Happy Friday everyone!! Some of you may not know this but April is Financial Literacy Month. I think it should be an ALL YEAR event, but nonetheless, I’ve joined a team of financial coaches and bloggers to hopefully encourage you to spend one minute a day with us to get you thinking about money and how you manage it. You can find these one minute videos over at Money Plan SOS where there is a new video every single day.
Enjoy and please take a few seconds to answer the question in the comments section so we can start the conversation. Feel free to share the video on Twitter (use hash tag #FLMonth), Facebook, or wherever you like.
Have a great Friday and an even better weekend!
I am submitting two videos this month and here is the very first one.
TODAY’S QUESTION
What is most important to you financially”?
A) Building retirement
B) Become debt free for life
C) Owning a home
Great question! I really needed to think through my answer a bit. I believe that each one of those three goals mentioned are importation. But, if I have to pick one it will be to become debt free for life. Currently I am debt free except my mortgage. Becoming debt free for life to me means that I have the financial stability to weather most financial storms that will come my way . I have had many periods of my life where I have been debt free but “Murphy” would happen and I would be right back in debt. Now, I am debt free but been working really hard for the past year a half to have enough savings to remain debt free. We are still contributing to our 401K and we refinanced our home for 3.75 percent for 15 years (down from 5.5 with 23 years left). I think to be able to own a home outright and have adequate retirement savings a person must be debt free for life. Thanks for the great question!
Absolutely Elise, they’re all important and great goals to have. Becoming debt free by far gives you the best opportunity to complete A and C the quickest, but if you look around, society has ultimately chosen to buy a house, pile on loads of debt, only to later realize they underestimated retirement. It’s hard to have hope when you are living with an upside down mortgage, are buried in debt and figure out that you haven’t even considered long term savings to secure your retirement. I can’t even begin to understand how frustrating it must be, to find yourself in that predicament. Personally, it’s why I love keeping this blog alive and well. 😀
To become debt free for life. And that includes my mortgage. All three goals are encompassed in that one though. If I were completely debt free I would actually own my home. And I own a rental property, which when paid off will give me income in retirement. So I’m providing for retirement along with that as well.
Oh… and I want Elise’s new mortgage… I’m going to look into that right now. 🙂
Hi Brad, I would have to say that my short-term answer is b) becoming debt free for life. That is what we are working on the most aggressively right now. However, long-term, my answer is definitely a) building retirement. We are in our mid 40’s and it’s becoming apparent that retirement is closer than we thought.
You’ve got it Julie!! I like this approach. Become debt free. Start saving 10-20% for retirement (depending on income and age). Buy or pay off the house. Then start throwing all that freed up money towards retirement to top it off as fast as possible!! Great answer! 🙂
B. once you’re debt free you can save for retirement
That’s right Erin, with B as the priority the other two will be much easier to accomplish. Not only can you save for retirement when your debt free but your income becomes a savings machine that allows you to do it faster! 😀 All of your answers make me so PROUD! 😉
Right now the answer is B. Once I get this debt paid off I’m not sure what we would do…house or retirement, hmmmm
I love it Money Momma! B is by far my favorite answer and one that I think is essential in order to accomplish A and C successfully!
My gut first answer is to become debt free, but if I think about it for a minute the better answer is to start building for retirement first and maintain always. You can’t go back in time and reap the benefits of dollar-cost averaging. I went through a divorce that I had to recover from financially, and while I was systematically paying off creditors, and pouring over my credit report weekly, the entire time I was still contributing to my 403B. Even if at some points it was only $25 a paycheck. So I agree being debt free allows you to comfortably build for retirement, but I don’t think you shouldn’t wait. So I am Retirement, Debt, then Home (which I actually have purchased already, but am not house poor….so far so good)
Jeannine, I think that there is a lot of wisdom in this answer. Now that we are about done paying off the evil credit card debt, which I always think should be paid off first, I wonder about the balance in attacking other debts vs. investing for retirement. More and more, I’m coming down on the side of retirement because of the things you mention.
Thanks for sharing Jeannine! 😀 I personally think the interest paid out by keeping your debt longer negates the benefit of saving for retirement. I believe that by having no debt you can steam roll your retirement as opposed to continuously shelling out minimum payments and interest each month. Sure your retirement might start faster but can you really reach the same retirement savings as you could by eliminating your debt and saving on interest over the long term.
Great response! This is what I love about this sort of thing. Different opinions and attitudes about debt and what to do with or without it are really diverse. I HATE DEBT so there is no way I would ever purposely keep debt so I could save for retirement. Actually I saved for retirement while getting out of debt but it wasn’t as significant as tackling retirement full steam ahead because I was so focused on removing the bondage from my life.
Regardless, I want to wish you luck on making the right decisions for you. Everyone has different goals and objectives which means their plans will be different as well That’s what it’s all about right? Keep up the good work! 🙂
B) Become debt free for life
Yeah Nicky! Rock some debt freedom for life! 😀
First the answer for me is B. becoming dept free. Once I become free from debt.It will be a lot easier to do Gods work in your community. How can you really be happy in what you are doing if you have a huge debt over your head all the time…..
Your entire comment is music to my ears Cynthia! I agree completely! Debt freedom gives you the most options and allows you to give in order to make a real difference! 😀
Hey Brad, you know my answer! We’re all about living on less than we make so that we CAN save for retirement and buy a house (at the appropriate time).
Thanks for being a part of this awesome little project. You rock Dude!
I do I do my friend! Debt freedom makes almost anything possible! Thank you for allowing me to be a part of it. I think we should do stuff like this more often and I would love to work with you on any group projects you have going on. This was fun and I really look forward to doing my next video for Financial Literacy Month on the 18th! 😀
I just realized that I unknowingly answered my own question. LOL I highly emphasized B when going through the choices.
For us the answer is currently B. We are deep in baby step 2. We have decided to keep putting money towards retirement because if we stopped contributions to the 401k at my husbands’ work he would loose all matching funds. The matching funds are only for the employees that had a pension before they halted the pension. So i guess we are really working on A and B. I also wanted to thank you brad for the daily encouragement. Baby step 2 is hard, your words help and help us discuss our plan!! thanks!
I don’t think there is anything wrong with that Gina. It’s hard to watch free money pass you by, especially when it’s not the money you put in the retirement to receive the match that would keep you from becoming debt free. We continued to put the minimum in our retirement accounts during our debt free journey too. When you become debt free you will be killing it so just keep doing what you’re doing! Thanks for the compliment too, and sorry it took me so long to get over here and respond. 😀
Well, I’m with most people here, I would choose to be free of debt. Right now, my wife still has student loans and we are paying on our mortgage. It’s nice living in a house, but I can’t help but feel that we would be closer to paying off her student loan if we would have rented a little longer. Anyway, I’d definitely like to eliminate debt because we pay more in interest than we get as a tax incentive.
We felt the same way about our house and finally we have sold it (actually in the process so it’s not exactly final but it is a cash offer.). We will rent until we save up enough money to buy a house 100% down. Going to be a hard journey but we are determined to never borrow ever again. 😀
I think they are all important but I would have to make b my priority currently in life. I am currently trying to work out a budget and plan to get out of debt. And once I am out of debt, I want to stay debt free.
Did anyone else get an error when trying to watch this video?
You shouldn’t be getting an error. What does it say? Are you able to watch other YouTube videos?
I just tried to play the video again. No issues!
Awesome! I think you’ll like today’s videos much better! 😀 My son stole the show!!
I would say all of the above. I’m almost debt free. Only got student loans. I’m already saving for a house and hopefully With my 10% contribution going to my 401k I can be retired with a paid off home.