Debt

Adulting with Julia

We were excited to finish off our series with financial planner Julia Chung, who workshopped how to set financial goals based on our own unique values and priorities.

We discussed things like:

• Differences between a scarcity mindset (budgeting) and a growth mindset (cashflow planning)
• How to be conscientious with spending and counteract forces that contribute to overspending and shame
• Goal setting and aligning our cashflow with those goals

More photos from the event are below!

Julia’s Adulting Advice

Julia taught us that budgets are usually fear-based: we create them when we feel we don’t have enough. This can lead to an unsustainable or unrealistic allocation of our financial resources.

She advises to start your financial planning by filling out your ‘wheel of life.’ From there, prioritize areas you’d most like to improve, figure out what the gaps are between where you are now and where you’d like to be, and then set specific goals. This approach aligns your finances with your values, and this synergy is motivating!

We also learned that “should” is a swear word. If you’re saving for something because you think you should, you won’t be motivated.

Take the time to outline the specifics of your financial goals. “I save enough to take a vacation somewhere warm next year” isn’t as exciting as “I learn to surf in Sámara, Costa Rica in Winter 2020.” Experts recommend that at least 20% of your after-tax income be spent on lifestyle and entertainment, allowing you to enjoy your life.

Keeping focused on your financial goals is difficult – our culture promotes mindless consumption and it’s hard to work against this system. Goal-setting and being a thoughtful consumer are two tools we can use in response.

There’s no one-size-fits-all solution to finances. There isn’t one way to invest, one set percentage to put aside for retirement. The answer starts with you putting in the work to determine what your values and goals are.

Adulting with Liz (Round Two!)

We had such good feedback on the Managing your Money session last summer that we decided to bring back Financial Coach Liz Schieck from the New School of Finance. This time she discussed the dreaded “D” word: debt.

We discussed things like:

• How to budget your money using 4 types of money categories
• The questions to ask ourselves in determining why we have debt in the first place 
•  How to sidestep debt in the future

As a bonus you’ll find photos from the event below! 

Dan & Rach’s Tips

Some good general tips to help with your debt right off the bat:

1. Pay off your highest interest rate debt first (credit card etc)
2. Ask your credit card company or bank about lowering your interest rates. Don’t forget you’re the customer. You don’t get what you don’t ask for. The worse they’ll do is say no, and then at least you asked.

Liz’s Adulting Advice

Before you can build a successful plan, you’ve got to unpack your debt, understand why you have it in the first place, and learn how to sidestep it in the future. Strategies and tips are ultimately useless until you deal with the emotional stuff, the root causes of your spending behaviour.

Most debt advice skips this crucial step. Many jump right into the super-exciting math parts, but there is so much that needs to happen before that in order to make sustainable permanent changes to your finances. 

If you don’t change your spending behaviour and if you don’t believe you can truly tackle your debt, you’ll never stop the Debt Loop.

First, deal with the emotional side of your debt, then do the math. This is crucial. It’s like having allergies. Instead of treating the symptoms—coughing, sneezing, itchy eyes—over and over, you have to figure out the root cause of the allergy and avoid it altogether. 

Spend some time unpacking how you think and feel about your money. Get to a place where you understand your Financial Tripwires and find motivation and strategies beyond the interest your debt is costing you. This is how to stop the Debt Loop. 

If you’d like to determine your personal Financial Tripwires and permanently break the Debt Loop, grab a copy of Shannon Lee Simmons’ book, Living Debt-Free, the No-Shame, No-Blame Guide to Getting Rid of Your Debt.