Travel Hacking Your Family Vacations: Discovering Epic Deals

How does a summer vacation in multiple countries sound? Road-trip around the US? Month in the Bahamas? 

Learn how one family of five plans and travel hack these epic trips so they’re getting an incredible deal!

Ready to Travel Hack an Epic Family Vacation?

Last week we discovered the risk and rewards of travel hacking with credit cards. This week we’re diving into planning the actual trip. 

This is why I’m thrilled Justin from Root of Good is on the show today. I interviewed him years ago on Couple Money and he shared how he and his wife were able to retire in their early 30s with three kids. 

As you heard at the top of the show, he and his family have gone on some incredible family vacations. 

Here’s the thing, though – they’re more affordable than you realize. Part of their strategy does include using credit card rewards, but it’s so much more than that. 

Justin uses different sites to optimize those details like travel and eating, which adds up quickly. 

In this episode, we get into:

  • how to plan for family vacations with kids
  • finding deals on flights, hotels, and transportation
  • getting the most value out of the experience while still relaxing

Are you ready?

Let’s get started! 

Resources to Optimize Your Travel Rewards and More

Looking for ways to save on your next family getaway? Here are some fantastic resources to check out:

Thank You to Our Sponsor Coastal!

Support for this podcast comes from Coastal Credit Union! If you’re living in the Raleigh Durham area and looking to bank better, come check out Coastal today.

As a credit union, Coastal serves its members first including an annual loyalty bonus. We've been members for years and love their service and competitive rates on checking and savings accounts!

Rollover Your 401(k) Easily with Capitalize

We’re grateful for wonderful partners like Capitalize. Not only do they support the podcast, but they help make managing your money so much easier. 

Did you know that it’s estimated that there are currently over 24 million “forgotten” 401(k) accounts? In fact, the average American changes jobs every 4 years

And because of the Great Resignation, you or someone you know might be changing jobs even more 

It’s an extreme case of out of sight and out of mind. Is your old 401(k) in there somewhere, left behind at a job you're no longer with?

One huge benefit with an IRA is you get to choose how your money is invested, not your old employer. 

If you want to consolidate your old 401(k) and have more options with how you invest, it may be time to roll them over into an IRA.  

With Capitalize, they handle the process from start-to-finish – for FREE. They handle the process from start-to-finish, and yes that includes calling the 401(k) provider on your behalf. 

Find out how and get started today

Support the Podcast!

Thank you so much for listening to the podcast! If you enjoyed this episode and found it helpful, here are some ways to support it.

  • Spread the word! If you enjoyed this episode and think it can help a buddy get on the path to dumping debt and becoming financially free, please share.
  • Leave a review. Honest feedback and reviews make a big difference and gets the word out about the podcast. Leave your review on AppleSpotify, or Audible.
  • Buy me a cup of coffee!

Travel Hacking Your Family Vacations: Credit Card Rewards

Learn how you can find the best credit card rewards and travel hack so you can save significant money while enjoying a fantastic and memorable vacation!

Travel Hacks to Enjoy Your Family Vacation for Less

We typically talk about ‘responsible’ financial goals, like paying off debts, saving for emergencies, vacations and buying a house, investing for retirement, and so forth. 

Those are wonderful things to take care of, but money can also be used for fun things as well, including travel. 

Look, these past two years have been stressful for so many families and I understand that many of us would like to literally get away from it all.

TripAdvisor did a survey earlier this year to see how people plan to travel this year. They found:

  • More people are looking to travel in 2022 than pre-pandemic reported travel levels
  • Here’s the interesting takeaway: roughly 3 in 10 Americans (29%) who traveled for leisure in 2019 said it's more important now than before the pandemic to splurge on a big trip
  • 41% of Americans said that traveling to a destination they've never been to before would be more important to them now
  • The top three most important considerations, across the markets surveyed, in future travel plans to visit a destination was to get immersive by seeing new places, having new experiences and learning about history and culture.

Planning a family vacation can be a way to not just relax, but mentally recharge and reset ourselves a bit. 

We’ve changed our destinations and stayed in state for most of our trips. Yeah it was a great money saver, but we also got to rediscover and enjoy some awesome spots here in North Carolina. 

We’d love to expand our horizons this year while still keeping safe and staying on budget. 

If you’re in the same boat, I think you’ll enjoy these next two episodes. We’re going to look at how to travel hack your family vacations so you can enjoy more for less. 

Next week we’ll discuss the logistics of planning an epic vacation on the cheap. This week we’re going to dig in and see if you can really snag a deal with travel hacking and credit card rewards.

That’s why I’m happy to have Daniel Rathfelder on the show. He’s the VP of Card Services over at Coastal Credit Union. He’s going to get into how those regards card programs work and how to get the most out of them. 

In this episode we get into:

  • Finding the right reward card
  • How your credit score is affected 
  • Optimizing your credit cards to reap the rewards and not get into debt

We have a lot to cover, so let’s get started! 

Resources to Optimize Your Travel Rewards and More

Looking for ways to save on your next family getaway? Here are some fantastic resources to check out:

Don't forget to join our Thriving Families Facebook group!

Thank You to Our Sponsor Coastal!

Support for this podcast comes from Coastal Credit Union! If you’re living in the Raleigh Durham area and looking to bank better, come check out Coastal today.

As a credit union, Coastal serves its members first including an annual loyalty bonus. We've been members for years and love their service and competitive rates on checking and savings accounts!

Rollover Your 401(k) Easily with Capitalize

We’re grateful for wonderful partners like Capitalize. Not only do they support the podcast, but they help make managing your money so much easier. 

Did you know that it’s estimated that there are currently over 24 million “forgotten” 401(k) accounts? In fact, the average American changes jobs every 4 years

And because of the Great Resignation, you or someone you know might be changing jobs even more 

It’s an extreme case of out of sight and out of mind. Is your old 401(k) in there somewhere, left behind at a job you're no longer with?

One huge benefit with an IRA is you get to choose how your money is invested, not your old employer. 

If you want to consolidate your old 401(k) and have more options with how you invest, it may be time to roll them over into an IRA.  

With Capitalize, they handle the process from start-to-finish – for FREE. They handle the process from start-to-finish, and yes that includes calling the 401(k) provider on your behalf. 

Find out how and get started today

Travel Hacking Using Credit Card Rewards

Elle Martinez: Many people have different ideas about travel hacking with credit cards. To double check we're on the same page, here's how I describe it.

Travel hacking is where you can get a discounted vacation- in some cases practically free one- by strategically using credit card rewards. Those rewards can be points, miles, and cashback.

Now you accumulate those rewards by using your credit cards for purchases. Many hackers gained the most by signing up for new cards because typically that's where the big bonuses and rewards are.

Now you could, and others have benefited from this, but how exactly does this work? How do the credit cards stay in business?

Daniel Rathfelder: Utilizing points to redeem for travel is not a new concept. I mean one of the most popular travel cards out there is the Delta sky miles, American express card, for example. That's been around for ages. I think we've all probably gotten an offer in the mail for it or something.

It's definitely one of those, those products that allows people to utilize sometimes their daily spending and redeem that for travel.

From an industry side, Travel cards are built around two key components. One is high interchange on travel merchant categories. So if you're using your card at say a Delta airlines or a Southwest or spirit or whatever, those particular vendors pay a higher interchange percentage on that transaction.

I'm just going to make a round number two and a half percent and so that credit card provider gets two and a half percent of your transaction for that as income. That's why you see usually the travel cards have slightly more appetizing rates or rewards rates than what you would see on a normal like cashback card, where they have to kind of blend the whole thing where like a grocery store, obviously doesn't pay two and a half percent of your transaction. They're more like 0.8 or 0.9% so very different in some of those strategies.

But utilizing a card to make the purchases that are specific to optimizing that reward offer and possibly the introduction of getting a new product definitely allow somebody to redeem for free flights and whatnot.

How Travel Reward Cards Work

Elle Martinez: Yep. There's always costs. I found this fascinating because of how we use credit cards. We have a cash back credit card that we typically use for a big purchase or vacations. We put it on the card and immediately pay it off. That way, if there's any problems, it doesn't mess with our regular checking and savings.

And they can deal with the credit card company. There's always going to be some, trade-offs not just with travel rewards, but with credit cards themselves. Before you sign up for one. There are a few things to consider so that you maximize the reward while not getting burned.

Daniel Rathfelder: The things to think about are what are you actually using in your daily life? You can relate this to that; you're not going to get yourself in trouble, which is the second piece of those rewards cards. Which is those typical high interest rates that you'll see.

You'll start to see the best rates for some of those travel cards in like the 16% number. That's pretty high as an industry. Whereas like lower cash back card or a non rewards card, you can get as low as like eight, 9% on a lot of those. It's very different in the approach and what you want to accomplish with.

How to Find the Right Credit Card Rewards for You

Elle Martinez: If you've been online, looking at anything financial or travel related, you've probably seen those ads about signup bonuses on some of those cards. Typically you have to spend so much within the first three months to get those really great bonuses, but how do you know which rewards are good for you and your family?

Daniel Rathfelder: Yeah, I'll start with annual fee. That's a big one. A lot of the times they'll waive the annual fee for the first year. But then you're from a credit side, you don't usually want to open and close credit cards very quickly. So you're going to be charged at annual fee for multiple years before that, even if you only use it once, put it in a file cabinet or a safe and put, tuck it away for a number of years. So that in mind, it's not just a, one-time kind of hit there's re continuation of that fee.

The bonus stuff is great but a lot of the time and, and what we study in the card industry is how to activate a consumer into a product because none of it pays for us from an activation side, if they're going to use it once and never use it again.

That's why the annual fee sometimes exists. That's why there's three months of incentive, because they're trying to build a behavior for you to use that card.

That's why that happens. So those incentives say, a 60,000 mile bonus or something like that. It was there with a annual fee of say, $95 in waves for the first year.

Then there's probably sometimes like a $20,000 bonus. If you spend say $1,500 in your first three months. A pretty attractive offer, right, right out of the gate. again, Think about what you're doing making sure you can pay that vacation off, or you get a 16, 17, whatever the APR is associated with the card.

Then you're going to be paying that $95 fee the second year, the third year, and probably the fourth year. If you don't use your card ever again, and that's always built into that and you never get those introductory points typically again. The rewards, rates can be anywhere from two to 5%.

Are Those Credit Card Travel Portals A Good Deal?

Elle Martinez: This is serious business for sure. If you decide to go with reward cards, you got to know the ins and outs of it to maximize those bonuses. For some cards, they incentivize you to use their travel sites.

Daniel Rathfelder: The other thing to look for is there's some companies that will be specific to using their travel site. So you can only get that like say on the 5%, which is on a couple of different providers, you have to go through their specific travel.

Spirit airlines, for example, would just typically known or jet blue, low rates on airline fees. You're not going to fly jet blue. You're not going to fly spirit. They have not even options typically at some of those sites.

Be prepared for slightly more expensive flights like American airlines or United or Delta or something like that. You'll pay similar prices or the same price as you would if you book directly through Orbitz, but it's Hey, we're going to use that site.

The reason that they do that is they avoid that interchange a loop because they don't pay; like a orbits, for example, they'd have to pay a percentage for that interchange fee. If you go direct to a site that's owned by the institution, they don't pay that. They just debit the card. They create a backend electronic process and say, okay, I'm just fine and they avoid that. That's why those points systems are a little bit higher through those, those sites.

Is the Annual Fee Worth It?

Elle Martinez: It's probably the personal finance nerd in me, but I was fascinated by how these programs work, especially with the psychology of getting cardholders to develop new habits. There were also a couple other points that caught my attention, like annual fees. I was not aware until digging into it recently.

How varied in how much it could be between cards. I was speaking with someone who's pretty much a professional travel hacker. Don't worry. You'll hear from him in the next episode. He recommended the card and the annual fee was just under $400 but it had a ton of bonuses on top of the one we eventually got.

Considering how much he and his family traveled compared to how we do it, I can understand why he went for it and it just didn't work for us on the number side.

That's why it's so important for you to sit down and look at the numbers to make sure you understand how you're spending and that if you're going with a credit card, it aligns with that.

Which Reward Cards Are Best? Cash Back Cards, Points, or Miles?

Daniel Rathfelder: Yeah. That's a really good conversation to have and to think about when you're going into, what card should I get? How often are you going to use it? If it's kind of a one-time thing a year, like that's how my family offers. We take one nice family vacation a year. That's what we do.

We might go and disappear like to beach or something a couple of times a year, but that's about it. It's not this grandiose, Hey, let's travel and have everybody do that.

A lot of the times, if you're not a frequent traveler or using it for booking frequent travel, the benefits for travel are sometimes less than if you were to look at just using your everyday cashback card.

Even putting all of your general purchases on it, including your travel, a lot of companies will allow you to bank that cash back piece and let it sit off to the side. Then when you're ready to do that vacation, go ahead and dump that over.

It's just an easier way to maybe maintain a lifestyle and not have to change behaviors and not have to watch, make sure. Hey, did I make sure I made the payment on this other card before the due date and don't have credit reporting history or late fees or anything like that. Definitely a couple of different avenues, but it depends on how much you travel.

Elle Martinez: Speaking of paying off for your family, there's another thing to consider when you're trying to find the best rewards card for you. Which is the right option- points, miles, or cashback?

Daniel Rathfelder: Yeah, so miles, a little bit harder to do because as seasonality changes and so forth, it's not something as tangible as cash, right? Like we all know what a dollar represents. We don't really understand 10,000 miles represents, like it's a little bit of a question and that 10,000 mile piece can change.

It's actually interesting, like the cost of gas, for example, for everyone has gone out including airline industry. You know, what you could get for 10,000 miles a year ago is very different than what you can get for 10,000 miles today. And it sometimes like, Why doesn't that compute?

Why do I need 25,000 miles for the trip that I only need 10,000 last year? But yet the way that the mile odometer kind of runs on the rewards points is always the same. It doesn't change the card. Now I know that some people would say, well, that's a pretty direct relationship to the cost and cash.

Yeah. But if you're getting a cashback card, you at least know, maybe I can choose a cheaper flight or maybe I can choose a flight live another carrier or whatever. That would be a little bit less. So it again, depends on how often you travel.

A lot of times, like you were saying your friend's recommended a card that he uses all the time. It sounds like he's a frequent traveler. He probably enjoys going to the airport lounges. But in that same token he, he probably enjoys flying the same carrier or the same airline pretty regularly. There's no bonuses because he's flying an airline with maybe using their card and, you know, free checked bags or free upgrade or something like that.

Again, it's all built into that financial model for them, but yeah, that, it's very different.

The other thing I'll say a lot of people do is they'll actually sign up with a business and use their credit card with a points model or something like that to accrue. Then sometimes use that for personal personal gain if they're traveling a lot for business.

That's a fairly good avenue because at least, it's possibly under the business for the credit reporting side. At the same time from a financer accounts payable piece, that's an easier ask to make sure that those are paid on time.

How Your Credit Score is Affect When Opening New Reward Cards

Elle Martinez: Since we're talking about opening up new accounts, one concern I heard from families was how doing that affects your credit score.

Daniel Rathfelder: I think the one common misconception people have when they talk around credit score is they think, well, if I do this, how many points do I lose off my credit score? That's not necessarily the case.

It kind of depends on your full picture, but what I will say is every inquiry that put on your credit report, which this would be an inquiry. If you apply for a card and get a card or even just apply, it does add to the risk of what the model sees so that typically lowers your score.

If you had a great credit score and then did 20 credit card inquiries to apply and see which ones you got approved for, maybe you've got to proof for all. That would cause a lot of detriment to your credit because you did 20 inquiries and then possibly you open 20 accounts up. Even though if you never put a balance on any of them or paid them on time or whatever, it, it is more risky to a lender to give you a loan later.

That's really what a credit score is: a representative of is the associated risk or it's really a probability of bankruptcy.

If you have more inquiries or open more cards to get more bonuses we, as a financial institution are going to go, Hmm, they're a little bit more of a risk because if something were to go wrong in their life, a life event happens, which those happen all the time.

They now have say $60,000 available for credit card debt, almost at the drop of a hat. Right. they could go all of that credit card debt, and then we might be on at the same time if we extend to them alone.

So it's not necessarily a direct relation, but yes, it does affect your credit. Then closing the credit cards after you're done using the points that actually has a more negative effect than just opening the card.

Now, some people even us as a financial institution might recommend that for certain cases, but in a lot of the cases, if you have a good credit score and start closing credit card accounts that will lower your score, at least temporarily until that back.

Being Wise with Travel Hacking Using Reward Cards

Elle Martinez: I hope you enjoyed seeing how those credit card rewards programs work. Before we finished up, Daniel had some great advice to keep in mind.

Daniel Rathfelder: Honestly, it's kind of pick and do the planning, right? Any part of your financial life should be somewhat, at least the majority planned. What does that monthly budget look like? What savings? What's retirement? Generic things; right?

Even the credit card component, like you were sharing traveling with your family, possibly in the fall, how often are you going to do that?

Is that like once, every couple of years? Try to maybe take ourselves out of the pandemic for a couple of minutes, but pre pandemic or post pandemic. What does that look like for your family? Is that going to be an every year thing and then start to figure out, okay. If I do that every year, what it's going to cost?

This is my fee. I can calculate what my rewards are going to be now on what they're going to be next year. Start doing just some really, really simple math. I mean, this is back of napkin, use your iPhone calculator, math. It's not super hard.

Then is that something that you feel is that there's risk and your other pieces of your financial life that would, if you opened up a credit card, You'd have to put something else on it. Would you ever pay interest on it or could you pay it off?

Those are really important. And then I'm going to go back to my earlier point. Could you just live with a cashback card? I mean, again, all of these providers, they typically have it cashback card without a travel rewards component to it that a lot of those don't have annual fees.

As a benefit you would compile and get the cash and use the cash when you're ready for that vacation. Then do you need a manage it? Is there a credit score issue? Is it easier for you to control?

Support the Podcast!

Thank you so much for listening to the podcast! If you enjoyed this episode and found it helpful, here are some ways to support it.

  • Spread the word! If you enjoyed this episode and think it can help a buddy get on the path to dumping debt and becoming financially free, please share.
  • Leave a review. Honest feedback and reviews make a big difference and gets the word out about the podcast. Leave your review on Apple, Spotify, or Audible.
  • Buy me a cup of coffee!

Living On One Income: How Families Can Make the Switch

Are you thinking of switching over to become a single income family? Learn the strategies and tactics families can use to make the transition easier on your finances!

Switching to a One Income Family

There are many great reasons why a family may decide to transition to a single income.

For some they're anticipating kids and one of them will be staying at home to care for them.

Others may be thinking of a career switch and so they're going to go back to school either for a certification or degree.

Or you've decided to start a business and so it's more practical to budget for one income while that business gets off the ground.

For us personally, it was a bit of a necessity. At the time we were married, I was wrapping up my senior year in college and was working as an intern.

The pay was good, but there was no guarantee it would continue beyond the semester. We decided to play it safe and base our budget on one income. Looking back, that decision has been a game changer for us.

We actually decided to use that as the basis for our family finances. We kept that mentality of basing our essentials on one income and then use the second to speed things up, like paying off debt. Savings and yes, having some fun.

Any of these cases may be true for you. So, how do you make this transition work, especially when it comes to your finances?

Joe Mecca from Coastal Credit Union is back on the podcast to share his take as  his family recently made the transition to prepare for their daughter’s arrival. 

In this episode, we get into:

  • Setting up your finances and budget
  • What you need to change and update with insurance and other finances
  • Doing a test run of the new budget

Even though our conversation is coming from a family, having a stay at home parent. There are a lot of principles that can be used in your family for your particular situation.

We have a lot to cover, so let’s get started!

Resources to Shift to Living on One Income

Here are some resources to make managing your money much easier!

Thank You to Our Sponsor Coastal!

Support for this podcast comes from Coastal Credit Union! If you’re living in the Raleigh Durham area and looking to bank better, come check out Coastal today.

As a credit union, Coastal serves its members first including an annual loyalty bonus. We've been members for years and love their service and competitive rates on checking and savings accounts!

Rollover Your 401(k) Easily with Capitalize

We’re grateful for wonderful partners like Capitalize. Not only do they support the podcast, but they help make managing your money so much easier. 

Did you know that it’s estimated that there are currently over 24 million “forgotten” 401(k) accounts? In fact, the average American changes jobs every 4 years

And because of the Great Resignation, you or someone you know might be changing jobs even more 

It’s an extreme case of out of sight and out of mind. Is your old 401(k) in there somewhere, left behind at a job you're no longer with?

One huge benefit with an IRA is you get to choose how your money is invested, not your old employer. 

If you want to consolidate your old 401(k) and have more options with how you invest, it may be time to roll them over into an IRA.  

With Capitalize, they handle the process from start-to-finish – for FREE. They handle the process from start-to-finish, and yes that includes calling the 401(k) provider on your behalf. 

Find out how and get started today

Switching to Become a Single Income Family

Elle Martinez: I'm thrilled we're going to be talking about switching to becoming a one income family. That's a big shift.

Joe Mecca: It's quite a big shift. I think always easier to talk about something when you're going through it or have gone through it.

This one's kind of live as it's happening. So I'm learning on the fly just as, just as much as you know, sharing and teaching.

Elle Martinez: Yeah. You became a father in the past year. Congratulations.

Joe Mecca: Thank you. Thank you. Yeah, we have a little one, four months old.

Elle Martinez: Wow. Yeah, that's a fun time. It's always going to be shifts in changes. When you're a parent, you're always adjusting, but I wanted to talk about finances specifically about switching to one income. Not every time, but a lot of families have these conversations when they're thinking of having kids.

First of all, when did you decide to make this shift?

Joe Mecca: We had our discussion pretty early. I know our discussion today is right now about, having a baby, but. I think this decision could really flow into other life scenarios as well.

I think a listener could be able to apply that to some different scenarios and, and make the decision to go from a two to a one income household.

We started having our conversation pretty early in the pregnancy because we had a timeline and we knew when we were going to be expecting and be able to know when we were expecting to change. But we really got deep into formulate probably about like seven months in.

Creating a Transition Plan to One Income

Elle Martinez: Okay. Gotcha. So, it's not as simple as, okay. We're going to switch the one income. There's usually the transition period. What was that big picture plan?

What was going through your mind as you're planning this transition and your wife's mind as well? What did it look like with savings? I know you're a saver. I think we've coined you the super saver.

Joe Mecca: First and foremost, we wanted to make sure we were doing what was best for our daughter. We considered one having my wife stay at home and be able to be her primary caretaker, but also we consider what would it be like if she continued to work either full-time or part-time and then maybe have in-home care?

We both were opposed to, sending her away and having daycare and a scenario like that. We knew we kind of wanted something in home. We kind of weighed our options from there and really focused on what's best for her what's best for her care.

Ultimately, we said, We're just going to go through and do the math and kind of figure out we figuring out how we can make it work and see what we'd be looking at to see what we would be entertaining.

We really had two parts to our plan though. The first was to create a budget that would reflect making the switch from two incomes to one.

Then we looked at a bunch of different factors cause it wasn't just reworking how we were spending money. We had to look at changes in income.

So it wasn't just looking at eliminating my wife's income coming into the household, but also what mine would look like after adding family members to my benefits plan?

I knew my deductions would increase so that means my take home would decrease a little bit and I would start contributing more to my health savings account because the one that would change for me. So all of that.

You mean a smaller take home for me as well, a little bit less to work. Then I looked at the changes to the limits in our tax advantage savings.

You mentioned that, I'm the super saver. In every scenario we looked at, I was not willing to sacrifice doing things like maxing out 401k and maxing out HSA contributions and IRA contributions like that, that had to be part of the plan.

What we did is we created a couple of different household bills, scenarios to see what those look like which I can get into that a little bit later. It would show what the new amount that we would need to pay all of our monthly bills. All of all the necessities. I would have to then change what I was putting into that account.

Finally, what did all those changes mean on what's left for discretionary spending and our other savings? You know, the stuff that's maybe a little bit short term and that's where really the biggest impact was, is what's left to spend.

Then the second part of the plan, and then here's what I'm really advocating for, for anyone who's even considering making the switch. We tested it.

Unfortunately, you know, I said, this was based around having a baby so we had a timeline and we knew when things were going to happen for us. We decided to start following our new while my wife was still working.

Then through her parental leave, so we were able to implement our plan before we actually implemented our plan.

That meant our household and our spending accounts would then reflect what we were anticipating my take home to be. And what would be anticipated to be available for the. And then, so the neat thing there was during that time, then we now had a little bit excess savings that we were able to kind of be a little bit strategic about you know, we still had her income coming in and then we had a little bit extra from mine that was reflecting the part that I hadn't yet seen a decrease on.

So we put all that aside and we kind of used it and get ourselves prepared for, you know, ultimately making the decision that she was going to stay home.

She came into the marriage with a little bit of credit card debt so we still had that to contend with. We paid all of that off during that time. We weren't sure we were going to be able to, but once we put the plan in place, we actually found we had a little bit extra than we had anticipated.

So we paid off all of her credit card debt. We made some plan furniture purchases. Now we're not worried about, things that we were going to talk about for the next few years, from a furniture standpoint. We were able to go ahead and get those taken care of. And of course, I'll be saying that we needed to get ready for the baby.

Getting the baby's room ready, and a lot of the supplies and things that we knew we were going to need at least in the first six months. We got planned for that. From that we actually still have a little bit left. So we're sitting on that and saying, okay, let's hold that aside in a separate savings account.

We didn't really budget to have that. But we're able to sit and sit back and think about, where we're able to use that later on. What that did is that built us into going into a two week cycle of budgeting around what we thought our new spending limits would be and what we thought our new household budget would be and we got used to that.

We got used to that through probably four and a half, five months almost. So when we did make the decision after her maternity leave ended that she was gonna stay home. We knew what it would be. We had been living it.

What was gone was the extra, but the week to week spending limits and household budget, that was set and we were able to then easily make that transition.

Do a Test Run with Living on One Income

Elle Martinez: Yeah. Wow. There's a lot of things I love about that. First of all, I also agree, test it out before you make that transition see if you can sustainably live on that new budget.

We did that as well. And as you pointed. Moving to a single income becoming a single income family doesn't necessarily have to be with kids.

Usually that's one of the pivot points where a family makes that decision. For us, I was starting my freelance business years ago. So knowing that that can fluctuate, especially when you're starting a business for the first few years that gave us that buffer because we had a budget that was relying on one income.

And then as you say, like, if you have that extra income, you can put it towards your goals, paying down debt, saving for short and long-term goals and then, hopefully putting some aside for investing.

I love that, especially in the pandemic, there's so many things changing, so it's nice to relieve some of that stress by having a financial cushion set aside. But I mean, I wasn't surprised with their level of detail. It's you, Joe, you heard the super saver.

Joe Mecca: You know, there were spreadsheets involved.

Updating Insurance

Elle Martinez: I love that. So you guys seem like you were really. Pretty much in sync with what you wanted, but I was curious, besides the budget, you mentioned health insurance had changed.

Has the issues like life insurance come up or what other changes have you noticed with your finances that you're doing to prepare for this next season of life?

Joe Mecca: Well, we did have to make the health insurance change. I think that was a big impact. She had her own employer plan previously, and it actually had a pretty generous reimbursment component to it that really helps cover her deductibles. So she stayed on her plan through having the baby and really through the end of her employment.

That was nice that we were able to have that handled a lot of the birth and delivery and even some of the early medical expenses.

But we have switched her to my plan, but it went from being an individual plan to family plans. Now that was an added expense. Yeah. We haven't really touched life insurance yet kept that pretty pretty consistent happy with really the level of coverage that we have.

One of the conversations that we've been having is I've got a term policy that isn't, isn't ending soon, but Isn't going to go out as far as now, I would anticipate needing to. I'm 45 now looking at maybe in the next two years, getting another term plan to, to overlap and then take me through to 67.

So we've talked about that, but that's a couple of years off right now. Yeah. Most of the other stuff that, that we've had to tweak is just really adapting on the fly to kind of the new situation and what we're learning as we go.

Shifting Budgets with Single Income

Elle Martinez: Yeah. it's always a work in progress with your finances and it's going to reflect whatever stage you're going through in life. You mentioned you were spending less in certain areas and spending more, do you mind kind of going over a few of those in the budget that you've adjusted, maybe overestimated on some or under underestimated on the others.

Joe Mecca: Sure. We definitely underestimated on a few of them. Some of our expenses have increased one that really had thought about. Too much in advance, but, but have adapted to is our utility bills are, are a bit higher. Not, not a ton, but enough that I've noticed our water, our electric, our gas, they've all increased slightly. It turns out the baby likes the house a little bit warmer than I do.

Yeah, we've we've adapted to that. Also we're doing a lot more dishes and a lot more laundry, so, so we've seen a higher water bill. We've seen a higher gas bill. Even the electrics gone up a little bit. Yeah, we're doing cost diapers, so we're doing a couple extra loads of laundry on top of.

Washing her clothes and all of her things. Obviously medical bills are higher. Usually had fairly well medical bills and, and didn't even come close to it through my deductible. Now we're going to the doctor pretty regularly.

So yeah, and while a lot of those are covered in our plan, there's been some that are a little bit extra so that's been a little higher and we've budgeted for that though. I certainly advocate for health savings accounts and being able to use those to cover expenses.

I had been feeding my HSA for years so comfortable placed now where I'm not necessarily worried about having even having a year where there's a high number of medical bills because I've planned for that.

Yeah, but while we've, as I say, reduced our overall discretionary spending things for the baby or taking a bigger cut of that than what we would have otherwise spent on ourselves. So we're still, the money is the money.

Elle Martinez: Yeah.

Joe Mecca: Yeah, it's just how you allocate it. There are some weeks where, you know, we, we need some extra baby items and, you know, that means maybe we put off a purchase for next week or something like that but we're pretty flexible.

One thing that's probably going to be down for awhile is entertainment and cost. We like things like concerts and sporting events and, and really haven't spent that kind of money. Yeah, during the pandemic because of it, but coming out of it where know, maybe looking forward to having more entertainment options.

We're really hitting the brakes on that for a little while unless it's things that we can do with the baby. So I do anticipate our entertainment costs to be, to be down for awhile. But really at the end of the day, the money you have to work with is what you have to work with so it's just a better of how you decide to carve it up and alley.

Elle Martinez: Yeah, absolutely. I completely agree. From one parent to another automating those savings because you're going to be so busy with baby and your kids, that it, it makes a dramatic difference.

I really appreciate these tips, Joe, and I do want to mention to any listeners who are in the Raleigh Durham area and are coastal members Coastal's does have a wealth management team for these pivots in your life. That would be a great resource.

I've met some on the team. Not only are they knowledgable, but they really care about helping you align your savings, your family finances towards your goals.

If you're thinking about becoming a single income family, or you're transitioning into parenthood, these are like great moments to sit with someone who's knowledgeable that can help you craft the plan that fits you.

Joe Mecca: Absolutely.

Photo by Josh Willink from Pexels

Money Diaries: Pandemic Pivots and Budget Shifts

These past few years have been challenging for many families. Today, we chat with the Stewart-Isaacs about how they've worked to pivot and thrive!

Family Finances During the Pandemic

Everyone I personally know has been impacted these last two years, financial or otherwise. We’ve had to adapt, pivot, or in some cases push through some challenging times. 

If you’ve spent any time in our thriving Families facebook group, you can see we’re supporting one another as we work with what we have and towards our family and financial goals. 

Today I want to highlight the Stewart-Issacs, a local family here in the Triangle area (who during a conversation we had are also Coastal CU members). 

Michael and Shemekka have had some pretty big shifts to deal with since 2020.

They were featured in the NY Times last year in their money diaries series and shared their numbers as they navigated through life changes such as having a baby, job switch, remote learning for their kids, oh and buying a house.

In this episode, we get into:

  • Balancing work from home while having kids doing remote learning 
  • Buying a house in the middle of a pandemic
  • Teaching their kids to be financially savvy and thoughtful

We have a lot to cover, so let’s get started!

Resources to Stay on Top of Your Money

If you want to chat some more about creating better money habits, questions, or share your own tips please join us over at Thriving Families on Facebook.

Thank You to Our Sponsor Coastal!

Support for this podcast comes from Coastal Credit Union! If you’re living in the Raleigh Durham area and looking to bank better, come check out Coastal today.

As a credit union, Coastal serves its members first including an annual loyalty bonus. We've been members for years and love their service and competitive rates on checking and savings accounts!

Rollover Your 401(k) Easily with Capitalize

We’re grateful for wonderful partners like Capitalize. Not only do they support the podcast, but they help make managing your money so much easier. 

Did you know that it’s estimated that there are currently over 24 million “forgotten” 401(k) accounts? In fact, the average American changes jobs every 4 years

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Money Diaries: Pandemic Edition

Elle Martinez: I can't believe I'm saying this. This is two years since the pandemic started and I don't know anyone who hasn't been affected in some way, shape or form.

I saw your incredible story in the New York times.

Credit: NY Times

Michael Stewart-Isaacs: Going through that pandemic was an interesting time period. So to have that opportunity to be a part of the I guess New York times version of history in motion represent people who were finding ways to survive in the pandemic was definitely an honor, but it definitely was telling to learn so much.

Shemekka Stewart-Isaacs: Yeah, absolutely. It really helped us be more accountable in the midst of crisis and to lean into that a whole lot more.

Elle Martinez: I can't even imagine. I've done some news piece but to feel comfortable enough to like share your numbers. Cause I know like finances and family, people are very private about that, but you were very open and something that stuck out to me was the, not just the resilience, but it came across, like you guys were team.

You were really leaning into that with your kids being there for them. Balancing let's see work, you have four kids and remote learning at that time, different ages. You had a new baby job changes, and then the toddler and buying a house.

That is amazing that you guys are coming out stronger. So if you don't mind, can you go through the timeline of like what came first? Because did your baby arrive right before COVID or around then? How did that work?

Pivoting Family, Finances, and Work During the Pandemic

Shemekka Stewart-Isaacs: Okay, well if we start the timeline right before COVID kind of began to creep across the us, we feel like we were just ahead of it. When things started shutting down, we were still, I was still very much pregnant due in June. And we were being we were in the Capitol having sent it to meetings, in March.

Right, right. They started breaking down. It was like, we have a poster, things were coming, you know, they were being a little bit more careful, a bit. But, but it hadn't hit very strong then. We were in DC shaking hands with senators in the midst of while a pandemic was like, so keeping up and breaking, closing things down alone.

Elle Martinez: Wow.

Michael Stewart-Isaacs: Essentially having a small business, building our consulting firm. I was recently laid off my job because of my department closed. So making the transition felt the momentum of the work supported by Shemekka's consulting firm. Then all of a sudden, the whole world falls apart and we are already looking for a house.

We were already preparing to, you know, family because we knew the new baby was coming in. Then the worst crisis that any of us have ever experienced and we're still experiencing, had started to happen, we had to, as unfortunate word, we, the people say pivot all the time. We had the balance, we had a balance with each other.

I think a lot of what our story reflects is that we saw the need to support one another should make us whole in our family in regards to me transitioned in my income and then being able to come in and support her to keep us supported, even though we're going through the roughest time.

My background is in sales and marketing, and Shemekka just one of the most amazing leaders and coaches. So us kind of building each other up and then analysing the kids. I was calling myself, daddy daycare sometimes had to do just to keep the things moving and we were just fortunate to have each other and the opportunity.

From the different organizations work with, we were just grateful that everyone was being nimble and flexible and we found our opportunities.

Juggling Remote Work with Kids at Home

Elle Martinez: Yeah. That's, that's amazing. You touched on a lot of things, but something I want to go back to and highlight is, the reality is running a business like working period.

That was a big transition for a lot of people. I know my husband works from an office switch to remote. I'm an entrepreneur myself. So I understand like it is a lot to juggle it because you're wearing a lot of different hats and you have four kids remote learning and they each have their own needs.

How did you balance that cause like I kind of shifted, I don't know if you guys did this, like a swing shift. So I do a lot of work early in the morning before they would wake up. And then in the evening, whatever had to get done that day got done. How did you guys handle that?

Shemekka Stewart-Isaacs: We found whatever corner we could because. The students at four different schools having to participate in those classes, they needed quiet space and I'm doing leadership coaching. I need a quiet space too. So we all gave each other grace, and we knew that in this case balance needed to be fluid.

We needed to be flexible so if it was having a meeting on the stairs in the corner, you get a moment of quiet.

Michael Stewart-Isaacs: We had a son there was work underneath the family table and that was his choice, but he wanted to have his own space on his siblings. So just funny things that we got to see, our kids have to develop new habits to get their work done, to work with their other siblings.

It's not like they're in the same classes of schools say, what was that assignment? We had two middle schoolers, two high schoolers and trying to manage all of their activities, having to tell our son, he could play football, you know, are avid for those types of sports. And it's just, you know, when we're looking at all the things we had to do, I mean, it is a beautiful thing to reflect.

And again, And we're still in the midst of really that first real year of the pandemic. So it, you know, we were even in shell shock to share our finances, to share our habits, but we also knew that we had an opportunity because we are in a space where a lot of times, statistically African Americans always get judged in regards to financing.

We wanted to set an example priority as a family overall. So the pandemic just allow for us to know at worst case scenario, our work together. Planning Shamekka is super scheduling cause I can't tell you, I must admit. We can just do things at the whims, but because she loves the schedule that changed my life and it really helped us in this pandemic is having really strict schedules that we disciplined ourselves to.

We had to create our own daycare kind of system for our son so he could still be educated. The he's four now, and he's still not even in kindergarten yet. We had to create all these unique ways of overcoming these obstacles. And not let our kids feel burdened by it. That was the other part of it as well, too.

We're going through changes. Don't want you all to, you know, feel it and, you know, cause they felt it with the friends, not seeing that, like they wanted to, so it was a lot, but because we have faith and we want another we bought it together. So

Shemekka Stewart-Isaacs: we encourage them to join him when they. Up to, especially if we were if it was a late day for us. Cause we tried to do it before everyone got up, but if it was a late day and it was in between their classes, they could come over and join us. So we were able to incorporate them in that, to give them their own outlet for their own wellbeing too.

Buying a House During the Pandemic

Elle Martinez: Yeah. I'd love that holistic approach. We were in the same boat too. We have two girls and that was kind of focus was what kind of routine. With everything changing outside, and all these transitions, we wanted to give them a space where they would feel calm, even though, there's all this stuff going on, and then let them express themselves.

You know, they see the news. They're not ignorant. Kids nowadays like they are on top of everything with current events.

But I want to talk about on top of everything, buying a house. I probably don't live too far from, beyond I'm in Raleigh. And I had to help my mom, she moved into the area in the middle of the pandemic and it was crazy house hunting.

For you guys, how did that process go? Since we were going through the pandemic and then we all realized, like we all need kind of our own space in a house. Did that change your house hunt, like what you were looking for?

Shemekka Stewart-Isaacs: Oh, pre pandemic. We were always looking for space because our family was growing and. We wanted our room at that point space was important for us to be able and then while we're going through the pandemic, having a yard, we now house in the midst of this.

There wasn't like a backyard to let the kids go out and just run that energy out. So in the midst of the pandemic, I think our, one of our first pivots was backing away from the competing and putting money down earnest money and it getting out by someone else and that emotional roller coaster.

Well, that was hard cause we were looking at houses, the kids knew, they were aware of the process. We wanted them to see the process and so we involved them as much as we could.

Then I just had my, this is it, no more denial getting our bids. We're falling in love with too many houses. I was like, let's get out of the competition and let's just build, and that'll remove this competitive nature out in this ugly market, but what was it like for you?

Buying a Home as Entrepreneur

Michael Stewart-Isaacs: Well, I mean, it was tough. We were planning it pre pandemic I had with gainfully employed, we had our businesses going and then the world falls out and you're still looking for a house. And like I said, we were going place to place bidding, really trying to look at options, even outside of the city to kind of see that greater Raleigh areas.

What I've now come to call it. You know, if you think about markets like Atlanta, you know, they'll Atlanta, they call it proper. It's the hub.

People that have kind of built up the outskirts and the growth around. I think for us, we saw that opportunity to say, Hey, we go a little bit further out the city, but enough that it's an easy drive.

We can get something with a greater value. We can really kind of hedge the market a little bit. Use some of these government subsidies possible. And that's just me giving game and information that anybody out there use.

Find out what's out there. There's rural subsidies. There's USDA, there's so many different products that are out there to help people who are looking for a home.

I'm saying that now, because we were fortunate, we got in right before the there was so much. Even our house and honestly our value has increased because the market changed, you know? So that's another thing. Well, home ownership,

Shemekka Stewart-Isaacs: positive equities. Yeah.

Putting In the Work to Buy an Affordable Home in a Hot Market

Michael Stewart-Isaacs: So it was just right. Because we were already looking and we pushed and we pushed you know, she Mackle may call it or I'll go double down on it.

It's called us, buying a home while black process you know exactly your own challenges from get past.

To talk about our big family. We were former divorce SES who bought our lives together and so we're living what we call our second chance.

We're living our second chance to be able to put our lives together, to love a person that loves you, do everything to make sure our kids have the right setups and that.

Having a house was so vital to us having that foundation as my wife made me realize, because I was hesitant at first.

As a man, you want that, that big dream house and all this stuff, keep working, but was, I know we need something now. It was more, we have a beautiful home, but it was a practical, like we have a lot of kids, things are changing.

I had adapt and really suck up my pride and really say, Hey, we need this and that. She made it really clear to me when she made a concept of, we need a place to address. You living in a townhome, we were even renting a storage unit just to put it in perspective to keep excess products.

Now having a home, we've been able to have all of our stuff in one place. And that feels whole again, after a lot of life changes over the years. Cause we talking about you go back to oh eight financial crisis to this pandemic. A lot of people that hit.

We don't want to go over anyone's head to say, if you even had the chance to rebuild from oh 8 0 9 and then you get in fast forward, less than, you know, 10 years later, you're in the midst of a pandemic. That's traumatic for a lot of people so we just count our blessings that we had each other, and we were able to really put together a solid plan.

I tell anyone out there, if you have a plan work, it don't give up on it. Don't let outsiders tell you it's impossible. Push your loan agents, push your realtors. Push. Push push push. Because if you let up at any point, they'll give up.

If you stay positive and let them know that there's no way you're taking yourself out of the game, there's no way you're going to let a bid stop. You. That's the tenacity. We had to get it done

Shemekka Stewart-Isaacs: and it feels like a blood through draw away.

I understand why they make it hard. It's not fake. But like Michael was saying that persistence is key. I mean, and we did this buying a home self-employed, which is a whole nother.

Michael Stewart-Isaacs: So this is what I'm saying, all these things and we still had to keep the process going to make sure that they would not try to limit us in what was possible for our family, because we had had to happen.

Elle Martinez: Yeah and you bring up some good points. I've also had friends cause for those that are not familiar with the triangle area, it.

I mean, it is a hot market. It's growing. We had bought our house now it's been six years and two going on three years ago. Like they have a whole new development across the street. If they find like a sliver of land, they put a development in there. Yeah. So the price has shift and jumped, but you do have to all your, you know, programs that are available.

I've had friends, like you mentioned the USDA rural. Cause people think, oh no, it's completely out in the middle of nowhere, but many times it's just over the line so like on the map it says rural, but you're still, within those city limits.

I know first time home buyers, like there's programs out there and like you said, lean into that, your loan officer, lean into your real estate agent whoever's on your team, make sure they're pitching in.

Michael Stewart-Isaacs: Make them your friends. We did everything. I mean, we had a phenomenal realtor.

I mean they would gift us a lot. Just really kept us, even when we weren't getting the bids we wanted, they would still stay with us. He was wonderful gentlemen.

We are very grateful to our friend, Bobby, you know, he knows what he is. But hopefully, like I said, whether it's him or any other great realtors out there, he was an asset to us to really kind of give us the information we needed guided the.

It took us to places where he was able to get other clients approved and really helped them through the process of again, yes, your team is very important. Most times you don't think about that when you're married or kind to buy a home that you still need a team to complete the process and even down to your closing, make sure you have a lawyer involved.

We did ourselves, we have our legal kind of mindsets, but at the same time after reviewing the paper for those who may not be financially savvy or you understand legal terms, Definitely have someone who, you know, that understands those things, you, the paperwork you're signing because they will, you know, closing people.

It was this like, wow, you're charging me fees. So this was the part where we, we hope there wasn't any, we want to call it discrimination more than we would say it was a new normal that people have to get used to that home ownership comes in new complexions and it comes with different ways of lifestyle choices in terms of how you employ yourself and how you pay us.

So I think we had a teach our mortgage professionals lesson in terms of the new world in the NSF, all the people out there, creators all of those people who are having incomes coming in and in conventional ways, no one tells you that that may give you trouble doing conventional things.

So we need to make sure that people are aware of that and through our trials and we were able to kind of capture that opportunity because we literally were doing the interview with the New York times in the middle of the paper. While the kids are in class.

Why would you have to keep and wild? Let me step over here. This lady was writing her first book now and all of that came out at the same time. New York gun. I bought that for you too.

Elle Martinez: I remember that when it came in. And it

Michael Stewart-Isaacs: focuses the winners. I like it so much cause it had the receip

t. It was about, it's funny and locally we'll talk, they'll say keep receipts on things. What I tell people in life, keep your receipts from the grocery store, from the mechanic, from anything you do.

So you can start to pattern yourself and pay attention to the habits that we all collectively have. I think that was the biggest thing about this process. And it's not actually permeated into our work now that we c a greater opportunity for what we learn with New York times and this money diary process.

A lot of the work we do with our organization, our consulting firm, I Am brilliant.

We're helping organizations as well as individuals, families to really figure out not only their financing, but their mental health and other things that are going to be that can be obstacles. So our journey, but we're helping people find a better narrative so that journey ends with them finding things.

Family Finances: Teaching Kids About Money

Elle Martinez: Yeah. We're definitely with the community. We've had these conversations where, there obviously there's the numbers part of it, but there's a lot of habits mindsets that we pick up, whether, , good or bad from our parents either were copying them or running away from that, you know, protecting ourselves.

But until we can at least have those honest conversations about what. We do what we do. It's really hard to, to hit those goals that a lot of families have for themselves.

I do want to talk about habits real quick. Cause I was looking at the numbers. This personal finance, we talk about your savings rate. You guys did really good job with that.

Shemekka Stewart-Isaacs: I'm saving in this case because we had so many dynamics going on with wanting to have a comfortable down payment. I'm wanting to make sure we had things covered and things didn't want included. We knew we had to come right in.

So for us fixing a yard and having a budget for that was important. You come with the house, but we had to be prepared for that. Also having contingency plans, because we didn't know what was coming down the pipeline. A lot of my speaking engagements and traveling was cut down. So there was a pivot, even in my business model because I wasn't doing on location things.

So readjusting how we were living, how we were saving. Prioritizing that was very important to create and build a stronger cushion with the big milestones we were hitting with the new baby and new home.

Elle Martinez: Yeah but that was amazing. I was looking at the numbers, like that's a great savings rate, but something else I noticed was you guys are giving focus like that is a part of your budget, charitable giving, giving to family.

I wanted to talk a little bit about that as a priority. You mentioned, including your kids with the house hunt, letting them know. What conversations have you had with them like family finances, things like this is why we give, and how much we give because it matters.

Financial Lessons Learned From Parents

Michael Stewart-Isaacs: For me my background is, you know, one, I saw it with my family, myself. My family were immigrants in America, so my mother's from Sierra Leone. My father's from Jamaica. Growing up my principles in terms of. Finance. It was different because everything was about finding that career, finding that great job.

For me, growing up in America, I took a different pivot trying to go after entrepreneurship, which is a no-no, but I started young. That modeling for me and starting young and entrepreneur. It's something. We start with our children. Financially we teach them the bare principles of how to make money.

So we also, we were very cognitive, let them be aware of the bills we pay, you know, as any event like how much it goes out. So we make sure that financially economically are aware.

We also then say, here is our bank account balance, but we do let them know that everything does cost money and the time we're spending to work is it a time we use it to create that income so we can spend money.

We make sure they understand the cause and effect of working creates income and an income gets spent whenever you're doing the normal things. And that in itself, can't be overseeing. To then lose money that you can't do more bigger things.

I think our work affords us the opportunity with our clients that we get to travel. Exposure is very important for our children. We growing up, we both didn't necessarily have that level of travel and exposure.

Our parents did the best they could for us so we took the foundation, our family gave us and we built from that. We're teaching our kids to build from the foundation we're creating that hopefully they can build.

I think that's what everyone ultimately wants as we call it generational legacy wealth to grow. So we learned lessons and the lessons we're learning instead of waiting for our kids to turn 23 or 25 before we teach, we teach them at 13. That way, by the time they're 23, they're able to make sound decisions. We have our kids do a DJ work. We have our kids t-shirts candy.

Teaching Kids About Giving Back to the Community

Shemekka Stewart-Isaacs: I have raised them as a norm in their own giving and how they engage community. My son started at a very early age with miles missions. Miles is their last name and they were writing grants at seven for backpack programs.

They've been doing dance, fundraisers for community centers. They've done men's marches for gender and sexual violence. They were involved with the Sandy hook. They did the animal drive.

We've kept that and made that normal as far as part of their giving and engagement, so that they understand that this is, for us, it's about our faith. Giving gives more room for us to receive.

We did that around their birthdays. Oh, you wants toys for your birthday was time to gift your other ones, someone else. So having that as a practice, Something that's been very important and raising our kids.

Now that they've gotten older, now they want to make their own money. They we've been talking to them about entrepreneurialship. So from DJ into, we have an artist, you know, her artwork.

We have these young kids that they let us know what they like, and we show them business opportunities around it so that they can work in their passion so that they're not working for someone else and not enjoying their life experience with.

Michael Stewart-Isaacs: Yes and we just show by example. So they see us out there. They see us having to hold up the book and say, Hey, buy a book.

Elle Martinez: But they also seen the behind the scenes, which is like the time that you had to put to craft that book and editing. I wrote a book, so I get. It's not an easy process. It really like it pulls from you.

They said they see both sides and I love that the work and the reward with that, I know we just scratched the surface. So if anyone listening or watching this interview wants to learn more about, the work you guys are doing, want to get involved and reach out to you. What's the best way they can.

Michael Stewart-Isaacs: Well, I would say the first beacon for both of our organizations is our website. I am brilliant.org. That will give you a lot of information about our joint effort, which is what we do a lot about mindset development, leadership, development, community development. That's what I am brilliant facilitates.

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Want to Make Money as an AirBnb Host? Here’s What You Need to Know

Thinking about becoming an AirBnb host? A superhost shares the scoop about the costs setting up your place, figuring out your price, and how to make money with your space!

The 411 About Making Money as an Airbnb Host

One of the big shifts we've had during this pandemic is how we travel.

We've pretty much gone with renting entire spaces on Airbnb if we're doing a family vacation or getaway so far, it's been a really good experience. The value we get from having a place with a kitchen and yard has been a game changer.

Now the personal finance side of me was looking around and. How profitable was it being an Airbnb host? Also how much work was involved as a guest?

Most of our hosts had wonderful local recommendations, and if we needed anything, there were only a text away, but pretty much they were hands off.

It almost seems like the perfect passive income stream, but is that really. What's going on behind the scenes. I wanted to find out and I discovered I didn't have to venture very far.

During our last trip to Asheville we went out to meet up with some good friends we hadn't seen in a while.

While we were catching up with Barb and Don, I discovered she was an Airbnb host.

Knowing her hospitality, I had a sense that she was a natural candidate for hosting . Airbnb also agrees because she's listed as a Superhost. In case you're not familiar with the term. It means she's experienced highly rated and committed to providing great stays for her guests.

I'm happy to have Barb on the show today to share her story about becoming a host.

In this episode, we get into:

  •  setting her place up, 
  • figuring out prices, and 
  • making her guests’ stays fun and relaxing. 

We have some fantastic tips and even better stories so let’s get started! 

Resources for Managing Your Money and Becoming an AirBnb Host

If you want to chat some more about creating better money habits, questions, or share your own tips please join us over at Thriving Families on Facebook.

Thank You to Our Sponsor Coastal!

Support for this podcast comes from Coastal Credit Union! If you’re living in the Raleigh Durham area and looking to bank better, come check out Coastal today.

As a credit union, Coastal serves its members first including an annual loyalty bonus. We've been members for years and love their service and competitive rates on checking and savings accounts!

As an added bonus, Coastal also offers business accounts, so you have a way to easily manage your side hustle or income stream.

Rollover Your 401(k) Easily with Capitalize

We’re grateful for wonderful partners like Capitalize. Not only do they support the podcast, but they help make managing your money so much easier. 

Did you know that it’s estimated that there are currently over 24 million “forgotten” 401(k) accounts? In fact, the average American changes jobs every 4 years

And because of the Great Resignation, you or someone you know might be changing jobs even more 

It’s an extreme case of out of sight and out of mind. Is your old 401(k) in there somewhere, left behind at a job you're no longer with?

One huge benefit with an IRA is you get to choose how your money is invested, not your old employer. 

If you want to consolidate your old 401(k) and have more options with how you invest, it may be time to roll them over into an IRA.  

With Capitalize, they handle the process from start-to-finish – for FREE. They handle the process from start-to-finish, and yes that includes calling the 401(k) provider on your behalf. 

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The Rewards and Risk of AirBnb Hosting

Elle Martinez: How long have you been an Airbnb host?

Barb Kelly: Let's see, this summer will be two years.

Elle Martinez: Okay. Nice.

Barb Kelly: Yeah. We ended up doing that because we were living in a little cabin in a really nice little neighborhood, but it's very scenic.

It's was a safe, good neighborhood with awesome neighbors. We built a smaller house in the same town, but we needed to downsize and get away from stairs and a steep slope.

We ended up having this little cabin afterwards and we're trying to figure out, should we sell it now? The market wasn't terrific. I came up with the idea of Airbnb, because I had been seeing, what everybody else sees, ‘oh, you can make extra money' and we're on a fixed income.

Extra money is always a plus if you don't have to kill yourself doing it. Anyway so I looked into it, my husband's like, ‘I don't know about this. You hate people'.

And I really don't hate people, but I just don't like to get involved in any kind of drama so I wasn't sure how that was going to work out.

I started to research it a little bit and I thought, well, we actually have the perfect setup for it. As long as I wouldn't have to really deal with people, face-to-face a whole lot. I mean, of course I would be available if they needed me. I spoke to him about it and he's like, well, as long as I have to do anything, he has his own stuff.

Elle Martinez: Yeah, so he didn't veto it.

Earning Money Through AirBnb

Barb Kelly: Yeah. I said, well, let's just try it. If we try it for a couple months and it completely stinks. I mean, we're not signing any kind of contract or anything. We can quit at anytime that we want to.

I guess it'll be two years ago this June. It was actually right after we moved. We had not taken all of our furniture with us because we were downsizing.

I thought, ‘oh man, I'm going to have to sell this furniture, get rid of it or do something. When I thought about the Airbnb, I was like, oh, I'll get a pass for a little bit. I won't have to move any of this stuff so it worked out good.

It's a two bedroom, two bath cabin that is entirely on one floor. It has a open concept of a living room kitchen. It has a huge front porch that goes the length of the house that has an, you know, really nice views and it's very quiet.

I just went on Airbnb and read everything I could possibly read and then I looked up everything that I could find about. What's the worst thing that could happen, which is usually my criteria.

Elle Martinez: Yeah, that's good to know. Yeah.

Setting Up a Place on AirBnb

Barb Kelly: be. I want to know what is the worst thing that can happen to me? So I can be prepared, but we listed it on Airbnb and I'm immediately like the whole Summerfield up because we are in an area that has a lot of tourists.

We have a tiny little motel that has like six rooms and the rest of everything in the entire two counties is Airbnbs so I thought, Oh, man, I'm not even gonna make it. Nobody's going to be interested in this.

And I didn't try to oversell it. I didn't say, oh, it's got two twin beds, but you can sleep 12 people. You know, like some of this stuff is ridiculous.

Elle Martinez: Yeah.

Barb Kelly: four people can sleep great and there is a queen size air bed, but I'm just telling you the truth,

Elle Martinez: It's appreciated, as a family that's embraced in Airbnb, we've done them before, but in the pandemic really, that's how we've been taking our vacations.

I appreciate it because sometimes I'll see these and they're beautiful photos, so kudos to the photographer, but I don't know what kind of special lens they use, but I get there.

Huh there's the wall. It just, it felt so great. Then when you have two kids, I'm looking for space and I don't mind paying for that because I just need to have them decompress and relax.

Barb Kelly: Yeah, and you don't want to have to blow up the air bed every single time. Or you don't want to have one with a slow leak in it and the kids are complaining in the morning that they were cold and slept flat on the floor.

I think too, because we like to travel and so we have stayed in Airbnbs and whatever the name they're called all over the world. So we've stayed in enough to know what not to do.

Elle Martinez: Yeah.

Barb Kelly: Like I don't want to take a shower outside unless it's something I specifically asked for, you know, I would go to hip camp if that was the case.

I guess that's the other thing having stayed in the number from really super nice, to just super simple and traveling with other people, you really do want to have a real firm idea of what you're getting, because one place we stayed in Italy, the two bedrooms. They were big and everything, but they were so low. It was like a loft, but it wasn't, it wasn't advertised as a loft. And I got a six foot, three husband that kept banging his head up against the ceiling every time he got up

Elle Martinez: Let's see that makes a memorable trip. Just the wrong reason.

Barb Kelly: Yeah. Or you want to know a place that has really tiny narrow steps or a spiral staircase or whatever, because, you want to know what you're getting. A lot of times I've seen that it's kind of buffed up to look better than it is. And I don't like that.

I rather people come in and Look at it and it's actually better than they thought it was going to be. That's where really good reviews come in so that's, that's kind of the angle I'm going for you get more than you paid for.

Elle Martinez: So kind of rewinding back to when you were first starting, what were your initial goals like? Was this money for maybe your vacations or did you have a particular goal or were you very let's just wait and see, I don't want to budget that money out yet?

Barb Kelly: Like I said, we built a smaller house and so, but that gave us a mortgage so when we did the Airbnb we could pay the mortgage with the Airbnb money.

It wasn't coming out of savings or it wasn't requiring one of us to get a, you know, a full-time job or something like that or go into money that we didn't want to mess with.

But we weren't sure how much it was going to be or how much it was going to cost us to do it. Those were all kind of out there. It was just one of those things where you just had to just jump in there and try it and see how it worked out.

We got through with that.

Elle Martinez: That leads into my next question because yeah, I can see some people say, Hey, you know, I can rent out this room. It's easy to set up and I'll just but realistically, there has to be some costs upfront, to fix it up and get it ready for Airbnb. Do you mind kind of taking me one through what you needed to do to get the place ready?

Then also how complicated or not complicated is it to get on Airbnb and list your place?

Barb Kelly: The getting it ready part was not that hard for us because when we were building our new house we were already doing well and we're good about maintenance anyway. I mean we like a house to be maintained while we were living in it. Mainly it was we had to put in a new parking area.

The slope that we live on was really steep but we did have a pave drive, which was unusual in this neighborhood because most of it is gravel. It's a paved road, but it is in the mountains.

It was pretty, and people will comment on that every once in a while now, but at least it's paved. So you're not sliding and gravel if you're not used to it. It doesn't require you to have an all wheel drive or a four-wheel drive, which a lot of places do.

So we did have to spend some money on that. We, at one point we had to replace our backstairs because they just weren't really up to par. I don't know, we just weren't comfortable that they were completely safe. So we made them a little bit wider and, and the treads a little bit bigger.

We went around and because this is a two story, the front of the house is two story, and it's a rather steep slope. We just made sure that the railings were all in shipshape.

Elle Martinez: As a mom. I'm grateful for that. Thank you.

Barb Kelly: Yeah. We don't want to lose any kids or anything. I went around and I made sure that you, I hate to use this phrase idiot proof, but you do have to kind of idiot proof it.

I put in those little plugs for babies. Cause I don't know if people watch their kids or not. I mean, I'm not there. Really it just updating some things.

The furniture was already really nice so I kind of just added some touches to it, some pictures, some nicer stuff than I've normally seen, but it wasn't expensive because goodwill shopper

Elle Martinez: Oh yeah. You're here. Talented

Barb Kelly: It was those things just made it look a lot nicer; like you just stepped into your home

Elle Martinez: Yeah.

Barb Kelly: just stepped into a hotel room or something like that. We did spend a little bit on really nice linens. I don't like linens that peel up, you know, that get little pills on them.

I bought they weren't real expensive. I got them from Amazon, but a hundred percent Egyptian cotton so that they could be. every single week and they still look like they're brand new.

The same things with towels. I like a hundred percent cotton they're much softer and thicker. Things like that.

We stuck it with hand soaps and things like that and I try to use things that nobody's going to be allergic to. We try to get like organic if we can, but just really Nice things that maybe people wouldn't buy.

Now I can refill a lot of things because we have a little place called Fillmore and it's bulk refills for laundry detergent and all that. They're all organic. We're trying to keep people from breaking out in a rash when they come.

Elle Martinez: Well, I love that. You're being thoughtful with. Both from your own experience, did you do any research, like looking at other in the area, other AB Airbnbs, whether online or , chatting with them?

Barb Kelly: Yeah. What I saw really made me think I could do it because a lot of it was just, I mean, it just, I would have been disappointed if I paid that amount of money to stay at a place that looked like grandma's living room and grandma's bedroom and there were doilies everywhere. I mean, sometimes people would just overdo it or either it was so bare bones that you look like you need to bring your own stuff.

I wanted people to just be able to walk in there and just go, wow, we can just stay here. We don't even have to go out because what I did too in the kitchen, because my husband is a huge foodie. If you come to the cabin, you can make stuff with a blender. There's a crock pot, there's a toaster, there's a there's a french press. There's a drip coffee maker.

Those things weren't expensive to get but people have raved there's even the ice cream maker and a waffle iron. You can do anything that you want to do while you're there.

We've had people really thank us for having such a well-stocked kitchen. You don't have to go out and buy. We keep coffee, tea, and breakfast items really good oatmeal and really good breakfast bars and stuff, because I hate for people to come in. If they come in late, at least you'll be able to have a cup of tea and a power bar before you go to bed.

You don't have to go right to the grocery store. And if we know it's a special occasion, like somebody says, we're coming for our anniversary or we're coming for. Blah, blah, whatever family reunion. I don't know what it is, but anyway, if it's an anniversary, we always leave a bottle of wine and a little bag with candy or something in a card or flowers or whatever.

People flip. I mean, I don't think it's that big a deal, but they think, they think it's

Elle Martinez: Oh, oh for sure. I mean, as a guest, I completely agree and especially like we've been around Asheville during the pandemic, when we go on break and something is relatively simple, you say, like to prepare is such a big help with the coffee.

Sometimes we're not in town and then you have to go like, where's the nearest coffee place and then I got to drive in the morning and I need coffee to get coffee. That's not working for me.

Barb Kelly: I know and that's what I don't want you because we're like seven minutes from town, but there's a most amazing coffee shop, but I want you to be able to get up, have some coffee and sit on the porch in your pajamas and enjoy it.

I don't want you to have to go out and so I do leave the coffee mate creamers, but then I'll leave milk creamers for the people who really want milk like me.

It's just, I have found it really fun because I'm not always dealing with people face to face, but the feedback that I get is. I mean, it's a real ‘attagirl' because it's like, you're doing a great job and you're like, what you enjoyed that?

Oh, that makes me want to do more, that's good part of it. Those are all the good things about it.

I really, I only have one horror story and it was just I would say any horror stories can probably be avoided by making sure that your description that you put on Airbnb has no holes in it because it was somebody who could have, who really did want to make a terrible scene.

It was just, it was awful. And it was because she was trying to say that we're misleading in our listing. And she went to Arabic about us. And they looked at it and they were like, Nope.

She's like my money back. And I don't want to pay for cleaning and I'm going to stay anyway. And then I'm going to leave. And we were like, Nope, you better try this scam on somebody else.

But it's very disheartening. I was really hurt about it because we had had all these good reviews.

And then she left us one that was like, You know, I would give you less than 10. would give you a 10.

Elle Martinez: Well, it's funny. Cause sometimes people reveal themselves because like everybody else before I stay, I look at the reviews and I look at the general tone. Like there's things I'm looking for are the same things broken in every review. Are they like, yeah, the shower

Barb Kelly: my

Elle Martinez: working, you know?

And then the other side is, is most of the reviews, you know, positive. And then there's this one review that doesn't even sound like the same place. And then you click on them and then you're like, other reviews. They just seem angry.

Barb Kelly: Yeah. well, Yeah, hers was like five paragraphs and she only, she stayed less than 24 hours. So and that was because there wasn't a chain lock on the closet door. But anyway, And then they moved all the furniture in front of the closet door. And I was like, oh man, I don't know. And then rated the the neighbors yard and brought in tools and stuff and left them.

I don't know. It w it w I just didn't even want to go over there.

Elle Martinez: yeah.

Barb Kelly: die down. But I did realize when that happened, that Airbnb will support you if you're in the right. Now, if you're not, because he kept saying, do you want to give her a refund? I was like, no. I'm not giving her a read on this is crazy. This is a scam. She just wants to stay for free.

There is nothing broken, but I guess I, she took all my toilet paper when she left. So I don't know. That was kind of ugly because paper was to use that stuff.

There is a reason why they give you a review, but there's also a reason why you give them a review. And she had one review. That was one sentence. It was like, they were good. And I'm like, should I take a chance on his? Oh, sure. This, I mean, somebody with kids, how bad. How bad could it be?

Elle Martinez: You gotta have one memorable story, but I'm glad that overall it's good. I'm kind of glad to hear that story, to know that Airbnb will have your back, should something like that happen.

I do want to ask you with the setup. How does that work on Airbnb when you are listing your place? Because I mean, at some point they have to verify that's actually your place, right?

Barb Kelly: Yeah. Well, All I had to do when I did my own pictures. So I didn't have somebody come out and do it. I have a little experience with it and I didn't want it to give false hope either. Like this place looks, but it's only 1200 score.

I really want it to be very honest about what people were getting, but just a little bit of staging. I mean, I'd just leave it like it is. Like, you're going to see it when you walk in there. It's not got any extra stuff, but yeah.

Going on Airbnb, I just, they verify who I am. I had to verify who I am and then putting the pictures. I don't remember that I had to show like a property record card or anything like that. I think they just go off of my personal information as the host.

Elle Martinez: Okay. Did you have to do like a driver's license?

Barb Kelly: Yeah, you have to have two forms of ID and so that wasn't hard to do. And you know that and normally a host will provide a picture too, that goes on there on their little site that will assure people that, you know,

Elle Martinez: It's a real person.

Barb Kelly: That is a real

Elle Martinez: Yeah. Some of those pitches will kind of worried me. I'm like, maybe I'll stay some other place.

Barb Kelly: I know, right. It's like, I don't know. This looks a little

Elle Martinez: They don't look happy to be on Airbnb, but

Barb Kelly: no. We actually stayed in a place that the people did not look happy to have people staying there. And so Don and I were like, yeah, I don't think so, I don't think we'll come back.

Figuring Out How Much to Rent Your Place on AirBnb

Elle Martinez: So you set it up and fixed it up the way you like it and for guest. Okay. Now the part I am curious how people even figure this out. It was like your rate. How did you figure yours out initially? And did you have to adjust it pretty quick?

Barb Kelly: What I did was because there are so many Airbnbs in my area. I had the advantage that that it was a standalone place in a very safe neighborhood and it's on the side of town that's nearest to Asheville so if you're staying like where I live now, it takes me 20 extra minutes to get to Asheville.

On the other side of town, it's a straight shot, 30 minutes and it's interstate.

Elle Martinez: Very nice.

Barb Kelly: What I did was just did a comparison to what was similar to what I've got and my setup and the proximity to where people want to go. I started out with that and my calendar immediately completely filled.

Elle Martinez: Wow.

Barb Kelly: I've thought, whoa, wait a minute, wait a minute. Then I saw where you could do there's a thing on the, on Airbnb called smart pricing so if you if there are holidays or there are like in the mountains, people want to come in the summer and they want to come in the fall.

Elle Martinez: Yeah.

Barb Kelly: winter, not so much unless it's a holiday. What it does is it raised, raises the rate slightly. You give them the criteria you can go from here to here. This is the lowest you can pick, and this is the highest you'll charge.

Some of them I've seen are ridiculous. I mean, they're asked for crazy amount of money, but mine fluctuates about $25. You're not going to pay a whole lot, even for a special occasion. I do give a discount for longer stays which is nice.

I just had one in December, which was great. The people were awesome. That's nice because you don't have to have it cleaned every week, then for a longer stay, they just do their own cleaning and we provide everything, but, I don't want to come in while they're there.

That's how we did and we're still kind of tweaking it because it just depends there. People have shown a lot of interest in it, but I don't want to make it so expensive that it's out of people's range because I don't need to make that much. I'm not trying to, you know, ream people out.

I'm just, I want them to enjoy it too. It's worked for us so we're trying to keep it real reasonable.

Elle Martinez: Well, that's fantastic. I know for a lot of families that are watching their dollars, that's always good.

Barb Kelly: Oh, yeah.

Elle Martinez: Speaking of expenses, you mentioned making sure for every booking there's cleaning. What other extra expenses including maybe wear and tear or any stories about guests that you've had an unexpected expense after visit?

Barb Kelly: Yeah. We have leather furniture in the cabin, and then we have mean like a leather recliner, that's a nicer one. It's not one that looks like at your grandpa's house, but in a nice leather sofa, which to me is better because people I've heard horror stories of ruined upholstery.

So I thought, well, the kiddies have scratched a few places on this, but it still looks good and it's still super comfortable.

We tried to go with furniture that was couldn't really be killed too much, you know? Like I said, anything that needs to be replaced, I'll replace it with something really nice, but I'm going to get that piece of furniture at habitat. If I need to paint it, I will. But so far there hasn't been too much damage.

Like we had these, a young couple that had a couple of kids and I think the mom and dad just decided to party and just let the kids like run wild with blue cake icing. Let me tell you something, you cannot get it out.

It was just like they had a cake fight, know, and that the tequila bottles, I know they had a good time over there. That's one of the, one of two experiences that were terrible.

Everything else, I mean, I haven't had like people ruining my towels and things like that. And a lot of people do because Ladies that wear makeup and don't use a makeup remover wipe they'll that stuff gets out.

You just have to make it into a cleaning rag because you cannot get that stuff out. But so far we've been really fortunate to have people be pretty careful with it, pretty nice to our house.

Elle Martinez: It sounds like overall it's been a good experience with Airbnb.

Barb Kelly: Yeah. I mean, Airbnb takes their cut, not on don't get me wrong and cleaning during COVID is more expensive because we don't play would that.

We wouldn't do it if we could not make it safe for people, because I don't want to go anywhere that people are saying, oh, we clean to the certain protocol and they don't do it.

It takes longer to do it because we go in the first day, spray everything down with a micro band type thing and leave it. We don't even clean that day. We just leave that everything anybody could touch. And then if it's during warm weather, we'll just open the house up and just let that house air out for a solid day.

In the winter, we'll just turn the fan on and it's yeah you don't want to be in there with micro band sprayed everywhere. It's pretty rough, but, but I feel good that people are safe when they come here.

I provide cleaning the cleaning stuff, like masks and gloves and things like that, because I don't want my cleaner to get sick either. She doesn't want to get sick either, so that's going to work,

Elle Martinez: I'm glad you have a system in place in it. I think everyone feels good when you put the effort upfront, do the right job. Everyone feels taken care of and you get repeats. I know we feel that way. If we find a place that they put that care that you're putting in, that's going to be our go-to place. The first place we look for, you know, if we come back to a certain city or anything,

Barb Kelly: We feel that way too. I mean, there are some places that we have stayed that were just so I mean, the host just went out of their way and we could tell it.

We definitely go back there just because we've actually gotten to know the host. That's kind of cool. He feels like you've made friends all over the world just by and I actually have had some guests that were just so they're so funny and nice.

One lady it snowed while they were there. No, no, not snow it was The leaves, it had, the leaves had just all come down on the driveway and it made it so slippery that they could barely get up the driveway. So Don and I went over to clean the driveway off and as soon as we got there, she ran out, she's going to be here. Let me help you give me that. Right. And so we were all standing out the driveway, just, it was, it was really Nice.

I mean, they were just super nice people. Those are the kinds of people you're going to tell it the really good places to go and.

Elle Martinez: Nice.

Barb Kelly: Give him a discount knock on wood. Yeah. It's kind of fun. It like my husband said, you know, I'm not a, I'm not a real people person.

I'm kind of quiet and introverted unless I really know you, but some of the people we've met have just been so nice that you feel like you made a friend and we've had international travelers, even in our little town, we've had a lot of people From everywhere.

I was really surprised like who comes here, but they do. Where we live is kind of unique. So I'm not going to say that, but I often wonder how in the world you hear about it,

Elle Martinez: I'm glad that overall it's been a good experience for you, and I appreciate you taking the time sharing, like the good side and the bad, and also the investment that it takes to make it work in sustainable so I appreciate it.

Barb Kelly: Oh, you're quite welcome.

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Listener Mailbag: Tax Refunds, Saving a House Down Payment, and Refinancing

We’ve brought back the listener's mailbag. Today we’re answering your family and finance questions about best ways to spend your tax refund, refinancing to pay off debt, and more!

Tackling your Family and Finance Questions

One of my favorite parts of creating Simplify and Enjoy is the community. 

While I’m happy to share our journey as a family, it’s fun when you chime in with your wins, stories, and questions. 

Today we’re going to be diving into your family and finance questions. 

In this episode we’ll discuss:

  • How and where to save up for a big goal like a house down payment
  • Wise ways to use your tax refunds
  • Is refinancing your home to pay off debt a good idea? 

We have plenty to cover so let’s get started!

Resources to Manage Your Money Easier

If you want to chat some more about creating better money habits, questions, or share your own tips please join us over at Thriving Families on Facebook.

Thank You to Our Sponsor Coastal!

Support for this podcast comes from Coastal Credit Union! If you’re living in the Raleigh Durham area and looking to bank better, come check out Coastal today.

As a credit union, Coastal serves its members first including an annual loyalty bonus.

We've been members for years and love their service and competitive rates on checking and savings accounts!

Rollover Your 401(k) Easily with Capitalize

We’re grateful for wonderful partners like Capitalize. Not only do they support the podcast, but they help make managing your money so much easier. 

Did you know that it’s estimated that there are currently over 24 million “forgotten” 401(k) accounts? In fact, the average American changes jobs every 4 years

And because of the Great Resignation, you or someone you know might be changing jobs even more 

It’s an extreme case of out of sight and out of mind. Is your old 401(k) in there somewhere, left behind at a job you're no longer with?

One huge benefit with an IRA is you get to choose how your money is invested, not your old employer. 

If you want to consolidate your old 401(k) and have more options with how you invest, it may be time to roll them over into an IRA.  

With Capitalize, they handle the process from start-to-finish – for FREE. They handle the process from start-to-finish, and yes that includes calling the 401(k) provider on your behalf. 

Find out how and get started today

Where Do We Start When Saving Up for a Big Goal?

The first question in the mailbag is, where and how do I start saving up for a big goal?

The whole process is covered in detail in my free course, five days to 5k. I actually created it because this is one of the most common questions families have. We have a lot of different goals that we're trying to pursue. But where does the money come from?

It walks you through step-by-step on how to analyze and optimize your finances. You can grab it at simplifying. enjoy.com/five K. But let me give you a high level review of the process.

The first step is you should get a ballpark of how much you need to save and when you'll need it.

It's hard to measure progress if you don't know what goal you're working towards. Even if it's not entirely accurate, getting a ballpark figure can give you a measurement of how close or how long it's going to take to hit your goal.

Then you can work backwards to see what your monthly contribution needs to be.

The third step is looking at your current budget calculate the difference between what you can put away now toward your goal () and make sure you automate that transfer right away. And what you need to fill in the gap. You may discover that you're much closer to your goal than you originally thought.

Once you have that number in place and you do have some transfer going into savings, the next step is to look at your budget. You're looking at your income and expenses. You really have to look at both sides of the coin.

The first step I recommend with families is optimizing that budget. And in the course, I go through some easy wins that you can have with your finances. Of course the big one for many families is food, but then I also look at bills where many families are paying much more than they need to for the services that they're getting.

I'll give an example – your smartphone bill. Did you know that the average American cell phone bill is $70 for a single user? When you have two or more lines that can quickly balloon.

The great news is that there are providers out there who use a hybrid model. The technology realized both on cell data and wifi that can drastically cut your bill in half in, sometimes more. Options, you might want to consider our Republic wireless mint, mobile and Google fi.

That's just one example from the course, I look at other expenses where you can save and find better alternatives that makes it easier to keep more money in your pocket.

The other side of the equation, which sometimes families forget is the income.

After all there's only so much you can do with optimizing your budget, even though that can be a big one. Besides getting a second job you might want to look at opportunities in the share economy that fit your schedule and circumstances.

Some obvious ones are doing deliveries or driving for Uber Lyft but you may find that something that's more suited towards you is pet-sitting. Maybe you don't mind picking up electric scooters if that's around your city and recharging them. You could get paid for that and then also believe it or not merchandising.

My friend, Sandy from, yes, I am cheap and the creator of the side hustle crew has a great side hustle selling mugs through Amazon. And she has a course that teaches you how to set that up yourself with whatever item you're thinking of dropshipping.

You want to weigh the pros and cons to find a side gig that fits your schedule and circumstance. But hopefully I gave you some ideas on how to start saving for whatever big goal you have, but don't forget again, sign up for that course. It's completely free. It's at simplifying enjoy.com/5k

What’s the Best Way to Save for a House Down Payment?

Since we're on the topic of saving let's jump into the second question what's the best way to save for a -house down payment.

This is fantastic because this means that you were thinking ahead and making sure that you have a sizable down payment for your home. Having 20% down can be beneficial for you because that's typically the threshold for lenders where you don't have to pay for private mortgage insurance or PMI.

Keep in mind that there are other programs and mortgages that you may qualify for where you don't have to put such a big down payment options like us da loans. FHA VA. And depending on where you live, there could be down payment, assistant grants.

Whatever option you choose, it's always good to have money saved up both for buying the house and when you become a homeowner, having something stashed away for home maintenance and care. So, where should you put that money?

There are a few options. I have to mention the most obvious, which is savings accounts. As boring as it is this can be the right account for you because more than likely you'll be needing to have this money assessable in the near future.

While investing can be a great longterm option for savings such as retirement. They're not so great for short term savings because the market can be volatile year to year.

If you're looking at savings account that you're not happy with the interest rate that's available, then you might want to consider high yield savings accounts.

Look at your community banks, local credit unions, online banks. Typically they offer more competitive rates with their savings accounts then some of the big banks because they don't have as big of an overhead to cover.

Finally, there's an account I recently learned about that might be of interest to you. It's called a first time home buyer savings account. Only a handful of states offer it like Colorado, Oregon, and Virginia so you have to double-check to see if it's available in your state.

It's a tax advantage account that can be used for eligible expenses such as your down payment and closing costs.

If you're thinking of buying a house in the near future. Please catch those episodes where I talk with Daymark agents about one, how to find those hidden gems of neighborhoods so you can get a great location and what you're looking for at an affordable price. And how to figure out if you're really getting a great deal with a fixer-upper or it's a money pit.

How Should We Spend Our Tax Refund?

This third question really fits in with the fact that we're in tax season. It's how should we spend our tax refund?

Tax refunds can be a great opportunity to give yourselves a boost and set yourselves up for an awesome year financially.

There's a couple of ways you can go with this. The key is to figure out what stage you are financially speaking and what are your goals for the year?

The first way you can boost your wealth and make sure that you're taking care of is building that financial cushion. That's right. You got to start with the foundation.

Make sure that you have an emergency fund that is stashed away for any hiccups that can come this year. The rule of thumb is a thousand dollars as a starter. But you want to look at your circumstances. You may find that a thousand dollars doesn't cover an emergency.

We found out these past couple of years, we can't control a lot of things that happen to us. But we can be better prepared. That will not only help us on the financial side but reduce a lot of the stress when you go through these tough situations.

A second way that you can make this tax refund goes so much further is by paying down or paying off your high interest debts.

Yep. I'm talking about credit cards. If you have them, you probably already know that they're basically quicksand with your monthly budget so feel free to go ahead and knock out a few of those.

Another money savvy way to use your tax refund is to increase your contributions towards goals like retirement.

Have you maximize your contributions with your IRA this past year? If the two of you are pursuing a goal of financial independence, have you contributed to a brokerage account? Don't worry if you haven't. You can start now with that tax refund.

Even though it might not be technically financially savvy. One last tip I would say is, do keep a portion of that tax refund for something that you can enjoy.

Perhaps you've discovered a new hobby during this pandemic. You can upgrade that so you can enjoy it even more or you can have that set aside for a family vacation.

Having these rewards can recharge you and keep you motivated with the other big goals that you have in mind.

Finally, as a reminder, if you're getting a rather large tax refund. Double check. Why?

It could be that you withholding too much in your paychecks. While we all love getting a nice big lumps of money. Many families have found that having that money sooner in their paychecks through the year is better than later.

Should We Refinance Our Home to Pay Off Debt?

This last one is a really good question. Should we refinance our home to pay off debt.

First off. Anytime someone asks me, should we do something? I want to be very clear. I'd love giving you information about options that you have or resources that are available but you really have to sit down and consider your family's specific circumstances.

Sometimes those seemingly small details can make all the difference with what's the best decision in your case.

While I do feel great that you want to pay off debts. This is definitely not a decision I would rush into. There are a few things to consider and talk about. So why don't we go into them?

Let's start off with why people use refinancing to pay off debts. Typically it's because mortgage rates have a much lower interest rate than other debts, especially when you're talking about credit cards. Currently the mortgage rate for a person with good credit. We'll say about six 70 to 7 39 is around 4.2%. While the average credit card interest is 16.5% for someone with the same credit. Depending on the balance you're carrying that could be a significant savings in interest if you were refinancing to pay off that debt.

So it sounds reasonable but let's also consider that not all debts are equal.

With things like your credit cards, those are considered unsecured loans. While your mortgage is secured. Unsecured means you don't have anything backing the loan, so to speak. So if you don't pay your credit card, They'll go after you, but there's only so much they can do.

Secured means you have something of value, backing it up. So, if you don't pay your mortgage, you could lose your home.

One of the first steps I would suggest is gathering up all the data and dig into the debt that you want to consolidate. What type of debt is it? Can you negotiate a better rate? Have you gotten your spending under control? For example, if this is a credit card debt, have you decided and have a system where you're not going to go back into that same debt?

I hate for you to be not only back, where you are with the debt but now have your house on the line.

Okay, now that you have that in front of you, let's go over to common refinancing options. The first is rate in term refi and then the cash out refi.

Both of these will require you to qualify in terms of your credit score and have equity in your home.

With a rate in term refi, you're taking out a new mortgage either with a new and lower interest rate, different term, or both.

The goal here is getting a better deal on your mortgage so that your payments go down. Then that monthly savings, that difference you use to pay down the other debt. You're not actually tying that extra debt into your mortgage. It's still separate.

Cash out refi is an essence where you're rolling your debt into a new mortgage. Let me give you an example.

Let's say you have $150,000 left on your mortgage and your house is now worth 250,000. That's a hundred thousand dollars in equity that you have. You also have $20,000 of credit card and medical debt that you want to get rid of.

Because you have enough value or equity in your house to cover it. You can do a cash out refi. With the refi your old mortgage is paid off. You now have a new mortgage of at least $170,000. Remember your original one 50 left on the mortgage and you want to cover that $20,000 of debt. And the reason I say at least is that there are closing costs with a refinance.

You'll get a check for the difference. In this example, we'll say $20,000, which you can then use to pay off and close those debts.

If you decide to refinance, as you can see, there's a lot that goes into it.

First off, will you qualify for the loans with your credit report and score? Do you have the equity in your home to do this? And if the refi has done. Can you afford the new payments?

Besides refinancing. There are some other ways you can consolidate your debt. And I'll include them in the show notes.

Thanks for sending in your questions. It's always fascinating to me to see what goals you guys are pursuing. And what you're trying to work on. So please keep sending them in. I'd love to do this again.

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