Listen Money Matters - Free your inner financial badass. All the stuff you should know about personal finance.

You may have a budget but what if you have a big life change? Move cities, have a baby, buy a home. Budgeting for a lifestyle change can make or break you. You got the new job in a new place, your family grows, you need to care for a parent. Your old budget won’t do. A New Place What if your new job involves a big change of location? Moving from the suburbs to a city for example. Will you still need a car? Will there be a place to park your car? Maybe, but it might not be free and if it is free, you’ll likely be competing for lots of other people for the spot. Not many attached garages in the big city. What is the cost of living like compared to your current location? You might be getting a $20,000 jump in income but in the right (or wrong) city, that can be gone just paying deposits and broker fees. City-Data is a great resource to help compare the cost of living between cities. The Best Laid Plans Hopefully you’ve planned when to start your family but accidents happen. What if that happened to you? Would you be financially prepared? One of the biggest considerations before having a kid is day care costs. Prices fluctuate widely and sometimes the cost is so expensive, it actually makes more financial sense for one parent to stay home. A family situation that is harder to predict is that of your parents. None of us want to think about our parents aging and getting ill but it happens and you might have to step in. How much money do they have set aside? Would they want to live with you, stay in their own home, move to an assisted living facility? Who will make medical decisions if they cannot? Have these discussion with your parents before any of this happens. Buying A Home You found a $100,000 home and you have $20,000 to put down, great 20%! No, not great to the bank. They don’t want you to be cleaned out making the down payment. You won’t be able to pay the mortgage or the taxes. You might want to do some renovations so you can put your own stamp on the place. You moved from a studio to a house. Your futon and bean bag chair will look pretty lonely in a 2,000 square foot place. Twenty percent is not enough. Start A Business You have a killer idea and you long to quit slaving away for the man and want to start your own thing. Great! How much run way money do you have? What are the start up costs? Is your spouse on board or will they freak out if there isn’t a regular pay check coming in? How will you pay for insurance now that you no longer have it through your employer? Get A Baseline Where is your money going now? Before you make any big changes or decisions, you need to know this. If you had to cut to make room for something else, what could you sacrifice? Some things become such an ingrained habit, that you don’t notice anymore just how expensive they are (booze). Not everything has to be completely axed, some things could just be reduced (booze). Think back to your past. There was probably, hopefully, a time, when you spent less money than you do now but were still happy. Now think how much more you’re spending currently. Does the level of happiness correlate to the greater amount of money you’re spending? Probably not. It certainly costs more to be an adult than it does to be a college student but if your costs have sky rocketed, it’s unlikely that all of that money is going to fixed costs. A lot of it may be going to lifestyle upgrades, a bigger place, better car, nice clothes. The longer you can live like a student while earning like an adult, the further ahead you will be for the rest of your life.  How Much Do You Cut? Let’s say you make $50,000. Use a base of 60%, so $30,000 after taxes and savings. Divide the $30,000 by twelve months to get $2,500. Learn more about your ad choices. Visit megaphone.fm/adchoices

Learning how to negotiate is not just a nice to have skill – it’s critical. Everything from your salary to your purchases to even your relationship requires it. Here we break it down for you and give you the knowledge you need to hit the ground running. Perhaps the most important thing you need to understand is that most successful negotiations come with skill and practice, not force. We’re not going to show you how to strong arm your opponent or debate them into submission. Instead we’ve created an epic resource with everything you need to know to get what you want and walk away from the table with everyone happy. Podcast Episode Want to learn but would rather do it during your morning drive or while you’re working? Give this episode a listen, it’s pretty awesome. (show note links are at the very bottom of the article) Negotiation Vs Bartering Before we jump into it we think it’s important to discuss the difference between negotiation and bartering. There tends to be a lot of confusion around the two. It comes down to knowing your goal and having the right approach. Negotiation: This is not about winning. It’s about achieving your goal or objective. It’s not an argument but a constructive discussion. Since success is measured by achieving your goal or objective it’s then easy to eliminate certain approaches immediately. We’ll get into them later in the article. Bartering: This is also not about winning. It’s about exchanging your commodity or service for something of comparable value with a minimum effort or time commitment.  Right off the bat we’ve taken two big departures from negotiation. You don’t want to work too hard or spend too much time here. If you have a fruit stand at a fair you may barter with potential buyers. However, if you’re selling (or buying) a car you’re negotiating. Bartering is about value where as negotiation is about something much larger. The 7 Core Negotiation Tactics There are a few key things you need to keep in mind for a successful negotiation. While some may seem immediately obvious we really encourage you to read deeper. Because negotiation is about achieving a win-win situation and not a win-lose situation it’s really important to keep these core principles in mind – and refine them over time.  If you ignore following a strong approach you’re at best opening yourself up to a less than optimal deal and at worse looking at no deal at all. Come Prepared You might have heard the saying “Don’t bring a knife to a gun fight.” Well, the same idea applies here. You’re not going to go to a car dealership and purchase a car originally having no idea how much it costs or what its positives/negative attributes are. The same applies to all negotiations. If you’re looking to get a raise, do you know how much other people with your skill set and background get paid? We talk about price anchors in the episode and this is a great place to use them. Head over to sites like Glassdoor or Payscale and do your research. Site’s like Indeed.com will also show you a data-driven aggregate of what they’ve seen people make for the position you have (or want). Use resources like these to ground yourself in reality, improve the chances of your success and logic for how you’ve approached your position. Remember, you’re looking for a win-win outcome. For a negotiation that’s a bit more nuanced like a big purchase you need to understand the value you’re getting, the main features as well as the weaknesses. Learn more about your ad choices. Visit megaphone.fm/adchoices

Have you ever thought about starting a Kickstarter campaign? We interview Chez Brungraber about how she did it for her travel bag. It takes some doing to get people to give you money for something that doesn’t yet exist. Chez tells us how she did it. Kickstarter is a place to get funding for a product that is still a prototype or a project that hasn’t been completed. The first rule is to have a product that you believe in. Once you have that, you have to get the word out, friends, family, bloggers, media. You have to keep your backers updated with how the project is progressing and when they can expect it to be complete. Chez’s company makes money but not enough to make large capital investments in things like new products. And it doesn’t make enough for a bank loan. That’s why she chose to fund this way. You have to hit your funding goal in order to receive the money towards your project. That sense of urgency helps to reach the goal. Most campaigns over $10,000 fail on Kickstarter so don’t ask for an insane amount of money. Keep in mind too that Kickstarter will take a percentage of your earnings, so factor that in. Once the goal is reached, you can set a “stretch goal.” Extra features that will be added to the existing product as higher funding goals are met. Chez recommends making sure you know what your stretches will be before starting the campaign. She had three days to come up with her first. Kickstarter isn’t a place for free money. Chez took four months to craft her initial campaign and more time to change it for her stretch goals. Make sure you have your basics set up, you’re incorporated, have a business bank account, you can’t deposit that money into your checking account! There are tax implications too. Kickstarter can be a great place for small businesses to get funding but do your research before starting a campaign. Show Notes Pumpking: A pumpkin beer from Southern Tier. Kickstarter: Chez’s new campaign for her travel bag. Gobigear.com: Here you can find more of Chez’s awesome gear LMM Community: Join the money revolution!   Learn more about your ad choices. Visit megaphone.fm/adchoices

  We haven’t done a Five Questions for awhile! We’re back to answer your questions about minimum wage, lending money and debt. We get a lot of questions and if one of you is wondering, more of you are wondering. How can you get by on minimum wage? Well, first of all, you have to live in a place like Iowa where the cost of living is very low. You also need to take advantage of any social programs you might be eligible for, low income housing, food assistance, reduced cost utilities. Work as many extra hours as you can to save up enough for a $1000 emergency fund. Next, try to build a marketable skill using all the free resources you can find, the library, the internet, Coursera, Khan Academy. A minimum wage job should be something you have while you build additional skills toward getting a better paying job. Apply to jobs you’re not qualified for. It may not always work but it only has to work once. At the very least you may get some interview experience. How do you know what tax bracket you’ll be in when you retire so you can choose the best IRA? When you retire, you won’t be earning money, or earning less, so the money withdrawn will be taxed at a lower rate. Unless, you have a separate revenue stream, like rental income. In that case, you might be earning more than when you worked. So it depends on your idea of retirement. Golfing all day or running a small property empire. If you’re going to relax, go traditional. If you’re going to earn, go Roth. Should we wipe out our savings to pay off student loans and then focus on retirement savings? Take the money in the savings account that isn’t earning interest, except for 3-6 months of expenses, and put that towards the loans. As for your investment money, the interest rate on your loans is low so leave that money where it is. What should we do with retirement plans from old jobs? Roll them over to avoid administration fees. How can you help manage parent and sibling debt? Just handing over a chunk of money is usually not a good idea. Agree to help with the caveat that the family member shows you how they plan to get out of debt and the steps they’ll take not to get into debt again. Thanks everyone. If you want to get an answer to your questions fast, come join us in the Community. Show Notes Allagash Dubbel Reserve: A malty, Belgian ale. LMM Community: Come join the money revolution! Learn more about your ad choices. Visit megaphone.fm/adchoices

Early retirement sounds ideal but is it always? Retire or not to retire with Roger Whitney, the retirement answer man. Roger believes rather than setting retirement goals, we should set retirement priorities. Not that you shouldn’t have goals. But when retirement is decades away, priorities are more flexible. The closer you get to retirement, the more you can concentrate on making concrete goals. Roger believes you should decide what your ideal retirement would be, not what you think you can afford. This allows you to see what your priorities really are and you can work harder towards those and spend less energy on the things that are not as important to you. Even if you retire at 65, you may still have twenty or more years of life ahead. You don’t want to get bored! Roger suggests crafting a life you don’t want to retire from. You don’t have to stay at your 9-5 but you don’t have to give up working for money forever either. But try out the life you don’t want to retire from before you retire! It’s a romantic notion to start your own farm and may help you make it through the crappy times at your job, but what if you don’t know anything about farming? Dip your toe into the life you think you want before you just dive right in. We don’t think you need a financial advisor. You can figure all this stuff out on your own with some educating and research. But if you must, make sure you use a fiduciary. They are held to certain standards that those advising under the blanket term “financial planner” are not. It’s never too early to start planning for retirement. Show Notes River Horse Hipp-O-Lantern: A carbonated pumpkin beer. Roger Whitney: The retirement answer man. Learn more about your ad choices. Visit megaphone.fm/adchoices

We receive a lot of questions on these topics so we brought in an expert. Today we discuss wills, trusts, and estate planning with Tyler. This is a big topic so we brought in a member of the LMM Community Forums who deals with this for a living. Tyler and is estate planner and a lawyer in the military. Put simply, estate planning is deciding where you want your stuff to go when you die or are incapacitated. Do you need a will? Probably. Do you need a will if you have a kid? Absolutely. You can’t count on the state or sometimes even family, to carry out your wishes. An asset that doesn’t have a next owner listed, some checking accounts for example, has to be assigned by a probate judge. A non-probate asset, like a life insurance policy or some brokerage accounts, bypass the process and are paid out pretty quickly. If you die in debt, creditor’s get first crack at your estate. But your family will not be held responsible for that debt unless they have co-signed for the debt. A living trust can help to take some of the burden off your family when you die. It takes some of the work and hassle out of the probate process. Power of attorney gives someone else the power to make financial decisions for you. They can handle things like paying your bills. Health care power of attorney allows someone to make medical decisions for you. You can leave money in a trust and set the parameters under which it will be distributed. Tyler recommends age, the age of 30 as the parameter. Having a big life event is a good time to check in with your estate planner to find out if you should update your will. You can have a will drafted for between $400-1500. A trust is more expensive because they’re more complex. This topic brings up things that none of us like to think about but making sure that your family is taken care of is worth it. Show Notes Estate Planning: A Primer: Tyler’s in depth article on the subject. Featured Image Photo Credit: “Fountain pen nib” by Ben FrantzDale Learn more about your ad choices. Visit megaphone.fm/adchoices

Today we welcome Forum member Chloe to discuss her finances. We’ll tell her what she’s doing well and where she needs some improvement. Chloe is a 28 year old nurse who recently got her masters and has been looking for a full time job with benefits. Even working part time, Chloe is doing pretty well. She went to small, inexpensive colleges on scholarships, federal aid, and one small loan. Most of her loan was forgiven due to her public sector work. Chloe made an incredibly detailed pro/con list of the two job offers she received in our Forums. She got some great advice and that helped her make her decision. In the end, she chose the lower paying job with better quality of life and better future prospects. It’s not always about the money! Chloe uses Mint to budget. Like most of us, food is her biggest budget problem. She maxes her 401k and Roth IRA but doesn’t have a lot of room to save for things like a wedding or a home. Chloe has a net worth of $140,000! She attributes this to having priorities. Saving and travel. And always living below her means. Chloe’s dad started an investment account for her to use for college but because of scholarships, she didn’t have to use it. It wasn’t a large initial investment but because the account is so old, the money grew. As we advise all of you, Chloe has an emergency fund. She invests in a few individual stocks. Lucky for Chloe, her dad introduced her to investing early. One of Chloe’s investments has a high fee. She needs to sort this out, you can lose a big chunk of your money to fees. One of Chloe’s problems is dealing with parental finances. Her mother’s situation is not ideal and it may be something Chloe will have to deal with in the future. Chloe is doing well for someone of her age. She may have some challenges with her parents but she’s on the proper track. Show Notes Yuengling Black and Tan: A rich, malty beer. Shipyard Pumpkinhead: Pumpkin beer season is here! Two Roads Roadsmary’s Baby: A pumpkin ale. Learn more about your ad choices. Visit megaphone.fm/adchoices

We interview Chris Clothier from Memphis Invest to explain real estate investments without the mess. Collect the rent check while someone else does the dirty work! Passive Income If you’ve listened to LMM for any length of time, you know how much we emphasize the importance of passive income. One of the keys to building wealth and achieving financial independence is to have more than one source of income and because there are only so many hours in a day, some of that income should be passive. Passive income is income generated with minimal effort on your part. Good sources of passive income can include your investments and retirement accounts, making money from things you already do like driving, shopping, or going out to dinner and our favorite, rental property income. Becoming a landlord can generate significant passive income. But how can owning rental property be considered passive income if you’re searching for homes to buy, tenets to live in them, and handling any repairs that have to be done and the whole list of other things a landlord has to do? The secret to making rental property a source of truly passive income is hiring a management company to deal with the day to day hassles of being a landlord. Turn Key Turn key rental property means that the home is ready to be rented out as is. Any needed repairs or upgrades have been completed and it’s ready for occupancy. This is the best kind of property to buy if you’re going to be an out of state landlord. It’s hard enough to deal with renovations when you’re local, almost impossible if you’re trying to do everything from a distance. There are turnkey management companies too. The right turnkey management company can do nearly everything for you from finding the property and renovating it, to putting a tenant in place and dealing with any repairs and maintenance that might need to be done. They collect the rent and send you a check. They also handle the sometimes protracted process involved when a tenant has to be evicted. You pay a management fee which is typically 8-12% of the monthly rent, some charge additional fees to cover expenses, and some charge a flat monthly fee. You can’t just blindly turn such a big investment over to anyone. You need to do your research when looking for a management company. Are there any real estate centered Meet Ups you could attend either in your local area or the area you want to buy in? It might be worth a trip to talk to some local investors and get recommendations for a management company. If you can’t travel, the internet has plenty of reviews for management companies so you at least have a starting point.   Once you have a few recommendations you can start interviewing companies. The preliminary round can be over the phone but once you have your list further narrowed down, you probably want to make a trip down in person. Some key questions are:  * How long has the company been in business in the local area? * What services do you offer? * How many properties do you manage? * Can the renter and I reach someone 24 hours a day? * What are the fees? * Under what circumstances can I cancel my contract? * Do the fees change when there is no tenet in the property? * How do you screen tenets? Learn more about your ad choices. Visit megaphone.fm/adchoices

  Fights over money are a leading cause of divorce. Andrew’s wife Laura joins us to talk about getting a reluctant spouse on board financially. Laura does a lot behind the scenes for LMM but this is her first time on the show! She was the spender to Andrew’s saver when they met. But after a few years, he whipped her into shape. Laura’s parents aren’t bad with money but they didn’t teach her enough growing up to be good with money. By the time she met Andrew, her wages were being garnished. When the couple moved in together, Andrew said one thing he never wanted to fight about was money so they needed to communicate openly and often about it. Strong arming any topic, especially money, is a fast way to fail. A crash course in what someone should have learned over a few years isn’t helpful either. Addressing money issues as they come up is less contentious and less intimidating. If one partner has a business the other is not involved in, large business expenses can cause problems. You’ll need to “open your books” and help your partner understand things like return on investment for those big expenses. Money inequality can cause resentment on both sides and poison a relationship. This is why communicating often about money is important, to talk these things out before that resentment starts to build. Money isn’t the only way to value things. If one partner takes care of things like cleaning, laundry, cooking, home repairs, the other spouse is getting those things for free. Things like those have value too. Sometimes the problem is one partner thinks about the future much more than the other. If this is the case, show your partner what the future could be like if you’re on the same page with money: early retirement, exotic vacations, starting a business. No relationship should end over something like money. Communicate with your partner, show them why you manage finances the way you do. To help you to both have a better future. Show Notes Betterment: The easy way to invest. Jabbercast: A new way to listen to LMM!   Learn more about your ad choices. Visit megaphone.fm/adchoices

If you are tired of your time and your income being tied together, you might have considered a career as a freelance writer. But can anyone actually make money writing? You can, and I do. I finally quit my full-time gig and now work for myself. I’ll show you how to become a freelance writer and quit your full-time job. Many people dismiss freelance writing, considering it not a real career. But a career is something you get paid to do. And if you can crack how to become a freelance writer and get paid a decent amount for it, guess what? You can have a career as a writer. How to Become a Freelance Writer You can begin to make money writing by starting your own blog and monetizing it. The problem is, this takes some time. You often hear about “overnight successes” in blogging or lots of other careers, but that is rare, very rare. It’s much much faster to get someone else to pay you to blog. That’s how I get paid to blog. You still need to start a blog though. Your blog is your personal portfolio. It’s a way to show potential clients what you can do. What’s Your Passion?  It doesn’t matter. I enjoy writing about money because it helps people, but I wouldn’t call it my passion. If you want to make money freelance writing, find out what people are paying for. If one of those things happens to be something you’re passionate about, great! But telling people, they will automatically make money by following their passion is bullshit. So spend some time on freelancing sites and see what topic people are hiring bloggers to write about and start a blog about that. The more niche your topic, the better. If you want to blog about vegetarian cooking, guess what? A million other people already did it, and there are a handful of big, well-known sites gobbling up all the traffic. A Google search for those words brings up 15,900,000 results. You can still write about vegetarian cooking but how about vegetarian cooking for children or for menopause? Those bring up 2,800,000 and 802,000 respectively. The more niche you are, the faster you can make an impact. You don’t need to be an expert on a topic though. Here’s a secret. I didn’t know hardly anything about personal finance when I started writing for LMM. I listened to tons of podcasts, read tons of articles and books on the subject and learned as I went. You’re Not a Techy Great, you have your topic all picked out, and you’ve been educating yourself about it. Now you need to design your site and get it up on the web. But you don’t know how to do either of those things. You don’t have to be a web designer or developer to start a blog. Your grandmother could make a blog using WordPress. A staggering 30% of all websites were made with WordPress. WordPress offers hundreds of templates to choose from, and you can customize them with your branding. And WordPress is free to use. If you want to use some of the premium plugins, there is a cost but to build your site is free. You need to host your site too. You can do that at HostGator starting for just $2.75 a month, and HostGator is compatible with WordPress. Engage Your Audience  Let’s be honest. Personal finance is not the most scintillating subject. It’s a vital one, but it can be pretty dry. But if I do say so myself, LMM takes a dry subject and makes it funny and interesting while providing easy to follow, actionable advice that will improve your finances. That’s what you want to strive for no matter what subject you choose to blog about. Use your own voice. I write as I speak (that’s why there are so many swear words in my articles) and it makes my posts more c... Learn more about your ad choices. Visit megaphone.fm/adchoices