The Squid Game is an intense look at the desperate measures people will take to get out of debt. While the story is fiction, the lessons we can take away about class divide, the reckless choices made when in debt, and the way money can reveal someone’s true character, are hitting home with so many of us.  ** spoiler alert**

Money Lessons for Grownups from the Netflix series "The Squid Game”

• You can’t judge people‘s wealth and success based on appearances.

• Money makes us do illogical, and often illegal things.

• Manage the pressure otherwise it will consume you.

• Betrayal comes from the people you trust the most.

• Strength is not always stronger.

• Wealthy people can abuse the vulnerability of people who have financial problems.

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Full Transcript:

Bobbi Rebell:
I hope you guys are all celebrating some big adulting milestones this season and you know what? Finding the perfect gift for those celebrations can be kind of tough. I have the solution over at grownupgear.com. We have adorable hats, totes, mugs, pillows, Ts and seriously, the most cozy and comfortable sweatshirts.

Bobbi Rebell:
They're all on grownupgear.com and all at affordable prices. We even now have digital gift certificates if you can't decide. Use code grownup for 15% off your first order. Buying from our small business helps to support this free podcast. You know what? We really appreciate it. Thanks, guys.

Bobbi Rebell:
You're listening to Money Tips for Financial Grownups with me, certified financial planner, Bobbi Rebell, author of How to Be a Financial Grownup and you know what? When it comes to money being a grownup is hard but together we've got this.

Bobbi Rebell:
Hey, grownups, welcome back. We are going to do something very special this week, starting with having back my number one, most favorite ever co-host, Mr. Neil Kaufman, aka, my husband. Welcome back, Neil.

Neil Kaufman:
Back on popular demand and for those of you that sent me fan letters, thank you. I appreciate it.

Bobbi Rebell:
Yes, Neil is poised to become a regular co-host on this show. And speaking of regular, a lot of the regular listeners do know that you were featured in our summer watch series where we talked about money related streaming shows and the lessons from them. Well, as of now, we're not going to do a whole series for fall, but there is a show that everyone, including Mr. Neil Kaufman, I should say, everyone is talking about that has some pretty intense money lessons.

Bobbi Rebell:
That show is the Netflix series, the Squid Game. Neil and I have been watching the series. We've already had some pretty intense discussions about it and so of course, I recruited him to come back to the podcast. So Neil, welcome.

Neil Kaufman:
Thank you. We're here to talk about Squid Game, which for those of you that have been I guess living under a rock and don't know about the Squid Game or haven't seen it yet, because it's the most popular show in lots of countries, it's a nine episode series about the lives of 456 people, all who need money.

Neil Kaufman:
They need it for lots of different reasons. They come from all walks of life. Some of drowning in debt, desperate for not being able to pay off their debt. Some people are thugs. Some people are white collar. Some people are just unlucky. But what they all have in common is they need money and they are willing to participate, willingly, they want to participate in this game to try and survive.

Neil Kaufman:
And they've got to play six Korean children's games where if you're the winner you're going to get a large sum of money, $46 billion Won, which is $38 million U.S. dollars. It's a high stakes game.

Bobbi Rebell:
It's a lot of money. Okay. So I want to make sure everybody knows that we have watched all of the episodes and we are not going to be able to remember what to say and what not to say so there will be spoilers. So this is your cue, if we've interested you in watching the Squid Game and you haven't watched it yet, pause. Go watch it. It's nine episodes.

Bobbi Rebell:
So for most people they could binge it in a day or two. For me, because I fall asleep during everything, it took a little bit longer but Neil was patient. Go watch the Squid Game and then come back right here. This is where the spoilers are going to start. Starting with the fact that the main character is presented as sympathetic but a lot of eye rolls.

Bobbi Rebell:
I mean, he's massively in debt. He gambles away money that his mom ... By the way, he's 40 something and living with his mom, speaking of not being a financial grownup, of course. He's asking her for more money to buy his daughter a birthday present. He gambles it.

Bobbi Rebell:
All kinds of things happen but just the characters, it's not like they're all that sympathetic. A lot of them are basically making big money mistakes on their own and trying to find get rich quick schemes to begin with. Right, Neil?

Neil Kaufman:
He's a likable guy but he's a schlump. It's just the guy, he does everything wrong. He's divorced. He's a gambler. I mean, he's got all the classic tell-tale signs of just being a not responsible person, both financially and emotionally. I mean, he doesn't even maintain a decent relationship with his daughter. I mean, or his mother.

Neil Kaufman:
Yes, he lives with his mom and we've heard that story all too often but he betrayed his mom. He canceled the insurance, her health insurance, which no shock there, an aging woman, she needed the insurance.

Bobbi Rebell:
Yeah, that's another big spoiler. It comes up later. The other spoiler is that he wins money gambling. Okay, so now in theory you would think he would use this money that's he's gambled ... he wins on this horse betting, which is another thing that comes up. They're betting on horses. Is it different to bet on horses than humans? Think about that, everyone that's seen the show.

Bobbi Rebell:
But, he wins a huge amount of money and instead of using it to pay off his debt he starts gambling away with it again. He doesn't pay off the debt that owes. He gives a big tip to the person in the window and he wants to go shopping and buy extravagant things for his daughter that he's promising her all this stuff.

Bobbi Rebell:
Even when he gets her a present he does it through a gambling game, a children's game where he picks a present, which later on ... We don't have to spoil this but let's just say it's not a child appropriate gift that he ends up getting her and it's really just the ultimate symbol that this guy just can do no right and he's his own worst enemy really.

Bobbi Rebell:
So, Neil, we've set up the premise, we've got this guy, fast forward a little bit. He runs into someone who's effectively a salesman who convinces him to go into this game and he meets a van, gets gassed so he doesn't know where he's going. And he ends up in a dorm with 455 other people who are competing in this contest and basically they say that anyone that is not eliminated at the end of six children's games will win a huge prize of money. As you mentioned, the equivalent of $38 million. But there's more to it.

Neil Kaufman:
Yeah. So they're playing these games but they don't realize it until they get into the first game, what it's really all about. So the idea is some people win the game, some people lose the game. If you lose, by the rules that are put in place, you are effectively eliminated from the game. And elimination means death.

Bobbi Rebell:
Right. And note, for the very first game they don't know that. They just know you're eliminated and they assume, I think understandably, that they would just go home. It becomes clear very quickly and it's a very gory scene that being eliminated is death.

Bobbi Rebell:
So after that, through a little TMI, we won't get into it. The players do choose to go home. They end the game and they play one game and by going home they have forfeited the opportunity to win the money and they go back to their dreary lives. And we talked about the main character but many of the other characters have very unfortunate situations with money.

Bobbi Rebell:
They're all desperate for money, to either save face. There's an immigrant theme here, to get their relatives out of North Korea, into Korea, to feed their families. To pay off gambling debts. All kinds of different reasons why people need the money. As Neil mentioned, white collar crime and so on.

Bobbi Rebell:
They go back to their lives. What's shocking to me is that of the people that go back to their lives and have the opportunity to not die in pursuit of this money, 87% of them choose voluntarily to participate in a life or death game where it's pretty logical that most of the people are not going home with the millions of dollars.

Neil Kaufman:
I think it really shows the desperation. So they went into the game originally knowing or not really knowing that much about it but after they realize that it was a fight to the death and they would actually potentially sacrifice their life and they go back home.

Neil Kaufman:
They willingly reenter it a second time, knowing what the consequences of their actions are. It may cost them everything but they're so desperate they'll still go ahead and play the game. 87% of them come back, which is really ... it just ... it boggles the mind.

Bobbi Rebell:
It is shocking and it also is shocking how the characters evolve through this process because they're in this bubble and they're not in contact with the real world any more. They're just in this world where they're surrounded by their ... in some cases they try to form teams and this and that but who's on your team can be very confusing. And it's confusing to know who to trust. And that's something that also goes to the theme of money, right, Neil?

Neil Kaufman:
It's really interesting. I'll tell you, choosing who's on your team, who's not on your team, I mean, I thought there was a part of the show where they were choosing teams for tug-of-war and nobody, nobody wanted to choose either the women or the old man to be on their team.

Bobbi Rebell:
Wait, but spoiler, we didn't know it was tug-of-war when they were choosing. They did not know what the game was. There was a presumption that strength mattered.

Neil Kaufman:
There was. There was a presumption.

Bobbi Rebell:
Which is also a real world perception very often that the strong men were the most desirable teammates. That was the perception, which is often the perception in real life too.

Neil Kaufman:
Yeah, no doubt. No doubt. And shock, maybe not shock, the team with the three women and the one old man, won the tug-of-war game against the men's ... the all men's team. Not so much for any other reason than it was the wisdom of the old man. He had life experience. He had some knowledge that he brought to the table.

Neil Kaufman:
And there was also the women in terms of how they all worked together as one cohesive team. So it was the mind that won over the power of many on the other side. It was a David and Goliath story and I love that but the point is, you've got to think broadly, have a different perspective. It's not always the obvious answer that wins.

Bobbi Rebell:
Another thing that's also interesting is that there might be a perception that everyone in this dorm, everyone playing this game was poor, maybe because they were born that way or just things beyond their control. But one of the characters that you found most interesting was character 218.

Bobbi Rebell:
He is someone that was the pride and joy of his neighborhood. We see scenes of his mother bragging about how successful he is. The main character knew him as a child and he was the big success of the neighborhood. He was working in finance but in fact, he had lost his investor's money and he still was in the outside world portraying this veneer of huge success. Nobody knew that he had had this huge financial ruin.

Bobbi Rebell:
And that's something that really resonated because very often people appear to have so much money and so much success in life but underneath there's nothing and sometimes there's less than nothing. And it's not always clear but there's a lot of reason to believe that this very wealthy appearing guy had maybe committed some crimes and really betrayed his investors. He was a bad guy.

Neil Kaufman:
I hate that guy. I mean, I got to tell you, even the way it wrapped up with him in the end and I'll get to that in a second. But I think it speaks to, I mean this guy had a pedigree education. He had the pedigree job. I think the lesson in that is don't judge people's wealth or success based on appearance only.

Neil Kaufman:
I guess it almost goes to what we're talking about these days around mental health issues. People that you think are okay, maybe they're not okay. Maybe they're not doing great. It's like that Instagram moment. It looks great from the outside in but the inside out is just terrible.

Neil Kaufman:
I think the life lesson here is the person who said that it's better to look good than to feel good, that person is wrong. The person that said clothes makes the man. That guy is also wrong. It's mental health. It's inner beauty. It's health. It's relationships that matter, not what your neighbors think, not what the valet who parks your car thinks or the stranger who sees on the street wearing whatever you're wearing.

Neil Kaufman:
You need to define a level of success by, I guess I want to say pay it forward. By the good words and things that you do and the impact that you make on others. It's those things that matter.

Bobbi Rebell:
Yeah. This show also makes some big picture statements about the growing gap between the uber wealthy and the poorer people in society and the things that the wealthy do. About two-thirds through the show, the series, we learn that this is a game that wealthy people are staging for their own amusement and it's compared by many people to things like Battle Royale and the Hunger Games.

Bobbi Rebell:
You have a lot to say about this. I mean, they come in, it's wealthy people really abusing the lower classes here who have financial problems instead of helping them. It's very cynical.

Neil Kaufman:
It's interesting. So wealthy people can abuse the vulnerable who have financial problems. No shocker there. I guess it's the theme for the decade. People hurting people who are already hurting, instead of lifting those people up in reality as opposed to the appearance of reality.

Neil Kaufman:
In the end what I liked was I think the last lesson of the show was that humanity wins. It's best to be your best. It's the best lesson so far in the show, which is sometimes people in power, people who seem to be doing good are not always doing good.

Bobbi Rebell:
And it's also interesting though, it makes a little ... well, a big statement. The main character early in the show is betting on horses. Later in the show the wealthy VIPs are betting on the contestants in this game. Is it saying maybe that are the wealthy and the poor doing the same human behavior? Is it just our human instinct to do this kind of cruel game?

Bobbi Rebell:
Obviously, the horses, I sure hope are alive afterwards, unlike the people but they're setting them up similar because the VIPs are very much gambling on the humans in this game. They are making bets and they're enjoying it and it seems like there's some parallels that the filmmaker or the series maker is trying to make there.

Neil Kaufman:
They're talking about objectification of both men, of women. They're talking about the abuse of power. I mean, it's a real statement that they're making here in terms of who's good, who's bad and sometimes who's good and who's bad is just a matter of perception.

Neil Kaufman:
So to your point, people betting on humans versus people betting on horses, is there a differentiation between them? I don't know but there's so many lessons in this story. I don't even know where ... there's so much. I read so much online about it and what I thought was interesting is how characters changed in the story too.

Neil Kaufman:
Like 67, I forget what her name is. I'm just going to refer to the characters by their numbers. It's easier. But 67, she started off as a hard character. She became a soft character in the end. It gives me pause to think about how people fall into two categories sometimes.

Neil Kaufman:
When people are put to pressure some people are like bits of carbon. You know what I mean by that? You put enough pressure on somebody and some people, like a bit of carbon, you put enough pressure on them and they turn into a diamond. They really shine like 67. She was playing marbles and her opponent gave up her life for her, which I thought was a selfless act.

Neil Kaufman:
It was amazing. She literally sacrificed her and not only was that an amazing act of selflessness but it rubbed off on 67. That's what I'm saying with that whole pay it forward thing. She became a better person for it and she did pay it forward, by the way, because in the middle of the night when she was hurting and there was an opportunity for 456 to kill 218 in his sleep, she paid it forward and she course corrected 456.

Neil Kaufman:
She brought him back on the tracks. She gave him ethics, gave him values again, which I thought was amazing as opposed to the character 218. So my whole other viewpoint is some people are like bits of carbon that you can turn into diamonds and some people fracture and crack under pressure.

Neil Kaufman:
This guy, 218, I was really disappointed in this guy. He manipulated Ali, number 199, played upon his naivete, tricking him into losing his life. He also betrayed all of the players in the beginning when he basically he knew the game, the honeycomb game, and he wouldn't share his knowledge with anybody else. He just looked out for himself only and I get it.

Neil Kaufman:
It's a game to the death but it was to the point where this person fractured so much from the pressure that not only did he betray all of his friends and then betray Ali and then he betrayed everybody at some point in the games. And he even slit 67's neck in the sleep. She was already dying and he killed her. What's the point in that?

Neil Kaufman:
In the end, his self-sacrifice, I got to tell you, it left me hollow inside. Hollow gesture from a dying man and he didn't even do it to give to 456 to win. He did it to give because he wanted the money for his own purpose, which was to share it with his family. So I get it but I'm telling you, it's a whole microscope of life on the two different types of people there, those that are good and those that are evil.

Bobbi Rebell:
I think the lasting image, because we need to wrap up in a minute. The lasting image for me is the final character, which is throughout the show, the series, they have this giant piggy bank hanging above the dorm that every time someone else dies the remaining players see more money coming in to this giant glass piggy bank above them.

Bobbi Rebell:
So it's like they're being driven by this character of this piggy bank that they can never stop thinking about it and how that will solve their problems, make their life better but in the end, as we know, it doesn't. It really doesn't and that's, I guess, the final spoiler, really. That the money doesn't change anything for the winner.

Neil Kaufman:
I got to tell you, there was one theme in there that really resonated with me on a personal level because I have seen this person in every company I've ever worked with. Betrayal doesn't come from people more often than it comes from people that you trust most. Sometimes your friends are really frenemies. I love that word, frenemy because you got to find out who your frenemies are sometimes.

Neil Kaufman:
Fake friends like Deok-su, number 101 and Han Mi, number 212. They were friends. They were friends but when 101 left 212 scorned by not picking her for ... we talked about the tug-of-war, didn't pick her. He didn't realize that 212 would ultimately be the death of him. So he burned bridges with her and she wound up throwing him off the bridge, which is kind of funny. It took him to his death.

Neil Kaufman:
So my lesson out of that was the kindness you show to others will always find a way of coming back to you or maybe karma is going to sting you for being ruthless in the end and that's what happened to 101.

Bobbi Rebell:
So on point, Neil. You're brilliant, what can I say. All right. Final thoughts.

Neil Kaufman:
I'm thinking that there's going to be a second season, the way they left it at the end there. He didn't get on the plane, 456 did not get on the plane to visit his daughter. He let me down again. He turned around and I think it's a hat tip to a potential season two.

Bobbi Rebell:
Yeah. I think so too. I mean, the rumor is and we're just laying down all these spoilers here but the rumor is that a season two might focus more on the VIPs and the police and the people behind the game and what's going on behind the scenes because they show us a little bit but I definitely want to know more about how this came about and what's going on.

Bobbi Rebell:
And we've got the brother, the police officer and that whole thing. So I would love to hear more about that and I'd love to see more about what ... I'm going to research more about what's been going on in terms of class divide in South Korea. I think that's really interesting and something we can talk about in our own country as well.

Bobbi Rebell:
So final, final words, Neil.

Neil Kaufman:
Tune into the podcast. Listen on Spotify. Tell us what you liked, what you didn't like. I'd love to hear from you.

Bobbi Rebell:
We love that. All right. And everyone, you can follow me and support the show on Instagram @bobbirebell1, on Twitter @bobbirebell. Let us know what you thought about it. Let us know if you want to hear more from Neil and more of our money related content reviews. I don't know what we want to call it, a synopsis, whatever. But be in touch and thank you for being financial grownups.

Bobbi Rebell:
Money Tips For Financial Grownups is a production of BRK Media LLC. Editing and production by Steve Stewart. Guest coordination, content creation, social media support and show notes by Ashley Wall. You can find the podcast show notes which include links to resources mentioned in the show as well as show transcripts by going to my website, bobbirebell.com.

Bobbi Rebell:
You can also find an incredible library of hundreds of previous episodes to help you on your journey as a financial grownup. The podcast and tons of complimentary resources associated with the podcast is brought to you for free but I need to have your support in return. Here's how you can do that.

Bobbi Rebell:
First, connect with me on social media @bobbirebell1 on Instagram and bobbirebell on both Twitter and on Clubhouse, where you can join my Money Tips For Grownups Club. Second, share this podcast on social media and tag me so I can thank you. You can also leave a review on Apple Podcast. Reading each one means the world to me. And you know what? It really motivates others to subscribe.

Bobbi Rebell:
You can also support our merchant shop, grownupgear.com by picking up fun gifts for your grownup friends and treating yourself as well. And most of all, help your friends on their journey to being financial grownups by encouraging them to subscribe to the podcast. Together we got this.

Bobbi Rebell:
Thank you for your time and for the kind words so many of you send my way. See you next time and thank you for supporting Money Tips For Financial Grownups.

Neil Kaufman:
(Singing)

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.

Optometrist Jen Tsai was in the process of launching her solo practice when the pandemic hit. She shares how she kept her cool and managed to overcome financing and construction challenges, as well as build a retail practice while the world was in turmoil. 

Jennifer’s Money Story:

Dr. Jennifer Tsai:
Yeah, it definitely wasn't my goal to open a cold start practice in the start of pandemic. I honestly thought with the year being 2020 it would be good luck to open it with that, but you can never plan for things. I think that was an important lesson, to just always be prepared, especially financially, with working capital, when you go into any business. If we didn't do that, if I didn't do that, we would've been in a different place today.

Dr. Jennifer Tsai:
I think being prepared for that was always important, and being able to work the first couple of years, just seeing how other practices ran their business, really taught me a lot because I paid attention to their maybe downfalls and ways that they were efficient and applied that to my own business model.

Bobbi Rebell:
Now, how did you balance everything? Because you had these plans in place, you were geared up to start this business, then coronavirus hit and you did have other financial things going on you had to balance. You still had student debt, so you had to balance that. Did you take out loans? How did you finance this business and how did you keep going as this pandemic is emerging?

Dr. Jennifer Tsai:
Yeah, I definitely have student debt. Luckily, my undergrad was paid off and I had some scholarships. In terms of medical school and optometry school, it is quite expensive as we all know and we come out of it with a couple hundred thousand dollars with our name. I didn't always have a fear of taking out debt. I understood and I did my research about what the student rates were. I think a lot of people do have a fear of taking out student debt, and when they finish school their immediate goal is to completely pay off their loans because it may seem daunting or scary and they feel that they can't continue to do other things with their money.

Bobbi Rebell:
Right, and it's not that it's bad to pay off the student debt. It's bad if it keeps you from living your life, I guess, is what you're getting at, that you don't start other things until you pay it down completely when you're facing, in your case, six-figure debt.

Dr. Jennifer Tsai:
Yeah. I think that is definitely something that stalls people or holds them back. I think it's important to realize that student debt is not a bad thing. I think people see it as a bad thing. There's definitely a lot of debt that other people have that they don't realize on a day-to-day basis that's actually worse, which is credit card loans that you purchase stuff with. Those interest rates are definitely higher.

Dr. Jennifer Tsai:
Going into that, I definitely saved up enough working capital and I made sure that I refinanced my loans to make sure that I had a lower interest rate. I didn't really let that stop me from chasing my dreams and going after what I really wanted. Initially, I was held a bit back, looking at the cost of how much to start a complete cold start. I was even looking at buying old practices that were definitely a lot cheaper, but also evaluating their P&Ls. Thinking about the whole thing, I realized in the long run, this is a short-term investment for your end goal, which is the more important thing. So I was willing to take that investment, especially on myself. That's what I wanted to focus on.

Bobbi Rebell:
How did things change when you were in the pandemic and you're trying to start this?

Dr. Jennifer Tsai:
Once it was around March, we were gearing up to open. We were finally putting down the finishing touches for the front of the store and then the pandemic happened. I'm in New York City, so when it first happened in March, it definitely was a tough time. It was really scary for us. We knew it was coming from upstate and then all of a sudden it became widespread and immediately everything just shut down. It was like a ghost town. We couldn't even go to the site to really look at the construction because we weren't even allowed to be in proximity with our contractors, so everything just came to a halt. I had to quickly convert to a virtual telehealth visit for my patients, while doing virtual Zoom calls with my architect team. It was just insane. It was an insane time. We couldn't even finish our construction because we had to apply for permitting in order to be able to finish construction during a pandemic.

Dr. Jennifer Tsai:
Finally, around I would say maybe like June or July, they allowed us to go back in to finish construction. Of course, at that point there was delays in manufacturers with their materials, getting it to our store. It was just working around that. I mean, I will tell you, our store still isn't even completely done to this day. I've just learned to live day by day at this point. But luckily, we were able to at least open our doors August 6. I was just really excited to get in there. After four months of not really seeing patients in person, I wanted to be back in there to be able to care for the ones that really needed to see me during that time.

Dr. Jennifer Tsai:
Then I was shocked because we basically, starting from the first day a month and a half ago to now, it's been seeing eight to 10 patients already. Partly, I think it would attribute to probably a little bit of social media, just sharing out there honest, brutal moments that I have and I think it makes it more authentic that people do see where you come from, and also sharing the fact that we're there to provide a space where they feel safe and comfortable, that it's modern and clean. I think that going forward, people really care about their health, patients really do, especially with COVID, that they realize how important their health is and they're willing to invest in that. I am grateful that people have been able to come in.

Bobbi Rebell:
What did you do in advance financially to shore up your finances and made sure you had that runway?

Dr. Jennifer Tsai:
On a bigger scale level I think about it. People are either really trigger happy, or they're really risk adverse. If you're really risk adverse, you'll never take the first step because you're just afraid of all these self-doubts that you have. I think what has helped me is just really creating a strong financial plan and making sure that you have everything checked off for the worst-case scenario in case it happens, because you never know. I think for people who are trigger happy, I think that's one thing that they need to think about. Are there things that could happen, such as a pandemic, that will maybe cause me to not have any cashflow or working capital going into it?

Dr. Jennifer Tsai:
Coming out of school a couple of years later, I realized it doesn't make sense to not refinance my loan so that I could reduce my interest rate and have it all in one place. That has helped me manage my money better. I was working, I would say for the first four years, full-time. Actually, when I first started in two practices, then I went down to one. I hustled, I worked really hard to save money. I didn't put it all into paying off my loans. I used it to save up money, invest on the side, so I had a better cash flow and working capital because I knew that I wanted to start my own practice at that point in time. I just knew that I needed money saved up to do that.

Dr. Jennifer Tsai:
Starting lean when you start a practice is really important and only purchasing things when you need it. It has to justify. If you buy a piece of equipment, how many times do you have to perform the procedure to make the money back, thinking about that, cutting back on vendor purchases or offering more of a curated product of frame line. I think these days, patients prefer that one-on-one time, that one-on-one experience to feel like they've had an amazing experience at the store. You don't have to purchase a million things that don't get bought, instead focusing on limited product lines and setting aside cash reserves to pay bills and reducing your overhead capital expenditures and working with your vendors and landlord, if it's possible, if they're willing to negotiate with you.

Jennifer’s Money Lesson:

Dr. Jennifer Tsai:
I would say, little by little, a little becomes a lot. These little steps that you set in place for the long road is really important. One of the things for me is making sure that you have your financial steps in place. At least for me, that was refinancing my student loans, that was the very first step. For example, I use Laurel Road. Right now, I think federal interest rates are so low it's silly to not take advantage of that. It's great to have this digital lending platform that is built for specifically young professionals in healthcare as well to work towards their goals. There's definitely perks and rewards that they have for healthcare professionals. Refinancing definitely helps you with savings over time, and that's how you can use working capital to invest towards your future or your dream practice or something that you want to build.

Bobbi Rebell:
Right, and it's also going to help your credit score to have all of your finances in order, obviously, which is going to help if you do need to get more funding, especially if you get these unexpected things like a pandemic and you need to access maybe more capital, more time to pay loans and better rates than you maybe thought before.

Dr. Jennifer Tsai:
Right, exactly. I agree.

Jennifer’s Money Tip:

Dr. Jennifer Tsai:
Yeah, shiny object syndrome is definitely a public enemy if you go down this rabbit hole of just purchasing everything you find. They're really good at it with marketing, you're just sitting at home, scrolling through your phone on social media and there's something that you want. I remember when I first graduated out of school, with my first paycheck living in New York City, the first thing I decided to buy was a Chanel bag. That was the worst decision I ever made. I could not pay rent the next month. I learned really, really quickly to not do that. I think that was because of Sex and the City. I was like, "Oh my gosh, this is so cool living in New York."

Dr. Jennifer Tsai:
But I think learning stuff like that is really important. You don't have to have every single piece of brand new state-of-the-art technology in your office. I know you want it for your patients and for your store, but you want to start off very lean so that your savings don't get sucked dry so fast.

Bobbi Rebell:
Yeah, and I think that makes sense. I mean, I was upset because the style that I wanted on your eyeglasses store was sold out, but you kept your inventory tight so you're living true to that. You don't want to buy so much inventory that you're holding on to inventory. You're starting out your business lean.

Bobbi’s Financial Grownup Tips:

Financial Grownup Tip #1:

Take your time. I was so frustrated that the glasses I wanted to order it were sold out on her online store, Carrot Eyewear, but Dr. Jen explained that she needed to control her risk exposure by keeping inventories lean, even if that meant losing out on some sales, like to me. Yes, it may slow the pace of the retail business growth, but when the pandemic hit, she wasn't over leveraged. Patience pays. Think about how you can buy just what you need so you don't feel stretched and stressed.

Financial Grownup Tip #2:

Paying down debt is all good, but as we have learned in the past eight or nine months, well, it shouldn't be at the expense of having enough cash on hand to manage through something totally unexpected, like a global pandemic. Don't miss any payments, be mindful, think about how you can refinance maybe at a lower rate as Jen did, especially with our still super low interest rates, but also do the other things to build your life and keep living.

Episode Links:

• Jennifer’s websites -

  • www.drjennifertsai.com

  • www.lineofsightvision.com

  • www.carroteyewear.com

Follow Jennifer!

• Instagram - @drjenandjuice

• Instagram - @lineofsightvision

• Instagram - @carroteyewear

• Facebook - Carrot Eyewear

• LinkedIn

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.

YouTube superstar Sarah Wilson documented and inspired others with her journey to being debt free. But after she got to do the debt free scream with Dave Ramsey, she had a whole new set of challenges. Plus Sarah saves Bobbi from buying things she can get for free at the Fincon conference. 

Sarah's money story:

sarah wilson:
five years ago I was working in a newspaper for about $26,000 a year. I had deferred my student loans from college, and there were $33,000 of them. I lost my job. Suddenly I was extremely scared and I swore to myself that whenever I got a new job, I would figure this money thing out. Because being unemployed would've been so much less stressful had I not had $33,000 worth of student debt looming.

sarah wilson:
So, I got a new job making $26,000 a year at a newspaper, in a new state, and I started budgeting. I did everything possible to lower my expenses, increase my income, side hustling. And over the next three years, I actually documented it on YouTube. Every single week, I'd go on and tell people how much debt I had left and what I was doing that week to help fix it. It took me three years and a couple of different jobs where I raised my income a little each time, but I paid off all my debt.

bobbi rebell:
We're so proud of you for that. And also, what you're leaving out with your modesty is that while you were doing this, there was something about you. You have a relatability and an it factor that you also developed a huge following of fans and supporters while doing this. How many YouTube subscribers do you have right now?

sarah wilson:
A little over 56,000.

bobbi rebell:
Wow. And you also have monetized that. So, you actually have this side business of this YouTube channel, which is really inspiring and helping so many people. Then you hit a big milestone a year ago and that changed everything. We're going to start your story, your money story that you're going to share, with a big scream.

sarah wilson:
Yeah, I actually went on the Dave Ramsey show because I was a huge fan of his and I was following his steps to get out of debt. I was able to do my debt free scream live in studio. That was just incredible. It felt like closing and opening a chapter in my life.

bobbi rebell:
It's a big milestone and it brings us to what we want to talk about, which is what happens when you reach your money goal. Because your money goal was to be debt free. That scream was so symbolic. Then what?

sarah wilson:
The first thing I decided was to save up a giant chunk of money. Once again, ala Dave Ramsey. I saved six months worth of living expenses in case I ever lost my job again. I would be okay for a while. Or if I suddenly got into a car accident, or a medical thing, it just gives so much peace to know that I have 10 grand sitting in a interest earning bank that I can use if something terrible happens.

sarah wilson:
And then I also started investing, which is super fun and kind of intimidating for someone who was never taught about money.

bobbi rebell:
How did you start investing?

sarah wilson:
I did a lot of research, and procrastinated way too long. And then I just kind of jumped in. I bought a few index funds. I did a little robo-investing. Just kind of got my feet wet and figured out what was right for me. I'm still exploring that. I'm starting to purchase, actually, some single stocks and do some more exploratory stuff.

sarah wilson:
I funded my... I did more retirement funding for her, so I opened a couple of Roth IRAs. It's a really fun time now because I'm learning about all of that, which was not within my capacity when I was getting out of debt. I couldn't think about future dreams then.

bobbi rebell:
How specifically are you learning? What are your tools and how did you set up these things? I mean, if we get really basic, did you choose a robo-advisor? Did you just walk into a branch of a brokerage firm? I mean, what specifically did you do at that point?

sarah wilson:
Well, I tried working with a planner first and then I didn't like that. They wanted 5% of whatever I invested and I was like, "You know what? No. I can figure this out. I figured out how to get out of debt. I can figure this out on my own."

sarah wilson:
So, I've read every single thing that Bigger Pockets has ever wrote. I've watched so many YouTube channels that my friends are on. As they've learned, they've shared that information as well, which is incredible. And read a couple of books. Erin's Broke Millennial's Guide To Investing, TFD, all of it.

bobbi rebell:
The Financial Diet.

sarah wilson:
Yes.

bobbi rebell:
It's The Financial Diet.

sarah wilson:
Oh, I'm sorry, the Financial Diet. And of course, How To Be a Financial Grownup by someone you might know.

bobbi rebell:
Thank you. I think education is such an important message. As you go through the different phases of being a grownup, your phase one was paying off the debt. Your phase two is educating yourself to grow your money. So, you didn't go with a financial advisor that wanted to take 5%. What did you go with? Are you with a discount brokerage. Are you with a robo-advisor? How did you come to those decisions?

sarah wilson:
Right. I don't advise people who watch my channel to do this, because I think you should do things more simply. But I have, probably, 15 different investment accounts. I have accounts at Vanguard. I have accounts at different robo-advisors. Because I wanted to try everything, and I wanted to see the pros and cons.

bobbi rebell:
So, you're sampling?

sarah wilson:
Yeah, I'm sampling. I will continue to kind of narrow things as I figure out what is right for me. The different fee structures, pros and cons, that kind of thing.

bobbi rebell:
That's interesting. And so-

sarah wilson:
I'm not advising that. People ask me like, "Well, what do you think of Robinhood?" And I'm like, "I don't know. Let me go try it."

bobbi rebell:
Right. Well, one thing that people should... I just want to note. Very often, if you do consolidate your money and you get to a certain level, you can get benefits at these things.

sarah wilson:
Yes.

bobbi rebell:
So, I do advise you even though I don't... But I advise you to consider consolidating into fewer accounts than 15 at some point.

sarah wilson:
Yes.

bobbi rebell:
Because there are often benefits. People do want to reward their better customers. And also, from a question of just tracking your money and having those efficiencies. That might be something to consider.

sarah wilson:
I have a lot of spreadsheets right now.

bobbi rebell:
You mentioned in terms of your bigger picture life planning, what have you been able to do since paying off your debt?

sarah wilson:
The next big thing is going to be buying a multifamily property, and house hacking that into another stream of income. This is something I never dreamed of before. I never thought I'd be able to buy a house on a currently around $50,000 a year. But I have no debt. I live off of about 50 to 60% of my income, invest and save the rest.

bobbi rebell:
And explain what house hacking is. And that's a topic we're going to cover, actually, on a new Financial Grownup episode coming up.

sarah wilson:
Wonderful. House hacking is say I purchased a duplex for $200,000. Because I live in Texas and I'm very lucky. So, I move into one unit and then the other unit I rent out for say a little bit above what my mortgage payment and taxes are for the entire property. Suddenly, I've got essentially someone else, a renter, paying my mortgage for me. I've opened up another line of income and I'm also building equity in this home. In a couple of years, I can be saving the money that I'm saving on rent and do that again. Rent out both sides and maybe move into a different property, or maybe a fourplex.

“I was able to do my debt free scream live in studio. That was just incredible. It felt like closing and opening a chapter in my life.”

Sarah’s money lesson:

sarah wilson:
I think that money mastery is a muscle and that none of us are born with it. And if we had been having this conversation three years ago, it would've been like, "I can't talk about house hacking. I can't talk about investing right now. I can't. I don't have the capacity."

sarah wilson:
But by doing small things in the direction of your goals, whether it's cutting your grocery budget a little bit, or ballsing up and opening your first investing account, even though you're a little intimidated, making those steps is going to get you to the place where you are financially free. You just have to keep moving forward one step at a time. You can't just suddenly wake up and be you.

bobbi rebell:
You make a great point to not be afraid. And even though I do hope that you eventually consolidate your 15 accounts, I do think there's something to be said for just starting. If you open an account at a brokerage firm and you decide, for whatever reason, it's not the right fit, you can move that money to someplace that is a better fit. It doesn't have to be forever, but it should be starting.

“It just gives so much peace to know that I have $10,000 sitting in an interest earning bank that I can use if something terrible happens.”

Sarah's everyday money tip:

bobbi rebell:
I want to transition to talking about your money tip because this is something that I totally did not know. I am significantly older than you, but apparently other people do. My husband made fun of me now for not knowing this. However, I feel that I have to be honest that I did not know to do this all these years, and maybe there are other people out there that haven't.

bobbi rebell:
We were chatting earlier at FinCon and I mentioned that I'd forgotten toothpaste. I had a toothbrush, I forgot the toothpaste. You gave me this amazing advice because I was about to go buy one. Go for it. What's your money tip?

sarah wilson:
I told you to go down to the front desk and ask the concierge, or hospitality, or the front desk clerk, just tell them that you forgot your toothpaste and toothbrush and they will give you one.

bobbi rebell:
For free.

sarah wilson:
Yeah, completely free. Like 50 feet away from the gift shop where they sell a miniature size toothpaste for $4 and a toothbrush for 3. He'll just hand you one.

bobbi rebell:
Not only did they give me toothpaste, they gave me a toothbrush. A full size toothbrush, by the way, Sarah.

sarah wilson:
Yeah. Like an Oral B toothbrush and then like Crest mini toothpaste.

bobbi rebell:
Totally.

sarah wilson:
It's the good stuff.

bobbi rebell:
And apparently they give away other stuff. The concierge.

sarah wilson:
What else do they give away?

bobbi rebell:
My husband has informed me they give away combs. They can give you a razor. All kinds of things that you would go to the gift shop right next door and purchase.

“By doing small things in the direction of your goals, whether it’s cutting your grocery budget a little bit, or opening your first investing account, even though you’re a little intimidated, making those steps is going to get you to the place where you are financially free.”

Bobbi’s Take:

Financial Grownup tip number one:

I never thought about the fact that hotels and tons of other places that we visit, that we see throughout our everyday lives, have lost and founds. They do, guys. It's not just school.

When you're growing up, this can be very important. If you lose something, or misplace it, or maybe if you need a charger, like Sarah did. I know this is very basic, but just like I didn't know that you could just ask for things for free from a hotel front desk, that were for sale right around the corner. Make sure that if you misplace something, or you just maybe need to borrow something, again like a charger, you ask if there is a lost and found. Maybe the thing that you lost is there, or maybe something that you need to borrow is there.

I once left a pair of shoes in a hotel. Don't ask how I lost the shoes. I was wearing other shoes. Just trust me. And I called anyway. They looked in the lost and found. Sure enough, they were there and they mailed the shoes to me. All is not lost. Just ask.

Financial Grownup tip number two:

Financial Grownup tip number two. Sarah is all over the place with her investing. That's her thing right now. We're not going to judge. But I do want to caution that although I said in our interview that you don't want your resources too scattered, and that there are often perks that you get if you have larger balances and you consolidate in one place, it's also okay to have your resources in a few places. Maybe not, and I know it's an expression but, put all your eggs in one basket. Put all your eggs in just a few baskets. Not too many, but a few.

Maybe I'm a bit paranoid, but sometimes things do go wrong. There have been companies that have gone out of business, or sometimes something not so legal happens in some places that seem to be pretty above board until they're not. So, it's okay to have your wealth in a few places. Make sure that they have the appropriate protections in place. Whether it's a bank with FDIC insurance. Or SIPC, for example, for a brokerage. And understand what that protects.

For example, SIPC is not going to protect you from a stock's value going down. That's just the market. What it does protect you from is the custody function of a broker. So, if a brokerage firm fails, that's going to give you some limited protection. Take the time to understand the protections for your investments when you choose what entities to park your money in. Whether it's banks or brokerage firms, what have you, there's a lot of startups, make sure that they've been vetted, make sure you understand the protections that are in place. Made a deliberate decision about how many entities you're going to be parking in your money in. Again, 15 seems like a lot. Whatever works for you, though. I think it's your decision. Just make sure it is deliberate, as I said.

Episode Links:

• Sarah’s Website - www.gobudgetgirl.com

• Sarah’s Dave Ramsey Debt Free Scream - https://www.youtube.com/watch?v=9ofhfT4mx7s

Follow Sarah!

• YouTube - @BudgetGirl

• Facebook - @GoBudgetGirl

• Instagram - @GoBudgetGirl

• Twitter - @GoBudgetGirl

• Pinterest - @GoBudgetGirl

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.

Kara Perez of Bravely go and The Fairer Cents podcast shares how she tackled more than $25,000 in student debt making between $9 and $12 an hour. Plus her go-to home recipes for making foods you normally buy in the store including bread, pickles and tomato sauce.

“I had 5 student loans total. Four of them were public. One was private. And zero financial education.”

Kara’s money story:

Kara Perez:
Yes, so let me paint you a picture. I'm 26; I'm living in Austin, Texas. The year is 2014 and I am crying about money every day, because I don't have any and I have a lot of student loan debt and it's ruining my life.

Bobbi Rebell:
Okay, just paint the numbers. What do the numbers look like?

Kara Perez:
Yeah. So, in 2014 I made $18,000. I graduated college in 2011 with $25,302, so flash forward back to 2014, I still have a little over $18,000 in debt. So, my income is equivalent to my debt. I'm making between $800 and $1,100 a month, working as a caterer for $12 an hour and as an MMA gym receptionist for $9 an hour.

So, the money is not really there.

Bobbi Rebell:
Right. And how did you feel?

Kara Perez:
Oh, I felt awful. I just was very much so treading water, if not falling backwards. I had to put one of my student loans ... I had five separate student loans ... I had to put one of them into deferment, because I couldn't make payments on it. I just didn't have enough money. And I was living in Austin, Texas with three roommates. I was trying to be frugal, but it was just ... the numbers quite literally did not add up, and I felt trapped, because I didn't know anything about money.

I didn't know how to use what I had. I didn't know how to get more of it, and I had no idea how to tackle my debt. It just felt like a weight on my shoulders everyday.

Bobbi Rebell:
And I just want to dial back a little bit. How did the debt come about in that, when you were taking it out, did you receive any financial education in the schools? Was it federal loans? Were they private loans? Were you consolidating them? What did this debt look like?

Kara Perez:
Yeah. I had five student loans total. Four of them were public; one was private, and zero financial education. I mean, god bless my mom in many ways, but growing up, we didn't talk about money, except for the fact that we didn't really have to. Single parent household. I have two siblings, and it was just very much so like, no we can't get that. We don't have the money for it. Not, hey, here's what the budget looks like and here's how much we're spending on rent, so we can't spend such and such ... you know, I just didn't have that break down. And in college, I also didn't get that break down.

And so, the narrative I heard was like, well, you'll take out loans so you can afford to go to school, you'll get a job and you'll pay them back. But of course I graduated in 2011, which was the aftermath of the recession and no one cared about my degree in English and jobs were changing and the workplace was changing. That path of take out the loans, get the job, open a 401K, pay back the loans, it wasn't really there anymore.

And so, it was just a whole lot of, "What am I doing?" in my mid-twenties.

Bobbi Rebell:
So, what was the Google search for? What did you search on Google for?

Kara Perez:
Quite literally, how to pay off student loans faster.

Bobbi Rebell:
And what did you find?

Kara Perez:
What was amazing is that a bunch of people who were blogging about personal finance popped up, and now I'm friends with many of those people. I fell into the world of personal finance blogging, where people were sharing their own stories in very casual ways of, "Hey, we're trying to pay off $100,000 in medical school debt," or "We're saving to buy our house in cash." And I thought, okay, this story features a cop and a teacher. If they can do it, I can do it.

For the first time, instead of feeling overwhelmed by money, this insight into other people's stories via their blogs made me feel like, oh, you're a normal person; I'm a normal person. If you can do it, I can do it.

So, from that, I spent two months just voraciously reading personal finance blogs, everything, anything. I was just crushing it. And then I started implementing some of the things I learned in my own life. So, even though I still had a really tiny income, I was able to pay off about $3,000 in 2014 in student loan debt. And so I was making $18,000, paid of $3,000.

Bobbi Rebell:
What specifically did you do? What were the first things that you learned?

Kara Perez:
First thing I learned was to sign up for automatic withdrawals from my checking account to pay my student loans, because I got a .25 percent interest reduction. So, even though it was a teeny amount, and even though I was scared because I didn't always have money in the account, I signed up for it anyway and just committed to always having money in the account. I was like, I'll just find a way. If that means I have to cut back on going out, that's totally fine. If that means I have to pick up an extra shift, I'll pick up an extra shift, but I want to get that reduction so I pay less in interest and I can get out of debt faster.

Bobbi Rebell:
Okay, what other things did you do that you learned?

Kara Perez:
The other biggest thing I would say was just getting organized about which debt I was paying off at a time, because I used to just make an extra $20 payment on this loan and an extra $20 payment on that loan, and my extra payments were kind of just thrown all over the place, and thus they weren't really making an impact.

So, I streamlined it. I used the debt avalanche pay off method, and made all my extra payments on my highest interest debt, and that really started compounding quickly, because an extra $20 every two weeks starts to add up, and then the more money ... I started also focusing on earning more, and in 2015 I made $32,000, which felt like, whoo, so much money!

I was able to put more towards the debt and make an extra $100 payment or something every two weeks, and it really, really started to go down quickly.

“With the right information and the right application you can change your life”

Kara’s money lesson:

The biggest lesson is, with the right information and the right application, you can change your life. So, even if you are really low-income or you're working part-time jobs, or you don't have access to a lot of tools that maybe you see other people having access to, find out what works for you. So, for me, again, it was signing up to get that interest reduction. It was getting very frugal. It was making more money via picking up other side hustles, so that I could funnel all of that toward my debt.

“It often is a healthier choice to make things at home, as well as a time saving and money saving choice”

Kara’s money tip:

Kara Perez:
Yeah, so I am a big ... well, I don't want to say a big, but I am becoming a big at-home cook.

Bobbi Rebell:
We're all evolving.

Kara Perez:
We're all evolving. I'm trying, because I spent so long in the food service industry, I would always take home leftovers. I didn't have any cooking skills. So, this year, I have really focused on making more things from scratch, and I know that sounds a little like, oh, bougie, like, oh you have the time, and you have the energy to do it.

Bobbi Rebell:
Right, and not only that, it's just intimidating also, because a lot of things that you think ... you look around the supermarket and things are made for you. There are things ... it's one thing to say, I'm not going to buy prepared food. I can cut up the cantaloupe myself. Okay, we know you can do that, but a lot of things that we buy, that I assume have to be made in a factory, apparently don't.

Kara Perez:
Definitely not. So, my big thing this year has been making homemade bread, which sounds, again, kind of intimidating, but it's actually so easy.

Bobbi Rebell:
Yeah, because what if you don't have a bread maker. I don't even have room if I wanted to get one for a bread maker.

Kara Perez:
Right. I don't have a bread maker either. You just put your flour, your yeast, your salt and if you want to put something like oats or something in there, you just put it in a bowl, mix it all up with some water, and then you let it rise over night.

The mixing takes two minutes max, you let it rise, and then you pop it in the oven for about 30 minutes, and then boom, beautiful, delicious bread.

Bobbi Rebell:
So, why does everybody feel they have to buy a bread maker? What do the bread makers do?

Kara Perez:
I honestly don't even know.

Bobbi Rebell:
I don't know. I hope the bread maker people don't come after us.

Kara Perez:
The bread maker lobby.

Bobbi Rebell:
Exactly, but there are appliances for every little thing that I don't think that I don't think we really necessarily need, because that's one of my hesitations is, I don't want to do that, I don't want to take out. Like I know I could make mayonnaise myself, but you have to take out the food processor or whatever.

So, there's a couple other things that you're actually going to tell us how to make by ourselves, without having to go to the store, which by the way, also, you're avoiding all the preservatives and all that yucky stuff.

Kara Perez:
Yeah, it often is a healthier choice to make things at home, as well as a time saving and money saving choice. So, I also have started making pickles at home, which is, again, just literally you cut up the cucumbers, you stick them in your jar with some vinegar, some herbs, water, garlic and then you put the top on, and put it in the fridge for 12 hours, and then you've got pickles.

Bobbi Rebell:
Great. I would never think about that. All you have to do take the cucumber and do that, and then it's pickles.

Kara Perez:
Yep.

Bobbi Rebell:
But we always just ... I don't know. It never occurred to me.

Kara Perez:
Yeah, it does work.

Bobbi Rebell:
You got one more.

Kara Perez:
And I make tomato sauce, which we eat a lot of pasta in my house, and so, that, again, it's just kind of stewing the tomatoes, the onions, the garlic, for about 30 minutes and then, boom, tomato sauce.

Bobbi Rebell:
And by the way, I know making pasta is actually not that complicated either. It's basically just making the dough, and you don't need the fancy pasta-maker. You could just cut it into spaghetti or fettuccine or whatever shape you want. There's even just, little rollers that can make different shapes. So, you don't need the fancy pasta machine, that you therefore don't have to buy, and in my case, also, you don't have to have counter space for, because I'm in an apartment. So, I think that's a big thing to remember, that these don't require special equipment.

Kara Perez:
That's such a good ... I didn't even know that. I've been intimidated to make pasta, but now maybe that will be my goal for the next month, make some homemade pasta.

Financial grown-up tip number one:

Be proactive and take ownership of your financial challenges, and don't over-complicate them. For Kara, just having the information by Googling it, and looking up the most simple stuff and then figuring out the tools to create debt re-payment strategies was enough to get her on the path to success.

Financial grown-up tip number two:

Think about the things that we buy from the store that we don't have to buy. We already kind of have them right there, just in a different form. Maybe the labeling is different, but we basically already have them. We don't have to pay up for the fancy brand name.

For example, a lot of cleaning solutions are made up combining products you already have. Sometimes, just adding water. So, for example, and I got this from the Good Housekeeping Institute, which I'll leave a link to in the show notes. You could mix four tablespoons of baking soda with a quarter of warm water and you have a cleaning solution that works on kitchen counters, appliances and the inside of your refrigerator, so you don't need to buy separately another cleaning item, which may even have more chemicals added, who knows what, and you're keeping it simple.

And if you aren't impressed with the money that you are saving doing that, which you should be in general, okay, think of it as keeping your home less cluttered, and your to-do list shorter because you have one less product in your life, and that is, as I said, much less clutter. Just think how proud Marie Condo would be.

Episode Links:

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

• Kara’s website - www.BravelyGo.co

• Kara’s course - Talk Money To Me

• The Fairer Cents podcast

• Good housekeeping article - https://www.goodhousekeeping.com/home/cleaning/tips/a24885/make-at-home-cleaners/

• The Four-Hour Week by Timothy Ferriss
  

Follow Kara!

• Instagram - @webravelygo

• Facebook - @webravelygo

• LinkedIn - @BravelyGoLLC

Quilt co-founder Ashley Sumner faced a totally unexpected and massive tuition bill mid-way through college after her dad’s business took a hit in the recession. The skills she learned in rising to the challenge led her first to a matchmaking business, and later to create  Quilt- a tech platform that connects female entrepreneurs online and in person.  

In Ashley's money story you will learn:

It's definitely not the lesson I thought I was going to be learning during those formative years. I can say that I'm very grateful for my upbringing, my family worked very hard, were entrepreneurs and we had a very financially stable life. My father, who had financially supported me my entire life, while I was the middle way going through school at NYU, which is arguably one of the most expensive private schools in the country, went from being a multimillionaire and extremely wealthy man to basically losing everything.

Bobbi Rebell:
What, just quickly, what had happened? Was he in an industry that changed?

Ashley Sumner:
Yeah, he's a land developer. He's an interest, he has a fascinating story, he kind of grew up with nothing, ran away from home, built up his entire career, learned this real estate trade and land development, moved west, one of the kind of first guys to go out and build land and I think during the financial crash while I was at school in 2008 everything changed and it really wasn't kind of prepared for it. He's actually since rebuilt himself up so his story is a fascinating one financially as well. But it was definitely-

Bobbi Rebell:
So you went to college with basically the understanding that you were not focused on financing your own college, it was going to be paid for, but I take it there wasn't actual money in an account that was separated?

Ashley Sumner:
Yeah, exactly. He was going to pay for the entirety of it, that was a huge part of my decision actually to go and be a musical theater major, because everybody knows you don't really graduate diving into a six figure salary and yeah that was a huge shift that took place a couple of years in, right while I was gearing up to start auditioning.

Bobbi Rebell:
So what was the talk like? What happened, did you just get a phone call one day that, "Honey, the money that was set aside for your college I need to use to rebuild my business." Or was it a gradual process, what was it like?

Ashley Sumner:
It was kind of an ongoing conversation, I mean I saw him struggle quite a bit and I've always been grateful for his capacity to show up and financially support me, throughout all of my dreams and very precocious childhood, lots of very big dreams to move to New York City from this small town. It was something that had been happening year over year and he really did try to continue to show up and support me and it was really more towards the end when I was graduating and trying to finalize my final year and where I was going to live and what I was going to start doing that we kind of came to an understanding that it was time. And I had this weird kind of desire to also ... I knew that it was time to learn, learn how to take care of myself, it was terrifying.

Ashley Sumner:
But I also knew that it was one of those things that I just trusted was going to really teach me some of the foundational things that I needed to know that I honestly beleive are the reason why I'm here today as a founder and I've been able to raise money and do some of the things that I'm so grateful to be able to do.

Bobbi Rebell:
One of the things I love is the next part of the story which is rather than just getting a job, you started a business.

Ashley Sumner:
I did. Yeah, I am definitely scrappy and the daughter of entrepreneurs, I can say that. I figured out that I had a knack in sales but not just any sales, in the space of matchmaking, so I had started, I had a start up in the matchmaking space and ultimately went on to have my own with some partners. And yeah it was just a skill that I had, you needed very little to get started outside of an ability to meet with and connect with people and listen to their needs and provide that value and that's very much the beginning of my community development career which has led me to my passion and purpose in helping others connect.

Bobbi Rebell:
Because like, and we're going to go back and talk more about Quilt, but it does make sense because you're matchmaking. Instead of romantic matchmaking you're actually matchmaking for different kinds of relationships. I do want to just touch on the fact that while you were doing this, first working for somebody but then very much an entrepreneurial venture, you still kept auditioning and I think that's really inspiring because it shows people that you don't have to give up one dream to fund the other dream.

Ashley Sumner:
Absolutely.

Bobbi Rebell:
You were able to do both.

Ashley Sumner:
Yeah, you know we're in the hyphen-hyphen-hyphen and I've been very proud of the multitude, I think, of starting off as soft skills and now hard skills that I've always had, an ability, I think, to architect. We can architect the way we want our lives to be and we don't need to kind of follow any traditional step by step or climbing a ladder and I'm grateful that my parents taught me that.

“We can architect the way we want our lives to be, and we don’t need to follow any traditional step by step or climbing the ladder”

In Ashley’s money lesson you will learn:

I think so much of having debt which I was under the weight of until six months ago is the head trash that comes along with it. I think there's a lot of shame and judgment and guilt around having that and seeing that there and there really are a lot of, I don't need to bore you with all of the ways that are out there, the practical ways that you can kind of chip off and get above water and start to breathe again. But I think kind of the mental game that it can play on you if you don't learn how to let go and understand that it's just a day by day, month by month, year by year planning, that's kind of my tip which is don't make it worse by also being so hard on yourself.

Bobbi Rebell:
I think a lot of us, not only judge other people, but judge ourselves too harshly.

Ashley Sumner:
Yeah, absolutely, I am my harshest critic. I was very ashamed to even share it with anyone, I kind of felt a little bit like an imposter or a fraud in having it. But every time I looked at it my refrain was like, "Those choices helped me get to where I am today and I'm so happy where I am today." So otherwise, who knows if I hadn't take that risk if it wouldn’t have led to now?

“It was empowering to understand how resourceful I am and how I could come up with non-traditional ways of making money”

In Ashley's everyday money tip you will learn:

Yeah, you know I have to give our head of product kudos for this, who teaches me all of those like tech savvy things. But I recently moved and I've recently learned about the abandoned cart method, when you're buying certain things online, just like leave it in the cart, walk away, go have a bit, go for a workout and then you come back and there's a miraculous little discount code hanging out in your inbox. So I think I've saved about $500 in the past few days on all of the new items that are on it's way to my home.

Financial Grown Up tip number one:

Ashley talked about the shame of debt. The reality is that debt can be a way to accomplish goals, so if you have debt for a good reason, and I'm not talking about excessive shopping sprees and all that stereotypical stuff, but I'm talking about good stuff. In her case paying for a great college education, as Ashley says, get rid of the mental trash, do not be ashamed, if it's your thing to talk about it externally, to socialize it, to talk to people about it because for some people accountability can really motivate you to pay it off faster or to figure out the right plan for you. But it's also okay to be something that you don't talk about, it doesn't have to be everyone's business, not everything about your finances for sure needs to be public, it's okay to keep it private.

Financial Grown Up tip number two:

Be sensitive and aware of what is happening financially to your parents, as is appropriate, at the appropriate age, however you define it and also of course to other members of your family, your generation and other generations. Ashley was so gracious in speaking about her fathers experiences, wealth is not always consistent, we'd like it to be, we can do things in our control to create financial stability but sometimes well a recession hits, as happened. Or an investment just doesn't perform as you had hoped and has all the research and how all the research had implied it would work. Or a business is simply struggling, things go through cycles, life is messy as they say. If your parents or members of your family can help you, maybe it's grandparents, maybe it's aunts, uncles, siblings, whatever, say thank you. But for the times that they can't, be there for them in the way that makes sense for your family.

Episode Links:

Melanie Lockhart's Financial Grownup episode

Lola conference

Check out Ashley's website -

www.WeAreQuilt.com

Follow Ashley!

• Instagram - @WeAreQuilt

• Twitter - @WeAreQuilt

• Facebook - @WeAreQuilt

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.

A side hustle can be a great source of extra income for things like paying down debt. But sometimes that whole paying taxes thing can slip through the cracks when the income isn’t coming from a big company with automatic withholding. Before he was the money savvy personal finance expert of today Student Loan Solution author David Carlson learned an expensive lesson about financial planning.

In David's money story you will learn:

• Why it's important to pay attention to the taxes taken out of each paycheck

• How overlooking the taxes being withdrawn from his wife's paychecks ended up costing them $8,000 in taxes

• Why it's important to put money aside for taxes from your side hustle's

In David’s money lesson you will learn:

• Why it's important to set aside some time for your finances and taxes

• Why people in their 20's generally do better to take more taxes with each paycheck

In David's everyday money tip you will learn:

• Why you should consider refinancing your student loans more than just once

• When refinancing, having a good credit score is so important so try to keep improving your credit score

In My Take you will learn:

• If you find yourself, like David and his wife, owing money on taxes, there are solutions! The most important thing is to still file your tax return

• Why it's so important to stay on top of the news when it comes to student loans

Episode Links:

David's website for his new book - www.StudentLoanSolutionBook.com

David's new book Student Loan Solution

David's other book Hustle Away Debt

Kristin Wong's episode

Check out David's website -

www.YoungAdultMoney.com

Follow David!

• Instagram - @David_Carlson

• Facebook - @YoungAdultMoney

• Twitter - @YoungAdultMoney

• Pinterest - @YoungAdultMoney

• LinkedIn - @DavidCarlson1

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

David Carlson:
And really was the perfect storm where no quarterly estimated tax on the side hustle income, not taken enough out of our regular paychecks and we owed $8,000.

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 grown-up is really hard, especially when it comes to money, but it's okay. We're going to get there together. I'm going to bring you one money story from a financial grownup, one lesson and then my take on how you can make it your own. We got this.

Bobbi Rebell:
Hello financial grownups. That was the voice of David Carlson personal finance expert and now two time author. His first book was Hustle Away Debt. He now has come out with Student Loan Solution. The story he shares with us today though was about a very amateur move that he and his wife made in their younger days, but if we're being honest guys, it's the kind of mistake a lot of us have made, Just saying.

Bobbi Rebell:
Welcome everyone, including our newest listeners. Thank you for checking out the show. I want to know how you heard about us. Please DM me on the socials and say hello on Instagram @BobbiRebell1 and Twitter @BobbiRebell or you can email us at hello@financialgrownup.com.

Bobbi Rebell:
Back to our friend David Carlson. His new book, as I mentioned is called Student Loan Solution: 5 Steps to Take Control of your Student Loans and Financial Life. And he knows a lot about student debt because his efforts to pay that down led to not paying something else. Here is David Carlson.

Bobbi Rebell:
Hey David Carlson, you're at Financial Grownup. Welcome to the podcast.

David Carlson:
Hey Bobbi, thanks for having me.

Bobbi Rebell:
Congratulations on your new book Student Loan Solution. You're a familiar name to many people who follow the personal finance space, who want to learn more about managing their own money and having more money, which is always a good thing because you're a well-known author and speaker. This is not your first book. You also wrote Hustle Away Debt and you were also the founder of Young Adult Money. So it's tax season. We talk a lot about multiple income streams and side hustles. You and your wife are so good at this. Lots of income streams, lots of side hustles. But there is one big caveat when it comes to taxes that you guys discovered, not in the best situation. Tell us your money story, David.

David Carlson:
Yeah, so this kind of dates back a few years ago, my wife and I, our first full year of marriage we were both pretty recent college graduates the past year or two. Just to kind of give some context, my wife was studying for the GRE and working a few part time jobs, so she nannied. She worked a couple of other places as well, so she was working a lot. But the thing that we didn't do was look at how much was being taken out of her paycheck for taxes.

Bobbi Rebell:
How much was being taken out, anything?

David Carlson:
Well with her nannying job, which was the primary income. Yeah, nothing. Which honestly, if you would've just asked, we would've kind of been on top of things, we would have known that and been able to plan around that, but we didn't. So we kind of assumed, oh, maybe they're taking a little bit out of your paycheck to account for that.

David Carlson:
And honestly, like I said, this was first year of marriage, newer college grads, this excuse that everybody uses. But I would say that we were super busy with a lot going on in our lives and we kind of dropped the ball on checking the pay stubs, checking what was being taken out.

Bobbi Rebell:
And you also had side hustles yourself.

David Carlson:
Yeah, that's kind of what made this even worse was that was my first year that I had made significant side hustle. And by significant, I mean more than $100, $200. So a few thousand inside hustle income. Back then it was primarily freelance writing, but also I was working on spreadsheets for some small businesses, which people always kind of find unique. But in my full-time job as an accountant at the time I was working spreadsheets all day. So it was kind of a natural fit.

Bobbi Rebell:
So Ironic, you're working as an accountant, but you're not paying taxes on the side hustle income. So what happened? How did this get discovered and tell me about that conversation and what was the damage?

David Carlson:
Yeah, so we at the end of the year, got everything together, put everything in the TurboTax and saw, hey you owe $8,000 in taxes. And we were like, ah, that can't be right because we were used to throughout college and whatnot, getting some sort of refund and really kind of banking on that. For sure not expecting to pay anything in. So $8,000 and I mean really when you look back at all makes sense. I was claiming one on my W4 for allowances. Really if I would have claimed zero it could have helped cover off on some of the taxes that weren't being withheld from my wife's paychecks. And really it was kind of the perfect storm where no quarterly estimated tax on the side hustle income, not taken enough out of our regular paychecks. And Yeah, we owed $8,000.

Bobbi Rebell:
How did you feel? What was the conversation like?

David Carlson:
There may have been tear shed, but thankfully we had set aside some money to purchase a new vehicle. But again that money was for the vehicle purchase so that got wiped out and cover the taxes, which was unfortunate because you kind of feel like you made all this progress on saving. Again fresh out of college. So finally making some decent income but got wiped out.

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

David Carlson:
The biggest lesson, just kind of broader terms was even if you're busy, set aside 30 minutes, an hour, really anytime you can put towards your finances and taxes. Something that people, I think intentionally and that that time myself don't think about until it comes tax time. But if you do a little bit of planning halfway through the year, look at your pay stubs, how much has been taken out, you need to have more withheld, what adjustments you need to make. For me personally, now I have not only zero allowances claim, but I also have additional money withheld each paycheck just to count for side hustle income. My wife does the same thing, so you can set yourself up to not owe anything if you don't want to and you just have to know your personality. Are you somebody who kind of banks on that refund and looks forward to it and it's really part of your financial plan or are you somebody who wants to pay as little as possible, than maybe ongoing $1,000 isn't a big deal.

Bobbi Rebell:
I think that's a really interesting point because people approached taxes and the concept of refunds very differently this year in 2019. We're grappling with a new tax system for the 2018 tax law change and a lot of people are not getting refunds, but in some cases it's not that they're paying more taxes. Some people are of course, but some people, it's just that their withholding was not adjusted properly, was over adjusted, let's say, and they were being given too much money in their paycheck for take home pay, not withholding enough. So it appears and feels like they're paying more in taxes. So a lot of this is psychological, right?

David Carlson:
Yeah. what I've seen is people in their 20s for the most part, they tend to do better if they do get that refund versus having to pay in just because finances are so tight and there's always something else that money can go towards. So even though you're giving the government kind of a interest free loan you could say, especially when you're starting out, it might make sense to kind of overshoot it and get that refund versus trying to get nothing back.

Bobbi Rebell:
Let's move on to your money tip because this is really in your area of specialty having to do with student loans and the whole idea of how to manage them after you graduate. How is the best way not only to be paying them off but to finance the loan that you do have because people talk a lot about refinancing. It's not a one shot deal necessarily, right?

David Carlson:
Yeah, and I think a lot of people when they do refinance student loans in particular, you go through the process, you find the company that are going to refinance with. You find a rate that looks good to you, so you refinance once and you kind of set it and forget it. But one opportunity that people have, and I think this is important because private student loans, which you either have or you got through refinancing, don't have as many advantages as federal student loans. So I think this is a great thing for people who do have those private loans to think about. You don't have to just refinance once. You can look six, 12 months down the road after refinancing and see is there any other company out there that's going to offer me a better rate? And as long as there is no origination fees with that new loan, there's no reason not to take advantage of it. And right now there's so many companies that are looking to refinance student loans and build up their balance sheet of student loans. If you look enough, you most likely will find a better rate, especially if your credit score has improved over time, your credit history is solid, that's how you're going to be able to unlock some of those better opportunities.

Bobbi Rebell:
You mentioned the origination fee. Can you explain what that is and is that something that you can negotiate if there is one, can you say to them, well, I'm only going to switch to you if you can give me some help with that.

David Carlson:
Yeah, that's not common with the student loan refinancing because again, I think a lot of banks are not desperate, but they really want to get into the student loan refinance game.

Bobbi Rebell:
What's not common is it's not common to have origination fees.

David Carlson:
Yeah. It's not common to have one because it's just a disincentive for them to go with you. And again, like if you search on Google student loan refinance, the first five or six results are all going to be ads because there's so many companies trying to get in front of you so that you'll refinance with them. So it's not common. But I did want to point out if there are fees that come with setting up a new way.

Bobbi Rebell:
Avoid them.

David Carlson:
Yeah. Yup.

Bobbi Rebell:
Right. And is there any other strategy that you could use to make yourself more desirable? Obviously your credit score could get better as you move away from school and into your career. Other things that can make you a better candidate for the best refinancing.

David Carlson:
Yeah, it's they'll take a look at your income. So income and credit score are the most important. And credit score really being the most important because if you have a high credit score, it means that you are a reliable person. More likely than not, you're going to continue to make your payments on time. So I'd say I'd really stress the credit score aspect of that. Make sure that you're doing what you can to improve that score, making your payments on time. Yeah, and I guess one way to get even a lower rate is to have a cosigner, but typically I think it's best to kind of keep your student loans separate when possible. And obviously this isn't just a tip for student loans. You can also use personal loans as an example where if you have one that's going to take you five to 10 years to pay off for whatever reason, it might make sense to keep looking for that better rate every six to 12 months.

Bobbi Rebell:
Just some of the great advice in your new book, Student Loan Solution: 5 Steps to Take Control of your Student Loans. By the way, there's a forward in there, everyone from Financial Grownup guest Kristin Wong, she's also the author of Get Money. We will link to her episode and you also have endorsements from some notable people including our friend Shannah Compton Game from Millennial Money Podcast. You also have Jason Vitek who wrote You Only Live Once and [inaudible 00:12:09] who is the founder of [inaudible 00:12:10]. And you know what? Yours truly, I also endorsed the book. I think it's a really wonderful tool for everybody. Tell us more about where people can find more about you and the book.

David Carlson:
Yeah, so you can go on Amazon to check out the books. So just search student loan solution. We also have a book website but the URLs is little bit long studentloansolutionbook.com because I was too cheap to buy StudentLoanSolution.com.

Bobbi Rebell:
We can remember that David. We'll find you. We'll link to it in our show notes don't worry.

David Carlson:
And then my website as Bobbi mentioned earlier, youngadultmoney.com personal finance blog for those in their 20s and 30s. And then I'm on Twitter @DavidCarlson1 and then Instagram David_Carlson.

Bobbi Rebell:
Congratulations again David. Thank you so much.

David Carlson:
Thank you for having me.

Bobbi Rebell:
Let's get to it my friends, Financial Grownup tip number one. If you find yourself like David and his wife owing money on taxes and that's happening to a lot of us, if alike them, you do not have money set aside. There are solutions. The most important thing is to still file your tax return. If you ignore this problem, trust me it is not going away. But what you need to remember is believe it or not, the IRS, the government, as with any lender, anyone you owe money to is to some degree your partner, they want you to pay. And they will work with you depending on the solution that you work out with them you may owe penalties and you may owe interest but you're not going to go to jail if you're cooperating with them and working out a solution, it's going to be okay.

Bobbi Rebell:
You can contact the IRS to work things out. The phone number is 1-800-829-1040. We will also leave a link in the show notes to the irs.gov website and to the pages that you need to get to in order to figure out what kind of payment plan or other solution you can work out with the IRS if you owe money. It's all explained there. It's very well laid out. Don't forget to adjust your withholding for this year, 2019 so you don't face a similar situation next year.

Bobbi Rebell:
Financial grownup tip number two, stay on top of the news when it comes to student loans. Unfortunately this has become a political issue and some programs that were put into effect by previous administrations could be changed under the Trump presidency, so stay informed. I will leave some links to recent articles about proposed changes already in motion in some cases in the show notes and you can find the show notes always at bobbyrebell.com/financialgrownuppodcast.

Bobbi Rebell:
If you don't see the episode that you were looking for just by scrolling down, use the search bar on the upper right corner to search by the guest's name or any other keyword. For example, you could search in this case for student loan or taxes. I also want to mention that David has a number of companion materials to his book that you can access on his website at studentloansolutionbook.com and he also has some very cool freebies. And speaking of freebies, this podcast is free. The only payment that I ask of you guys is that you help us grow the show and that means first of all just making sure that you're subscribed so that the show auto downloads in your feed and you don't miss any episodes.

Bobbi Rebell:
If you have a free moment, reviews are so appreciated. They really mean a lot. And when people go to decide whether they want to subscribe to the show, they see good reviews and hopefully it motivates them to subscribe. And of course, the most powerful thing and the most appreciated thing is when you share it with friends who you think would also enjoy the podcast and maybe in some cases even show them what a podcast is, what the app is on their phone, and how to subscribe and download the episodes.

Bobbi Rebell:
Big thanks to David Carlson, author of the new book Student Loan Solution for helping us all get one step closer to being Financial Grownups. Financial Grownup with Bobby rebel is edited and produced by Steve Stewart and is a BRK Media production.

3 Student Loan Tips

• What an Income Driven Repayment plan is and why you should look into applying for this

• The benefits and drawbacks of refinancing student loans

• Taking advantage of PSLF (Public Service Loan Forgiveness)

Episode Links:

The website for David’s book - www.studentloansolutionbook.com

David's book Student Loan Solution

Davids website - www.youngadultmoney.com

Follow David!

Twitter - @DavidCarlson1

Instagram - @David_Carlson

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.

Scholarships are anything but free money. They actually take a lot of work. Jocelyn Paonita Pearson shares the story of how she graduated not just debt free, but also with cash to spare, all by knowing where to focus her efforts, and how to avoid the scholarship scams. 

In Jocelyn's money story you will learn:

• How her business, The Scholarship System, came about from her own experience

• How Dave Ramsey had influenced her decision to seek out scholarships

• How she won enough scholarships to pay for not only college but also living expenses

• What a scholarship scam is and how to know what to look for to avoid them

In Jocelyn’s money lesson you will learn:

• Why she feels like applying to more and more scholarships actually becomes easier

• How you can still continue to get scholarships even when you are out of high school and in college

In Jocelyn's everyday money tip you will learn:

• Not all scholarship opportunities are online and some are still on paper. Jocelyn shares where you can find these scholarships

In My Take you will learn:

• Other places you can find scholarships besides just educational institutions

• One benefit to look for in your job search that can help with student debt

Episode Links:

Jocelyn's book The Scholarship System

Jocelyn’s free webinar

Melanie Lockert's Financial Grownup Episode

Check out Jocelyn's website -

https://thescholarshipsystem.com/

Follow Jocelyn!

• LinkedIn - @TheScholarshipSystem

• Twitter - @ScholarshipSYS

• Facebook - @TheScholarshipSystem

Scholarships are anything but free money. They actually take a lot of work. Jocelyn Paonita Pearson shares the story of how she graduated not just debt free, but also with cash to spare, all by knowing where to focus her efforts, and how to avoid the scholarship scams. In this Financial Grownup podcast episode you’ll learn how to find and recognize good scholarships and how to apply for them. #MoneyTips #Scholarships

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

Jocelyn Pearson:
Scams is a pretty harsh term, but I think it's fair, so these are the sweepstakes scholarships, the ones that are based on drawings. If it's based on luck, it is not worth your time.

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 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:
Hello Financial Grownup friends. College, totally affordable, said no one ever. It's crazy expensive and every dollar that you can save is a really good thing. That much debt student debt on the other end. So glad I was able to get Jocelyn Paonita Pearson on the program. She is the master at finding money to pay for school and save precious time while doing it with a fantastic program called, The Scholarship System. Welcome, to everyone. If you're a new, we're so glad you discovered the show. We interview high achievers and get their money stories, and their lessons and even some every day money tips, all in about 15 minutes. If you have a little more time though, feel free to stack a few episodes together to make it work for you. With that, here is Jocelyn Paonita Pearson.

Bobbi Rebell:
Hey, Jocelyn Paonita Pearson. You're on Financial Grownup. Welcome to the podcast.

Jocelyn Pearson:
Thanks so much for having me. I'm excited to be here.

Bobbi Rebell:
I'm excited to learn more about The Scholarship System because who doesn't need more money for education for themselves, for their children, for the future and so on. Tell us, just briefly, what it is before we get to your money story.

Jocelyn Pearson:
Sure, so The Scholarship System is a six step process that I accidentally stumbled upon to pay for college without taking out student loans. Now, it started off as a simple book, but then we learned that our families wanted true live interaction and get some videos, worksheets, templates, you name it, and so now it is a full on course, blog and tons of resources for families to learn how to pay for college with scholarships.

Bobbi Rebell:
And we're going to circle back to that, but first, I want to get to your money story, which is actually very appropriate because that's actually how you came up with this. It all started with you and your own scholarship needs. Do tell.

Jocelyn Pearson:
I would love to. So, it really was an accident. When I was in high school, my parents sat us down. I'm one of five kids, and they said, "We love you guys, but there is no way we could pay for college." Because at this rate it's half a million to a million dollars for this many kids, right? So, I was a pretty bullheaded teenager who just ... I did not want to take out student loan debt. Actually, I had watched Dave Ramsey's Financial Peace University in one of my high school classes and made me terrified of any kind of debt, nevermind just student debt. So, I started off on a path to get scholarships for college and I just, for some reason, assumed my university would give me a ton of money.

Bobbi Rebell:
They did not though. They give you very little, I got to say. $2,000, right?

Jocelyn Pearson:
Yes.

Bobbi Rebell:
Oh my gosh. And what was tuition? What did that represent versus tuition?

Jocelyn Pearson:
Tuition was I think around 10 grand a year, so I needed way more just for tuition, but the thing was my freshman year in college tuition was just half of my expenses. So, in the end, it cost me over 20 grand a year. So, yeah, they gave me, what? 10%?

Bobbi Rebell:
Yeah, and a lot of people don't understand that tuition is not everything. There's so much more that comes out of pocket. Not to mention the fact that ... sometimes your earnings are more limited than they might have been otherwise because you're studying, so you can't work as many hours as you might be able to if you weren't in school. There's that opportunity cost as well.

Jocelyn Pearson:
Absolutely. And that's the beautiful thing about what I figured out is that I could use this money that I ended up getting without stealing too much from the end to pay for these other expenses as well, not just tuition. So, that was beautiful, but it was not a beautiful process at the beginning. It was so painful. I think a lot of your listeners could probably relate. I think most people either have the intentions of applying for scholarships or have given it a shot, but-

Bobbi Rebell:
And this was first happening in high school, I should say. You're in [crosstalk 00:04:24] figuring this out.

Jocelyn Pearson:
Yeah.

Bobbi Rebell:
What number are you among the five children? Did you have older siblings that had done this already?

Jocelyn Pearson:
No, so I was the guinea pig.

Bobbi Rebell:
Okay.

Jocelyn Pearson:
Yeah. So, I started looking for scholarships and spent my junior year, this was before I knew that I was not getting much money, but I spent my junior years nonchalantly applying. But what I was doing was I was applying to these, what I later found out, were pretty much scams. So, I wasted an entire year applying to scholarships that weren't legitimate.

Bobbi Rebell:
What do you mean by scams? What would they be? They would say there was a scholarship and then they would just get your data? What was going on?

Jocelyn Pearson:
That's pretty much what it was. Scams is a pretty harsh term, but I think it's fair. So, these are the sweepstakes scholarships, the ones that are based on drawings. If it's based on luck, it is not worth your time, period.

Bobbi Rebell:
Are they legit? Like, if you win, it is at least legit. If you want to enter a lottery, it's not ... They're not taking from you. Your worst case scenario is you've wasted your time. I mean what is the danger of these scams? Because I don't know about this.

Jocelyn Pearson:
Yeah, that's a great question. So, my inbox that I used for that, now has over 20,000 unread emails, and I'm not exaggerating, literally over 20,000. I'm sure it's way more now. Because what they did was they were taking my information and selling it to affiliate marketers. So, your inbox will pretty much be destroyed and whatever information you've given could possibly be given out. So, it's not that they're necessarily really hurting you, but in this day and age, our data is really valuable. So, it was a way for them to target teenagers especially.

Bobbi Rebell:
Who don't know better. Who are just looking to pay for their college education.

Jocelyn Pearson:
Exactly. Which is the easiest, most vulnerable set of people to go after because everything is so scary and overwhelming with this process in itself. So, I got sucked into that. I did not know until finally the end of my junior year, I found a small little local scholarship that was 500 bucks, and I applied and wrote this essay. It was terrible. I had so many different drafts that I had to go back and forth and fix, but in the end, I won 500 bucks. Some people might be thinking, $500, you needed pretty much six figures to get a free ride. Why would you waste your time on $500? But that $500 scholarship meant so much more for me because what it did was it validated scholarships in general. It showed me, "Hey Jocelyn, there is money out there. There are scholarships out there. You just need to know what you're looking for, and apply to the right ones."

Bobbi Rebell:
What was different about that $500 one versus what you call the scams?

Jocelyn Pearson:
You asked the best questions. This is one of the golden nuggets that we really harp on in our course, and it's to know if a scholarship is legitimate or not. There's really a spectrum. So I mentioned the ones that are based on luck, you throw your name in a drawing, and you're entered to win $10,000. Those are not worth your time. Even though people are like, "Well, someone has to win them." I have been doing this for now nearly a decade, and I've never met anyone to win one, so it's not worth your time. But on the other end of the spectrum, we have scholarships that asked for criteria that we compete, that shows our qualifications for money.

Jocelyn Pearson:
Those are the ones that are worth our time. For example, I mentioned the one that I finally won $500 with required essays. That was something where, if I improve my essay, if I write a high quality essay, that increases my chances of winning. It's something within my control beyond just luck. So, in that way, it has a higher chance of being legitimate. The more it's based on my true credentials, and my competitiveness versus luck.

Bobbi Rebell:
And you eventually raised I think $126,000 to fund your education and the ancillary costs of that education, correct?

Jocelyn Pearson:
Absolutely. So, in the end I got to six figures, and I was, not only able to graduate completely debt free, but I actually got an overage check every school year, every semester to pay for any external expenses that I had that were beyond my bill.

Bobbi Rebell:
So, What is the lesson for our listeners here that people don't know that's not obvious? Because there's a lot to this. It's not just write an essay. There's a strategy here.

Jocelyn Pearson:
When I got my six figures in scholarships, it was not all in my senior year. It was gradual. Every single year I was able to apply for more and more money and it got easier and easier, I promise. That might sound like a lot of work, but once you get some winning ups, you just reuse them. So, that's actually a golden nugget as well. But every single year can get more money. A lot of people think, oh, once I finished high school, I'm out of luck. There aren't any more opportunities for me to change my status when it comes to loans or scholarships. That's not true.

Jocelyn Pearson:
And the second one that I want to share is to find these scholarships, and we will share a free webinar, where I go in more depth and have more time about this, but we teach how to use Google the right way to find scholarships. I think one of the biggest challenges with the scholarship process is it's so overwhelming for students, where they go to Google, they look up scholarships, and they find a bunch of junk that doesn't even pertain to them. One of the smallest low hanging fruit tactics that we can teach that someone can implement in two seconds is to go to Google and Google their community or their zip code or their city name plus the word "community foundation." And oftentimes, community foundations have half a million, a million plus dollars to give out in scholarships.

Bobbi Rebell:
Wow.

Jocelyn Pearson:
Right there, that one search can open the doors to, not just dozens of scholarships, but dozens have scholarships specifically for students in their area, which means it's less competitive.

Bobbi Rebell:
I want to get to your everyday money tip, which is very retro. It has to do with paper. Give it up Jocelyn.

Jocelyn Pearson:
Yeah. This is so funny. Back in the day, if I will, when I was doing this, paper applications were more common, but believe it or not, they still are around. I know that's hard to believe, but there are organizations like the Elks Club or the Rotary Club, where some of them just aren't tech savvy just yet. And so, what they're doing is they're still sending letters to our guidance counselors saying, "Hey, we have this money, can you please share it with students?" A lot of schools are now doing great where they put that inside a student portal or put it on some sort of page for students, but there are still some that just stash that away inside a filing cabinet. I highly recommend students, go into the Guidance Office at their high school and also at their colleges. Again, remember this is not over in high school.

Bobbi Rebell:
A lot of scholarships don't even start or not available to freshmen. Sometimes they start at older grades.

Jocelyn Pearson:
Right. And there's a reason for that. One of the reasons is because once you get to college, you have such a higher chance of graduating, so people want to make sure they're giving the money to the highest chance of someone that would do something with it.

Bobbi Rebell:
Wow, I never knew that.

Jocelyn Pearson:
Yeah, that's [crosstalk 00:11:23].

Bobbi Rebell:
I never thought of it that way. That is so interesting. But a lot of this that you talk about in the scholarship system is that it's about effort, but it's also about knowing which scholarships are less competitive because some scholarships don't have that many people applying. We're talking about these paper applications where you have to physically go into the office IRL and asked for them. That gives you a big leg up.

Jocelyn Pearson:
Absolutely, Bobbi. That's the one thing is ... a lot of students, they go after the Dr Pepper Scholarship or the Coca Cola scholarship, where it's a free ride in one shot, but the problem is everyone is going after that one. And even I, I applied for the KFC one, I didn't get it, but that was a really competitive one. And then when I realized, you know what? That $500 one, $1,000 one, $1,200 one, they still add up pretty quickly and yet, I'm competing against ... actually, just a quick story. Once, ISM had an application and they had two awards that they were going to give out. And this was a local based one. In the end, they only received four scholarship applications, so they doubled the award and gave all four of us an award. So, it was 100% success rate because it was one of the lucky ones.

Bobbi Rebell:
Amazing.

Jocelyn Pearson:
Yeah, isn't it incredible?

Bobbi Rebell:
You have to just try. Okay, before we wrap up, I want to hear what is going on with the scholarship system. You have a webinar, first of all, so tell us about that and how else people can learn more about you and all your social channels.

Jocelyn Pearson:
Absolutely. I appreciate that. So, we have a free webinar that we hold. It's around an hour to an hour and 15 minutes. I go in-depth about some very large myths, which we did burst a few here, but I go in more depth on those in the Webinar, as well as a very specific places you can look, including more detail on how to use our Google method. So, if you're interested in joining our webinar and registering, it's completely free. You can go to, we created a unique link just for Bobbi's audience. So, you go to the scholarshipsystem.com/grownup. This is for parents and students. Actually, if you can attend together, that's even better.

Jocelyn Pearson:
So, that's the best place to get ... just hit the ground running when it comes to finding these scholarships we're talking about. The low hanging fruit, the ones that have a greater chance of winning and get started. Then, if you want any additional information, I love our Facebook page. We share scholarships on there as well as tons of helpful articles, our own and others. So, you can just go to Facebook and search "The Scholarship System." And then our website, we have a weekly blog that we give and these are massive, actionable in-depth blog posts and you can just go to the scholarshipsystem.com for those.

Bobbi Rebell:
Thank you so much. This is all so important. And you're really creating the shortcuts because we're all so busy, so this is kind of a central place for everyone to go. So, thank you, Jocelyn.

Jocelyn Pearson:
Thanks for having me.

Bobbi Rebell:
Hey friends. Here is my take. Financial Grownup tip number one, scholarships are not limited to educational institutions. Many professional conferences have them. In fact, usually the information on how to apply is right on the website, but you can also just write to the people running the conference and find out. For example, one of my favorite events, The Lola Retreat, run by Melanie Lockert, who has been on this podcast, we'll link to her episode, offer scholarships, including one financed by this podcast. Another conference that I attend that offer scholarships is Finncon. It is run by Philip Taylor, Aka PT Money, also has been on this conference, and they offer scholarships for content creators that are looking into the industry or growing their business and aren't really financially able to attend. Totally worth applying to all these kind of conferences and seeing if there are scholarship money available.

Bobbi Rebell:
Financial Grownup tip number two, if you do graduate with debt, student debt I should say, consider looking for jobs that have programs to help pay down those loans or that will pay for graduate school so you don't take on more debt. It is becoming more common in this tight job market. Thank you, to everyone, for being here with us. Please share with friends and be in touch with your tips on paying for education, both school and professional developments. On Instagram, I am @bobbirebell1 and Twitter, @bobbirebell and you can always email us at hello@financialgrownup.com. And by the way, I have a new podcast, in addition to this one. Financial Grownup is not going anywhere.

Bobbi Rebell:
It is with my friend Joe Saul-Sehy of Stacking Benjamins' fame. It is called, Money in the Morning. We talk about headlines and break down what matters to you, and we tape it live on Facebook. We will leave links to where you can join us in the show notes. Big thanks to Jocelyn Paonita Pearson 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.

Reality TV can be a job- but it often doesn’t pay like one. To film The Bachelorette and later Bachelor in Paradise Derek Peth had to take a break from his paying job in commercial banking. That’s where his emergency fund savings became the star of the show. 

Derek's money story:

Bobbi Rebell:
I'm so glad that you're here and so many of your fans are going to be tuning are going to be blown away by what they learn about you, because you're so well known as one of the ... first of all you were on The Bachelor on the JoJo season.

Derek Peth:
Right.

Bobbi Rebell:
You did not apparently live happily ever after with her. But you went on to more success on Bachelor in Paradise season four. And you even now continue a side hustle, which we'll talk about, host a podcast about Bachelor in Paradise and The Bachelor. But we're here because, and this got by the way this announcement of what you're doing now got over 16 thousand likes on Instagram. We're here to talk about what you do for a living right now, which is you are in the financial services sector. You are a Senior Vice President at Laurel Road. So congratulations on this career path as well.

Derek Peth:
Thank you. This is the original career path. Speaking of side hustle, I think that's kind of what The Bachelor became for me.

Bobbi Rebell:
Exactly.

Derek Peth:
Hey, more opportunities.

Bobbi Rebell:
Absolutely. And you're stilling doing that. We're going to circle back to that, but I want to talk about your money story because what you're going to share with us is something that is, on the one hand unique to you and the people that are on reality TV shows, but also very relatable to almost anyone that has ever dreamed of taking a break from their quote, real career, their everyday job. And asking our boss for a sabbatical so that they can do something, maybe a dream, maybe an opportunity for an interesting experience. Maybe financial opportunity down the road. But that's what happened to you. You were working, all of how many years ago? Four years ago maybe?

Derek Peth:
Yeah I think it was about four-ish years ago. I was working in commercial banking as a sales role down in Florida at the time. And actually it's a funny story how it all originally happened because I wasn't ready for it. I didn't signup or anything, I was very focused on my career, and I thought it was a prank call from a radio station at first. I made them email me, and I researched them.

Bobbi Rebell:
Wait. How did they find you? I just assumed people apply to be on these shows. You just get this call.

Derek Peth:
I know. My sister signed me up.

Bobbi Rebell:
Oh my gosh.

Derek Peth:
I didn't figure it out until three weeks later when finally I ... because I had been kind of quiet about it and then finally I was like, "Hey did you happen to sign me up for The Bachelor ever?" And boom. There we go.

Bobbi Rebell:
She didn't tell you? Oh my gosh.

Derek Peth:
No. Her friends watch the show and it was like they all got around the computer and sent my photos and information in. But when I started thinking about this, it was like this is one of those opportunities that are once in a lifetime that can change the course of your life completely. And luckily, my mom has put self-help books in front of me my whole life, and I've been very, always interested in making sure that things were setup so that ... I ran some marketing businesses on the side when I was younger. I had a nice foundation of rental income incoming constantly that put me in a situation where I was like, "You know what? I don't necessarily need to have this job." While I enjoy what I'm doing, and I have a great relationship with my boss at the time. He really tried and he was like, "Listen, you're a sales role."

Bobbi Rebell:
Well what happened? Can you go in and say, "Hey I'm going to be on a reality TV show can I have a sabbatical of I don't know how long?" How does it work?

Derek Peth:
Exactly. I called him up. I said, "Hey I really need to have a side conversation that needs to be pretty quiet because there's some legal matters." And he was freaked out so he called me right away. But the legal matter was that I couldn't really discuss what the situation was with a bunch of people. And I just said, "I don't know. It could be one week that I'm gone, it could be eight weeks, 10 weeks." That's how long they tape for, and you have no idea going in. He went back and he reached out to HR and they tried to figure something out, but in the end, the response was basically, "This is a little too much of an ask right now, Derek. The only option is, if you want to do this you have to leave and quit, or you can keep working here. And call us back afterwards." The truth is, there's no chance on us just putting and eight week paused on your role.

Derek Peth:
Like you said, I saw it as a sabbatical of sorts, because there was that open end coming back, which I built from working by butt off in my job. And I built that foundation that I could really use to support my living without a normal income by working my butt off on the side. And again, I think there's a lesson there that really gives you the opportunity to do some unique and different things sometimes in life that we all dream and talk about, but when you're forcing yourself into the bare minimums, that's where I think, like I said, luckily I've had some of that literature in front of me my whole life and it was just pounded in my head, "Make sure you have enough income to live for a full year with what you're doing."

Bobbi Rebell:
You had a full year of income saved?

Derek Peth:
I did.

Bobbi Rebell:
How do people support themselves on these shows? Do you get paid to be on, do you get paid more if you last longer on the show? How does it work?

Derek Peth:
Some of those work that way. The actual Bachelor, Bachelorette, the first one there's no income from it, but the second show that I did that you talked about, it works that way where it's a per day payment situation. And so, it depends on what show you're talking about. Obviously, as we both know, the Instagram ad game has become I think the goal for a lot of people after that. And that's where the supporting themselves, and being a public figure offers some cool opportunities to do some travel where, if you're going and doing speaking somewhere or just doing an event anywhere, a lot of times there's free travel or the event itself, I should say, takes care of the travel and the accommodations. It is a unique situation. It's a little bit different than having to jump on Spirit because you're flying all over the place.

Bobbi Rebell:
But people going on these shows are not necessarily paid. There are costs involved, and you often lose your income. I don't know that people really understand that.

Derek Peth:
Yes. And that's why a lot of the people end up on the show, I think, are entrepreneurs. When you really think about it, there's business people and some small business owners a lot of the time, and it's because they have the flexibility to do that, they don't have this fear of having to jump of a cliff with their job, because it's scary thing. Not to mention just the nature of the United States these days. I don't know the exact numbers, but the cost of college has quadrupled or more in the last few years, and when you really look at that and compare that to what you come away with, and what you need, we have to have that income in order to just survive, right? Just the environment itself has made it so hard for people to jump out and do anything unique like this without cutting away, and living at home, and dodging their student loans.

Derek’s money lesson:

I think that rule is so important for people to live by. Instead of focusing on how do I get to the next paycheck, you got to focus on a rule, a separate goal. And that maybe 5% of their income for some people, 10% of their income. That's a conversation, especially if there's relationships, there's other situations that come in, but instead of maxing out what you're making, there needs to be savings goal and then a long-term goal of course. One of my favorite sayings is, how do you eat the elephant? One bite at a time. You have your big goal, but then one little step at a time, each month, each week, you're saving that money away, and that's how you, I think, create that foundation to give you the opportunity to go and do some different things.

Bobbi Rebell:
And also because as much as these kinds of ventures can create opportunity, at the end of the day, you're not an actor.

Derek Peth:
Right.

Bobbi Rebell:
You have a normal life to some degree. It will never be quite as normal again, and you're still doing a lot of Bachelor related things, but you have an actual job.

Derek Peth:
There's a few very successful individuals. No different than professional sports. Honestly every aspect of business and any job in and of itself has high performers, and medium as well. But a lot of people in that quote, medium performance, which of course relates to how many Instagram followers you have now. But they really butt their head up against the wall and get sucked into this life with these hopes and aspirations without the understanding that it does take the work no different than your job to do some hustling, to make connections, to call people, to set things up for yourself. They do the bare minimum, and sometimes that's nice for a little while, but I mean, I think the people who have been very successful with taking this opportunity that The Bachelor presents you with and have treated it like a job. You see some of those folks who previously had jobs.

Derek Peth:
I have a great example from my season. Wells, great example. They were high performers in what they were doing already. And they pivoted everything into, all right, this is my new side gig. I can just take the same lesson I learned from working hard and taking care of business in my day-to-day life and apply it to this new opportunity.

Derek's everyday money tip:

My money tip, especially for millennials like myself is, first and foremost, within the marketplace we're in, there's an urgency to refinance your student loans. We ourselves we save over $20 thousand, on average, for people who refinance their loans, when you look at the life of their loans. I think knowing your rate in the first place is a great place to start. A lot of people, a lot of my friends even when I started working at Laurel Road they didn't even know what their rate was. And I started talking to them about the opportunities and they were just mind-blown at how much they could save each year.

I don't mean that facetiously. They were shooting, kicking themselves saying, "Hey, I'm an idiot. I haven't been looking at this. I didn't even know that. Here I am complaining about my income, and I could have saved it just by going online, doing a little bit of research." And to all those millennials out there, or anyone else who's recently gone through school and still has those student loans, go refinance them. There's no cost. It's very quick. I'm going to say, go check out Laurel Road's website because we are, I think, the best at this, but across the board, that's the number one thing we need to be doing.

Financial grownup tip number one:

Emergency funds aren't just for when bad things happen. In this case, a really amazing thing happened, a once in a lifetime opportunity. Literally life-changing experiences, and Derek had the financial resources available to cover up to a year. So when he was on The Bachelorette, not a lot of financial stress. And then even more fun on Bachelor in Paradise. And by the way, did I mention he hosts The Bachelor podcast, which is strangely addicting, even though I don't even know all the people that Derek, and Kay his co-host, are talking about. Don't be judgey. Derek has had a great ride. And I'm not saying that I know anything, or that Derek told me any upcoming projects, maybe when we kept talking after we stopped taping. But you want to stay tuned to what Derek is up to. Follow him on all the socials, and keep tabs on him at Laurel Road.

Financial grownup tip number two:

I joked with Derek about being judgey. We can all get judgey, myself included, about productivity, and joke that if we spend all day watching Netflix, or whatever, on Instagram, on our social media channels, we're not going to be building our businesses, our personal brand empires or whatever our goals are. So yes, we have to be mindful of our time. Go listen to the Laura Vanderkam episode for tips on that, by the way. But you know what, I really enjoyed Derek and his cohost on The Bachelor podcast. And the Bachelor shows are really fund. If that's your thing, enjoy it. Like all indulgences, chocolate, try to keep it under control. Maybe do a Bachelor in Paradise marathon over the holidays with your friends, get it out of your system for a little bit, then be more productive in the new year. Enjoy it. Don't feel bad. It's all good. And then of course, come back and listen to all the good advice here on Financial Grownup to get your finances in order for the new year.

Episode Links:

• Derek’s website - Laurel Road

• The Betchelor podcast

• The Bachelor

• The Bachelorette
  

Follow Derek!

• Instagram

• Linked In

• Twitter

• Facebook

Want to learn more about productivity? Click Here to listen to our episode with "Off the Clock" Author @LauraVanderkam

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.

Financial Advisory Winnie Sun learned a brutal lesson just before she went off to college after her frugal and hard working parents lost her college fund in a failed real estate venture. 

In Winnie’s money story you will learn:

-How her parents well-planned college funding evaporated right when she needed it

-The compromises Winnie made in reaction to the news

-How Winnie funded college

-The shift in Winnie’s relationship with her parents as she became a source of financial support for them

In Winnie’s money lesson you will learn:

-Why Winnie sees the unexpected financial challenge as a blessing in retrospect

-How Winnie applies what she learned to teaching her kids about money

In Winnie’s everyday money tip you will learn:

-How Winnie travels around the world for free

-Exactly what to do to upsize your point score when you shop

In My Take you will learn:

-The importance of supporting family and friends in financial need including older generations

-The best ways to leverage airline and credit card points over the holidays to lower your out of pocket gift costs. 

EPISODE LINKS

Learn more about Sun Group Wealth Partners

Follow Winnie on social media!

Twitter:  @WinnieSun 

Instagram @winniesundotcom

LinkedIn Winnie Sun

Facebook Winnie Sun

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

Winnie Sun:
... we're proud of you for getting in schools that you want to get into but you can't go to college because remember that project we invested in in Claremont, well, the partner went bankrupt and so they're pulling us into bankruptcy. And so it's not just paying for college but we got to worry about paying the house and keeping the family together, like financially how we're going to keep this in one piece.

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 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, imagine if you had really financially responsible parents. They saved, they invested for your education, and then right when it was go time, the money went poof. That happened to investment advisor, Winnie Sun of Sun Group Wealth Partners and how it unfolded will keep you on the edge of your seat. Welcome, everyone to the Financial Grownup podcast. We talk to high achievers like Winnie Sun about pivotal money-related events in their lives so we can all learn from them. And we keep it short to about 15 minutes because you're busy. And with that, let's get right to Ms. Sun. Her story has a big plot-twist and stay to the end because Winnie has some great advice for up-sizing your point-score when you shop so you can travel in high style and for free, in many cases, like she does. Here is Winnie Sun.

Bobbi Rebell:
Winnie Sun, you're a Financial Grownup. Welcome to the podcast.

Winnie Sun:
Thank you so much, Bobbi. Excited to be here.

Bobbi Rebell:
Congratulations on all of your success with Sun Group Wealth Partners. You're also known as the Wealth Whisperer and of course, you were on the CNBC Financial Advisor Council which is a huge honor. You're all over the media and you're social media is amazing. I'm so excited to have you on.

Winnie Sun:
Thank you, I'm excited to be here with you.

Bobbi Rebell:
And you brought a wonderful bunny story that has a great happy ending. You were a senior in high school and your parents came to you with some shocking news.

Winnie Sun:
Yes. Yes. I was so excited about going to college. It's senior year, we're having a grad night and everything else. And I came home one day and I could tell there was something going on. I mean, there was just something going on with my parents. And my mom, I could tell, she came to talk to me. And my mom, just to give you some reference is like literally hard as nails. I mean, she's like an iron fist. I mean, she's a person that if you came home with anything less than an A or an A-plus, we would be in big, serious trouble.

Bobbi Rebell:
Right. So all of high school you're working hard. You're getting the straight As to go to a top school.

Winnie Sun:
Right. So I got into all the schools I wanted to and then she says, "I just want to let you know, we're proud of you for getting in schools that you want to get into but you can't go to college because remember that project we invested in in Claremont, well the partner went bankrupt and so they're pulling us into bankruptcy. And so It's not just paying for college but we got to worry about paying the house and keeping the family together. Like financially, how we're going to keep this in one piece." And so that was really sort of my first, big, scary financial moment.

Bobbi Rebell:
And had you had any inkling that this was such a risky project? Had you ever been involved in the family finances before?

Winnie Sun:
No, not at all. And in fact, I had zero interest in finances. It was really a project they had invested. I heard about that they were investing in this project but I didn't know my college education depended on this. They never even told me that. All I knew is that they invested in something and it would be for our future and all I needed to worry about was my grades. Because they were always really highly responsible with money. I mean, my family didn't spend money on anything. I remember going to Burger King for a 39 cent hamburger and this was like a treat. We do this maybe once a quarter. We just didn't spend money. And my parents were like incredible savers. They just invested in the wrong thing at the wrong time.

Bobbi Rebell:
This came as quite a shock. Had you had a job in high school at all? Did you have your own income in any way?

Winnie Sun:
I did. I worked all through high school. My earliest childhood memory of making money was when I was seven years old. I was selling avocados in my front yard. And then at nine years old, I was working in my parent's restaurant. I worked the cashier and I remember this because this is before really high-end equipment. And I actually memorized the tax card or tax code.

Bobbi Rebell:
Wow.

Winnie Sun:
I memorized how much sales tax was on every item, like soda or pizza. Yeah, that's what I did.

Bobbi Rebell:
So your family was hard working. They were budget minded. They were frugal.

Winnie Sun:
Yes.

Bobbi Rebell:
And they were investing for the future where they just put too much into the wrong investment at the wrong time, unfortunately.

Winnie Sun:
Exactly.

Bobbi Rebell:
And so tell us more about how that then played out.

Winnie Sun:
I decided to go to UCLA, which was local, instead of I was looking at Caltech, I was looking at Stanford. But financially, UCLA made a lot of sense because it was just about an hour and a half away from home and it was a public school. And I was excited about going there. And it also gave me an opportunity to start working right away because I had worked that summer right after the news hit senior year and then as soon as I started as a freshman at UCLA, I remember right after my first class that afternoon I made my way to the internship office to find work.

Bobbi Rebell:
Wow. And meanwhile, how were your parents recovering? What happened to them?

Winnie Sun:
Well, my mom is tough as nails, like I told you. So she got back to work. I mean, they were already in the real estate business. So my mom just ended up working that much harder and my dad helped here wherever he could. And then my job was just to not only do well in school, but just really find work. So I was juggling like two or three jobs throughout college.

Bobbi Rebell:
What kind of jobs? What jobs did you have?

Winnie Sun:
Well, I actually work access control at night which is where people want to get into dorms but you have to check their ID. So I worked the night shift. And then during the day, I'd go to class. And then I had an internship at a television show called Jones & Jury. And then I worked at an entertainment company as well. So I just did whatever I could do.

Bobbi Rebell:
Wow. You were busy.

Winnie Sun:
Mm-hmm (affirmative).

Bobbi Rebell:
And did you then have to help your parents with their finances?

Winnie Sun:
I did. So I got student loans and all that. And then whatever money that I could ... which wasn't a lot, whatever I could then I would give to my mom and help her out. And then the rest I just had to have enough money to pay for gas to go to work or some school supplies, books and things like that, that was all my responsibility.

Bobbi Rebell:
So what is the lesson for our listeners, what is the takeaway from this story for them?

Winnie Sun:
You know, I look back and I think it was the biggest blessing that could have happened. Because when you have financial hardship, it's all about perspective. Understand that this actually makes you much stronger financially and mentally when you get older. So I look at my own kids and sometimes I feel bad because they're not going to have these sort of same experiences because that struggle is what makes us better at money and in our entrepreneur spirit. But really, understand that it's important to see our options and also to have good financial literacy and have a second opinion on what you're doing.

Bobbi Rebell:
I know you work very hard at educating so many people with all of your different media projects. One thing you are passionate about, especially as we get towards the holidays is travel and leveraging your travel points. And you're going to share some of your tips for this because we're all obsessed with points. Let's be honest, we love points. There's something about them that gives ... It's almost like playing the lottery, like what will I choose now. You feel like you've won but there are ways you can win bigger with them. So tell us, what's your everyday money tip?

Winnie Sun:
I love this. You are my people. So my biggest thing is I love like the whole work-life balancing. And people talk about it all the time but I think you really have to be mindful and I do this to the fullest extent. So yes, you and I work a ton but on my off days, and that's like weekends or any holiday, I try to take my three kids and my husband all over the world. We are like travel maniacs. And so the best way I love to travel is to travel for free and how I do that is I travel on points. A lot of people think oh, yeah, I have a points credit card and a cashback card, I do that and I hear that all the time.

Bobbi Rebell:
But it takes so long to get enough points. You have a family of five, Winnie, that's a lot of points.

Winnie Sun:
But I get a lot of points.

Bobbi Rebell:
How do you get them all?

Winnie Sun:
I might teach you some ways. Especially going to the holidays because you and I talk about this. I love this idea. Now, during the holidays, you can actually rack up points much more quickly than any time during the year. And the best way to do that is to leverage normally credit cards that give you a nice healthy points like sort of multiply on where you spend. But also take a look at where you travel on, like, for example, if you travel on certain airlines that take American or Delta or United, each of these airlines has what they call a shopping portal. And if you go to these shopping portals, it gets to the website that you want to shop at, you can actually double dip and sometimes triple dip on points meaning the credit cards will give you points for that purchase and then the airline portal will give you miles for that same exact purchase. And this could be all sort of regular companies such as Target, and Walmart, and Amazon, typical stores that you and I would shop at. It's just a matter of taking that extra step.

Winnie Sun:
So what I always say is don't shop directly on a website itself. So let's say you want to buy at Target. Instead of going to the Target website, you should always go to either the airline portal or the credit card portal and then link over to Target. Because by doing that extra step, it will take like an extra 30 seconds, you'll then get an extra level of either points or miles which adds up really quickly.

Winnie Sun:
And then once you have the points, then take a look at your credit cards because your credit cards will often do bonus deals, airline deals, or hotel deals, and you can get like sometimes up to an extra 40, 50, even 100% more on your points for the same exact purchase.

Bobbi Rebell:
Amazing. Amazing. Tell me more about what's going on with you. I know your baby right now is your LinkedIn series. Tell us more about that.

Winnie Sun:
Yes. We got really excited about doing this and I think the project happened around, my goodness, about six months ago. And we said, you know, let's try something because people don't really have all day to hear about financial tips nor do they have the interest to learn about financial tips every day. What if we made these tips no longer than 90 seconds? Would they listen? So the videos themselves are every single day on LinkedIn and they're 90 seconds. And so if you literally just watch the videos, you'll get one really meaningful financial tip every single day. And we did that every day for I think almost six months and we plan to actually continue it even more so into the new year. A lot of people have been asking us to go Saturday and Sunday which we don't go right now.

Bobbi Rebell:
Oh, my gosh.

Winnie Sun:
But I think we're going to do that. I think we're going to be that crazy.

Bobbi Rebell:
Well, I am blown away by all of this. I love seeing you on so many different media outlets. Tell us more about where else besides LinkedIn people can find you, follow you, and learn more about you.

Winnie Sun:
Well, thank you. Well, you can get free follow me on Forbes. I've been writing, contributing to them for about five years now. I do a lot of work with CMBC and I'm the regular money person on Good Day LA for those of you who are in California. But otherwise, join me on Twitter. I have actually the largest financial tweet chat every single Wednesday and we cover not only financial things but entrepreneur topic, social media marketing, all that fun stuff to give you chance to really increase what you carry in your wallet.

Bobbi Rebell:
Love it all. Thank you, Winnie.

Winnie Sun:
Thank you.

Bobbi Rebell:
Hey everyone. Love ending on such a positive note. Financial Grownup tip number one. Family sticks together. Yes, Winnie was absolutely frustrated and with good reason at how the financing for her college education fell apart. But her parents clearly love her very much and your tone of both forgiveness and being there for them when they needed her sets such a great example. Sure, things are simpler and more traditional when parents are helping their kids financially, but that doesn't preclude the value of having generations helping each other out if that's the way that things evolved.

Bobbi Rebell:
Financial Grownup tip number two. Points tied to travel. Whether it is airlines or hotels have become a currency. Winnie likes to use her points for airplane tickets and upgrades but the possibilities are endless. In theory, we should all use that for what we get the most bang for our buck as but sometimes, there are other uses that just make sense, that just actually save us from spending actual cash. For example, this holiday season, if you have a lot of points, maybe consider buying gift cards for your favorite stores. Now, some stores within the credit card offers, some cards even run specials where you get more points than usual for certain designated retailers.

Bobbi Rebell:
So look for that. Look for the one and they're usually in market where it's normally let's say 20,000 points per this dollar amount but right now, it's going to be 25,000 points, whatever it may be. Then you could use those gift cards to buy presents for the holidays for your friends and family and not spend actual cash and certainly avoid running up credit card bills that you can't afford to pay or just kind of would rather not have. How about that one?

Bobbi Rebell:
All right. Thank you all for supporting the show. Please invite your friends to join us as well and [inaudible 00:14:14] your favorite ways to use your points. Instagram is Bobbi Rebell one, Twitter Bobbi Rebell, and you can always email us at hello@financialgrownup.com. And, of course, thank you to Winnie Sun 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 Steward 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/ 

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.

Serial entrepreneur Lindsey Holden, who is the CEO and Co-Founder of the personal finance app The Long Game, literally played the long game when she spent 5 years living in her family’s veterinary office, to pay off her student loans and build a solid financial foundation. 

In Lindsay’s money story you will learn:

-Why she lived at her family’s veterinary office for 5 years

-Some of the unique experiences she had and what, if anything she would do differently

-How to come up with creative solutions to financial problems

-Tips on how to pay off student debt

In Lindsay’s money lesson you will learn:

-How to stick to your convictions and deflect judgement when making personal money decisions

-Why Lindsay considers herself a minimalist spender

In Lindsay’s everyday money tip you will learn:

-How to leverage coupon codes using Google ads to get discounts on services like Uber and more.

In My Take you will learn:

-How using gamification can motivate you to save and encourage better money habits

-How to get the most out of a rewards programs

Bobbi and Lindsay also talk about:

-How Lindsay’s app The Long Game works

-Lindsay’s experiences as a serial entrepreneur

EPISODE LINKS

Uber

Google Adwords

Cryptocurrency

https://www.longgame.co/ 

Follow Lindsay!

Twitter @linzor1

Linked In @LindsayHolden

Follow Long Game 

Twitter: @LongGame

Instagram: @LongGameSavings

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

Lindsey Holden:
It's kind of like a sitcom story, right? You're like, "Yeah, I'm actually living at a veterinarian office," which is really weird and also kind of hilarious for your dating life.

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, hope that little teaser at the top got you curious. This story is one-of-a-kind. And it makes you think, what would you do to get yourself on solid financial footing if you had debt coming out of school? How far would you go? And for how long? And would you care what people thought?

Bobbi Rebell:
Welcome to everyone, and thank you for spending time with us. We keep it short here, around 15 minutes, flex time for podcasts. If you find value, the only payment that we ask is that you share it with friends, the ones you care about, the ones you want to live a richer life.

Bobbi Rebell:
Now to our guest, Lindsey Holden. She is the CEO and founder of Long Game, which is a personal app that uses games and rewards to incentivize financial habits. All of us could use a little extra motivation. And Lindsey was certainly motivated to get her financial life in order. Great story, my friends. Here is Lindsey Holden.

Bobbi Rebell:
Hey Lindsey Holden, you're a Financial Grownup, welcome to the podcast.

Lindsey Holden:
Thank you so much.

Bobbi Rebell:
Congratulations on the Long Game. You're certainly in it for the long haul. This is not even your first company.

Lindsey Holden:
Yeah, we built a financial app, so we're an FDIC insured savings account. That have games on top, and you can win up to a million dollars on our app for saving your own money.

Bobbi Rebell:
That's awesome. Let's talk about your money story, because that has to do with building a base to now have the kind of success that you're seeing. You kind of took a step back at one point, to make sure you have that firm foundation, and it had to do with sharing a bathroom with 40 people for about five years? Am I getting that right?

Lindsey Holden:
Yes you are. Let me tell you a little more about that. After leaving college, I had a graduate degree. I had also, major student loans, like a lot of people today. And, I had a job offer in San Francisco, which is a very expensive place to live, and my finances are tight. My father owns a veterinary hospital in San Francisco. So I decided to move into a veterinary hospital, in a room in the back, where I did share a bathroom with 40 people.

Bobbi Rebell:
Explain more. How exactly did that work? Were there 40 people living there?

Lindsey Holden:
No.

Bobbi Rebell:
I didn't think so.

Lindsey Holden:
It was a place of work. Essentially, my bathroom was also shared by the people that work there. And there're specific hours, obviously, where it was much more comfortable to take a shower or whatever it was. But it was kind of a silly thing, but it was a really long period of my life. I had lived there from, I'm embarrassed to say, five years, to pay off my student loans, and get a good start on my career. But there're a lot of silly little things, when you're there. Because you end up being part of a community in the place that you live.

Bobbi Rebell:
So, like what?

Lindsey Holden:
I lived in a room in the back of the hospital, and we had a mouse infestation. Mice, they moved into my room. I was like, "Well, we have so many cats here." So I went downstairs and basically said, "Hey, can I borrow a cat for a minute?" And they're obviously like, "No, you cannot. You cannot take a cat."

Bobbi Rebell:
I thought they were going to say yes.

Lindsey Holden:
I know, me too. There's like a boarding cat, that wants to do some work here.

Bobbi Rebell:
But you actually accomplished quite a bit, because you did pay off your student loans.

Lindsey Holden:
Exactly, yeah. There's a lot of expectations around starting your career, and having this life that you've always imagined. I think it's really important to be practical, and not to be afraid to have creative solutions, and just develop the foundation that you need to build a life that you want.

Bobbi Rebell:
What are the specific things you did, besides not paying rent, to pay off those loans, and form that foundation? So you could go and be an entrepreneur?

Lindsey Holden:
Paying off loans is absolutely huge. Most people today, that are graduating, have student loans, about $38,000 on average. So, to build a lifestyle that you're living well within your means, when you get that first job, is just really important.

Bobbi Rebell:
What are the specific things that you did? So you lived rent-free. Were you changing the kinds of foods that you ate? Did you go out less with your friends? What other things helped you achieve that goal?

Lindsey Holden:
I'm kind of a minimalist when it comes to things, so I wasn't spending too much on extra things, and trying to really optimize my life in that way. I think that's basically a mindset and an attitude that you can get in, that's really helpful.

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

Lindsey Holden:
The takeaway is that maybe it's not cool to move in with your parents or whatever, but don't let shame be the driver in this. I think it's ridiculous. The way to really live a cool life is to be an individual, and be responsible for the financial life that you want to live.

Bobbi Rebell:
Did you ever get criticized? Or did you feel like people judged you?

Lindsey Holden:
Not criticized, but it's like a sitcom story, right? You're like, "Yeah, I'm actually living at a veterinarian office," which is really weird and also kind of hilarious for your dating life, as you can imagine. But I just owned it because it was something that, I really care about building the foundation that you need to have the career that you want. And the people that love you, really start to think that's cool too.

Lindsey Holden:
I've had flowers delivered to the front desk there, before. So all the people that work there, just knew my social life.

Bobbi Rebell:
All right, let's talk about your every day money tip. You have one of the most creative ways I have ever heard of, to really leverage reward codes.

Lindsey Holden:
This one's fun. You know, there're a lot of referral programs out there. When you're playing on the internet a lot, you find creative ways to use these. And one of the things that I did when I was living at veterinary hospital was to run Google AdWords against my Uber code. This can be done with any other referral program, but essentially, the link that you're using is your referral link. And then, you're able to get the money from the referral, which ended up being credits for Uber. It was just a fantastic way to get some free rides around the city.

Bobbi Rebell:
All right, let's talk about the Long Game. So, as I mentioned earlier, this is not your very first venture. You're an experienced entrepreneur. Tell us more about the Long Game.

Lindsey Holden:
Like I said, Long Game is a gamified financial app. We're trying to make banking into a wonderful, joyous experience. And we do that through use of games. A lot of those games are games of chance, where you can win up to a million dollars. But you can also win cryptocurrency in our app. We're always talking to our users and finding out what rewards they want to see in our app. And then using those to help people build a financial foundation that they need.

Bobbi Rebell:
So specifically, how does it work?

Lindsey Holden:
So you download an app, where Long Game, obviously on Google Play and the App Store. You get a FDIC insured savings account. Then, as you save in that savings account, we reward you with games. And you can choose which game you'd like to play. Some of our games are instant win, some of them are a weekly drawing. But they're all giving you a chance where you can win cash. And, the more you save, the more games you can play.

Bobbi Rebell:
How did you come up with this?

Lindsey Holden:
It came from an idea that's called Prize-Linked Savings. It's usually run by financial institutions, or governments, actually, for bonds. But, it's offline, you basically deposit in an account, and there's a monthly raffle, generally. So we've taken that idea, and brought it into an app form, and made it much more engaging and accessible.

Bobbi Rebell:
And tell us more about the future. I know you're always coming up with new games. What can we expect to see next?

Lindsey Holden:
Not only are we coming up with new games, new rewards, all the time, new characters in our app. We're also adding financial products. So, Long Game hopes to be the financial hub that can help you with all your financial needs, in a rewarded way. So you can imagine us later, online banking, letting you pay down your loans, and that sort of thing. And then giving you rewards for completing those actions.

Bobbi Rebell:
What's the biggest prize that anyone has won?

Lindsey Holden:
It's a thousand dollars.

Bobbi Rebell:
A thousand dollars is the most you've given away?

Lindsey Holden:
A lot of people have won a thousand dollars, actually. We've given away over a hundred thousand dollars to-date.

Bobbi Rebell:
Awesome, great. Tell us where people can find out more about you and about the Long Game.

Lindsey Holden:
You can find out more about us on LongGame.co. You can download Long Game in the Google Play store, and the App Store.

Bobbi Rebell:
And, to follow you on all your socials?

Lindsey Holden:
On Twitter, I'm @linzor1. And you can find me, Lindsey Holden on the rest of them.

Bobbi Rebell:
Awesome. Thank you so much Lindsey. This was amazing.

Lindsey Holden:
Thank you so much.

Bobbi Rebell:
Wow, that was a genius money tip there. Super original for sure. DM me if you try it, and let me know how it goes.

Bobbi Rebell:
Financial Grownup tip number one. Apps that use gamification to motivate you to adopt better financial habits, are always a good thing. In addition to, of course, checking out the Long Game, some other popular ones are Beeminder. It forces users to make a commitment to a financial goal, and to hit milestones. Now, if you don't hit them, you have to make a payment to Beeminder. Obviously, you can fake out the system, but, if you go with it, it might be just painful enough to make a difference.

Bobbi Rebell:
Another one that's a little different, is Fortune City. Along with bookkeeping and so on, to check expenses, the app has a simulation game to build and grow your own city, so it keeps it interesting. Other more traditional apps that make paying more attention to your money, more fun, and help you achieve savings goals for example, include Acorns, Stash, You Need a Budget, Thrive, and Qapital, that is, Qapital with a Q. I'm going to leave more info in the show notes, which can be found at bobbirebell.com/podcasts/lindseyholden.

Bobbi Rebell:
Financial Grownup tip number two. Lindsey talked about sharing her Uber code through Google AdWords. We all get codes all the time. Make sure if you love a product that you use, and you recommend it to a friend, you tell them, give them your code, ask them to use your code, if they try the product. And it's fine to say, "I'll get a bonus," because almost every case, they get something too. And even if they don't, friends want to see you rewarded. So don't be shy about it.

Bobbi Rebell:
And every time you sign up something new, don't forget to use a friend's code, that they can share with you. So if you know a friend uses a service, or goes to a certain exercise place, or buys a certain product, ask them, "Do you have a reward code that you can give me, because I might sign up for that as well." Just think for a moment, who you know that uses that product or service, pay forward.

Bobbi Rebell:
And with that, I want to thank all of you for sharing your time. DM me, let me know your favorite gamification apps. On Twitter, I am @bobbirebell. On Instagram, at bobbirebell1. More about the podcast, at bobbirebell.com/financialgrownuppodcast. And did I mention, my book, How to Be a Financial Grownup is now out in paperback. I'd love it if you pick up a copy, and maybe one for a friend.

Bobbi Rebell:
Thanks, to the Long Game's Lindsey Holden, 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.

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.

 

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.