. But if you have it as a ritual, then that becomes something that you don't feel guilty about. In fact, you know that it's going to empower you to do better the rest of the way.

Erica Keswin :

Exactly. And it's something that you're looking forward to. And it would all of a sudden feel weird if all of a sudden three hours went by and you hadn't gotten up to do it.

Erica Keswin :

Number three is to make sure that you're staying connected. Whether you live alone or living with five other people as I'm doing right now, we are all feeling isolated and lonely and we're really wired for connection. And so, one of the things I've been doing as part of my rituals is to say, "I am going to reach out to some friends and check-in, schedule those phone calls. I have one friend where, and this is actually how you and I met the first time we went for a walk around the reservoir in New York, so maybe when we're both back in New York, we can build that ritual in, you know, once a week or once a month for us to stay connected.

Erica Keswin :

But it's been really nice to get off of Zoom, outside in nature with a friend on a regular time, you know, once a week. So staying connected is number three. Number four is giving back. And I do think that if there's ever a time to building a ritual around gratitude, it's 2021. And that could be anything from coming together with your kids and talking about what you're grateful for, figuring out how you want to give back as a family, you know, the beginning of quarantine, living in New York city, checking in an elderly neighbor, dropping off groceries, I do believe it's something that many of us started in 2020 that we need to really focus on. And there's a lot of data around the impact of gratitude on performance and how we feel in general.

Bobbi Rebell :
And part of a ritual can be involving your entire family.

Erica Keswin :

Yes, 100%. And the kids need to, and they want to. Once they get into it and see the impact on how they feel. I mean, I know we both have seen that firsthand. And last and definitely not least, I'm trying to build in some rituals to have fun. These days can feel long and heavy, and as you said in the beginning, just because it's now on the calendar 2021, it's not as if the pandemic went away. I mean, some people woke up depressing, wow, it's 2021 and things still feel the same. And so we need to build in some time for fun, some time for silliness and not feel guilty about it.

Erica Keswin :

You and I have a mutual friend in Randi Zuckerberg, and she shared with me that on Fridays, and she has little kids, so I think that this connects with the under 10 set, but her family has dessert before dinner on Fridays. And they all think it's like the most hilarious thing.

Bobbi Rebell :
Oh, I think any family will go for that. I think kids of all ages will be on board with that ritual.

Erica Keswin :

You know, or on the company side I've worked, spoke with a group at LinkedIn that has a one-minute dance party every day at three o'clock and they just get up and they let loose, they did it in person, you can do it remote. But again, we need-

Bobbi Rebell :

Erica, I want to see you get your twin daughters to do the one minute dance ritual every day at three o'clock. I think that'd be great.

Erica Keswin :

They would, they probably would want me to film it and put it on my social media, which I have to get special permission to do now. But what we do to have fun is every Monday, our entire family, my husband, my 15 year old son and my dog, we all watch the Bachelor. That is our guilty pleasure. We laugh so hard and we are actually this year doing a bracket like a final four bracket-

Bobbi Rebell : Oh my gosh.

Erica Keswin :
... of the Bachelor.

Bobbi Rebell : I love it.

Erica Keswin :

but be intentional and build in some rituals for fun because we all need it, and it's contagious.

Bobbi Rebell :

Well, there're a lot of great ideas and specific examples in your book. So everyone should check it out. Where can people learn more about you? And I assume the book is going to be available pretty much everywhere.

Erica Keswin :

So you can find me, my email is my name, ericakeswin.com, which is K-E-S as in Sam W-I-N.com. You can sign up for my monthly-ish newsletter to hear more about the book. On the website, there's lots of places, as you said, to order the book from Amazon to Barnes & Noble to the Strand, I'm trying to support local bookstores. And I really do believe that rituals now more than ever can help us through these turbulent times. They don't have to cost a penny, but the impact is priceless

Bobbi Rebell :
Very well said. Thank you so much.

Erica Keswin :
Thanks, Bobby. I can't wait to see you in person.

Bobbi Rebell :

All right my friends. What was your favorite ritual that Erica talked about? For me, definitely dessert before dinner. But most of you guys would guess that pretty quickly. Taco Tuesday though, definitely a classic we can all go for. I would love to hear from you. DM me on Instagram @bobbirebell1 or on Twitter @bobbirebell, let me know what rituals you and your family and your coworkers use. A lot of the stuff is for work, but frankly, work and home is kind of the same thing these days.

Bobbi Rebell :

Anyway, I'm also really excited about the changes that we're making to the Grownup List. It's going to be coming out pretty reliably I hope, that's the plan once a month. And I want you guys to join ASAP by going to my website, bobbirebell.com because we are going to be doing a lot of giveaways, including author books like Erica's. We're going to be giving away a number of signed copies of that. And also other authors that are appearing on the show. We have a lot of really amazing ones.

Bobbi Rebell :

And as I mentioned at the top of the show, we are developing some merchandise and some really cool stuff that we are going to give away at first, because we're still setting up the store and we want to see what you guys like and get some feedback. So you can be our beta testers and win some free merch. Just get on the Grownup List again at my website. And of course, don't forget to pick up a copy of Erica Keswin's book, Rituals Roadmap. And if you like it, recommend it to friends. We could all use some calming rituals right now. And of course, big thanks to other Erica Keswin for helping us all be financial grownups.

Bobbi Rebell :

Financial Grownup with Bobbi Rebell is edited and produced by Steve Stewart and is a BRK media production.

Episode Links:

• Erica’s website - https://ericakeswin.com/

Follow Erica!

• Instagram - @ericakeswin

• Twitter - @erica_keswin

• LinkedIn - @ericakeswin

Follow Bobbi!

• Instagram - @bobbirebell1

• Twitter- @bobbirebell

• LinkedIn-https://www.linkedin.com/in/bobbirebellkaufman

• Website- http://www.bobbirebell.com/

Some of the links in this post are affiliate links. This means if you click on the link and purchase the item, I will receive an affiliate commission at no extra cost to you. All opinions remain my own.

The secret to getting the most free money in the form of scholarships is in knowing the systems to use and the shortest, most efficient path to success. Jocelyn Paonita Pearson, creator of the Scholarship System joins Bobbi to talk specific strategies to get the most dollars to pay for your education or that of those you care about, without wasting time on dead ends.

Here are 3 tips for scholarship success

• Dedicate a certain day to work on scholarships

• Efficiency - apply all the way through the college and tweak your story that is working

• Don't make excuses - there is money out there for for all gpa's and low income - Still apply - read criteria

Episode Links:

• Free webinar

• Facebook

• The Scholarship System

Some of the links in this post are affiliate links. This means if you click on the link and purchase the item, I will receive an affiliate commission at no extra cost to you. All opinions remain my own.

College can be the ultimate adulting experience- including taking on some bad money habits if students aren’t taught the right way to start building a financial life.

4 Things College Students Need To Learn About Money

• Debt can be dangerous (credit cards are not free money, student loans must be repaid)

• Cash flow is king (save money, start budgeting, know needs vs. wants)

• Run your own race (know priorities and allocate dollars accordingly)

• Money is a tool that can help or hurt you in reaching your goals

Episode Links:

• Blinkist - The app I’m loving right now. Please use our link to support the show and get a free trial.

• Tara’s website - www.reisupllc.com

• Tara’s courses MONEY and WEALTH

  • Tara is offering 20% off of either course to our Financial Grownup community. Use the code GROWNUP20 at checkout

Follow Tara!

• Instagram - https://www.instagram.com/reisupllc/

• Facebook - https://www.facebook.com/reisupllc/

• Twitter - https://twitter.com/reisupllc

• YouTube - https://www.youtube.com/channel/UCe5MrXlrFYJmvRzN9XDAeLA

• LinkedIn - https://www.linkedin.com/in/tarafalcone/

Some of the links in this post are affiliate links. This means if you click on the link and purchase the item, I will receive an affiliate commission at no extra cost to you. All opinions remain my own.

The College Investor’s Robert Farrington loved his job at Target. He was also well paid. But he loved his family more. So he made the tough decision to leave and focus full-time on the side hustle that was already throwing off even more income. 

In Robert’s money story you will learn:

-The value of time and how Robert made the decision to leave a job he loved in order to spend more time with him family

-How Robert grew his side hustle from no income into his full-time business

-Advice on how to leave a job on great terms

In Robert’s money lesson you will learn:

-His take on the benefits of growing a side hustle

-The specific obstacles Robert prepared for before taking the lead in his business

In Robert’s every day money tip you will learn:

-The truth behind retail shopping myths

-Quick tips on saving money while grocery shopping

-The number one Black Friday tip

Bobbi and Robert also talk about:

-Where the idea for his website started

-His regrets about leaving his job

-The College Investor and the resources offered online

-The College Investor 6 minute audio show on Apple Music

In My Take you will learn

-How to be honest with employers about having a side hustle - while not oversharing

-How spending time with family during the holidays can be more valuable than rushing out for Black Friday Deals

 

EPISODE LINKS:

Follow Robert!!

Instagram @thecollegeinvestor

Youtube @TheCollegeInvestor

Linkedin Robert Farrington

Listen to The College Investor Podcast https://apple.co/2CqMuC3 

Learn more on The College Investor website https://thecollegeinvestor.com/ 

Some of the links in this post are affiliate links. This means if you click on the link and purchase the item, I will receive an affiliate commission at no extra cost to you. All opinions remain my own.

Transcription

Robert Farrington:
Am I really able to say that I value the time I spend with my family and stuff when I'm missing Thanksgiving and Christmas and holidays and weekends and not able to go to birthday parties?

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, Financial Grownup friends, get ready for an episode not really about money, but about living a rich life with your family. It's about the price of your time and the value of your time, and for many of us, not all time is created equal. Target store manager, Robert Farrington, had the money, but he wanted the time. Not just any time. Nights, weekends, and holidays, specifically, the times that most of us get to be with our families, but in retail, not so much. Fortunately, he had something else going on. More on that in a sec.

Bobbi Rebell:
First, a quick welcome to our new listeners and to our returning ones. If you like the show, take a screen grab, share it on social. Then subscribe so you don't miss any upcoming episodes, and make sure that you have it set in the settings for automatic download. With that, let us get to Robert Farrington's story. He now runs a little site. It's actually a really big deal website called The College Investor. And for you early stage entrepreneurs, it was a side hustle with literally zero income. Yes, zero income, no money coming in for the first two years, but that was a while back. He'll tell you more about it.

Bobbi Rebell:
Now, it is his full-time business and it is growing. You're going to love this story. Here is, the College Investor. It's Robert Farrington.

Bobbi Rebell:
Hey Robert Farrington. You're a financial grownup. Welcome to the podcast.

Robert Farrington:
Hey. Thank you so much for having me. I'm excited to be here.

Bobbi Rebell:
You are ... And this is trademarked, my friends. You are America's student loan debt expert. You're also the founder and editor of The College Investor, so you have a lot of knowledge to share with us.

Robert Farrington:
Whew. You kind of scare me when you say it all, but yeah. I'm excited to share with you.

Bobbi Rebell:
So give us a quick summary of what The College Investor is and then we're going to move into your money story.

Robert Farrington:
Sounds great. So, The College Investor was started by me as a side hustle in college, because I wanted to share my thoughts on how to invest. But everybody that I knew was like, "That's cool Robert, but I have student loans and other things and I just can't get there yet."

Robert Farrington:
So over the last few years, we've kind of incorporated more about getting out of student loan debt, getting out of debt in general, and how to build wealth so you can start investing even in your early 20s, or in college, so that you can build wealth and set those financial footprints in motion for your future.

Bobbi Rebell:
So, this is where it gets really cool and exciting, because you've been working on this for a very long time. You are married. You have two young children, the oldest one going into kindergarten. You were full time at Target until a year ago and this was your side hustle. And then you were able to make the decision to flip the switch and take your side hustle full time. And that's your money story. Tell us more Robert.

Robert Farrington:
Yeah. So about three years ago, I started earning more than my Target job. You know, we were just stashing the money away and didn't really have any plans to leave because you have to understand, I have loved working at Target. It was a great company to work for. I had been there a long time. I was comfortable there. I was probably one of the top performers in my area, so life was really good at Target. But there is one big drawback about working in retail and that is that you have to work nights and weekends, and holidays.

Bobbi Rebell:
Even if you were the manager by then. You were pretty senior.

Robert Farrington:
Right, but I also believe in being a leader, so I would still work my weekends with my team. I would work a night a week with my team and then as the leader, I definitely had to be there on Black Friday and throughout the holiday season. It meant having Thanksgiving lunch at like 12:00 and then going to work at 2:00 in the afternoon on Thanksgiving day, so that we're ready to go when the store opens.

Robert Farrington:
That really became hard as my kids were getting older.

Bobbi Rebell:
Okay, so tell me about the conversation that you had with your wife when this decision was made.

Robert Farrington:
It really was a series of decisions. First off, it was like, this is a cool side hustle. Let's not change anything. And then it was like, wow this is really becoming more of a thing and we can live off this business income on the side. And you don't need to work there. Finally, I really had to think about what we valued as a family. So my wife and I were talking and you hear these things like, "Show me your money and show me your time, and it will tell you what you value." So, am I really able to say that I value the time I spend with my family and stuff, when I'm missing Thanksgiving and Christmas and holidays and weekends, and not able to go to birthday parties.

Robert Farrington:
So, it was really really hard to leave something I was so comfortable with, but at the same time I also wasn't living my truth in that I wasn't necessarily doing exactly what I valued. And we could afford it. I could afford the life I wanted to, and said that I wanted to. And that really was a big part of our conversation with my wife.

Robert Farrington:
The second thing is, is contingency plans. We always had these conversations. I run an online business, so it's like, what happens if the internet goes out tomorrow? Right? Are we going to be financially okay if suddenly there is no income stream. So, it really was about planning and making sure we had enough saved and if the internet did stop tomorrow and I left my day job, would we be okay financially? And we kind of checked all these boxes and once those were all yeses, it was setting a timeline up for when does it make the most sense to leave?

Bobbi Rebell:
They knew about the side hustle right?

Robert Farrington:
It was one of those things. I never hid it, but I was never fully overt about it. It had been on my LinkedIn profile for a decade. My peers, every now and then, I'd get student loan questions from my peers. They'd be like, "I'm trying to pay off my student loans. Can you help me?"

Bobbi Rebell:
Yeah, but did the Target management know that this was producing more income than they were paying you?

Robert Farrington:
I never shared that, so I'm 99% sure that they had no idea. In fact, I know most of them didn't because when I left and afterwards, they had a little going away party for me and like, "We wish you the best of luck. We hope this all works well for you."

Bobbi Rebell:
So they had no idea?

Robert Farrington:
Yeah, and I never hid that. So that's the interesting thing. If no one asked, I was very candid. I've been candid even for the last seven, eight years online. On different podcasts and interviews and stuff, so it's out there.

Bobbi Rebell:
Did they ever think maybe we should pay him more? If he can make more from a blog, maybe we're underpaying him? Was there any kind of conversation like that, ever?

Robert Farrington:
It's hard, because I was extremely well paid. It was a nice six-figure ... I don't think people realize what you make at Target, but I was, with my bonuses and stuff, I was probably making about $180,000/year when I left.

Bobbi Rebell:
Wow. So, let's go back to quitting. So, how did you actually quit?

Robert Farrington:
So, I really did think about this and planned it out. Because I also, like I said, I wanted to leave on really good terms. I didn't want to burn any bridges, so I actually, my wife and I finalized our plans for leaving in February, or March of last year. We said we're going to leave in September. And I thought this was very respectful from the workload that was going on at Target, but it was also enough time that they could have enough leeway to have everything in place before the holiday season.

Robert Farrington:
I decided that we're going to give a month notice, so I actually told my boss in August. And I probably gave about five and a half, six weeks notice. But I was fully ... You hear these horror stories like, if they were going to walk me out that day or something crazy, I was fully prepared to leave that day. But I was going to be very respectful, and so when my boss came in August, I would say she comes like once or twice a month. When she came in, I just pulled her into my office and said, "I have something really important to share with you." She had no idea what was coming. I said, "Hey. So I have some big changes I want to tell you. I am going to be resigning and I'm going to be pursuing my own endeavors outside of Target. Spending more time with my family."

Robert Farrington:
And the look of shock, she actually texted me like four hours later. So I told her at probably 4:00 in the afternoon, so this was like 8:00 at night. She's like, "I cannot believe this. This is crazy. I'm totally shocked." I totally caught her off guard. But I gave them, like I said, almost six weeks notice. So, I felt like I left in the most respectful and terms possible. Which I also think is the best way to possibly leave if you are going to leave.

Bobbi Rebell:
What was the reaction around your store?

Robert Farrington:
Most of them were pretty excited for me. I think all my direct reports actually were much more aware of everything then anybody else above me. And so, it was less of a shock, but same thing. I'm also very diligent in how you let people know, so make sure you have a very strong hierarchy of letting my senior managers know. And then just announcing it downward. Clear communication before I even let them know. So, I don't think I let them know until about a week and a half after I let my boss know. So my boss already had some plans in place, and we were able to share some very specific plans, which I think is really important when you transition in any workplace.

Bobbi Rebell:
Are there things you would do differently, looking back?

Robert Farrington:
I honestly would probably do it sooner. It's one of those things, I was so worried about all these random variables. And I probably gave an extra year or two to Target. And like I said, it's a great company but at the same time, what could I have done in those extra year or two when I could have left longer. That's the only real regret I have.

Bobbi Rebell:
So what is the lesson for our listeners?

Robert Farrington:
I think the big lesson is, if you grow this side hustle with your time and energy outside of work instead of watching TV shows, or doing whatever non-productive things you're probably doing outside of work, you could turn this into a full-time job that you're passionate about, you love, and it works with your schedule. So, I think it's definitely a clear path that you can actually achieve if you want to put the time and effort into it.

Bobbi Rebell:
Alright, let's talk about your everyday money tip. We're going to tap into your knowledge as a retail expert, having seen it all, from the grassroots level. Tell us what people can do to save money and be better shoppers at stores, not necessarily just Target, but stores like Target. What can they know about pricing, about sales, and so on?

Robert Farrington:
Yeah. Let's debunk some of these myths first. So first off, I always love these Buzzfeed articles that come out. What digits are the last ones that you know what the markdowns are?

Robert Farrington:
Well, let's talk a little bit about math. So almost every price in retail ends in 99 cents, right? So, when you mark something down half off, it's always going to end in eight. Because that's just math. And so when you mark it down 75% off, for the third time, or the second markdown, it's going to end in a four. So, these math strategies that they say are secret hacks, is really just the math of the sales. It's true.

Bobbi Rebell:
Yeah.

Robert Farrington:
I think people just need to realize that. I think the best thing ... The other thing that people need to realize is that, almost every store Target included, puts the same things on sale every two weeks. So it just alternates, so if you're a regular grocery shopper, you'll notice this a lot. Especially in food, because one week it'll be Coke on sale, the next week it'll be Pepsi on sale. And then it goes back to Coke on sale. Then it goes back to Pepsi on sale. And it's the same sale. It's just goes alternating every other week. And you see this in almost every major retailer, so one, if you have really strong brand allegiance, align your shopping habits with your sale week and you'll probably find that you're going to get that same sale every time you go in because it will line up with your shopping habits.

Bobbi Rebell:
So you said you always have to work, you've always had to work the holidays and especially Black Friday. What's your number one Black Friday tip?

Robert Farrington:
The number one Black Friday tip is that all the ads come online about a month before Black Friday. So you can plan out all your shopping ahead of time. And you have to realize that the door busters at every store, there's only about 10 to maybe 50 of that item. And so, if there's one thing that you really really really really can't live without, if you're not the first 10 to 50 people in line, you're probably not going to get it. So don't waste your time going out there.

Robert Farrington:
The second thing though, that's really emerged over the last couple years is online shopping. So at the same time, a lot of these companies are trying to compete with each other and they're moving their Black Friday sales online and they're moving them on to the week before Black Friday. So you can get a lot of the same great deals online, but without even going to the store, about a week before you even shop.

Bobbi Rebell:
Let's talk more about what's going on with The College Investor. So this is your full-time passion project, slash income, slash growing company. You've got a whole staff there now. You're managing that now. What are you priorities? Where is your growth going to come from? What can people expect and look forward to there?

Robert Farrington:
So if you want to know anything about getting out of student loan debt, and starting to invest, The College Investor has it for you. We have pretty much every topic around student loan debt covered and you know, sadly as much as I don't want this to be the growing reason for our growth, student loan debt in America is growing and it's such a problem for most people. So we have your answers. We have tools and resources that can help you. If you don't like to read, you can also listen to The College Investor audio show. It's a podcast where we change our written articles into a short digestible audio show for you because I know-

Bobbi Rebell:
You love that. Love short.

Robert Farrington:
Yeah.

Bobbi Rebell:
Yes. I love that.

Robert Farrington:
Short. I mean, I think I beat you because my average show time is like six to eight minutes because we're just talking about the daily article of the day.

Bobbi Rebell:
But that's perfect. That's what people need because everyone's busy. Alright, where can people ... People can obviously reach you at The College Investor, but tell me your social channels et cetera.

Robert Farrington:
Yeah. You can go to thecollegeinvestor.com. You can go to The College Investor audio show. You can find us on YouTube at The College Investor and you can find us on Instagram at The College Investor.

Bobbi Rebell:
Love it. Thank you Robert.

Robert Farrington:
Thank you for having me.

Bobbi Rebell:
By the way, that pricing math that Robert thinks is so obvious to everyone, I had no clue. What about you?

Bobbi Rebell:
Here's my take on what he had to say. Financial Grownup tip number one. If you have a side hustle, follow Robert's path and be open about it at work. You don't have to be too open. When I went to write my book, How to be a Financial Grownup, the first thing I did was tell my managers and get their okay. Don't hide things. But then also, don't work on it during your work hours and you can be open about your plans, but you don't have to share the whole big picture and all your grand plans.

Bobbi Rebell:
Financial Grownup tip number two. I love that Robert chose family over spending time working on the holidays. The same can be said for shopping. Before you race out to get one of those amazing, say Black Friday deals, remember that Robert said, and a lot of you know this already, there are very few available. So, you'll have to get here really early and spend a lot of time, invest a lot of time, to get it. So is saving money really worth cutting into your family time on a holiday? Maybe look online, a different day, ahead of time and set a price alert. Then, if you get that alert, you can spend five minutes buying it online and get back to being with your family. Or, maybe what you have is fine and you don't buy it at all.

Bobbi Rebell:
Before we wrap up, tell me, I want to know, what's your best retail shopping tip? DM it to me. And please, take a minute to follow me on social media. I am @bobbirebell1 on Instagram. bobbirebell on Twitter, and Bobbi Rebell on Facebook. The website to get more information about the show, bobbirebell.com/financialgrownuppodcast and for the show notes and more about Robert and the The College Investor, go to bobbirebell.com/podcast/robertfarrington and thanks to The College Investor's Robert Farrington for bringing us all 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 College Investor’s Robert Farrington loved his job at Target. He was also well paid. But he loved his family more. So he made the tough decision to leave and focus full-time on the side hustle that was already throwing off even more income. 

In Robert’s money story you will learn:

-The value of time and how Robert made the decision to leave a job he loved in order to spend more time with him family

-How Robert grew his side hustle from no income into his full-time business

-Advice on how to leave a job on great terms

In Robert’s money lesson you will learn:

-His take on the benefits of growing a side hustle

-The specific obstacles Robert prepared for before taking the lead in his business

In Robert’s every day money tip you will learn:

-The truth behind retail shopping myths

-Quick tips on saving money while grocery shopping

-The number one Black Friday tip

Bobbi and Robert also talk about:

-Where the idea for his website started

-His regrets about leaving his job

-The College Investor and the resources offered online

-The College Investor 6 minute audio show on Apple Music

In My Take you will learn

-How to be honest with employers about having a side hustle - while not oversharing

-How spending time with family during the holidays can be more valuable than rushing out for Black Friday Deals

 

EPISODE LINKS:

Follow Robert!!

Instagram @thecollegeinvestor

Youtube @TheCollegeInvestor

Linkedin Robert Farrington

Listen to The College Investor Podcast https://apple.co/2CqMuC3 

Learn more on The College Investor website https://thecollegeinvestor.com/ 

---

Transcription

Robert Farrington:
Am I really able to say that I value the time I spend with my family and stuff when I'm missing Thanksgiving and Christmas and holidays and weekends and not able to go to birthday parties?

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, Financial Grownup friends, get ready for an episode not really about money, but about living a rich life with your family. It's about the price of your time and the value of your time, and for many of us, not all time is created equal. Target store manager, Robert Farrington, had the money, but he wanted the time. Not just any time. Nights, weekends, and holidays, specifically, the times that most of us get to be with our families, but in retail, not so much. Fortunately, he had something else going on. More on that in a sec.

Bobbi Rebell:
First, a quick welcome to our new listeners and to our returning ones. If you like the show, take a screen grab, share it on social. Then subscribe so you don't miss any upcoming episodes, and make sure that you have it set in the settings for automatic download. With that, let us get to Robert Farrington's story. He now runs a little site. It's actually a really big deal website called The College Investor. And for you early stage entrepreneurs, it was a side hustle with literally zero income. Yes, zero income, no money coming in for the first two years, but that was a while back. He'll tell you more about it.

Bobbi Rebell:
Now, it is his full-time business and it is growing. You're going to love this story. Here is, the College Investor. It's Robert Farrington.

Bobbi Rebell:
Hey Robert Farrington. You're a financial grownup. Welcome to the podcast.

Robert Farrington:
Hey. Thank you so much for having me. I'm excited to be here.

Bobbi Rebell:
You are ... And this is trademarked, my friends. You are America's student loan debt expert. You're also the founder and editor of The College Investor, so you have a lot of knowledge to share with us.

Robert Farrington:
Whew. You kind of scare me when you say it all, but yeah. I'm excited to share with you.

Bobbi Rebell:
So give us a quick summary of what The College Investor is and then we're going to move into your money story.

Robert Farrington:
Sounds great. So, The College Investor was started by me as a side hustle in college, because I wanted to share my thoughts on how to invest. But everybody that I knew was like, "That's cool Robert, but I have student loans and other things and I just can't get there yet."

Robert Farrington:
So over the last few years, we've kind of incorporated more about getting out of student loan debt, getting out of debt in general, and how to build wealth so you can start investing even in your early 20s, or in college, so that you can build wealth and set those financial footprints in motion for your future.

Bobbi Rebell:
So, this is where it gets really cool and exciting, because you've been working on this for a very long time. You are married. You have two young children, the oldest one going into kindergarten. You were full time at Target until a year ago and this was your side hustle. And then you were able to make the decision to flip the switch and take your side hustle full time. And that's your money story. Tell us more Robert.

Robert Farrington:
Yeah. So about three years ago, I started earning more than my Target job. You know, we were just stashing the money away and didn't really have any plans to leave because you have to understand, I have loved working at Target. It was a great company to work for. I had been there a long time. I was comfortable there. I was probably one of the top performers in my area, so life was really good at Target. But there is one big drawback about working in retail and that is that you have to work nights and weekends, and holidays.

Bobbi Rebell:
Even if you were the manager by then. You were pretty senior.

Robert Farrington:
Right, but I also believe in being a leader, so I would still work my weekends with my team. I would work a night a week with my team and then as the leader, I definitely had to be there on Black Friday and throughout the holiday season. It meant having Thanksgiving lunch at like 12:00 and then going to work at 2:00 in the afternoon on Thanksgiving day, so that we're ready to go when the store opens.

Robert Farrington:
That really became hard as my kids were getting older.

Bobbi Rebell:
Okay, so tell me about the conversation that you had with your wife when this decision was made.

Robert Farrington:
It really was a series of decisions. First off, it was like, this is a cool side hustle. Let's not change anything. And then it was like, wow this is really becoming more of a thing and we can live off this business income on the side. And you don't need to work there. Finally, I really had to think about what we valued as a family. So my wife and I were talking and you hear these things like, "Show me your money and show me your time, and it will tell you what you value." So, am I really able to say that I value the time I spend with my family and stuff, when I'm missing Thanksgiving and Christmas and holidays and weekends, and not able to go to birthday parties.

Robert Farrington:
So, it was really really hard to leave something I was so comfortable with, but at the same time I also wasn't living my truth in that I wasn't necessarily doing exactly what I valued. And we could afford it. I could afford the life I wanted to, and said that I wanted to. And that really was a big part of our conversation with my wife.

Robert Farrington:
The second thing is, is contingency plans. We always had these conversations. I run an online business, so it's like, what happens if the internet goes out tomorrow? Right? Are we going to be financially okay if suddenly there is no income stream. So, it really was about planning and making sure we had enough saved and if the internet did stop tomorrow and I left my day job, would we be okay financially? And we kind of checked all these boxes and once those were all yeses, it was setting a timeline up for when does it make the most sense to leave?

Bobbi Rebell:
They knew about the side hustle right?

Robert Farrington:
It was one of those things. I never hid it, but I was never fully overt about it. It had been on my LinkedIn profile for a decade. My peers, every now and then, I'd get student loan questions from my peers. They'd be like, "I'm trying to pay off my student loans. Can you help me?"

Bobbi Rebell:
Yeah, but did the Target management know that this was producing more income than they were paying you?

Robert Farrington:
I never shared that, so I'm 99% sure that they had no idea. In fact, I know most of them didn't because when I left and afterwards, they had a little going away party for me and like, "We wish you the best of luck. We hope this all works well for you."

Bobbi Rebell:
So they had no idea?

Robert Farrington:
Yeah, and I never hid that. So that's the interesting thing. If no one asked, I was very candid. I've been candid even for the last seven, eight years online. On different podcasts and interviews and stuff, so it's out there.

Bobbi Rebell:
Did they ever think maybe we should pay him more? If he can make more from a blog, maybe we're underpaying him? Was there any kind of conversation like that, ever?

Robert Farrington:
It's hard, because I was extremely well paid. It was a nice six-figure ... I don't think people realize what you make at Target, but I was, with my bonuses and stuff, I was probably making about $180,000/year when I left.

Bobbi Rebell:
Wow. So, let's go back to quitting. So, how did you actually quit?

Robert Farrington:
So, I really did think about this and planned it out. Because I also, like I said, I wanted to leave on really good terms. I didn't want to burn any bridges, so I actually, my wife and I finalized our plans for leaving in February, or March of last year. We said we're going to leave in September. And I thought this was very respectful from the workload that was going on at Target, but it was also enough time that they could have enough leeway to have everything in place before the holiday season.

Robert Farrington:
I decided that we're going to give a month notice, so I actually told my boss in August. And I probably gave about five and a half, six weeks notice. But I was fully ... You hear these horror stories like, if they were going to walk me out that day or something crazy, I was fully prepared to leave that day. But I was going to be very respectful, and so when my boss came in August, I would say she comes like once or twice a month. When she came in, I just pulled her into my office and said, "I have something really important to share with you." She had no idea what was coming. I said, "Hey. So I have some big changes I want to tell you. I am going to be resigning and I'm going to be pursuing my own endeavors outside of Target. Spending more time with my family."

Robert Farrington:
And the look of shock, she actually texted me like four hours later. So I told her at probably 4:00 in the afternoon, so this was like 8:00 at night. She's like, "I cannot believe this. This is crazy. I'm totally shocked." I totally caught her off guard. But I gave them, like I said, almost six weeks notice. So, I felt like I left in the most respectful and terms possible. Which I also think is the best way to possibly leave if you are going to leave.

Bobbi Rebell:
What was the reaction around your store?

Robert Farrington:
Most of them were pretty excited for me. I think all my direct reports actually were much more aware of everything then anybody else above me. And so, it was less of a shock, but same thing. I'm also very diligent in how you let people know, so make sure you have a very strong hierarchy of letting my senior managers know. And then just announcing it downward. Clear communication before I even let them know. So, I don't think I let them know until about a week and a half after I let my boss know. So my boss already had some plans in place, and we were able to share some very specific plans, which I think is really important when you transition in any workplace.

Bobbi Rebell:
Are there things you would do differently, looking back?

Robert Farrington:
I honestly would probably do it sooner. It's one of those things, I was so worried about all these random variables. And I probably gave an extra year or two to Target. And like I said, it's a great company but at the same time, what could I have done in those extra year or two when I could have left longer. That's the only real regret I have.

Bobbi Rebell:
So what is the lesson for our listeners?

Robert Farrington:
I think the big lesson is, if you grow this side hustle with your time and energy outside of work instead of watching TV shows, or doing whatever non-productive things you're probably doing outside of work, you could turn this into a full-time job that you're passionate about, you love, and it works with your schedule. So, I think it's definitely a clear path that you can actually achieve if you want to put the time and effort into it.

Bobbi Rebell:
Alright, let's talk about your everyday money tip. We're going to tap into your knowledge as a retail expert, having seen it all, from the grassroots level. Tell us what people can do to save money and be better shoppers at stores, not necessarily just Target, but stores like Target. What can they know about pricing, about sales, and so on?

Robert Farrington:
Yeah. Let's debunk some of these myths first. So first off, I always love these Buzzfeed articles that come out. What digits are the last ones that you know what the markdowns are?

Robert Farrington:
Well, let's talk a little bit about math. So almost every price in retail ends in 99 cents, right? So, when you mark something down half off, it's always going to end in eight. Because that's just math. And so when you mark it down 75% off, for the third time, or the second markdown, it's going to end in a four. So, these math strategies that they say are secret hacks, is really just the math of the sales. It's true.

Bobbi Rebell:
Yeah.

Robert Farrington:
I think people just need to realize that. I think the best thing ... The other thing that people need to realize is that, almost every store Target included, puts the same things on sale every two weeks. So it just alternates, so if you're a regular grocery shopper, you'll notice this a lot. Especially in food, because one week it'll be Coke on sale, the next week it'll be Pepsi on sale. And then it goes back to Coke on sale. Then it goes back to Pepsi on sale. And it's the same sale. It's just goes alternating every other week. And you see this in almost every major retailer, so one, if you have really strong brand allegiance, align your shopping habits with your sale week and you'll probably find that you're going to get that same sale every time you go in because it will line up with your shopping habits.

Bobbi Rebell:
So you said you always have to work, you've always had to work the holidays and especially Black Friday. What's your number one Black Friday tip?

Robert Farrington:
The number one Black Friday tip is that all the ads come online about a month before Black Friday. So you can plan out all your shopping ahead of time. And you have to realize that the door busters at every store, there's only about 10 to maybe 50 of that item. And so, if there's one thing that you really really really really can't live without, if you're not the first 10 to 50 people in line, you're probably not going to get it. So don't waste your time going out there.

Robert Farrington:
The second thing though, that's really emerged over the last couple years is online shopping. So at the same time, a lot of these companies are trying to compete with each other and they're moving their Black Friday sales online and they're moving them on to the week before Black Friday. So you can get a lot of the same great deals online, but without even going to the store, about a week before you even shop.

Bobbi Rebell:
Let's talk more about what's going on with The College Investor. So this is your full-time passion project, slash income, slash growing company. You've got a whole staff there now. You're managing that now. What are you priorities? Where is your growth going to come from? What can people expect and look forward to there?

Robert Farrington:
So if you want to know anything about getting out of student loan debt, and starting to invest, The College Investor has it for you. We have pretty much every topic around student loan debt covered and you know, sadly as much as I don't want this to be the growing reason for our growth, student loan debt in America is growing and it's such a problem for most people. So we have your answers. We have tools and resources that can help you. If you don't like to read, you can also listen to The College Investor audio show. It's a podcast where we change our written articles into a short digestible audio show for you because I know-

Bobbi Rebell:
You love that. Love short.

Robert Farrington:
Yeah.

Bobbi Rebell:
Yes. I love that.

Robert Farrington:
Short. I mean, I think I beat you because my average show time is like six to eight minutes because we're just talking about the daily article of the day.

Bobbi Rebell:
But that's perfect. That's what people need because everyone's busy. Alright, where can people ... People can obviously reach you at The College Investor, but tell me your social channels et cetera.

Robert Farrington:
Yeah. You can go to thecollegeinvestor.com. You can go to The College Investor audio show. You can find us on YouTube at The College Investor and you can find us on Instagram at The College Investor.

Bobbi Rebell:
Love it. Thank you Robert.

Robert Farrington:
Thank you for having me.

Bobbi Rebell:
By the way, that pricing math that Robert thinks is so obvious to everyone, I had no clue. What about you?

Bobbi Rebell:
Here's my take on what he had to say. Financial Grownup tip number one. If you have a side hustle, follow Robert's path and be open about it at work. You don't have to be too open. When I went to write my book, How to be a Financial Grownup, the first thing I did was tell my managers and get their okay. Don't hide things. But then also, don't work on it during your work hours and you can be open about your plans, but you don't have to share the whole big picture and all your grand plans.

Bobbi Rebell:
Financial Grownup tip number two. I love that Robert chose family over spending time working on the holidays. The same can be said for shopping. Before you race out to get one of those amazing, say Black Friday deals, remember that Robert said, and a lot of you know this already, there are very few available. So, you'll have to get here really early and spend a lot of time, invest a lot of time, to get it. So is saving money really worth cutting into your family time on a holiday? Maybe look online, a different day, ahead of time and set a price alert. Then, if you get that alert, you can spend five minutes buying it online and get back to being with your family. Or, maybe what you have is fine and you don't buy it at all.

Bobbi Rebell:
Before we wrap up, tell me, I want to know, what's your best retail shopping tip? DM it to me. And please, take a minute to follow me on social media. I am @bobbirebell1 on Instagram. bobbirebell on Twitter, and Bobbi Rebell on Facebook. The website to get more information about the show, bobbirebell.com/financialgrownuppodcast and for the show notes and more about Robert and the The College Investor, go to bobbirebell.com/podcast/robertfarrington and thanks to The College Investor's Robert Farrington for bringing us all 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 Opposite of Spoiled author Ron Lieber dishes on the underground network he tapped into as a teen to ace the financial aid game- and gives a sneak peak into his next book “What to Pay for College".Plus Ron’s secret to getting hot tickets at below market prices- Including the Cubs.

In Ron’s money story you will learn:

-How Ron got the inside track on how to maximize financial aid for college

-How much Ron took out in loans for school and how long it took to pay it back

-Ron’s theory on how grownup’s can help cut through the information overload and  get to the important information

-Insight into how Ron researches his columns for the NYTimes

-The significance of Ron’s mom taking him to meet with "the guy”

In Ron’s money lesson you will learn:

-Ron’s advice on how to learn about the options to pay for college now

-The one thing you should not do that could hurt your ability to get the maximum financial aid

-Why financial aid applications have become so complicated over time

-Specific resources from Ron to learn more about how to pay for college, before his book comes out

In Ron’s money tip you will learn:

-About his love of experiences like concerts and baseball games

-How he is able to get discount tickets to events

-The specific strategy, including the timeline, that Ron uses to get the best prices on tickets

-The best ticket score Ron ever got, and why he was so excited about the show!

In My Take you will learn:

-How I went on a “Mentor Tour” a few years ago, before launching the Financial Grownup brand

-Why I agree with Ron, that consulting people who know more about something that you do, can be the best way to get an edge on a new venture, whether it is college, or launching a business. 

-The value add of an in-person conversation compared to doing internet research

-The importance of making children aware of the costs of higher education, whether or not they pay for part or all of it. 

EPISODE LINKS

Ron Lieber’s website: http://ronlieber.com

Ron’s NY Times Columns: NYTimes.com/Lieber

Get Ron’s book The Opposite of Spoiled

Learn more about Ron’s upcoming book “What to pay for college”

Resources recommended by Ron Lieber

Paying for College without going Broke by Kal Cheney

SavingforCollege.com

Follow Ron!!

Twitter @RonLieber

Instagram @ronlieber

Facebook.com/RonLieberAuthor

 

 StubHub is where Ron goes to get last minute discount tickets!

---

Transcription

Ron Lieber:
Somebody slipped us a phone number for a guy, the guy to see in the Chicago land area if you did not have enough money for college. Turns out he was the assistant director of financial aid at Northwestern University and he had this side hustle going on where every day at 5:00 p.m. after his colleagues had gone home for the night he would sort of usher you in at the side door of the financial aid office at Northwestern. You'd give him 50 bucks in cash and he would tell you all of the secrets of the financial aid system.

Bobbi Rebell:
You're listening to financial grown up 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 OK. 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've got this.

Bobbi Rebell:
Hey friends. So Ron Lieber, famous, very famous New York Time's money columnist, super nice guy, also the author of the upcoming book What to Pay for College, the best seller The Opposite of Spoiled. He knew a guy. As he describes it it was basically an underground financial aid information network. This really happened. Before we get to Ron's unbelievable story, can't believe this really happened, I do want to welcome new listeners. And of course welcome back those who are returning. The show's been growing and I'm so happy you guys are spreading the word. So thank you in advance for any more spreading the word that you do. Please tell friends about Financial Grownup if you're enjoying it. I'm also happy that you guys are enjoying the video promos that we do for each episode. A reminder if you want one for you or your business we are having a little competition. Whenever you see the video in social media, share it. Whoever shares it the most between now and July 1st I will make a customized video just for you. So a little experimental competition we're having here.

Bobbi Rebell:
And if you have a great money story, you want to be on the show, we want to hear from you. E-mail us at info at financialgrownup.com, tell us what your money story would be and what your everyday money tip would be and maybe you'll be selected to be featured on the program. We have our first listener episode coming up soon. Now to Ron Lieber. My first exposure to his writing came when I read his bestselling book The Opposite of Spoiled, Raising Kids Who Are Grounded, Generous and Smart About Money. And yes I have used his strategies in my own home. I am also now an avid fan of his New York Times column, Your Money. In it Ron sheds light on issues that touch so many of us and with real solid reporting behind it. So that's something as a journalist I really value and appreciate. He's really good at what he does and as a parent I can't wait to read his upcoming book What to Pay for College. An entirely new guide to the biggest financial decision your family will ever make. But first you get to hear this story about a guy. Here is Ron lever.

Bobbi Rebell:
Hey Ron Lieber, you're a financial grownup. Welcome to the podcast.

Ron Lieber:
Thank you for having me.

Bobbi Rebell:
We're so excited to have you. You are the author of one of my favorite books, The Opposite of Spoiled which has set the standard for so many families including my own. We have our three save/spend/give jars in our house for my 10 year old. So thank you for that. And I know you have a new project.

Ron Lieber:
Yes I'm working on a book right now called What To Pay For College which is all about when if ever it is worth paying more than whatever your flagship state university costs for a private college or an out of state public university or something else entirely.

Bobbi Rebell:
Something we all need to be thinking about. What I want to hear for your money story though is about your experience when you were younger visiting the financial aid consultant with your mom when you were a senior in high school. Tell us what happened.

Ron Lieber:
So there I was. 1988. Chicago, Illinois. Already a scholarship kid at the K to 12 private school I attended back then. We didn't know very much about financial aid, somebody slipped us a phone number for a guy, the guy to see it in the Chicago land area if you did not have enough money for college. Turns out he was the assistant director of financial aid at Northwestern University and he had this side hustle going on where every day at 5:00 p.m. after his colleagues had gone home for the night he would sort of usher you in at the side door of the financial aid office at Northwestern. You'd give him 50 bucks in cash and he would tell you all of the secrets of the financial aid system.

Bobbi Rebell:
No.

Ron Lieber:
[crosstalk 00:04:26] God forsaken FAFSA form. Yeah, he knew exactly what he was talking about. I got into college at Amherst early decision, got a fantastic financial aid package and graduated with under $10,000 in student loan debt which wasn't all that much at the time and got it paid off in 10 years.

Bobbi Rebell:
Wait, but we got to go back Ron. So what are some of the secrets that he told you?

Ron Lieber:
It was a reminder that there is always some financial grownup out there in the world who has the information that you seek and quite often if you just had the guts to pick up the phone or show up in their office maybe with a little bit of cash on the barrel that person will tell you the secrets of whatever code you're trying to crack, whatever system you're trying to beat. There is a grownup out there somewhere who can help you. And you know every time I go out and write a column for The Times I'm looking for that one financial grownup who has the answer and they're always out there somewhere.

Ron Lieber:
But the second thing and maybe the most important thing here came from the fact that my mother took me there in the first place. She could have left me at home. She might have felt anxiety about the situation we were in or ashamed that we were going to have to go hat in hand to all these schools you know asking for money. But she felt like I at the age of 17 ought to have a front row seat for that process because it was going to be my education and my debt. And I tried to remember that when I'm tempted to shield my older daughter who's now 12 from whatever financial dilemma that my family is facing. She's old enough to hear a fair bit of this and I want her to understand.

Bobbi Rebell:
Have you ever circled back to your mom and asked her why she took you in and what was going on in her mind at that time?

Ron Lieber:
You know I did a couple of years ago as I started thinking about this guy again. I actually tracked him down on the plains of Colorado where he's gone to retire from financial aid. And he remembered me and we chatted about it and he said the thing that always surprised him was when the parents came without the kid. So you know he gave my mom great credit. And you know my mom to her credit to this day you know doesn't shield me from you know any financial dilemma she's facing.

Bobbi Rebell:
How did she find this guy?

Ron Lieber:
The people at my private high school in Chicago just did not know a ton about financial aid and how it worked. But they said there's this guy. And you know it was literally a slip of paper with the guy's phone number on it, I'm not even sure there was a name and you know I just dialed the suburban Chicago area code and he picks up and he said yeah you know come to this address next Tuesday and bring me my money and we'll talk. And it was like a financial aid underground.

Bobbi Rebell:
For our listeners now in 2018, what is the lesson from that? What's the takeaway?

Ron Lieber:
I think you always have to turn over every rock and talk to every person who might have information that can help you. Don't be ashamed of the fact that you don't understand. Every single last one of these financial systems that we encounter in our daily life is complex. Often they are complex by design. Sometimes they're complex by accident right. In the case of the financial aid industry loan systems, you know layers of people over the decades have layered you know different levels of complexity onto this. All in the hope that they can help some or another student who might be disadvantaged by the last layer that was laid on right. What we end up with is you know eight student loan programs and nine different income driven repayment plans and you know two different ways the financial aid is calculated at most colleges and it's really confusing so ask for help, you know express your ignorance and demand information. Right. I mean if you're approaching a system that has a sticker price of over $300,000 now at the most expensive selective colleges. You have a right to demand more information and to get some answers so don't be sheepish about it.

Bobbi Rebell:
Are there specific resources that you would recommend?

Ron Lieber:
Well here's the problem right and the reason I'm working on What to Pay for College is that I don't actually believe that the perfect resource exists. But if you're looking for like nuts and bolts of financial aid I really like Cal Cheney's book Paying for College Without Going Broke. It's about the best book that I've seen about the financial aid system. And if you're thinking about saving for college and how to do that the book that the folks at savingforcollege.com published is quite good if you want to know about the ins and outs of 529 plans and all of the various complexities there and there are a fair number.

Bobbi Rebell:
All right well this is why we need your book. I'm going to hear more about your book in a second but I want to just get to your money tip because we talked before we started recording and you apparently have a concert ticket problem. And I think a lot of people can relate to this, especially coming into the summer, it's time we all like to go see our favorite artist. Tell us Ron.

Ron Lieber:
I'm constantly wrestling with you know how much should I spend for the possibility of you know close up literally experience that's going to make me happy. I do often snipe my way through StubHub. So instead of buying tickets you know weeks or even months ahead of time if it's something where I'm pretty sure there's still going to be a lot of tickets at the end I will wait and I will wait and I will wait until sometimes less than an hour before showtime or before play ball. You know and buy my tickets as I watch the prices fall in ten minute increments, you know every five minutes. You know that was how I saw Phish on New Year's Eve a couple of years ago for not very much at all. Of course there's always some risk involved that all the tickets will disappear. But you can watch and see. You know are there dozens left, hundreds or thousands. Right. Are the tickets disappearing quickly or not. You know you can keep track, make a little spreadsheet for yourself as you watch as the date or the hour approaches. You know but what I often see with concerts is that you know the price will start falling relatively quickly you know within a couple hours of showtime. You know then you just grab the point at which you feel comfortable paying the price. And at that point you can generally download the tickets instantly.

Bobbi Rebell:
So what's been your best score?

Ron Lieber:
I think the best score was probably those Phish tickets on New Year's Eve. Although whenever the Cubs come to town to play the Mets as they are doing in a week or so here in New York City I'll often use this method as well.

Bobbi Rebell:
Alright. So you are actually on a break from your full time job at the New York Times because you're working on your new project. Tell us more about that.

Ron Lieber:
Sure. So the book is called What To Pay For College, it will be out sometime in 2020. No pre-orders yet. You know for anybody who's interested in kind of where I'm heading with it you know you can find hints of it in the columns that I've written for The Times about higher education. You know I read a handful each year and my archive is at nytimes.com/lieber and the book questions I'm asking are born of really a half decade of observation where without anyone really noticing the rack rate at the most expensive private schools top $300,000 for four years, flagship state universities now regularly cost $100,000 dollars or more for four years. You've got a $200,000 difference between those two things. That's per child after taxes. Almost nobody can save that much money. This is insane.

Bobbi Rebell:
Wow. It is insane.

Ron Lieber:
Yeah so the question then becomes what if anything are you actually getting for that $200? And if you go asking those questions at the more expensive colleges they will look at you cross-eyed and if you ask for data to prove that the extra $200,000 is worth it and there are a lot of different ways to potentially define worth, which I'm exploring in my reporting, if you just ask that right, well why do you think it's worth it and show me some numbers right. Here we are in the era of big data where you can get a ton of information about your social plan or about your car or about the house you want to buy, you can just round in data on all that stuff. There is almost no data about what happens to you when you're at college and what happens to you afterwards. And it is my suspicion that the colleges actually like it that way because in the absence of data we make decisions on the basis of snobbery. Private is better than public.

Bobbi Rebell:
So true.

Ron Lieber:
Right, you know ivy covered walls are better than you know concrete 1970s Britos architecture. Right. So I'm going down all these rows and asking all of the impertinent questions and I'm going to have a lot to say about it very soon.

Bobbi Rebell:
All right well I'm hoping you can hook me up with a preview sometime soon because I will need to read that. I've got kids in college so I am very excited about this new project. Where can people find you and learn more about what you're writing in the meantime?

Ron Lieber:
Sure. Www.ronlieber.com, there's a big fat contact button for anybody who has a story to share about how they and their family decided what they should pay for college.

Bobbi Rebell:
And on social media?

Ron Lieber:
@RonLieber all over the place, you know on Twitter, on Instagram and the Facebook community that I run on parenting and money is at Facebook.com, Ron Lieber author.

Bobbi Rebell:
Awesome, thank you so much Ron. This has been amazing.

Ron Lieber:
It was a pleasure.

Bobbi Rebell:
So Ron's sincerity is contagious and his book is definitely needed. As he mentioned he wants to hear from all of you about your experiences. So share yours with him, as he said all the info is at his Web site, ronlieber.com. Here's my take on what Ron shared with us. Financial grownup tip number one. As Ron said, there is a grownup there who can help you. Don't be afraid to reach out to older and/or more experienced people for help. Yes, the internet does have a lot of information but not always context. Sometimes just getting the scoop from a person, someone, who's got the dirt on whatever you need to know can be really meaningful, they can cut through a lot of the junk out there. Ask someone, call someone you know, ask someone who they would recommend that you talk to, set a meeting.

Bobbi Rebell:
When I was figuring out what I wanted to do after years of being a television anchor I went on what I jokingly called a mentor tour, setting up face to face meetings with anyone I admired who would generously give me their time and asking them who else I should talk to. And trust me mo internet research can take the place of the kind of information download that you can get from sitting face to face with somebody and asking them what they think, what their experience has been and what they think you should do. People are generous so take advantage of that. That will be good.

Bobbi Rebell:
All right. Financial grownup tip number two. Ron points out the significance of the fact that his mom took him with her to meet the guy. Ron learned that financial aid wasn't going to just appear. He knew that he was a stakeholder in the process and he appreciated the money that much more. We all want to shield our kids from the reality of our financial fragility but if we can get past our egos we do them a service by keeping them in the loop and making them aware of what it really takes to pay for college.

Bobbi Rebell:
Thanks to all of you for spending part of your day with us. We make these podcasts relatively short to fit into your busy schedule but also so you can listen to a few in a row when it makes sense like during your commute, if you're watching your kids do an activity or just chilling out and you want to listen to a little bit more. You can listen to three or four at a time, make 45 minutes, listen to four, it could be an hour. Whatever works for you. The goal is to make it fit in with what you're doing and fit your life. If you enjoy the show please help us grow. We need you. Tell a friend, write a review on Apple Podcasts and follow us on social media. I am @BobbiRebell on Twitter, BobbiRebell1 on Instagram and Bobbi Rebell on Facebook. Ron's new book can't come soon enough but I'm glad he gave us a sneak peek. And by the way also a great strategy for discount tickets so thanks Ron for getting us all 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.

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.

Tom Corley grew up in financial turmoil but after studying the wealthy was able to copy their habits and make his money dreams into a reality. 

In Tom’s money story you will learn:

-How Tom’s childhood money disappointments created poor money habits in his early adulthood

-The specific things Tom’s parents did that created financial instability for Tom and his siblings

-Why his graduation party was cancelled because of his parents’ financial troubles

-How he was unable buy a car and to rent an apartment as a young adult again, because of his parents financial needs

-The emotional component of his financial challenges early in his life

-How a client inspired him to do the research that became “Rich Habits"

In Tom’s money lesson you will learn:

-The impact of your parents money habits on your own money habits

-The importance of avoiding “want spending" driven by envy

-How you can change those habits

-Why changing only two or three habits can change your life

-Tom’s habit that he does every day on his way to work to re-inforce gratitude

In Tom’s every day money tip

-Why successful people keep track of other people’s birthdays

-How calling them on their birthday makes a meaningful impact

-Why to avoid the birthday wish on social media

-The connection between the Happy Birthday habit and why it will help you prosper through genuine friendships

 

In My Take you will learn:

-How to move past parents who have poor money habits

-The advice Tony Robbins offers to people who get a rough start in life, as he did

-How my new friend Ramit Sethi uses birthdays as a way to connect with friends and get "Birthday Wisdom"

Episode Links:

Tom’s website: www.richhabits.net

Follow Tom!

Twitter: @RichHabits

Facebook https://www.facebook.com/thomas.c.corley.3

Learn more about Rich Neighbor, Poor Neighbor

 

Get Tom’s books including "Rich Habits, Poor Habits" and "Change Your Habits, Change Your Life” and “Rich Kids"

 

Tom is also writing a book called “The Other Side of Cancer”. Learn more about the Ashely Lauren Foundation which helps families struggling with pediatric cancer. 

 

Also mentioned in the episode:

Tony Robbins

David Bach

Ramit Sethi

 

More about Tom Corley: 

CBS Nightly News Interview: http://richhabits.net/cbs-news-rich-habits-interview-with-lisa-hughes/

Dave Ramsey Interview:http://richhabits.net/dave-ramsey-rich-habits-tom-corley/ 

SUCCESS Magazine Interviews: http://shar.es/1HKwDe      http://shar.es/1HK95w

USA Today Article: http://www.usatoday.com/story/money/personalfinance/2015/02/22/credit-dotcom-credit-card-habits/23545023/ 

 

Tom Corley is an internationally recognized authority on habits and wealth creation.

Tom has spoken alongside Richard Branson, Robin Sharma, Dr. Daniel Amen and many other notable speakers.

In Tom’s five-year study of the rich and poor he identified over 300 daily habits that separated the “haves” from the “have nots.” Tom is s bestselling author and award winning author. His books include: Rich Habits, Rich Kids and Change Your Habits Change Your Life and Rich Habits Poor Habits.

Tom has appeared on or in CBS Evening News, The Dave Ramsey Show, CNN, MSN Money, USA Today, the Huffington Post, Marketplace Money SUCCESS Magazine, Inc. Magazine, Money Magazine, Kiplinger’s Personal Finance Magazine, Fast Company Magazine, Epoca Magazine (Brazil’s largest weekly) and thousands of other media outlets in the U.S. and 25 other countries. Tom is a frequent contributor to Business Insider, CNBC, SUCCESS Magazine and Credit.com.

Tom is also a CPA, CFP and holds a Master’s Degree in Taxation and heads a top financial firm in New Jersey

---

Transcription

Tom Corley:
I told all my friends that I'm having a graduation party, I told them the date, and a couple of weeks before the party date I just let my mother know, and she said, "We can't have a party, we don't have any money." I said, "Yeah, I know, I saved $200." That night my father came into my room and he said, "You know what, I hate to do this to you, but we need the money."

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 faith on how you can make it your own. We got this.

Bobbi Rebell:
Hey, friends, if you feel a big knot in your stomach from that clip you just heard from our guest today, I'm right there with you, this was a tough one. But it's also an important story, so I hope you stick with us. Welcome, everyone. As our regular listeners know, while we try to keep the mood light, we also get real here on the Financial Grownup podcast, and we listen and we learn from others' experiences. So my guests are brave and they reveal very personal financial stories sometimes, in the hopes that it will make your lives better, our lives better.

Bobbi Rebell:
Tom Corley is the author of a number of bestselling books including Rich Habits, and it was inspired by his devastating childhood experiences, but also how you can change your habits and have financial freedom. This really goes to the heart of what we try to do here. Here is Tom Corley.

Bobbi Rebell:
Hey, Tom Corley, you are our financial grownup, welcome to the podcast.

Tom Corley:
Hi, Bobbi, thanks for having me on, I appreciate it.

Bobbi Rebell:
I'm so excited to have you because you are the author of Rich Habits, and we all need to develop rich habits for sure.

Tom Corley:
Yeah, I spent five years doing research on the daily habits of rich people and poor people, gathered three hundred and forty something data points, and decided to incorporate some of them, the most important keystone habits, into my book Rich Habits, which has become very popular around the world.

Bobbi Rebell:
Well, you're being very modest, it's been a huge bestseller, and you've been on everything from Dave Ramsey to the CBS Evening News, literally you've been all over the place, and I know that the book has helped so many people, so thank you for that. Also I'm going to thank you in advance for sharing what's a very sensitive money story having to do with your upbringing and the poor habits that you learned from your father. Tell us more.

Tom Corley:
Yeah, so I actually have two stories that I'll try and be as concise as possible. So you know, we were rich and then we were poor. My father's business went under when I was aged nine, it's a complicated story, but it was really random bad luck. Anyway, from the age of nine until, I guess, I left the house, we were poor.

Bobbi Rebell:
And you had a big household, by the way.

Tom Corley:
We had 11 in our family, so we were constantly worried. Our home was in foreclosure, as least as far as I can remember, four times. So we were worried about being homeless. I remember I used to shovel snow and mow lawns, and I spent the whole year doing that, saved money, saved $200, because in the 8th grade I wanted to have a graduation party. I told all my friends who I wanted to come that I'm having a graduation party. I told them the date. A couple of weeks before the party date, I just my mother know, just to make sure it was okay, and she said, "We can't have a party, we don't have any money." I said, "Yeah, I know. I saved $200." Well, that night my father came into my room and he said, "You know what, I hate to do this to you, but we need the money, because I have bills that I have to pay or they'll shut off my electricity, our phones, or whatever." So I handed him the money.

Tom Corley:
The second story was when I was 23 and I had just been working for about a year. I was still living at home, but I was trying to get ready to leave home. So I saved about $5,000, I wanted to buy a car, and use whatever was left to put down on a rental, an apartment somewhere. Somebody in my family found out about it, and my father approached me a couple of days later and said, "You know, we need that $5,000 to pay our real estate taxes. They're in the process of foreclosing on our house again." So I had to give up that $5,000.

Tom Corley:
So what I learned from those two experiences, which were very emotional experiences to me, was, don't save, if you save, somebody will take it. I was young when I learned those lessons, so they stayed with me in my adult life. And it wasn't until really I did my Rich Habits research that I realized I had this horrific poor habit of not saving, and it was emotion based, which most habits are.

Bobbi Rebell:
What even started the idea of doing Rich Habits research?

Tom Corley:
When I took over my CPA firm here from my predecessor, I had a small business client in the auto body business, he had inherited the business from his father and over the course of 20 years he found himself with cashflow issues. He asked me, "What are your successful clients doing that I'm not doing?" Then he started crying because he couldn't make payroll that week, and basically he was going out of business.

Tom Corley:
So I started doing research, I couldn't find anything other than The Millionaire Next Door, that didn't help me really, it wasn't specific enough. So I said, "You know what? I'm going to do my own research." I interviewed 361 rich people and poor people, find out what the rich do and what the poor do, and I didn't know I was doing a habit study, I just was trying to uncover the truth, why are some people rich and why are some people poor? What I wanted to do, Bobbi, was find out what they did from the minute they put their feet on the floor in the morning to the minute they put their head on the pillow at night. So that's kind of what started me on that research.

Bobbi Rebell:
Did you talk to your dad about this at all?

Tom Corley:
No. My dad passed away in 2013, and he was always one of my biggest cheerleaders, but we never really saw eye to eye on a lot of things. I did everything a good son is supposed to do to help my father, and he loved me, you know, we just didn't have that kind of relationship.

Bobbi Rebell:
You never talked to him about your feelings when the money was taken from you after saving it?

Tom Corley:
No. I couldn't do that to him. I know, he was older, why burden him with that? I just felt, this is something that I don't ever want him to know about.

Bobbi Rebell:
For our listeners, what is the takeaway from your story?

Tom Corley:
Well, the takeaway is this: I was able to turn things around, thanks to my Rich Habits research, I started saving, started putting money into my 401(k), and other things. Whether you are aware of it or not, you have certain good habits and bad habits, I call them rich habits and poor habits, that are the result of your upbringing. They primarily are from your parents. So if you are, like I was, not saving any money, and maybe have debt, credit card debt, there's a very good likelihood that that has something to do with your upbringing, and some habits that you forged in your childhood that stayed with you in your adult life. The good news is that I'm evidence you can change your habits, and not only am I evidence, I have 177 self-made millionaires that are proof that once you change your habits, you change your life.

Tom Corley:
So there's light at the end of the tunnel here for anyone, doesn't matter if you're poor or stuck in the middle class. You can change your habits, and it only takes two or three habits to change your life.

Bobbi Rebell:
So give us some habits.

Tom Corley:
So many people struggle with savings, right? If you really peel that onion, what's the reason why they just can't save? In many cases, especially in America, it's the keeping up with the Jones's mindset, it's, my friend bought a BMW, or leased a BMW, my other friend, or someone I know, or colleague just got a really nice house. So you supersize your life. I call it want spending. What drives want spending is envy. Envy is a negative emotion. What shuts down the want spending is turning the fuel off for your want spending, which is turning off your envy. How do you do that? You shift your mindset from negative to positive by, instead of being envious, be grateful for what you have.

Tom Corley:
What I do every day, every morning on my commute to work, is, I sit in my car as I'm driving and I say, "What are three things that went right yesterday with my life, that I'm grateful for?" I spend about 10 minutes thinking about it and going over it. It's an amazing thing, Bobbi, but it completely makes you positive. Gratitude is the gateway to positivity, it's a domino effect. So it's not just, "Oh, all of a sudden I have this gratitude, positive mental outlook." You have a completely changed mental outlook, everything, you start seeing the glass half full, you start seeing the good in life, the good in people. It's amazing when you start treating people as valuable instead of finding the flaws and the faults in them, they respond, and next thing you know you've got these powerful relationships with people that you didn't have before, all because of a shift in your mindset.

Bobbi Rebell:
Tom, for your everyday money tip, I think you're going to win the most original, and should I just wish you a happy birthday even though I don't even know when your birthday is, but I just want to say happy birthday.

Tom Corley:
Thank you, Bobbi, I appreciate that. It wasn't long ago, June 12th. The happy birthday call was one of the things that I uncovered that the self-made millionaires did. All you do is just call people, you don't tweet them, you don't Facebook them, no social media interaction here, you're calling them on the phone, just to wish them a happy birthday. The amazing thing is, when you call somebody on their birthday, guess what, you're going to probably be one of three or four phone calls that they receive. Here's the really cool thing, Bobbi, I found, because I've been tracking this since I uncovered it in 2007, 25% of the people that you call on your birthday will reciprocate, so it's called the reciprocal happy birthday call, that really takes your relationship off life support, takes it to another level.

Bobbi Rebell:
And especially, you mentioned, not social media and that kind of thing, taking it in a different medium really differentiates you.

Tom Corley:
Yeah, look, you want to stand out. If you're going to just be saying "happy birthday" on Facebook, you don't stand out, because the herd is doing that. You want to step outside the herd. What do people outside the herd do? They make happy birthday calls. It's going to emotionalize your relationship. Why is that important to making money? Because the people that really help you open doors, they might be on board of directors with you on nonprofits, they might be other successful people, well, these are the people you want to be making the happy birthday calls to, they're going to remember you, it's going to improve your relationship, strengthen it, and now you're going to start to develop friendships with these people.

Bobbi Rebell:
Love it. Tell us more about what you're up to this summer and into fall, and where people can learn more about you, Tom.

Tom Corley:
Sure. So I've got a book, Rich Neighbor, Poor Neighbor, that I'm just about wrapping up. I'm going to be traveling to Vietnam for a couple of speaking engagements. I'm also going to start work on a book called The Other Side of Cancer. So I've got a few things in the pipeline this summer.

Bobbi Rebell:
What prompted that, Tom?

Tom Corley:
I'm the president of The Ashley Lauren Foundation. We help families who are struggling with pediatric cancer. So if you found out your child had cancer, we step in to help you financially, emotionally, all different sorts of things. We've bailed people out where they were almost homeless because cancer costs money to fight that fight. We've kept people in their homes just by paying their mortgage and paying their rent. So growing up poor, that means a lot to me, because we didn't really have anybody to help us, so I'm going to write a book and proceeds are going to go to The Ashley Lauren Foundation, and it's going to be an upbeat book about how some of the kids who survived cancer went on to become doctors, lawyers, and other things.

Bobbi Rebell:
All right, well keep us posted on that, and I'll make sure to have you send me some links that we can put in the show notes, and people can learn more about it. Thank you so much, Tom.

Tom Corley:
Thank you, Bobbi, I appreciate it.

Bobbi Rebell:
So, can't thank Tom enough for sharing such a candid and raw story. I truly hope none of you have had to go through that kind of, not just financial devastation, but the toll that it takes on the relationship with your parents and how you view them and how you relate to them.

Bobbi Rebell:
Financial Grownup tip number one: as much as our parents set the foundation for our financial perspectives, if you get a bad deal, like Tom, you can move past it. In addition to Tom's books, there are other resources to check out. As our regulars know, I'm a big fan, for example, of Tony Robbins, who was kind enough to support my book, How To Be a Financial Grownup, by contributing the foreword. Tony is a big believer in owning your own situation. Whatever happened in the past with your parents, in your childhood, whatever, look forward, you're an adult, be a financial grownup, and move past anything your parents may have done that you feel hurt you financially. Almost all our parents are well intentioned and really do try their best. Maybe try to teach them what you learn places like here, and from Tom Horley or from Tony Robbins.

Bobbi Rebell:
Financial Grownup tip number two: let's talk about those birthday wishes. I recently met Ramit Sethi at a dinner party that he co-hosted with my friend, David [Bock 00:13:50], Episode 1, by the way, guys, if you want to go back. You guys may know Ramit as the author of the book, I Can Teach You To Be Rich. So I follow him now on social media. It was recently Ramit's birthday, and he said that when his friends have birthdays he reaches out, and he asks them to share birthday wisdom with him. So maybe that's something that we can all do when we reach out and call them, as Tom suggested.

Bobbi Rebell:
Thanks to all of you for joining us. This was an emotional one, but that's okay, it was also honest. If you have not, please hit that subscribe button, and follow us on social media, on Twitter @BobbiRebell, and on Instagram @BobbiRebell1. Thanks to Tom Corley for helping us all get 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.

Andy Hill was so in love with his then future wife that he literally used his student loan money to buy her the ring she wanted- and oops did not tell her. He shares what happened when she did find out, and what he would do differently now that he is a financial grownup. Bonus: His tips on how to start a 529 account for your kids.

In Andy’s money story you will learn:

-The big mistake Andy made with his student loan

-The emotional backdrop to that mistake

-Why Andy did not talk to his girlfriend (now wife) about the decision

-His biggest regrets and what he would do differently

In Andy’s money lesson you will learn:

-The options Andy wish he had considered

-His advice on the best ways to communicate about money in a relationship

In Andy’s everyday money tip you will learn:

-HIs take on 529 plans and how he did his research

-The factors to consider in choosing a 529 plan

-Why Andy chose his plan for his children’s college savings

In my take you will learn:

-How to plan for expenses related to life events, like getting married!

-The cost of not just engagement rings, but weddings as well

-Recent changes to how 529 plans can be used

-Resources to get more information about 529 plans

Episode Links

Andy’s website:

Marriagekidsandmoney.com

Get Andy’s e-book : Young family wealth playbook

Listen to Andy’s podcast! 

Follow Andy!!

Twitter @andyhillmkm

Instagram: @AndyHill 827

Facebook @andyhillMKM

 

Learn more about 529’s: 

Link to the SEC website:

https://www.sec.gov/reportspubs/investor-publications/investorpubsintro529htm.html

Link to the FINRA website Saving for College

http://www.finra.org/investors/saving-college

College Savings Plans Network

http://www.collegesavings.org/

SAVING FOR COLLEGE

https://www.savingforcollege.com/intro-to-529s/what-is-a-529-plan

---

Transcription

Andy Hill:
I took advantage of these student loans that I was using for my MBA program at the time, and just took a little bit extra from my student loans in order to pay for my wife's engagement ring. That's kind of how I started off my marriage with a little bit of debt, also with a little bit of love, as well.

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 gonna get there together. I'm gonna 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, they say love is blind. That was certainly true for our guest today. Before we get to him, quick welcome to everyone, especially our new folks, we keep the episodes, just so you know, to around 15 minutes. You can fit it easily into your busy schedule while you're running errands and so on.

Bobbi Rebell:
A lot of regulars, though, say they enjoy listening to a few at a time, especially if they are commuting. The idea, do what works for you. You get to hear an inspiring, and hopefully entertaining money story, and then get some specific advice, money tips, things that you could do right away.

Bobbi Rebell:
Today's story is definitely entertaining, heartwarming, but you also might get that sinking feeling in your stomach, like, "Oh, no! He did not!" We've all been there, so into our loved ones that we just want to get them exactly what they want. Budgets, whatever, we find the money, even if we find it in our student loans? Yes, I'm talking to you, Andy.

Bobbi Rebell:
Let's roll the interview.

Bobbi Rebell:
Hey, Andy Hill, you're a financial grownup, welcome to the podcast.

Andy Hill:
Thanks so much for having me, Bobbi.

Bobbi Rebell:
Congratulations on the success of your podcast, marriage, kids, and money. Nominated for the most important podcast awards that there are, the 2017 Plutus Awards. You were nominated for best new personal finance podcast, so congratulations!

Andy Hill:
Thank you so much, yeah. It was a great honor, and look forward to keep on bringing exciting material for all those people out there who are married with kids that love talking about money, or just want to give their families a better opportunity in the future.

Bobbi Rebell:
Well, I am a hopeless romantic, in addition to focusing on money, and you brought with you a money story that is both romantic and financial, having to do with your engagement. Tell us what happened.

Andy Hill:
Yeah, so back in, oh, this is maybe in my mid-twenties, I met an incredible girl named Nicole and fell in love with her. When you fall in love and you start to see the opportunity for marriage coming up, the first you think of, as a guy is, "Man, I got to get this ring thing going."

Andy Hill:
Me, not making that much money at the time, was probably making $35,000 a year, I said, "Well, I better start saving a little bit of money to make this thing happen." Unfortunately, since we were dating long distance from California to Michigan, my bank account was a little light, we'll say, but my love for her was continuing to grow. I know I had to take advantage of this moment and go for this engagement.

Andy Hill:
We looked at rings together at the store, and we found the ring that she liked, with the type of the style, I found out it was about $5,000.

Bobbi Rebell:
Ouch!

Andy Hill:
Yeah. That was about $4,500 more than I had.

Bobbi Rebell:
Okay.

Andy Hill:
I decided to go for it anyway because I was in love, and I wanted to move this thing forward. The way that I went about it was I took advantage of these student loans that I was using for my MBA program at the time, and just took a little bit extra from my student loans in order to pay for my wife's engagement ring. That's kind of how I started off my marriage with a little bit of debt, also with a little bit of love, as well.

Bobbi Rebell:
Oh my goodness. That is such a big no-no though. Let me just ask you, taking it back a little, did it occur to you to either wait and save up more, or maybe downsize the ring a little bit, or find ... I don't know if that was maybe the best interest rate you could get on student loans versus taking out a different kind of loan. It's certainly better than a credit card, we know that.

Bobbi Rebell:
Any other considerations at the time?

Andy Hill:
Oh yeah, Bobbi. All these things I could've done better. Could've gotten a better opportunity to get a lower interest rate than ... I think it was 6.8% that I was paying for my student loans. I could've maybe spoken to my wife ... my future wife about it a little bit about the- [inaudible 00:04:43][crosstalk 00:04:43]

Bobbi Rebell:
So, she didn't know about this, she did not know that you went into debt to get her ring.

Andy Hill:
Nope.

Bobbi Rebell:
What would she have said if she knew?

Andy Hill:
I believe that she would've said, "That's not a good idea. We can either wait, or we can look at something that's a little bit more feasible for your actual budget."

Bobbi Rebell:
Okay, but you did not talk to her, so that's also a lesson. Just to point out. That's one of the things you talk about a lot on your podcast, is the communication aspect.

Andy Hill:
Absolutely. I preach about it all day long, but did I do it back in my mid-twenties? No. I did not. Definitely having communication with your spouse, or your future spouse is an incredible way to start the marriage, and I definitely did not do that.

Bobbi Rebell:
If you can get into the mind of 27-year-old Andy, what were you thinking at the time?

Andy Hill:
What I was thinking was, "I'm in love, and I want to make this thing happen as soon as possible. She's shown me the type of ring that she wants, and I want to make her happy." Unfortunately, I didn't think about any of the other consequences that went along with that: the interest rate, not speaking to my future wife about something that's super important. That could've been a really pivotal moment for us, actually, to speak about something that important, and I passed it up, for sure.

Bobbi Rebell:
When did she find out? Assuming it's not now, listening to this podcast? When did she find out when you had done that?

Andy Hill:
She found out about the debt that I had, as well as the ring situation a little after we got married when-

Bobbi Rebell:
Whoa, whoa, whoa, wait. The debt you had in addition to the ring. What was the other debt you had? You had $4,500 from the ring, and then what else?

Andy Hill:
It was all these student loans that I had, it was about $40,000 of student loans total, as well as a home equity line of credit, which probably equated to another $10,000, so about $50,000.

Bobbi Rebell:
Okay, go on.

Andy Hill:
Yeah, yeah, so we got married, and then with that comes the merging of the finances, right? As we were merging finances we started to have the conversations then about what my debt situation was, and what her debt situation was, and then it became our problem, and something that we worked on together, but she didn't realize until then, "Oh, so I'm now paying off the ring that you bought for me."

Bobbi Rebell:
"I'm paying off my own engagement ring. Thank you very much."

Andy Hill:
How romantic, right?

Bobbi Rebell:
That's so romantic. No. No, no, no, no. Quickly tell us how did it resolve? How did you pay all that off?

Andy Hill:
Well, yeah, so we got together and we made a plan to pay it off. We started to talk about potentially having kids in the future, and we said, "Hey, well, let's work together and pay this off." Combined we were making a little bit over six figures in a salary. We said, "All right, let's live on half, and pay this off as fast as possible," and we were able to clobber it in about 12 months.

Bobbi Rebell:
What is the lesson for our listeners from that now that you're a wise, wise old man in your thirties?

Andy Hill:
Yeah, I would say communication as early as possible in your relationship, especially when it comes to money is so important. The opportunity that I did not take advantage of was to speak to my future wife about, "Hey, this ring that you want, I love it, you love it, it would make you feel great, but I just don't have the money right now in order to make this happen. We can either delay our marriage in order to get the ring, or we can look at something that's a little bit more feasible."

Andy Hill:
That would've been a very good financial grownup conversation to have with her at that point in our marriage, for sure. Communication and just working on things as a married couple before you're even married shows the true partnership before you get into it.

Bobbi Rebell:
I love the money tip that you're going to share, because we kind of moved things forward now to the mindset of being parents, which you now are. You have two children, ages six and four. That means time to think about college and getting ready. It's never too early. Tell us your money tip.

Andy Hill:
Absolutely. When we got married we decided to have children, and one of the things as we started to get our financial grownup selves together was, "Hey, if we're gonna be helping our kids get through college we got to start saving now."

Andy Hill:
We started researching 529 programs, and the cool thing about 529 programs is that you don't have to take advantage of the one that's specifically in your state. There are other programs that maybe have lower fees to consider. We did a broad research of all the programs that were available to us in the U.S.

Andy Hill:
We ended up going with our state, because it had good fees, or lower fees, through TIAA-CREF, and actually, there was a great state income tax break, as well, that helps us save a little bit of money each year as we donate into ... as we contribute into our kids' college fund.

Andy Hill:
I guess my tip would be, take a look at all the opportunities that you have to save for your kids through a 529 program, start as early as possible, but definitely take a look at the fees that are associated with it, because some of the programs might have higher fees, and they might not even be in your state.

Andy Hill:
Taking a look at that, as well as getting an understanding of the tax advantages of utilizing a 529 with your state. It's a great way to save, and it's a great way to prepare for the future college costs that we're all looking for as parents.

Bobbi Rebell:
Definitely, and I also want to just ask you quickly before we wrap up about your E-book.

Andy Hill:
Yes, have a E-book on my site called The Young Family Wealth Playbook. It is an amalgamation of all these interviews that I've done on my podcast from the 50+ self-made millionaires, financial independent rock stars, and personal finance experts, and I've taken all that information that will help individuals who are reading it to look at what they can do, all the way from the start of marriage, all the way to being parents and helping your family to build wealth.

Andy Hill:
It's seven steps that I've taken from those conversations, and it'll walk people through how they can grow wealth and create a great future for their family.

Bobbi Rebell:
So cool. Tell us where people can find you, social handles, all that good stuff.

Andy Hill:
Excellent, yeah, so I'm at marriagekidsandmoney.com. On that site you'll be able to check out the podcast, The Young Family Wealth Playbook, as well as my blog. I'm also very busy on Twitter: @andyhillmkm. I'd love to have some conversations, and thanks for checking it out.

Bobbi Rebell:
Thank you so much, Andy.

Andy Hill:
Excellent. Thanks so much, Bobbi.

Bobbi Rebell:
Oh, Andy. We can't help but be charmed by you, even though I can't believe you did that. So glad you clearly are a financial grownup now, and even more happy that your wife is still there with you.

Bobbi Rebell:
Financial grownup tip number one: remember, the ring is just the beginning of the cost of your trip down the aisle, so if you blow your budget on that, oh my goodness. According The Knot, Americans spend an average of $6,351 on just the wedding ring.

Bobbi Rebell:
In Andy's case, given that he got married a few years ago, Andy was relatively in line at the $5,000 mark. If you want to stretch for that, that's fine, but you got to keep in mind what's coming next. The wedding. The average cost of a wedding, according to The Knot, again, is over $33,000, and, of course, in New York City, couples spend even more, almost $77,000, so that's a choice. But, think about it, if you are going to spend that kind of cash, make those decisions as a couple. Andy admits he messed up by not talking to his wife.

Bobbi Rebell:
Financial grownup tip number two: 529s are a great resource for parents, and if you are sending kids to private school, you now can use them for that, as well, but there are a lot of rules, and you need to play by those rules, or you're gonna get stuck. You're gonna pay higher fees than needed, as Andy warned, you also may have penalties if you try to get the money in a non-qualified way.

Bobbi Rebell:
I will leave a link to the sec.gov website that has a very easy and straightforward explainer article. Read it. I'm gonna leave some other helpful links, as well. You need to do your homework on this, because you may not be able to get to the money in the way you want, when you want, without the penalties, so just do it with your eyes open.

Bobbi Rebell:
Thanks to everyone for joining us. If you like the promo videos that you are seeing on social media you can win one. Just share them in social media when you see them. I'll be making one for a lucky winner in July, basically based on whoever shares the most.

Bobbi Rebell:
To learn more about the show go to bobbirebell.com/financialgrownuppodcast, and, of course, stay in touch by following me on Twitter: @bobbirebell, on Instagram: @bobbirebell1.

Bobbi Rebell:
Andy, you truly became a financial grownup by learning your lesson. Glad it all worked out for you and the wife, and now your children. Thank you for helping us all get once 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.

 

Indiana-based radiologist Dr. Scott Steenburg joins the Financial Grownup podcast as our first listener to share a money story. Scott shares the story of how a push to have students take out more money than needed to pay for tuition, created devastating debt situations for classmates.

 

In Scott’s money story you will learn:

-Why Scott was offered more money than needed when taking out student loans

-What Scott used his extra student loan cash to buy, and whether it was a smart financial decision

-The things his fellow students spent their extra student loan money on, and how  that impacted their financial wellbeing.

-How the tech stock bubble impacted many of his peers who were leveraging student loan debt

-How much student loan debt Dr. Streenburg had, and how it compared to his peers

-The strategy he and his peers used when they could not pay the debt, along with the consequences

-Whether or not he believes taking on all the debt was worth it

In Scott’s money lesson you will learn:

-His big regret regarding the debt he incurred while in medical school

-The long-term consequences and impact to his peers that spent student loans for things other than tuition. 

-The risks that medical students take on when assuming large student debt, that is unique to the medical profession.

In Scott’s money tip you will learn:

-How you can get medical school debt forgiven

In My Take you will learn:

-how to find programs that allow you have loans reduced or forgiven

-The requirements needed for student loan forgiveness

-Resources to manage, lower, and get rid of student debt

 

EPISODE LINKS

• Government website links:

  • www.studentloans.gov

  • https://studentaid.ed.gov/sa/repay-loans/forgiveness-cancellation

  • https://studentaid.ed.gov/sa/repay-loans/forgiveness-cancellation/public-service/questions

• Here is the article from Robert Farrington’s The College Investor: 

  • https://thecollegeinvestor.com/578/ways-to-get-student-loan-forgiveness/

• This is the article by Melanie Lockert. 

  • https://studentloanhero.com/featured/the-complete-list-of-student-loan-forgiveness-programs/

• You can also check out Melanie’s episode of Financial Grownup here!

• You can consolidate your student debt, and get  more information by visiting websites, including two that I mention, SoFi.com and StudentLoanHero.com

 

Follow Scott!

Twitter @radiology911

---

Transcription

Scott Steenburg:
Some of my classmates used their excess money to invest in tech stocks. It did not turn out well for them. Some of my classmates lost all of their student loan money in the dot-com bubble.

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, friends. This is a big episode here at Financial Grownup. We tried an experiment. We asked you guys to send in your money stories and your everyday money saving tips to potentially be a guest here on the show, and you know what? It worked out really well. We have our first listener episode. I am so excited for how it turned out. Our guest is fantastic. He is a radiologist in Indiana, Dr. Scott Steenburg, so let's get to Dr. Scott's story. It is about the loans that he and his medical school classmates racked up years ago.

Bobbi Rebell:
Student debt to pay tuition is one thing, but taking up more than you need to actually pay the tuition, your real school costs, is a whole other thing, and the reality is that in some cases people are talked into taking out more than they need, just in case. But remember, that money is there and sometimes it doesn't get paid back right away. Sometimes it gets invested in, oh, technology stocks that can crash and burn in the dot-com bubble. It could also go to a new car. You'll hear all about it. Here is Dr. Scott Steenburg.

Bobbi Rebell:
Hey, Scott Steenburg. You're a Financial Grownup. Welcome to the podcast.

Scott Steenburg:
Thanks a lot, Bobbi.

Bobbi Rebell:
And congratulations, you are our very first listener that we are having as a guest. You're the winner, so I'm so excited to have you.

Scott Steenburg:
I'm glad to be here.

Bobbi Rebell:
Just quickly, tell us about you, what you do.

Scott Steenburg:
Sure. My name is Scott Steinberg. I am a radiologist in Indiana. A radiologist is a physician who specializes in interpretation of medical images such as X-ray, CAT scan, and MRI, and my subspecialty is in the emergency and trauma radiology world.

Bobbi Rebell:
Wow. What made you decide to write in?

Scott Steenburg:
Well, I've been listening to your podcast since the very beginning. A lot of your stories that you have on your podcast are very compelling, and when I heard that you wanted to have a listener on with a compelling story, I thought, "You know, there are some really weird things about the student loan industry," particularly with respect to medical school that I thought maybe this might be something that you haven't heard of before, so I reached out to you and told you some interesting nuggets about that.

Bobbi Rebell:
Which brings us to your story, which is very interesting, especially because it has to do with your student loans, but also money that you didn't necessarily use for tuition, so tell us exactly what happened.

Scott Steenburg:
Sure. As you probably know, medical school is not cheap, so most medical students need to finance their education with student loans. At that time when I started medical in 1999, it was really easy to get a lot of loans for all four years of medical school.

Bobbi Rebell:
And how much did four years of medical school cost at the time?

Scott Steenburg:
At the time tuition, I went to an instate school, it was maybe 9,000 per semester, so 18 to 20,000 per year, which is not a whole lot by today's standards.

Bobbi Rebell:
Okay, so go on. You were able to get financing, though, to go to school?

Scott Steenburg:
Yes, so during the interview process, you interview for getting into the medical school, and then in the afternoon you meet with a financial aid counselor to figure out how you're going to pay for medical school. At that time, I'm not sure if it's commonplace now, but at that time we were kind of nudged towards taking out the maximum allowable student loans because in future years, if you lower the amount that you requested, there was no guarantee that you'd be able to increase that number in the future, so we were kind of nudged towards just take up the maximum, and if you have access leftover you can do whatever you want with it.

Bobbi Rebell:
Okay, so how much did you take out relative to what the tuition was? You took out more than the tuition.

Scott Steenburg:
Yeah, so as a medical student it's hard to have a job to help pay for living expenses, so a lot of medical students will finance not only their tuition, but also living expenses such as food and rent and whatnot.

Bobbi Rebell:
What did you use the money for, besides living expenses? You bought a car.

Scott Steenburg:
Yeah, yeah. That's one thing that I told you about. If you have excess student loans, you can do whatever you want with it. You can either pay back immediately, which is the financially responsible thing to do. What I did one semester is I knew I had enough living expenses saved up, I already looked at my budget, I knew I wasn't going to need the student loan check, so I literally, it arrived in the mail and I walked across the street to the bank and put it in a one-year CD. At that time, the interest rate was somewhere just higher than the interest rate for the loan, so I did make a little bit on that, but it would have been smarter just to pay back right away to lower the overall balance. One thing I did in the subsequent years, I needed a new car, my car was falling apart, I needed to be able to commute from my apartment to school, so I used my excess student loan money to buy a new car.

Bobbi Rebell:
Did you need a car? I mean, was that a legit expense, or did you buy a lot more than you really needed?

Scott Steenburg:
We bought what we needed. The good thing about this, if there is a silver lining, is I put 50% down, so there's a small balance, but then I financed the rest at 7%, which was not a great idea, so I'm using the student loan money that has an interest rate at that time of 3.5% to pay off another loan that has 7%, so that was a terrible, terrible choice.

Bobbi Rebell:
Well, but you told me some people did even other things like buying tech stocks.

Scott Steenburg:
Yeah, so this was in 1999 to 2003 when I was in medical school, and some of my classmates used their excess money to invest in tech stocks, and it did not turn out well for them. Some of my classmates lost all of their student loan money in the dot-com bubble.

Bobbi Rebell:
Wow. That's really scary. Let's talk more about you. So, we get to the end of school. Describe to me how much you had in debt and then what was happening at that point.

Scott Steenburg:
Sure, so I graduated in 2003 and immediately started residency, entered a five-year residency in radiology. At that time, the student loan balance was about 130,000 which by today's standards is a fraction of what students are graduating with. I threw out an informal poll to a closed physician Facebook group that I'm a part of, and the numbers I was getting back for current graduates was between 200 and 400,000. So by today's standards my balance was not all that big, and even the minimum payments at that time were somewhat draconian. I was making a resident salary which at that time was about $35,000 per year, and out of that, of course, I needed living expenses, had to pay for a car, had to commute every day, so even the minimum payment was tight.

Scott Steenburg:
So what a lot of students do in this instance is they first defer, and at that point you could defer up to 36 months. I think it might still be that. Then after that, if you still can't make your payments, then you can go into forbearance, which is even worse, so then throughout the entire time the interest is accruing. From the time I started medical school to the time I started paying down my loan, it was nine years, so that was a long time of compounding.

Bobbi Rebell:
So then where did it stand? How did this end up?

Scott Steenburg:
Sure. The balance tipped the scales at about 165,000. I started making very aggressive payments in 2009, and this story turns out okay. I was able to finish paying off those loans last year. Everything turned out okay, and I really don't have any complaints. Taking all these loans helped enable me to realize my dream of becoming a physician and being a radiologist and doing what I love to do, but I live in a world of chaos in the emergency and trauma world, and I see people's lives destroyed every day.

Scott Steenburg:
Nine years of deferral of putting off student loan payments is a long time. That's a long time, and anything could have happened. If I developed an illness, or if I were in a car accident like a lot of the patients I see every day, or if I developed a disability or for some reason couldn't finish residency, that would have been really, really bad. And fortunately everything turned out okay for me, but for a lot of people it doesn't.

Bobbi Rebell:
How did you feel when you would see $165,000 as your balance?

Scott Steenburg:
Honestly, I buried my head in the sand. I didn't want to think about it. When I saw the number going up every month, and each month the amount that it would increase would increase because of compounding, I put it out of sight, out of mind. I kept my eye on the prize of finishing residency, and when I got an attending job, an attending salary, I had to be able to quickly pay it off, but in retrospect, I was entering the danger zone. You know, if something bad happened that negatively impacted my ability to earn income, it may not have turned out so well, and as you know and many of your listeners know, dismissing student loans and bankruptcy is very challenging.

Bobbi Rebell:
Is that something you ever thought about?

Scott Steenburg:
No, no.

Bobbi Rebell:
Okay.

Scott Steenburg:
I knew that once I finished residency and got a job I was going to be able to pay it down. I mean, the number is big and it was moderately terrifying, but once I started seeing that number come down, I started to feel better about it. I regretted having that balanced because I knew I could be taking that money and putting it to good use elsewhere. I did some math. You know, if I didn't have student loans and I used all that money to invest, it was a much bigger return than just taking out the student loans.

Bobbi Rebell:
So what is the takeaway then, for our listeners? When you look back at who you were when you were first entering medical school and having these meetings with the financial aid advisors, what would you have done differently, if anything?

Scott Steenburg:
I probably would have taken the excess money that I didn't need. I would have just paid back the balance and be able to give it back. You can use debt as a tool to accomplish your goals. However, if you're going to use debt to finance an education, you have to be very mindful of that. You need to be conservative, only take out what you need and then pay back as quickly as possible. If you use debt, especially for education, incorrectly and something bad happens that negatively impacts your ability to pay back the loan, that could be financially devastating.

Bobbi Rebell:
What about these people that were ... I mean, was it a popular thing at the time to take your student loan money, and instead of using it for tuition, use it to buy stocks?

Scott Steenburg:
That was one popular thing that students did. Other students would, if they had time off, they would go on a nice vacation. Like, me, I helped buy a car. That's what a lot of the students did, and like me, a lot of them were putting it out of sight, out of mind. All we need to do is finish medical school, go to residency, get an attending job with a higher salary, and pay back the loans quickly. But as I said before, it's a long time from the time you start to the time you end and start making a physician salary to be able to pay that down aggressively, and anything could happen in that time.

Bobbi Rebell:
So what is your money tip now? You have something really innovative that maybe some people don't know about, but could really be helpful.

Scott Steenburg:
One thing that exists in the medical world is a student loan forgiveness program where if you start paying off your loans even during training and you go to work for a non-profit, over a shorter period of time you'll have those loans forgiven. I'm sure there are other programs for non-medical professionals where there's a similar type track where if you go to, for example, an underserved area in your field, that you may be able to have some of your student loans forgiven or paid off.

Bobbi Rebell:
Great. Well, thank you so much, Scott. Is there anything else that you want to add? Anything you want people to know about you? How to reach you?

Scott Steenburg:
Sure. If you'd like to follow me on Twitter, I'm @Radiology911.

Bobbi Rebell:
I love that.

Scott Steenburg:
So that's a nod to my ... that's a nod to my-

Bobbi Rebell:
How did you get that? That's pretty cool that you got that handle.

Scott Steenburg:
I don't know. It just came to me, so I picked it. So that's a nod to what I do. I don't do a whole lot of personal finance there. Most of what I do is medical education, physician wellness, and policy, but if you like to see interesting images, that's where to go.

Bobbi Rebell:
All right. Thank you, Scott. You were wonderful, and really thank you so much for supporting the program.

Scott Steenburg:
Thanks for having me, Bobbi.

Bobbi Rebell:
Hey, friends. So first, student loan debt, as Scott mentioned, is pretty hard to get rid of unless you actually pay it. It stays with you even in bankruptcy, but there are some programs that you can at least look into and some options that are emerging, some new things in just the past few years. I'm going to send you guys to government website called studentloans.gov, and from there you can look for how to repay your loans and go to repayment forms. I'm going to now walk you through some of what you'll see there just to give you a high level sense of your options.

Bobbi Rebell:
So financial grownup tip number one, some loans, like Federal Family Education Loans and Perkins Loans can be eligible for something called Public Service Loan Forgiveness. The key thing for eligibility is that you have made 120 qualifying payments under a qualifying repayment plan while working full-time for a qualifying employer. That's a lot, I know.

Bobbi Rebell:
The key thing, though, qualifying employment is generally things like government organizations, federal, state, local. They even say tribal on that government site. You guys are going to follow up and look for yourselves. Also non-profits, like those with the 501(c)(3) designation. Also some other non-profit organizations, if they provide certain public services, things like AmeriCorps or Peace Corps volunteer. So if you are interested in those things anyway, it could be something to look into that could pay off in more ways than one.

Bobbi Rebell:
Financial grownup tip number second. Now, this is more for the for-profit schools, some of which were not living up to what they promised students, so you can also apply for something called borrower defense to repayment if you took out loans to attend a school that misled you about the educational services that you paid for with the loans. There's a lot of fine print to all of this. You have to follow up by really combing through the website. It even covers the extremely rare times that student debt can be forgiven in bankruptcy, but again, that's very rare. And also, of course, what happens to student debt if the student or the parents, who in some cases are the borrowers, pass away.

Bobbi Rebell:
A few other resources regarding student debt. Check out one of my favorite websites on this topic, The College Investor. It is run by Robert Farrington. He knows a lot about student debt. He even has a great article I'm going to leave. Well, there's many great articles, but I'm going to leave a link to an article that's one of my favorite in the show notes for more ideas to get your debt forgiven, and also answering questions about things you might have heard of that were options in the past but have now merged into other forms, so it's important to keep up with it. It's kind of a moving target, the way that the laws change. Also, SoFi and Student Loan Hero both run blogs that have a lot of useful information. I'm going to leave a link to a great article by my friend and former financial grownup podcast guest, Melanie Lockert, in the show notes as well that has some great resources.

Bobbi Rebell:
Thank you to radiologist Scott Steenburg for being our very first listener to share their money story and advice. It was great. If you want to be considered for an upcoming episode, email us at info@financialgrownup.com. Tell us what money story and what everyday money tip you would share if you were chosen.

Bobbi Rebell:
Thanks to everyone for your support. If you listen on Apple Podcasts, please take a moment to rate and review the podcast. If you are enjoying the podcast, please tell someone that you think would also like it. Spread the word. Post it in one of your Facebook groups and tell people to check it out. If you spot one of our video promos on Twitter or Instagram, share that, and you could win a custom one just for yourself. We're running a little competition.

Bobbi Rebell:
I'm on Twitter, @bobbirebell, on Instagram, at bobbirebell1, on Facebook, at Bobbi Rebell. I can't thank Scott enough for reaching out and being our first listener to share a story. It was a good one, and something unfortunately way too many people can relate to, but I do think his story and his great advice got us all 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.