TCC Podcast #287: How to Manage Finances, Pay off Debt, and Invest for the Future with Keina Newell

Keina Newell is our guest on the 287th episode of The Copywriter Club Podcast. Keina is a financial coach who helps professionals and solopreneurs with their money. With over $75,000 in student loan debt on a teacher’s salary, Keina knew she had to make a big change if she was ever going to achieve financial freedom. Whether you want to pay off debt, save and invest money, or a bit of all three, this episode will give you practical tips on doing just that. Here’s how the conversation goes: A career that is passion aligned but also helps you accomplish financial goals… real or myth? What is the purpose of money in our lives? How to backwards plan where you want to be financially. The steps to getting granular with your financial goals. Why you should pay yourself as an employee. 3 types of budgets and how to break them down. When to start building a financial system. An emergency fund for business vs personal. Taking a leap vs safety first: which are you? How to plan for expenses that come with being self employed. Where should we be investing when we DO have money to invest? How to create a money hell YES and a hell NO list. Why this one thing will impact your investment style. What about debt? Where does it fit into our financial plan? How to reframe your mindset around debt and change the money stories we grew up with. What it really means to charge less for your skills and how it will affect your future. 3 questions to ask yourself when deciding whether to cut down vs earn more. How to decide where your financial gap is. What to think about before hiring contractors. Why you need to start dating your money. Budgets – what’s that all about anyways? How to actually reach your financial goals. Financial tips for beginners – what are the first steps? How to start up money conversations with business partners. This episode is full of actionable steps to further our financial journeys, be sure to hit play or check out the transcript below. The people and stuff we mentioned on the show: The Copywriter Think Tank Copywriting Income Survey Kira’s website Rob’s website Keina's website The Copywriter Club Facebook Group The Copywriter Underground Sign up for Typeform Episode 110 Full Transcript: Kira: All right. Keina, let's kick this off with your story. How did you end up as a financial coach? Keina: I, I think my, my go-to answer is that God has a sense of humor, uh, which has been the theme my entire life, but I ultimately got into financial coaching because I was really looking at what did I enjoy doing? And one of the things that I really enjoyed was budgeting, and in my own personal story, um, I graduated college and with a lot of student loan debt. And in addition to having student loan debt, I actually joined Teach for America, which anyone who knows anything about teachers teaching is not like the highest-paid position in the world. And at that time, I was making probably like $30,000 a year and trying to figure out how could I actually do something that felt very passion-aligned but also be able to work towards buying a home, saving money and paying down student loan debt. So it was like through my own personal journey of budgeting and figuring out how to buy a house, how to make more money. And that progress over, over a decade, got me into the financial coaching space. Rob:  So as you've been coaching Keina and working with people on their own finances, where do you see the biggest opportunities or the starting point where we need to be thinking more about our finances? Keina:  I would say really knowing the purpose of money in your life. I always encourage people to think about when you're 80 years old, like, what do you wanna have achieved? And I think sometimes people think it's like a silly question, but I don't think that we actually kind of press pause to think about why are we doing the work that we're doing right now? Like, what is it in service of? Um, and so when you're 80, what does life look like? And, and really thinking about, okay, so if I am going to achieve those things, which generally people talk about, you know, wanting to be retired, I have grandkids I'm able to travel. Like, what does that actually mean for where you wanna be maybe five years from the current point in time? What does that look like for a year from now? What does it mean six months from now? But really starting to, I identify for me, what looked like financial goals. Like maybe it looks like, you know, you wanna save a certain amount of money. Maybe it looks like you are thinking about a home buying process, but I think we actually have to start to conceptualize and kind of backwards plan where we desire to be financially, so we can decide what we actually wanna work on in the here and now.  Rob:  So can we take that to an example level? Like what do, if let's say that one of my financial goals is to buy a home or, you know, maybe it's to travel more? Like, what should we be thinking about a year out or six months out, three years out? What does that look like?  Keina:  Yeah. So I would say like if just taking travel, for example, and getting kind of granular with that, I hear a lot of people talking about travel, but then when I ask them like, well, how much do you wanna spend on travel? They don't actually have a number. And so knowing how many trips do you wanna take? Are you taking three international trips? Are you taking four domestic trips? What's the price of all of those trips? Um, let's say in a year. And if you know that, um, each one of those trips is, is going to cost. Let's say $3,000 because you wanna take four domestic trips. Well, you know that you are going to need $12,000 annually to actually be able to travel. So where does that show up in your month-to-month budget that you're actually saving a thousand dollars a month so that you have that $12,000 travel budget? I would also say if you're thinking about buying a home, um, the other thing that I tell people to do is like, can you create space in your current budget for thinking about what it looks like to actually be a homeowner? So if you're paying right now $1,200 in rent and you wanna buy a house, let's even just say in the next two years, and you expect that mortgage to be, let's say you've done some numbers on the internet, you've looked at Zillow and you kind of know, oh, it's probably gonna cost me like $1,500 for a mortgage; are you able to actually save an extra $300 a month comfortably without that, without that impacting other areas of your finances? Kira:  So it seems like you're, you're working backwards. You're reverse engineering, the goals and purpose. Can you talk us through what you do with your clients? Maybe this would help us work through it on our own too. Do you start with the vision and then recommend working backwards from there? Is that where we should start?  Keina: Depends on who you're asking for, right? So specifically, I would say talking about business owners, I think if you're looking at your personal finances, I always tell people with business finances, I actually want you to sit down and write out what your personal expenses are. Like, how much do you actually desire to pay yourself? So as a business owner, you should be paying yourself consistently, and there's some amount of money that you desire to be paying yourself. But what I actually find with business owners is they give themselves money when their account gets low. What I want all business owners to do is actually pay themselves as though they're an employee. That doesn't necessarily mean $1000 on the 30th. I get $1000 because maybe it costs me $2,000 in terms of my personal expenses. But I would say first sitting down and thinking about like, what's the paycheck that you actually need to cover your, let's just start, with your like minimum household expenses? I generally talk about it with business owners as like bronze, silver, gold. And so your bronze budget might be something that like, I know that all of my lights will still be on. I will have a roof over my head. What does that look like? Then going up a step up from there, especially if we're tying it back to goals and saying, you know, do you desire to save more money? Do you desire to travel more? Maybe you wanna be able to invest more money in your like solo 401k, or you wanna open up a solo 401k or a Roth IRA. What does that look like in your silver budget? And then what does that look like in your gold budget? So kind of having like three tiers. So you're able to think about over time, what does it look like for you to be able to pay yourself? So that's one level of where I start with clients, but then that also informs, I would say, on the business, like how you can set revenue goals. So you can really think about if I desire to pay myself $5,000 a month, what does that need? I mean, I need to be making in my business annually or on average per month so that I can pay myself consistently $5,000 a month. Rob:  Yeah. These are really good questions to think about. Especially when we start talking about paying ourselves because it's not just as simple as writing a check for $5,000. There's taxes; there’s self-employment taxes that have to be paid and all of that. And so I have a feeling I know, you know, you're gonna say, it's never too soon to start planning this out, but you know, if I'm starting out as a copywriter, maybe I don't have that consistent flow of clients yet. Should I still be paying myself a thousand dollars a month, or do I need to make sure that, you know, the money is going to be there before I commit to that? Or, or maybe, you know, the number is higher, you know, maybe it should be $5,000 a month or, or does committing to it help me create it, or should I make sure that I have it before I commit?