Speaker 1: Episode one seventy one. Should you focus on paying down
Speaker 1: your debt right now? Welcome to the Frugal Friends podcast,
Speaker 1: where you'll learn to save money, embrace simplicity, and liberal
Speaker 1: your life. Here your host Jen and Jill. Welcome to
Speaker 1: the Frugal Friends podcast. My name is Jen, my name
Speaker 1: is Jill, and today we are talking about debt. We
Speaker 1: haven't had a debt focused episode in a little while,
Speaker 1: and there's a big question going around how hard should
Speaker 1: you be focusing on debt? And I see kind of
Speaker 1: the same one as how hard should you be focusing
Speaker 1: on like storing up cash right now? Too? So I
Speaker 1: think we'll touch on that one a little bit as well,
Speaker 1: but specifically on debt. And it is straightforward, I mean
Speaker 1: spoiler alert. We love advocating for paying off tet. We
Speaker 1: think it brings a ton of freedom, but there are
Speaker 1: some things to consider. It's not incredibly black and white,
Speaker 1: so we want to we want to take a look
Speaker 1: at that today, but first our sponsors. Today's episodes also
Speaker 1: brought to you by Maslow's hierarchy of needs. Why you
Speaker 1: ask because I need you to know that not all
Speaker 1: needs are created equal. While some needs are more important
Speaker 1: than others. Pursuing any need that improves your life is
Speaker 1: not bad. Maslow's hierarchy of needs the triangle for your basic,
Speaker 1: psychological and self fulfillment needs. Wow. Yeah, and I think
Speaker 1: that's our most educated sponsor. Yet I really felt pursued
Speaker 1: by them yesterday in my head and I was like, well, okay,
Speaker 1: how do we make this fit? And it's I thought
Speaker 1: it was appropriate. I thought it would fit because we
Speaker 1: are talking about, like the need to pay off debt.
Speaker 1: Sometimes you just feel a need to be debt free,
Speaker 1: regardless of what the math says on some things. And
Speaker 1: I say that that because that's where we were. Granted,
Speaker 1: we didn't know a lot about other financial things when
Speaker 1: we were paying off debt, but regardless of if maybe
Speaker 1: we could have made a little more in the stock
Speaker 1: market or bought a house earlier or whatever, getting out
Speaker 1: of debt was a life improving thing that we did.
Speaker 1: So if you're doing something that improves your life, you're
Speaker 1: not doing it wrong. You're not living life wrong just
Speaker 1: because you're not living in accordance with what somebody else
Speaker 1: thinks you should, and vice versa. If you are maybe
Speaker 1: focusing a little more on investing than paying off debt.
Speaker 1: Do You're not doing life wrong if you're improving. So
Speaker 1: that's the mindset I want us to taken today's episode.
Speaker 1: Good word, Jen. Yes, once we have food, shelter, and water,
Speaker 1: some of how we approach our other needs and wants
Speaker 1: are going to be different, and there's freedom for that
Speaker 1: as long as we're being intentional with it and thoughtful
Speaker 1: about what's going to be best for you. Absolutely, So
Speaker 1: a little current events for us, and this we don't
Speaker 1: typically talk about current events because we want these episodes
Speaker 1: to be pretty evergreen. But right now, the federal student
Speaker 1: loan payment pause is slated to end September one, that
Speaker 1: could be extended through the end of it, could even
Speaker 1: be extended to March of So we don't know when
Speaker 1: federal student loan payments are coming back, but we can
Speaker 1: guarantee with certainty that they are coming back. They will
Speaker 1: not stay asleep there ever. Yeah, we do not hibernate forever.
Speaker 1: That is so wise, Jill, That is so wise. Um.
Speaker 1: And we are also unsure about student loan forgiveness. There
Speaker 1: are different amounts everywhere from zero to fifty. I would say,
Speaker 1: do not absolutely count on fifty dollars of loan forgiveness,
Speaker 1: like don't do it, but like maybe you want to
Speaker 1: account for the possibility of maybe ten and loan forgiveness.
Speaker 1: Maybe that's something you want to do. Um, that's not
Speaker 1: wrong to do, but it's also you know, you don't
Speaker 1: have to do that. You don't have to wait for
Speaker 1: the government to become debt free, even if they do
Speaker 1: end up forgiving loans. Um, you will miss nothing by
Speaker 1: paying off your debt and becoming debt free earlier. So
Speaker 1: with all of the uncertainty, let's just talk about some
Speaker 1: things that we do know that will kind of be standard.
Speaker 1: And something else knew that we're doing is instead of
Speaker 1: doing like a top Well, I guess this was when
Speaker 1: when I've searched um, this was at the top of Google,
Speaker 1: but mostly because it's newsworthy and it's from go Banking Rates,
Speaker 1: but it's on It's on Yahoo Finance, and it says
Speaker 1: Mark Cuban says the best investment is paying off your debt.
Speaker 1: Is he right? Jill? What did you think when you
Speaker 1: saw this article? First? I thought Shark Tank because of
Speaker 1: Mark Cuban. I have to say, Barbara Carkrand is my
Speaker 1: favorite shark, but it's neither here nor there. Yeah, I
Speaker 1: like Rob. I'm blanking on his last name. It's it's
Speaker 1: a complicated one, but he's kind. He's so kind. Anyhow,
Speaker 1: I think it's a helpful one because there is there
Speaker 1: is this argument and perspective out there. Why would I
Speaker 1: focus my energies on paying down debt when I could
Speaker 1: put that money into the stock market, I could invest
Speaker 1: sit and get potentially a higher rate of return. Of
Speaker 1: course we'll talk about that because it does depend on
Speaker 1: the interest rates, so it's not necessarily the way my
Speaker 1: mind thinks. I am definitely more of a what's right
Speaker 1: in front of me, payoff debt, save money. But for
Speaker 1: those who are more investment minded, this is a really
Speaker 1: helpful look at why should I consider paying down debt
Speaker 1: with that other argument of what's the cost benefit analysis
Speaker 1: of if I were to put that money into an investment.
Speaker 1: So one of the first things that they mentioned with
Speaker 1: this is that debt is like investing, but in reverse,
Speaker 1: the same principles are going to apply. Paying down debt
Speaker 1: as fast as possible is going to provide the most
Speaker 1: value in the long run. Again, that has to do
Speaker 1: with interest rates. If your debt has a I don't
Speaker 1: know any type of interest rate right, the quicker you
Speaker 1: can pay it off, the less money you're gonna be
Speaker 1: paying towards interest and then freeing that up to be
Speaker 1: able to do what you want with it, similar to
Speaker 1: investing money will give you a return, and interest return. Yeah,
Speaker 1: I mean we know this. That's why we believe that
Speaker 1: we have to pay off our debt. I think nobody
Speaker 1: is like really happy. Most people are not just happy
Speaker 1: with just having debts sit around. So yeah, I think
Speaker 1: it's important to look at the interest rate. That's why
Speaker 1: we say you especially have to get high interests at
Speaker 1: out of your life because you're essentially kind of losing
Speaker 1: sixteen percent and interest. That's the average credit card interest
Speaker 1: rate right now. Versus if you paid it off, you
Speaker 1: have an immediate gain. It's not compound interest like it
Speaker 1: is in investing. But we always say that past returns
Speaker 1: are no indicator of future gains, and so you just
Speaker 1: us don't know what the market is going to be
Speaker 1: like long term, it trends upward, but sometimes you need
Speaker 1: those short term gains, and there's no better short term
Speaker 1: gain than getting rid of like credit card interest. The
Speaker 1: way it gets tricky is when your interest rates are
Speaker 1: closer to three or four percent, Like, then that's lower
Speaker 1: than the stock market. And what do you do? And
Speaker 1: of course we're talking about if you actually do invest
Speaker 1: that money. So I just want to say this caveat
Speaker 1: here that I think sometimes people will utilize this as
Speaker 1: a reason for not going hard at paying down debt,
Speaker 1: to say, well, because I can make more money in
Speaker 1: investing it, then I can off of tying up my
Speaker 1: money paying down debt. And that's all that can only
Speaker 1: be true if you are actually investing. I think sometimes
Speaker 1: people will stop there with that train of thought and
Speaker 1: they won't actually invest their money. So that also needs
Speaker 1: to be stated. You actually have to do something with
Speaker 1: it in order to actually like see that idea play out.
Speaker 1: But yes, to focus on interest rates. Taking a look
Speaker 1: at what are the interest rates on your debt is
Speaker 1: usually expressed in a p R. So debt with a
Speaker 1: high a p R is almost always going to be
Speaker 1: better to pay down before you focus on any other
Speaker 1: financial priorities, investing, etcetera. That's the hierarchy of needs, right,
Speaker 1: like focus on the big things first. Yeah, So, on
Speaker 1: the same topic of interest, let's talk about compounding and
Speaker 1: simple interest so that's another point that the article makes
Speaker 1: is that look at the type of interest your loan has.
Speaker 1: So if you have it's something like a credit card, Yeah,
Speaker 1: that interest does compound, so you're going to pay interest
Speaker 1: on interest in the future. So that's another reason those
Speaker 1: high interest rates and compounding interest our reasons to really
Speaker 1: focus on getting that type of debt out of your
Speaker 1: life as quickly as possible. And interest like a mortgage,
Speaker 1: so that does not compound on itself. It's calculated at
Speaker 1: the onset and you can, yes, save money by paying
Speaker 1: it off early, but that doesn't mean it increases if
Speaker 1: you pay it off more slowly, if that makes sense.
Speaker 1: So yeah, and uh, student loans, you can also pay
Speaker 1: interest on interest, and which is why student loans you know,
Speaker 1: blow up obviously not as their interest rates are lower,
Speaker 1: so it's not as fast as a credit card, but
Speaker 1: the amounts are higher so it feels like the same
Speaker 1: and so that's often one of the things you overlook
Speaker 1: is you just look at the interest rate of a
Speaker 1: student loan and you don't think as much about the compounding,
Speaker 1: but it really does give you if you're looking at
Speaker 1: just the amount of interest you're paying every month like
Speaker 1: that could be very reasonable if you had a lower
Speaker 1: credit card balance within higher interest rate versus a higher
Speaker 1: student loan balance with a lower interest rate. You know,
Speaker 1: and I don't know what the exact numbers are to
Speaker 1: get there, but if you're looking at amounts, then those
Speaker 1: could be comparable. And so something in marketing like marketers
Speaker 1: will use is we tend to gravitate towards sales with
Speaker 1: a higher percentage off Versus if something is maybe twenty
Speaker 1: off or forty off, we don't gravitate towards those as much,
Speaker 1: even if the percentage maybe more. So we all we
Speaker 1: we like to save in percentages, studies have shown versus amounts,
Speaker 1: and so that's why you very very rarely ever see
Speaker 1: a sale for you know, this amount off. Sales are
Speaker 1: always in percentages. And we kind of think the same
Speaker 1: way about our debt. When our debt interest is lower,
Speaker 1: we focus on the higher interests instead of the actual
Speaker 1: dollar amount in interest that our separate debts are occurring
Speaker 1: for us monthly. Yeah, that's interesting, just even from a
Speaker 1: marketing perspective, the way they play their mind games. Yeah,
Speaker 1: and so there's a little bit of a twist with
Speaker 1: this article because it wasn't actually what Mark Cuban said,
Speaker 1: like the best investment. He was referring to that first. Yeah,
Speaker 1: that's all right. Yeah, it was click baity and we
Speaker 1: clicked on it because Mark Cuban, But he was answering
Speaker 1: the question of what's the safest investment. So this links
Speaker 1: to knowing your risk tolerance. So, yes, investors, people in
Speaker 1: business and even working with large amounts of money may
Speaker 1: take calculated risks in the hopes that their investment returns
Speaker 1: will outpace the cost of borrowing. But when it comes
Speaker 1: to personal finance, we generally want to take the safer route.
Speaker 1: And so the answer does remain the same that the
Speaker 1: safest investment for looking at risk tolerance is to err
Speaker 1: on the side of caution, which would say pay down
Speaker 1: debt first before you look into kind of straddling that
Speaker 1: line of debt, payoff and investing. Yeah, I always say
Speaker 1: that focusing on one thing at a time is the
Speaker 1: most effective way to do anything, And yeah, you you
Speaker 1: can definitely do too at the same time, but one
Speaker 1: is always going to get your focus anyway, so you should.
Speaker 1: You might as well just prioritize it intentionally versus just
Speaker 1: letting whatever happens happen. So yeah, definitely stop straddling the
Speaker 1: line of anything and just picking something is a smart decision.
Speaker 1: I also on this one like that he said don't
Speaker 1: forget taxes, and so I think sometimes in Florida we
Speaker 1: forget that other people pay a lot more taxes than
Speaker 1: we do. And so while some interest can be deducted
Speaker 1: from taxes, if you really need to bring down your
Speaker 1: tax liability for a year, you're going to find a
Speaker 1: lot more tax relief in contributions to a flour oh
Speaker 1: win K or traditional I r A. Then you would
Speaker 1: by putting extra money towards paying off debt um So
Speaker 1: this is definitely a niche reason too. Maybe prioritize investing
Speaker 1: over paying off debt, but it is it's something you realize.
Speaker 1: I think for those of us who kind of just
Speaker 1: focused on paying off debt over in investing, you know,
Speaker 1: while we did that, sometimes we may not realize why
Speaker 1: other people might not do that, or why it might
Speaker 1: not be the best decision for somebody else. And knowing
Speaker 1: that sometimes these things are more complicated for people in
Speaker 1: certain states or cities. Some cities you have a city tax,
Speaker 1: a state tax, and you're paying federal tax, that's where
Speaker 1: I came from. Yeah, p a gouge everywhere, so so
Speaker 1: sometimes in certain areas, um, it can be smarter to
Speaker 1: focus on investing if those higher interest compounding interest you know,
Speaker 1: loans are or cards are out of your life. We
Speaker 1: love to put a hard and fast rules on it,
Speaker 1: while we don't, a lot of people do and then
Speaker 1: yell at others about it. But yes, I love your
Speaker 1: point there jen to say, look, there's more to consider here,
Speaker 1: and what's best for me is not always going to
Speaker 1: be best for other people. Like there are some general
Speaker 1: tenants that we can be aiming at, but we cannot
Speaker 1: assume that my decision in finances needs to be everybody
Speaker 1: else's decision. Yeah, I mean, and being educated can also
Speaker 1: help you in your argument why you've chosen what you
Speaker 1: have chosen. So like for me, I have federal tax
Speaker 1: and that's it, and it's you know, it's not that high.
Speaker 1: So it was totally fine for me to forego the
Speaker 1: tax you know, benefits of a four oh one K
Speaker 1: when I was paying off debt. And if somebody else
Speaker 1: had told me, no, you should be lowering your taxes,
Speaker 1: I could have said, well, this is my tax liability
Speaker 1: and YadA YadA. You sound really smart talking about tax liability.
Speaker 1: And for me, I just moved to Florida, you know,
Speaker 1: where they don't have a lot of taxes. Florida. Blessings
Speaker 1: anything else on this one for you, Jill, that's it.
Speaker 1: Thanks smart Cuban finance the safest investment, and he is
Speaker 1: right on that that is a guaranteed return, even if
Speaker 1: it's not the highest. But honestly, honestly, like we're out
Speaker 1: of the bull market that we were in for what
Speaker 1: nine years or something is the longest bull market history
Speaker 1: and technically, I guess we're in a bull market again,
Speaker 1: but like it doesn't really count to me. And I
Speaker 1: know we're gonna get a one star review from something
Speaker 1: I've already said in this episode, so I'm sorry in advance.
Speaker 1: But like it's we're in a really good time that
Speaker 1: you could really do whatever you want on this subject.
Speaker 1: Focus on paying off dent, focus on investing, and as
Speaker 1: long as you're focusing on something like that's going to
Speaker 1: be good for you. There's nothing economically where someone's like, oh,
Speaker 1: we're you know, you know, our economy is growing so fast,
Speaker 1: it's so strong, like you would be dumb not to invest.
Speaker 1: Nobody's gonna say that. So you really have the freedom
Speaker 1: right now to do what what makes you feel like good.
Speaker 1: And uh, this is a really strong time to do that.
Speaker 1: You really strong argument for doing either one freedom. How
Speaker 1: appropriate after we celebrated the fourth of July. Yes, alright,
Speaker 1: So our next article is going to be specifically for
Speaker 1: student loans, and it's from Credible and it says, before
Speaker 1: paying off your student loans early, read this and it
Speaker 1: is just five questions or signs that paying off your
Speaker 1: student loan early makes sense or doesn't. What do you
Speaker 1: think of these? Joll great, they're short, sweet to the point.
Speaker 1: I think so many people can relate to this. Many many,
Speaker 1: many have student loans. It's not just those in their
Speaker 1: early twenties, right, student loans are following us into our
Speaker 1: thirties and forties. So this is a helpful one to
Speaker 1: kind of way out. Again, it's not just a cut
Speaker 1: and dry answer. There are some situations where we might
Speaker 1: want to consider, let's get these ducks in a row
Speaker 1: before we go hard at this other thing. And so
Speaker 1: these are some of the things that they're telling us
Speaker 1: to focus on. Yeah, and while the first article is
Speaker 1: kind of debating, like should you mathematically prioritized paying off
Speaker 1: debt early? Or this one's like these are hard and fast,
Speaker 1: like yes or no. So these are definitely and and
Speaker 1: I think we agreed with all of these. So yeah,
Speaker 1: the first one, the first question you should ask yourself
Speaker 1: is do you have an emergency fund? If yes, then
Speaker 1: paying off student loans early is a good idea. So
Speaker 1: that's the first off the bat. I think the biggest
Speaker 1: question is like what size should your emergency fund be?
Speaker 1: And how long should you wait before you start paying
Speaker 1: off your loans. Somebody asked me the other day on Instagram.
Speaker 1: They're like, should I save a three to six month
Speaker 1: emergency fund even if it's going to take me a
Speaker 1: year before I can start paying off debt? And there
Speaker 1: were a few questions that I had for her. Well.
Speaker 1: The first was a suggestion to stop thinking about your
Speaker 1: emergency fund in terms of months. The reason we say
Speaker 1: three to six months, and the article says it right here,
Speaker 1: is typically you want to have three to six months.
Speaker 1: The reason we say that is for if your industry volatile,
Speaker 1: if you could be laid off, if you could find
Speaker 1: yourself without employment abruptly, and nobody, I guess can see
Speaker 1: a layoff happening. So that's why we say three to
Speaker 1: six months of expenses because that's about the time it
Speaker 1: would take you to find a new job. But it
Speaker 1: in reality, if you can't save that very quickly, then
Speaker 1: think about it in terms of actual emergencies. So look
Speaker 1: at your last year. How many quote unquote emergencies have
Speaker 1: you had? What have they cost you? Look around you,
Speaker 1: is there anything any car repairs you're going to need,
Speaker 1: any home repairs, anything around you that might result in
Speaker 1: an emergency in the next year or six months, And
Speaker 1: so kind of taking those emergency costs into consideration and thinking,
Speaker 1: has anybody ever has been able to help me with
Speaker 1: my emergencies? Do I have a strong familial support system? Uh?
Speaker 1: Stuff like that. So take these things into consideration and
Speaker 1: create an emergency fund based on that. So that's if
Speaker 1: your income is really low, because you shouldn't have to
Speaker 1: wait a year. You shouldn't have to save an emergency
Speaker 1: fund for a year before you start paying off debt.
Speaker 1: I mean, I can't say what a hardened ask number is,
Speaker 1: but definitely a year seems like a long time to
Speaker 1: save an emergency fund before you start paying off debt.
Speaker 1: H Yeah, and that's the before you start paying off debt,
Speaker 1: Like that you can keep working on building an emergency
Speaker 1: fund while you're also making payments to debt. But yeah,
Speaker 1: if you're kind of talking like I want to have
Speaker 1: this first and then look at that, kind of look
Speaker 1: at what's a reasonable amount before you can get to
Speaker 1: a larger amount that you feel more comfortable with. And again,
Speaker 1: the reason for this is so that we don't go
Speaker 1: into further debt. That's the reason for an emergency fund ultimately,
Speaker 1: is that we are able to cash flow whatever the
Speaker 1: emergency is and not get ourselves deeper into the pit
Speaker 1: of owing some other entity. So cushioning yourself for that
Speaker 1: is a good idea before you start paying your student
Speaker 1: loans early. And I think the one caveat I gave
Speaker 1: her the last question was like, do you feel comfortable
Speaker 1: with less than three to six months of expenses in
Speaker 1: your emergency fund? And if the answer is no, like
Speaker 1: I only feel I have this goal number and I
Speaker 1: will only feel safe if I have this number, then
Speaker 1: it's a moot point. Then you save till you get
Speaker 1: to that number so you can feel safe, but don't
Speaker 1: or I guess, don't lie to yourself and think like,
Speaker 1: if this number is enough, then you'll start to think
Speaker 1: of something else you need, and the number just keeps
Speaker 1: going up and up and up. If you have a
Speaker 1: number that feels good and feels safe, and you will
Speaker 1: save to save to it, it's a moot point. But
Speaker 1: if you feel like you could feel safe with less
Speaker 1: than three to six months it's just what you've been
Speaker 1: told you need to have, then maybe you don't need
Speaker 1: three to six months right now. You can save the
Speaker 1: amount that will keep you out of dipping into your
Speaker 1: credit cards and stuff for emergencies and just continue to,
Speaker 1: like bit by bit, build that up while you're paying
Speaker 1: off debth. The next question to ask yourself is do
Speaker 1: you have a lot of credit card debt? So, again
Speaker 1: this is in comparison to paying down student loan debts.
Speaker 1: If you have a lot of credit card debt, then no,
Speaker 1: you should focus on the credit card debt before the
Speaker 1: student loan debt because on average, the credit card interest
Speaker 1: rate is about sixteen point nine seven percent versus your
Speaker 1: plus loans, your federally funded loans that are about between
Speaker 1: like four point five to seven percent. So credit card
Speaker 1: loans are gouging you far more with interest rates, and
Speaker 1: so the frugal friends hierarchy of debt payoffs to focus
Speaker 1: on credit card debt first. Yeah, even if your student
Speaker 1: loans are private, those are still usually nine to thirteen.
Speaker 1: So definitely focus on the credit cards first, and focus
Speaker 1: on the habits that got you into credit card debt
Speaker 1: or the life situations that got you into credit card debt,
Speaker 1: and kind of look at the root causes and see
Speaker 1: how can I get stable there and put my focus
Speaker 1: there before I start putting my focus on finances. So
Speaker 1: we want to get stable, we want to get strong habits. Um,
Speaker 1: we want to get healthy there so that we can
Speaker 1: actually sustain paying off debt. Because if you're just looking
Speaker 1: at your cards and be like, okay, I'm going to
Speaker 1: pay off my debt, now, that's a hard like that's
Speaker 1: very difficult to sustain. But we want to look at
Speaker 1: the circumstances that got us there first and get healthy
Speaker 1: there and then try to pay off her debt. So
Speaker 1: number three, if your student loans have high interest rates, yes,
Speaker 1: paying off your student loans early is a good idea. So, yeah,
Speaker 1: what I just said, private student loans are Obviously higher
Speaker 1: federal student loans can have rates as high as in half,
Speaker 1: so it's definitely if you have graduate loans or any
Speaker 1: private it definitely makes sense to pay those off early
Speaker 1: for sure. The next question, fourth question on here is
Speaker 1: do you contribute to your retirement and get the max
Speaker 1: employer match. So, assuming that you're working in a place
Speaker 1: that offers a four oh one K and maybe even
Speaker 1: offers a match, you want to focus on doing that
Speaker 1: as well or beforehand, before you focus on paying off
Speaker 1: your debt early. So the answer is, if you're not
Speaker 1: doing that, then no, paying off your student loans early
Speaker 1: is not a good idea. And the argument here is
Speaker 1: while it might seem when we are in the place
Speaker 1: of insurmountable student loan debt, retirement is not something that
Speaker 1: we're thinking about. But the amount of time that we
Speaker 1: can be putting money towards retirement and investing that is
Speaker 1: going to do far better for us in the future.
Speaker 1: The amount of time that we can be investing not
Speaker 1: not always the amount that we're investing. So time is
Speaker 1: on our side. If you're younger, and so you do
Speaker 1: want to focus on that. Look at contributing to the
Speaker 1: four oh one K, getting the match maxing out your wrath.
Speaker 1: I ra s that's a big important component to be
Speaker 1: focusing on even while you have debt. Yeah, and I
Speaker 1: would say definitely the max employer match is the keyword
Speaker 1: here because that's not a lot of money. And honestly,
Speaker 1: it just takes emailing HR and be like, hey, can
Speaker 1: you send me the link to sign up for the
Speaker 1: four oh one K if you weren't already auto enrolled,
Speaker 1: or then just getting the link to sign in and
Speaker 1: just saying yes, I want to get the max match,
Speaker 1: which is typically about three Because if you don't do that,
Speaker 1: you're essentially telling your employer you're turning down a three
Speaker 1: percent raise, is what it is. So you are entitled
Speaker 1: to that money. And so don't tell your employer that
Speaker 1: you don't want more money from them, because I'm sure
Speaker 1: nobody can say that. Yeah, you can treat it like
Speaker 1: it's another bill. Yes, it'll get taken out of your paychecks,
Speaker 1: but you will thank yourself in the long run. And
Speaker 1: again there is another piece that doesn't have to take
Speaker 1: you away from paying down debt, But don't pay down
Speaker 1: debt instead of doing these very minimal retirement investment things. Yeah,
Speaker 1: you can definitely invest beyond the match, But if you
Speaker 1: don't want to focus on investing while you pay off debt,
Speaker 1: that's totally fine, But still sign up. Get the employer match.
Speaker 1: Your employer owes it to you, and that's money that
Speaker 1: will just grow and grow and typically at a seven
Speaker 1: percent long term return, will double around every ten years.
Speaker 1: And so it's money that is just there for you
Speaker 1: for the taking, So don't turn it down. Yeah, it's
Speaker 1: a benefit. Yeah. And so the last one is five,
Speaker 1: are you already contributing to other life goals? Um? And
Speaker 1: if the answer is yes, then yeah, you might as
Speaker 1: well pay off your student loans early. So they define
Speaker 1: the life goals is saving for a house, investing, and
Speaker 1: paying off higher interests set So if you've got one
Speaker 1: through four kind of figured out, then yeah, it's a
Speaker 1: good idea to pay off your student loans. Some people
Speaker 1: will gladly have their student loans around and I think
Speaker 1: it can get really overwhelming if you are looking for
Speaker 1: diverse voices in personal finance, because every one will have
Speaker 1: a different opinion and that's great. You can find somebody
Speaker 1: who speaks to you in the language you feel good about.
Speaker 1: You know about debt or investing or um real estate
Speaker 1: or whatever whatever feels good to you. You can find
Speaker 1: somebody who speaks wisely to that. It can also be
Speaker 1: really overwhelming if you're not sure what camp you're in yet.
Speaker 1: Just know that if you are looking to improve your
Speaker 1: life and your finances in whatever way you do that,
Speaker 1: as long as you're focusing on something, you're going the
Speaker 1: right way. But I think there's these these really important
Speaker 1: tenants that we have, is like pay off the high
Speaker 1: interest debts credit cards and get the four oh one
Speaker 1: k match have the emergency fund, and if you have
Speaker 1: the basics on your hierarchy of financial needs, everything else.
Speaker 1: It's kind of semanti x. Yeah again, decide for yourself.
Speaker 1: But if you are in the camp of saying, yeah,
Speaker 1: there might be some other things to consider, then here
Speaker 1: it is. This is the podcast episode for you. But
Speaker 1: if you're in a place where you're just saying, I
Speaker 1: don't really need to know all of the other arguments.
Speaker 1: I just don't like this burden and I just want
Speaker 1: to get all my debt gone, great, go for it.
Speaker 1: Yeah you do? You you know what else is us doing? Us?
Speaker 1: You really I didn't know where you were going to
Speaker 1: go with it. I'm glad you went there, but I'm
Speaker 1: happy to head somewhere else the week. That's right, it's
Speaker 1: time for the best minute of your entire week. Maybe
Speaker 1: a baby was born and his name is William. Maybe
Speaker 1: you've paid off your mortgage. Maybe your car died and
Speaker 1: you're happy to not have to pay that bill anymore.
Speaker 1: That's bills, Buffalo bills, bill clean. This is the bill
Speaker 1: of the week. Hi, guys, this is Tasha in sunny St. Petersburg, Florida.
Speaker 1: What's up, neighbors, um And I am calling because I've
Speaker 1: been trying, you know, thinking about it all March and
Speaker 1: I've been waiting and it was coming, but you've been waiting.
Speaker 1: I wanted to make sure that that bill that is
Speaker 1: coming through this week actually came through. Okay, here it does.
Speaker 1: I paid off my highest interests like credit cards, consolidated
Speaker 1: loan sixteen months early, and I am so excited. I'm yelling.
Speaker 1: My goal for New Year's was to have a paid
Speaker 1: off by the end of the year, so you know,
Speaker 1: one year, six months early. But no, it is down
Speaker 1: to zero and all right, sup, We're excited. Thanks guys.
Speaker 1: Love the show. Yeah, yeah, because I'm doing my lightning
Speaker 1: rod sounds early. I'm so excited, Oh my gosh, and
Speaker 1: doing it in sunny St. Petersburg, and man, now you're
Speaker 1: going to be able to, like I don't know, invest
Speaker 1: in real estate in St. Petersburg, become a millionaire because
Speaker 1: that's what everyone's doing. So congratulations. And how fitting paying
Speaker 1: down that high interest loan early, that's what we're talking about,
Speaker 1: getting rid of it sixteen months early, accomplishing your goals
Speaker 1: even earlier than you had set for yourself. So many
Speaker 1: great things here. Congrats. We're so proud of you. All right,
Speaker 1: and let's see our second bill of the week. Hi ladies,
Speaker 1: my name is Emily. I'm from Toledo. Hi. Oh, and
Speaker 1: I'm so excited to share this with you. My bill
Speaker 1: of the week is my rent bill, which is now
Speaker 1: four hundred and thirty five dollars a month. I'm a
Speaker 1: new listener, and your podcast helped me work up the
Speaker 1: courage to call my landlord and negotiate a twenty five
Speaker 1: dollar monthly discount in exchange for signing another year long lease.
Speaker 1: You guys were my courage buddies, and because of you,
Speaker 1: I'm going to save three hundred dollars this year. So
Speaker 1: thank you, oh m from Tolito. Oh my gosh, three
Speaker 1: hundred dollars. We're so happy to like like be in
Speaker 1: your ear, by your side, giving you courage. That all
Speaker 1: that courage comes from you, girl. We're just telling you
Speaker 1: you have it. Courage buddies. I love that term. And
Speaker 1: also I was expecting you to say, for negotiating and
Speaker 1: you're going to do an exchange of some lawn maintenance
Speaker 1: or something, but it was just for sign another year.
Speaker 1: It doesn't take any time or energy out of you
Speaker 1: over this next year. You just get a savings well done.
Speaker 1: And I hope that this inspires other people to do
Speaker 1: likewise and experience and discount for themselves. So Emily, glad
Speaker 1: to be your courage buddy. And you are, I know,
Speaker 1: being a courage buddy to somebody else right now. Yeah,
Speaker 1: I mean, And you can negotiate with landlords. They landlords
Speaker 1: want really good tenants that keep up their property well.
Speaker 1: And if that's you and you want to give them
Speaker 1: more money for another year and keep them from having
Speaker 1: to look for a new tenant, take a chance on them,
Speaker 1: run background checks and all that stuff like, then they
Speaker 1: can help you out with rent a little bit, or
Speaker 1: at least not increase it if they're trying to increase it.
Speaker 1: So definitely always ask. The worst they can do is
Speaker 1: saying no. But always ask and give a reason behind
Speaker 1: why you deserve what you're asking for. If you want
Speaker 1: to submit your bill of the week, visit Frugal Friends
Speaker 1: podcast dot com slash bill. Leave us a bill, whether
Speaker 1: it's about paying off debt, lowering bills. You know it
Speaker 1: a person named Bill. We're all ears and now it's
Speaker 1: time for the choo choo. Yes, So in today's lightning round,
Speaker 1: we are going to share what we would change about
Speaker 1: our debt payoff. You go first, Gen, I'm curious what
Speaker 1: you have to say, and I bounced on that. Okay, Um,
Speaker 1: I would have so part of me thinks that I
Speaker 1: would have started maybe investing a little bit earlier. We
Speaker 1: ended our debt payoff in August, which gave us enough
Speaker 1: time to max out of rath iire for that year.
Speaker 1: Because you could go into the next year. You have
Speaker 1: until tax day to contribute to your WRATH. So we
Speaker 1: were able to max out. But I think I may
Speaker 1: have done a little bit more in the year previous,
Speaker 1: but not doing that allowed us to be in a
Speaker 1: place where we could buy a home at the beginning
Speaker 1: of two thousand seventeen while we were paying off debt.
Speaker 1: So I'm really glad we did that. Yeah, maybe I
Speaker 1: would have just if I had known about rath Eyres,
Speaker 1: I would have opened one just a year earlier. Honestly,
Speaker 1: our debt payoff took two years, which is very reasonable,
Speaker 1: so I can't even really say I regret not investing.
Speaker 1: But had I known about it, I definitely would have
Speaker 1: done a little even if it was just, you know,
Speaker 1: to fifty a month. So yeah, I would have done that. Yeah,
Speaker 1: that's good. It doesn't make a big difference in the
Speaker 1: grand scheme of things, honestly, So yeah, I think similarly,
Speaker 1: I in no way want to come across as though,
Speaker 1: oh everything happened perfectly for me. I generally don't have
Speaker 1: many regrets, I will say that, and maybe part of
Speaker 1: that is just like my ideology, you either learn from
Speaker 1: things or you can build upon any of it. Ultimately,
Speaker 1: I'm glad that I was focused on paying off debt
Speaker 1: immediately after graduation, if not student or like it was
Speaker 1: on my radar, So ultimately I don't have massive regrets
Speaker 1: around it or things that I would change. I think
Speaker 1: maybe having made more money would have helped in the
Speaker 1: stress levels that existed of Okay, I really don't like
Speaker 1: this burden. I want it gone. But I also barely
Speaker 1: make enough to kind of cover costs. Eric and I
Speaker 1: had a very very low income in our first years
Speaker 1: of marriage, and I've talked openly and candidly about that.
Speaker 1: But at the same time, I mean that that is
Speaker 1: part of our journey, and it's part of what allows
Speaker 1: us to have a focus on generosity because we know
Speaker 1: what it feels like and I don't know. Yeah, so
Speaker 1: it's so tough because if you take one thing, what
Speaker 1: what does that mean for what your journey would have been.
Speaker 1: But I think as I look back, if I would
Speaker 1: have had more permission in myself to look for higher
Speaker 1: paying jobs, I think that would have helped me. I
Speaker 1: think I stayed a little stuck for a little bit
Speaker 1: too long thinking that's where I had to be, and
Speaker 1: it just wasn't. I'm okay, So I'm glad you said that,
Speaker 1: because that is very much a mindset, and I think
Speaker 1: I would like to amend mine by saying I wish
Speaker 1: I had believed I could pay off debt. Even though
Speaker 1: I was making a really small income when I was single.
Speaker 1: I didn't believe that I could pay off the debt,
Speaker 1: and so I wish I would have just believed more
Speaker 1: and tried to start sooner and and even not maybe
Speaker 1: accomplished a lot, but just tried to start sooner because
Speaker 1: I did have money. But again, very negligible amount of time,
Speaker 1: just a few years that I waited after graduating UM
Speaker 1: before I'm met Travis. So but yeah, it's the mind
Speaker 1: I think the mindset I was in kept me stuck
Speaker 1: more than anything. So probably that was what I would
Speaker 1: I wish only realized that. You know, in hindsight looking
Speaker 1: back that I felt stuck. I did get out of it.
Speaker 1: I'm not in that same place, but if there's any so,
Speaker 1: I think part of why we're saying this is to
Speaker 1: speak to those who might find themselves in that place
Speaker 1: of if you are a young working professional and you
Speaker 1: feel stuck, begin to look for options. You You don't
Speaker 1: have to be stuck. It doesn't mean that you can
Speaker 1: immediately get out of that situation, but begin to believe
Speaker 1: what we're saying and in your own abilities and capacities
Speaker 1: to look for something different. If it's not feeling right,
Speaker 1: if you're not at peace about it, you don't have
Speaker 1: to stay in that place. Yeah, the sooner you start
Speaker 1: replacing the term I can't with, how can I, the
Speaker 1: faster and further you will get um, the sooner you
Speaker 1: will get to wherever you want to go. I can
Speaker 1: vividly remember, and so I felt stuck in this one position.
Speaker 1: I was working at a residential facility for youth, and
Speaker 1: so much of what kept me there was my my
Speaker 1: desire to help these kids who were about to age
Speaker 1: out of the foster care system. So certainly there's a
Speaker 1: lot of empathy present there, and that's a lot of
Speaker 1: what kept me there. But I I can still remember
Speaker 1: this moment in my car where I was at the
Speaker 1: end of my rope. I was in the parking lot
Speaker 1: about to leave work for the day, just at the
Speaker 1: end of myself, and just like crying out in the car,
Speaker 1: like like when can this end? Kind of a thing,
Speaker 1: like it just all felt like too much, emotionally, too much,
Speaker 1: financially too not enough, Like it all just like felt
Speaker 1: like such a burden. And and it just this flip switch,
Speaker 1: like who's holding you back from doing something different? Who
Speaker 1: said you have to be here, you have to stay here,
Speaker 1: and all of a sudden, I just felt like this
Speaker 1: weight lifted, like, oh, I have permission, I don't. I
Speaker 1: don't have to stay here. This does not have to
Speaker 1: be the rest of my life. I still care immensely
Speaker 1: for those students who were there. I mean, they're probably
Speaker 1: all like in their late twenties at this point, and
Speaker 1: my sites are still on foster care and wanting to
Speaker 1: help those in the system, particularly older children, so it
Speaker 1: can inform But anyhow, Yeah, I can still remember that
Speaker 1: moment of like, oh, there's permission, I don't have to
Speaker 1: stay here. Yeah, Oh my gosh. Yes, Well that was
Speaker 1: an insightful lightning round that I hope inspired you to
Speaker 1: kind of challenge some of the things and some of
Speaker 1: the ways that you think about paying off debt and
Speaker 1: making financial decisions. So thank you so much for listening. Um,
Speaker 1: we want to thank you for your kind reviews, and
Speaker 1: if you disagreed with anything in this episode, we hope
Speaker 1: that you won't leave us a one star review, but
Speaker 1: if something impacted you positively, we hope you will leave
Speaker 1: a pose stive review like t x Kane, who left
Speaker 1: a five star review called making Money Fun. Thank you
Speaker 1: for making frugal living fun. Listening is like hanging out
Speaker 1: with my two best buds who I might actually listen to.
Speaker 1: Very helpful, short and sweet. I love it. Thanks t
Speaker 1: x Cane. We also want to thank our friends who
Speaker 1: share these episodes on social media, So when you share
Speaker 1: the latest episode and tag us on Facebook or Instagram,
Speaker 1: we add you to our monthly drawing. So for every
Speaker 1: five tags and reviews we get each month, we give
Speaker 1: away a copy of the Frugal Friends workbook. So keep
Speaker 1: leaving us reviews on iTunes or Stitcher and sending the
Speaker 1: screenshot to Frugal Friends podcast at gmail dot com. Don't
Speaker 1: forget to tag us on social Remember it is still July,
Speaker 1: so you can opt to get a all access passed
Speaker 1: from the Future Fruit Summit. It is no longer for sale,
Speaker 1: so if you missed your chance, this is the way
Speaker 1: to get one. Thanks so much everyone, see you next week.
Speaker 1: Frugal Friends is produced by Eric Syrian. When you were
Speaker 1: talking about mistakes and you're like, you either learn from
Speaker 1: things that happen or and I wanted so badly to say,
Speaker 1: or you die, they're never mistakes. They're just opportunities for learning,
Speaker 1: or you die, or you couldn't ever learn it because
Speaker 1: you're not here anymore. You did so learn or die.
Speaker 1: But that's the morbid way of looking at it, which
Speaker 1: is why I didn't say it in the episode. Um
Speaker 1: it still is the episode you are still saying, you're
Speaker 1: still recording, Okay,