Todd Tresidder is our featured guest, speaking about setting goals for building wealth that make sense despite today’s financial difficulties.

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Show Notes

Today, Todd Tresidder from FinancialMentor.com joins Harlan and Miranda to speak with the Adulting.tv audience about setting the right kind of goals for building wealth over the long term. Thinking about the future is hard when you’re struggling, but this is the best time to put plans into action that will help you in the long run.

Todd Tresidder graduated from the University of California at Davis with a B.A. in economics and a passion for creating successful businesses. A serial entrepreneur since childhood, Todd went on to build his own wealth as a hedge fund investment manager before “retiring” at 35 to teach others. Today, he provides advanced investment and retirement planning education at FinancialMentor.Com showing you what works, what doesn’t, and why based on a depth of proven experience.

Hosted byMiranda Marquit
Produced byadulting.tv
Edited and mixed bySteven Flato
Music bybensound.com

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Clipping coupons isn’t going to solve this poor AF budget situation. You need some serious strategies for climbing out of this hole.

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One of the first things personal finance experts tell you when it comes to saving your money life is to trim the fat from your budget.

It’s all about looking for savings. Free up that cash. Cut all the things!

The problem with this approach?

Once you get right down to it, there’s only so much you can cut from your budget. Eventually, you’ll be down to the bone, with nowhere left to go. At that point, you need more than someone telling you the secret is in saving $5 a week on your groceries with coupons.

If you’re poor AF and wondering where to go next, there is hope. It takes planning, work, and time. It’s not fun, but it’s doable.

Concepts

  • How to know that you really can’t cut any more from your budget.
  • How chronic health issues and other circumstances can limit your choices.
  • Why it’s so difficult to get back on top once you start falling behind.
  • The importance of finding ways to earn more income.
  • Tips for looking for a second job.
  • How to use the sharing economy to make a few extra bucks.
  • Ideas for home-based ways to earn money.
  • Ideas for side hustles that can get you earning almost instantly.
  • Community resources to look for when you need help stretching your budget.
  • How to approach your support system and loved ones for help.
  • Tips for approaching your creditors to make payment arrangements.
  • The importance of getting psychological help when you need it.

This week, the “do nows” revolve around honestly evaluating your situation and making a list of your resources. What can you expect in terms of help from others? What are the realities of your budget situation. We’ll help you figure out where you are right now so you can begin making a plan of attack.

This week’s listener question is about a circumstance many of us can relate to. What happens when you fall behind and things just keep piling up? What do you do? We take a look at the options, and how you can take small steps today to start breaking the cycle.

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Just because your finances suck today doesn’t mean they have to suck tomorrow. You can figure out what’s wrong and fix it.

Let’s face it. Your finances suck.

It’s ok, most people are in a similar position.

Staying perfectly on top of your budget, your investments, your income, and your expenses is like trying to juggle flaming chainsaws while brewing a cup of tea.

But much like juggling, balancing your financial responsibilities can be done. It just takes knowledge, practice and a little finesse.

Here are some of the problems holding you back from money greatness and what you can do about them.

You aren’t willing to change.

During my time as a personal finance blogger and writer, I’ve offered financial coaching on the side. I’ve counseled people who made $10 an hour and those who earned six figures a year. Before coaching, I thought the main problem most people faced was a lack of income.

Turns out I was wrong.

The biggest reason for my clients’ success was a willingness to change and improve financial habits – and vice versa. If you aren’t willing to eat out less, move to a cheaper apartment or find a part-time job, there’s not much I can do for you.

If you really want to pay off your credit card balance and don’t have enough in your current budget to do it, the answer is simple: change your lifestyle. If you refuse to do that, you’re just like an alcoholic who won’t admit they have a problem.

If this is you, don’t feel ashamed. Addictive spending is very real, and moving forward isn’t about bringing yourself down – it’s about realizing you have the power to build yourself up.

What to do: Change is hard, so start slow. If you eat out for lunch every day, try bringing in leftovers a couple times a week. If you often order take-out, make a big dinner to last you for a few days. As you get accustomed to your new lifestyle, each change will feel less and less noticeable.

You aren’t sure where the money’s going.

When I was a college senior, I decided I would start budgeting to prepare myself for “the real world.” I allocated $80 a month toward eating out, which averaged about one meal a week.

In two weeks, I had blown through my self-imposed limit. I called my mom, confused as to how I could have spent that money so quickly. She suggested I go through my bank statement to see where my money was going.

I was shocked at what I found. I was spending $150 a month on eating out and more than $200 on groceries. How was I spending so much on food without realizing it?

That’s when I learned the power of tracking my expenses.

If you don’t know where your money is going, you can’t control it. Like most people in this situation, I was consistently underestimating how much meals, groceries and other expenses were costing me. Once I started tallying those numbers, there was no excuse to overspend.

Any time I coach people on budgeting, I have them go through their bank and credit card accounts to add up how much they actually spend. Most people are surprised to find out how much they’re really spending compared to what they thought.

What to do about it: Find a tracking system that works for you. I use Mint.com, but others like the You Need a Budget software or the old-fashioned pen-and-paper method. Track every purchase you make, even if it’s $1.50 for a Coke at a gas station. Little purchases add up, especially when you’re unaware of your spending.

You want to live like your friends.

Peer pressure is a powerful behavioral catalyst. A 2016 study from Ryerson University in Toronto found that people who surround themselves with less-frugal friends tend to spend more.

Even when I was committed to paying off my student loans early, I had trouble saying no when I was out with my girlfriends. If I promised myself I’d avoid ordering food or more than one drink, I had trouble saying no if the people around me were doing it.

It can be even worse if your friends are encouraging you to overspend in other aspects of your life, like housing, transportation or traveling. That’s not even mentioning the inherent pressure that comes from comparing your lifestyle to friends who live extravagantly.

So how do you combat peer pressure without dropping your social circle?

What to do about it: If you’re going out, bring cash so you won’t spend more than you want to. Suggest having drinks at someone’s house instead of happy hour or a potluck in place of a restaurant dinner.

Tell your friends about your financial goals and how you’re trying to change. Some might be feeling the same way, but are too embarrassed to say anything.

And what if they start throwing shade? Well, those probably aren’t friends you want to keep around.

Bottom line.

There are some things we can’t change about how we got to our current place. But you can influence what happens next. Pinpoint the reasons behind your current problem. Acknowledge the reasons you suck at money.

And then take steps to make a change. It’s not always easy. It’s not always fun. But in the long run you’ll be happier — and have more money.

What’s your biggest money struggle? How are you working to overcome it? Let us know in the #Adulting Facebook community and see if you can find a few ideas you can use.

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Beth Kobliner, author of Get a Financial Life: Personal Finance in Your Twenties and Thirties, discussed retirement, credit, and basic personal finance.

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Miranda and Harlan are pleased to welcome Beth Kobliner to Adulting.tv. We discuss the actions you can take today to set yourself up for financial success in the future, and why you need to start thinking about the future right now.

One of the topics we cover is retirement. Regardless of how difficult it seems, there are ways to start putting away a tiny bit of income for retirement, and Beth shares exactly how that can be done. We also discuss other financial basics, including tips for improving credit even without a lot of experience with money.

Beth Kobliner is a commentator and journalist, and author of the New York Times bestseller Get a Financial Life: Personal Finance in Your Twenties and Thirties. Her guide for parents, Make Your Kid a Money Genius (Even If You’re Not!), was published by Simon & Schuster in February 2017. Kobliner has been a staff writer for Money magazine and a contributor to the New York Times, the Wall Street Journal, Redbook, Glamour, Reader’s Digest, and O, The Oprah Magazine.

She also served as a content advisor for Sesame Workshop’s financial education initiative, offering on-air money advice to Elmo. Kobliner was selected by President Obama to serve on his Advisory Council on Financial Capability for Young Americans.

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Getting your first car is a big step. You don’t want to screw it up. Figure out whether it makes sense to buy or lease.

It’s time to get your first car.

This is an exciting time, a time that heralds adulthood.

With all their bright and shiny and “new-car-smell,” even those adulting hard can make a child’s mistake.

Don’t let emotions cloud your judgment.

I’m not a car person – most cars look like Jettas to me. But even I get a euphoric high when I sit in a new car with its new leather, unblemished windshield, latest technology, and spotless dashboard.

The problem is that those dastardly auto dealers are marketing and money masterminds. They’ve figured out how they can oversell and overfinance even people like me who don’t really care about cars.

When getting your first car, you want to leave emotion at the door and realize that you’re probably not going to be driving your dream car.

You may have the budget for a Ford Pinto, but they’ll get you into a Mercedes Maybach if they have their way. It’ll just take 15 years to pay off and cost you more than most people’s mortgage and your first-born child.

But, hey, that new car smell.

Therein lies the birth of car leasing. Why buy a practical car you can afford and own outright when you can buy an impractical car you can’t afford and will never own but will look good on you?

Some things to consider when considering leasing a car.

Lessees don’t own.

The first thing to realize if you decide to lease those hot wheels is that you never own your car unless you choose to buy out your lease at the end of your term.

Most people don’t buy out their leases at the end of their term, no matter how committed they are.

Your ideals are usually high when you sign the lease. However, just like you say you’ll only have one mimosa at brunch, you almost never buy out your lease. At the end of your three to

At the end of your three- to five-year term, unless you have a large sum of money and want to do so, you’re without a car. This is why people become habitual lessees.

You’re always a guest.

All the while, as you lease a car, you’re borrowing it. You must treat the car like you’re borrowing it. This may sound like the above concern, but that’s about managing your money.

This is about living life.

For starters, leased cars come with mileage limits. The mileage limit is usually capped at 12,000 a year or 36,000 miles over three years, the most common term for leases.

Even if you’re an average driver, the U.S. Department of Transportation Federal Highway Administration (FHWA) says you’ll probably average 13,476 miles a year.

So, unless you’re below average, toward the end of each year or your lease term, you’ll probably have to be conscious of your mileage limit. You could find yourself paying a penalty if you go above that limit.

The other way you’re always a guest in your leased car is that if your vehicle experiences wear and tear beyond the norm, you must get it fixed.

Of course, the definition of “normal” is subjective. And, of course, most responsible car owners repair and maintain their cars to keep them in good condition. As a lessee, though, you don’t have the option. Your leased car must be repaired and maintained to keep it looking as good as possible.

Lessees need better credit.

Most people who lease cars do so because they can’t afford to purchase them outright or finance them.

Likewise, those who lease cars tend to have less money to use as a down payment on their car. Therefore, the manufacturer or lender assumes more risk. To mitigate financial risk, manufacturers and lenders require higher credit scores to lease cars.

If you’re getting your first car, there’s a good chance you have a short or non-existent credit history and, likewise, a lower credit score. This will make finding favorable leasing terms harder.

Some things to consider about buying a car.

By now, you’re saying, “Okay, leasing a car sucks, but buying one is hard.”

That’s not necessarily so. By being strategic about buying your first car, you can save yourself money with little complication.

The best way to get a car is to pay 100% cash for it up front. Because most people can’t do that, the second-best way to get a car is the most practical. That’s by putting as much down as possible, ideally no less than 20%, on a certified pre-owned car with low-interest rate financing.

Occasionally, dealerships offer 0% financing. If there isn’t an ideal promotion when you’re in the market to buy a car, credit unions offer great financing terms.

By getting approved through a credit union before shopping for your first car, you’ll save yourself a lot of frustration by not negotiating these terms with a car dealership.

When to lease your first car.

I can only think of one situation when leasing a car makes sense. That’s when someone or something else leases it for you.

For example, my father sold steel to manufacturers. For several years, he was in charge of the Tri-State region and did a lot of driving to sales calls. One perk of his job, because of his required travel, was his company gave him a car.

Even though this was his work car, he used it for work and personal driving. His employer wasn’t in the business of owning cars, so they leased him a car, and he got a new car every three years. Other than the gas he used for his personal travel, all the expenses of his leased cars were his employer’s.

Unless someone or something else to leases a car for you, it likely doesn’t make sense to lease a car. Even if you can get someone or something else to lease a car for you, plan for the day you can buy your own car. Save $200 to $400 a month in an account for when you do buy your own car.

You’ll be happier if you do and will be closer to buying the car you want.

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Ready to take things to the next level with your S.O.? Not until you have the money talk. You need to make this happen.

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Any relationship requires work. There are plenty of situations that can stress you out. But nothing quite matches the stress that comes when you talk money with your boo.

Are you ready for that talk? Do you know what you will say? And how can you make it less stressful and contentious for everyone involved?

Concepts

  • How we handle money reflects our values.
  • Why it’s so hard to talk money with your S.O.
  • The ways money goes beyond just spender vs. saver.
  • Different styles of money management.
  • How to pinpoint what matters most to you.
  • Tips for setting the tone before you talk money with bae.
  • Suggestions for money topics you should be discussing.
  • When it’s time to start talking about money.
  • How to gauge your partner’s money values before you talk money.
  • The importance of setting shared financial goals.
  • Tips for setting time to talk money so that you are both more likely to be open and willing.
  • What to do if things get too heated during the discussion

Our “do nows” this week focus on actually getting the money talk taken care of. Figure out your own money values, review your financial situation, and schedule a time to talk money with your S.O.

This week’s listener question deals with someone not really ready to trust bae with joint accounts. We look at the pros and cons of granting your S.O. access to your money.

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Resources

How money stress impacts relationships

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Living the dream as your own boss? Don’t let it become a budgeting nightmare. Stay on top of things when you have a variable income.

When former cubicle-jockeys switch to a freelance career, it’s almost always in pursuit of one elusive goal: freedom.

But with that freedom comes uncertainty. Many newly self-employed individuals find themselves missing the income consistency that came with their old gig.

But variable income doesn’t have to mean a dubious financial situation. There are a few methods you can use to create the consistency you’re looking for. This allows for the kind of stability you’d enjoy at an office job.

Here’s how I manage my own variable income:

Calculate how much you need.

Living on a variable income is stressful if you’re also living in the dark. If you don’t know how much you need to survive, how can you know if you’re budgeting correctly?

Go through your spending and add up your necessary expenses, including rent, groceries, gas, utilities, debt payments and other bills.

Then divide that number by 75% to calculate your target income.

That will be the minimum you need to earn each month. Anything left over can be used for discretionary spending or saving.

Live on last month’s revenue.

While salaried individuals know how much they’re going to bring in every month, people living on a variable income have no clue.

A long-term client could take an extended vacation or an assignment might be delayed indefinitely. One of my favorite ways to combat this uncertainty is to live on last month’s invoices.

If you grossed $3,000 last month, then you can only spend $3,000 this month — even if you project to make $4,500 this month.

This budgeting philosophy is all about spending the money you have, not the money you think will have. After all, things can and will go wrong every month. The technique also eases your cash flow, since many freelancers don’t get paid until 30 days after they’ve submitted an invoice.

Save most of your surplus.

A friend of mine who worked in the dance industry once told me about a mentor who would go designer shopping every time she got a choreography gig. These jobs paid exceedingly more than teaching gigs and left her with more cash than she was used to.

Instead of saving that dough, she’d go shopping for name-brand purses and clothes. I was shocked when I heard that story, but not surprised. It’s human nature to go on a shopping spree when you land a big windfall. However, budgeting responsibly (especially on a variable income) is all about denying those urges.

It’s ok to celebrate a new client or big project as long as you’re tucking some of it away for a rainy day. Try to save between 70% and 80% of your surplus income and enjoy the rest responsibly.

Keep an emergency fund.

Everyone who works for themselves has a slow period where the work seems to dry up. You can plan ahead for these months by having a larger-than-normal emergency fund.

I keep a six-month emergency fund since my husband and I are both self-employed. Having half a year’s worth of expenses keeps us afloat during the off-season. It’s a good buffer to have and prevents me from picking up a McDonald’s application when the work starts to dwindle.

Multiply your baseline income by how many months you want to save for. Most people with variable income should have between six months and a year’s worth of bills saved in an emergency fund.

Make your expenses the same every month.

One of my favorite ways to regulate my finances has been budget billing for our utilities. Most gas, water, and electric companies allow you to pay the same amount every month instead of the amount you use.

Having budget billing has simplified my finances since I know our water bill will be static, no matter the season. I don’t have to worry about high gas statements in the winter or AC costs in the summer. Contact your energy company to see if they offer this service.

Look for other ways to normalize your bills so that you have the same expenses each month.

Save by percentage, not dollar amount.

Writer Jackie Lam of Cheapsters became a freelancer after she got laid off at her full-time gig. To make the transition smoother, she started saving a percentage of what’s left over after she’s paid the bills, instead of a specific dollar amount.

For example, instead of saving $200 a month for a vacation, she sets aside 5% of her budget. Using percentages makes it easier to hit her savings goals, even if she hasn’t had the most productive month.

In busy times, she might save more than $200, and during slowdowns she might only save $100. That percentage tends to average out over the year.

It’s a way to feel a little more secure and avoid feeling like a failure if you don’t hit a set dollar amount.

Be your own CEO.

If you really miss the stability of office life, consider paying yourself a salary. Once you’ve calculated your baseline, it’s simple enough to choose a stable wage to take going forward. Overage income can be applied to your savings, while consistently coming in under budget can be a warning sign that it’s time to take a pay cut.

This isn’t exactly the most efficient method listed, but it can take a lot of psychological weight off of planning your finances. It’s simple. Pay yourself a little less than you typically make and save the rest.

Do you live on a variable income? How do you make it work? What’s your favorite budgeting technique? Let us know in the #Adulting community on Facebook.

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