Where I Part Ways With Dave Ramsey

Nov 27, 2020

ve is the man for getting you out of debt, but some of his advice may need a bit of an update.

Q: “You mentioned you don't agree with all of Dave Ramsey's steps, so I'm curious- what do you recommend doing after debts are paid off?“

I do agree with Dave Ramsey step one is the baby emergency fund, although I am concerned that he’s been recommending $1,000 for a really long time. $1,000 isn’t what it once was. I could see for some people they might need a bit more.

I agree with Dave Ramsey that step 2 is paying down the debt and that high interest credit card debt is an EMERGENCY. Dave is the man for motivating people to pay down their debt.

I also agree that after paying off debt the next step is to finish out your emergency fund (which I define as 3 months of expenses for dual income households, 6 months of expenses for single income households, with perhaps some extra padding if the economy is down, someone’s job is at risk, etc.), although I don’t think you have to have your full emergency fund to start your retirement investing at work. I think you can do both at the same time.

I would also agree that the next step should be retirement money, but I’d rather see people max it out than just do a set percent as Dave teaches (unless they have a big urgent savings goal they are also working – then you might want to wait to max out the retirement fund until after the big urgent goal. But starting as soon as possible is important because of the power of compounding).

I part ways with a lot of what Dave has said over the years about investing. He’s talked about people getting 12% returns in the market, which I don’t think is realistic. I also don’t like that he refers people out to financial advisors and planners but doesn’t (as far as I’m aware) help people find advisors and planners that put the client’s needs first. I’d love to see more education around how they get compensated, suitability vs. fiduciary standards, etc. so people can make a more educated decision when they are picking a financial planner or advisor.

I don’t have kids, so of course I personally am not putting money toward that baby step of Dave’s.

Dave recommends paying a house off early. Mathematically this does not make sense with today’s interest rates. If your mortgage is at 3.5% and you can get 7% in the market, you are better off financially investing the money.

Time in the market beats timing the market, so if someone is hyperfocused on paying off the house they will lose a lot of the growth they would get from having that money invested earlier.

The emotional relief that must come from having a paid off home is REAL, and it does really reduce your bills when you aren’t having to make mortgage payments, which would allow you to invest more once the mortgage is done. So it’s not wrong or bad if someone wants to pay off their house – I get it. But do a bit of research on what it is costing you if you aren’t putting that money into investments before you decide.

Are you ready to get your finances on track? I can help. Schedule a free call to see which of my programs would be a fit for you at https://lisaduke.net/schedule

Three Tips to Enjoy the Holidays Without the Spending Hangover

Nov 24, 2020

“The way you spend Christmas is far more important than how much.” – Henry David Thoreau.

Please welcome our first guest post from my friend, Valerie Carpenter! When she's not sharing her tips for getting the most out of your holiday spending, she's helping people get the most out of their vacation budget. You can find her business Facebook page here.

There are plenty of blog posts about Christmas budgeting and spending. How you should start a budget several months, if not a year, in advance with suggestions to even open a new banking account specifically for Christmas spending. Although budgeting is essential to have a successful and debt-free Christmas, my hopes is that this blog post will inspire you to see the holidays differently and how it’s possible to pivot from the typical traditions and expectations for the season. If you have personally suffered a financial loss from the unprecedented pandemic, or maybe you are just tired of being broke after the holiday, it is an ideal time to get creative and savvy with your holiday endeavors! I have composed some suggestions on how to do exactly that…

SHOP LOCAL! – This one is huge to me. This time of the year is heavy on all of our pockets, whether you are an entrepreneur or not. So why not support one another buy buying from one another. And I am not talking about buying from your friend who is a cashier at Macy’s – let’s stay away from these big box companies. There are plenty of small businesses in your community that offer tangible items that make fantastic gifts. Some of which have put sweat and tears into handmaking them themselves! I am personally a gift giver, and find ways to make gifts during the year unique and special. This typically means the gifts I give are customized or personalized in some way. Find local businesses that have services like these to offer. Their products cost less because they are crafting them in house and you can get away without shipping costs if they are in drivable distance. Meanwhile, the gift you give to those special people in your life will be much more appreciated because it shows you took the time to get something made specifically for THEM! In turn, you are helping a small business financially. Strick up a conversation and share what it is you do with the people you buy from – maybe they will have a need for what you have to offer! Or perhaps you can even barter! I bet I have you thinking now…

QUALITY OVER QUANITY! – There is this unspoken rule of sorts, that the more you spend the more you love someone. But if you read that out loud…doesn’t that sound ridiculous?! Some of my most favorite gifts received were handmade or reasonable priced. It was more about the person understanding me and buying something that they knew I would appreciate, love or find humorous. My advice is to set the expectation ahead of time. For families with kids, why not express that each year they will get one GREAT gift (a high-ticket item), but that will be followed by smaller / stocking-stuffer type gifts. These other gifts are really for the sole purpose of generating that morning-of-excitement in having several things to open under the tree! Face it, have you ever seen a kid open a gift on Christmas day…you know, the “gift of the year” that every kid has been talking about…to find them 30 mins later making a fort out of the cardboard box it came in? My point exactly!

MEMORIES OVER CONSUMPTION – And that brings me to my next point! You know why kids find it fun to play with the cardboard box their expensive gift came in? They want to pretend, explore and use their imaginations. So maybe this year consider doing exactly that! Give one another the gift of memory making. There is no sweeter gift, than the gift of travel! Take a trip…near or far. Either plan this in advance as a family, or surprise the kids Christmas morning. How awesome would it be to find out as a kid (well, even as an adult) on Christmas morning, that you are headed to see Mickey Mouse at Disney and leaving the very next day?! That’s a Christmas that keeps giving! That will be days of fun and adventures, where as a family you enjoy it together. Truth is, if you ask anyone (child or adult), what they got for Christmas 5 years ago, they likely can’t remember…but if you ask what trip they took 5 years ago, I would confidently bet money they will remember!

These are all just suggestions from personal experience, so make of them what you please. To recap…YES, budget, just like everyone says to. [Annnnnnd, if you don’t know what budgeting looks like…well, that’s a whole other discussion. You ought to consider reaching out to Lisa Duke Financial Coaching for a better understanding *wink wink*]. But in all seriousness, change your thinking and you will change your spending. Christmas can look extra bright without making your checking account extra tight.

P.S. Would you be interested in a free call where Lisa works with you to identify your #1 money block and the solution? Grab a spot on her calendar today!

Saving for Big Goals

Nov 20, 2020

IQ: Recommendations on how to plan to save for big event planning: EX: Wedding or preparing to have a family

A: DO IT. 🙂

First step would be research – how much is the budget for the wedding? Will other family members be kicking in? What are the out of pocket expenses that insurance won’t cover for the baby? What are the non-medical expenses (crib, diapers) – both initial set up and ongoing?

When is this happening? How many months do we have to save up?

If you know you will be having the baby in 6 months, take the amount of money you want to have when the baby comes and divide by 6. Look for expenses you can cut and possible ways to grow your income to come up with the money.

I would say it’s also ok to give yourself a bit of grace and know sometimes we make choices that don’t make sense financially, and such is life. It’s tradeoffs, right? We don’t want to be completely irresponsible, but there’s no prize for making it through life saving every penny but not enjoying your life (Ebenezer Scroge taught us that!).

Are you ready to get your financial life on track? I can help. Let's talk live to see if you are a fit for one of my programs. Pick a time on my calendar at https://lisaduke.net/schedule

Paycheck to Paycheck

Nov 13, 2020

Money makes the world go 'round.

Q: “Any tips/tricks for those of us living pay check to pay check and barely have enough money to pay off our bills/debt?“

Many of the bills people think of as mandatory are not. Question everything. Remember my husband and I shared a used Honda Civic while living in Atlanta? If one of you work from home, can you share a car? Do you even need a full time car, or could you get by using Instacard and Lyft? How often do we even leave the house now anyway?

If you can’t get out of any of your bills, earn more money. Get creative. Look at everything you own as a possible asset to be sold or rented. Can you take on a roommate? Rent your car on Truro when you aren’t using it? AirBnB your couch? Get your dog a job herding sheep (ok, that’s probably not going to work, but you get the idea). Can your kids do something you now pay other people to do? Could they earn their own money for clothes and video games?

Even if you don’t want to take these ideas on now because pandemic, you can certainly start brainstorming now and implement these ideas down the road.

Are you ready to get out of the paycheck to paycheck cycle? If so, let's talk live to see if you are a fit for one of my programs. My calendar is available at https://lisaduke.net/schedule

How to Pay for College

Nov 6, 2020

Too cute for student loans.

Q: “How do you advise those who need to pursue higher education for their desired career path but do not have financial assistance options other than student loans and need to get their post grad degree done?”

Does your employer offer tuition reimbursement as a benefit?

Have you looked into scholarship options? My understanding is that there are more scholarships for undergrad than for graduate, but I would look into it before ruling this out. Often scholarships go unclaimed because no one applies for them, so get creative.

Have you talked to the admissions and financial aid people at the school of your choice? Do they have any suggestions?

Are you taking the classes ONLY so you can make more money? If so, have you confirmed that the additional pay is real? I have friends who graduated from law school and really don’t make much more than they would have with a Bachelor’s degree.

Honestly, I have not gotten a MBA despite an interest in it because I can’t see any ROI for me as an entrepreneur.

Student loans suck. Not getting the degree you want because you don’t have the money to pay for classes also sucks.

If you have thoroughly investigated the options and thought it through and you just want to do it, then just do it and accept the consequences of debt and be thankful that not having cash to pay for classes doesn’t completely shut you out of being able to pursue this program of study. Sometimes we make these choices.

Oh, if you are REALLY looking for creative ideas, I hear university is free in Germany (and yes, you can find classes in English) although I don’t know if this applies to post-grad and I don’t know if you are up for that much adventure.

Are you ready to improve your finances? Let's talk live to see if you'd be a fit for one of my programs. Schedule a call at https://lisaduke.net/schedule