(Ep. 126) Putting Your Goals First and Student Loans Last | Student Loan Planner

Welcome to another episode of the Student Loan Planner podcast. I'm Travis and I'm joined today by our senior consultant Lauren Williams. How's it going Lauren? I am having a great day Trav. How's your day going? It's pretty good. I mean baby sleeping through the night and getting more sleep. I'm really tired still but at least they were kind of over that initial hump that you just constantly wake up in the middle of the night. That happens sometimes but thankfully baby's doing a little bit better. Do you have like a secret weapon that worked? I know there's so many different ways they say to get the baby to sleep through the night. So we've got this sound machine going on and then we also have this it's a small world drilled into my brain because we've got this little planet thing that goes around. It plays like the small world tune 50% of the time I feel like. So those two things we have combined like pretty much knock her out every time and I kind of feel like that's unnecessary. My wife's like no we got to make sure that we do the same routine and I mean I can't really complain if it keeps baby asleep because we've got baby in our in our room with us and we've got my in-laws in another room. We live all five of us in a thousand square foot apartment so this pandemic's been fun for me. Wow way to keep it interesting. Yeah you know we're moving and I think a lot of people know that the email list people know that and we're going to North Carolina. Definitely first thing on my list is like an 8,000 square foot house. I think I'm just so like what's the word traumatized from like pandemic living and like being in a small place like we kind of rented this apartment thinking like oh this is great for like the two of us and then we had like a baby and then we needed child care and it was a pandemic and so my wife's parents came to help and oh my gosh it's been a stressful year. Well I think you might be increasing your home size. I don't imagine you as an 8,000 square foot house kind of guy. No no at this point any improvement will be great. Did I tell you to a tree fell in our car the other day? Don't worry it's still drivable. I don't know it's just been a difficult year like we had somebody break into our car my wife was tired I think and like backed into one of those concrete cylinders in the hospital parking garage and somehow this car is still driving so I don't know I mean talk about pin-up demand in the economy. We move and I'm again I'm at least going to 1,500 square feet and I am definitely going for a car that hasn't had a tree fall on it. Sounds like the Travis I know. I know I know so today's episode is talking about everybody's like oh my gosh what do I listen to this guy for student loan advice. So we're talking today about how your life goals should come first and your loan should come last. So I'm pretty excited about this because I think that we're gonna make a list of seven key life goals that are just way more important than your student loans that should come way before your student loans before you worry about your student loans. Now I will say you can't default right you don't want to do that and the reason you don't want to default Lauren is wage garnishment that can take 15% of your income. Why would 15% of your income be worse than just paying something for student loans like why would default end up costing you more just from a cash flow perspective than just paying what you have to pay with like income based options. Yeah because you could actually be paying 10% of your income if you chose something like repay or pay as you earn assuming that you're eligible for those two programs. So if you actually are suffering from low income or even no income an income based repayment would be much better than you know being in repayment not paying the loans ruining your credit going into default and having to pay 15% toward those loans each month. Yeah and how often would you say people come to us and they think they're paying the minimum payment but they're not actually paying the minimum payment. Oh that happens all the time where they're not quite sure what it what exactly payment plan they're on what they should be doing and they're just doing what they feel like they can afford not realizing that there is something called income-driven which is set up to be exactly what you can afford. Yeah so I mean I think a lot of times people are unaware about community property loopholes right filing taxes separately they over commit when they refinance to a 10-year right away instead of a 20 year right so you want to figure out what is your actual minimum payment and whatever that minimum payment is you do have to make it right and right now that minimum payment for most people still zero until the end of September. So I'm not saying like let your loans go into default so you can achieve these seven life goals that's not what we're saying right but I do think that these things come way before making any additional effort on your loans. So we're gonna talk about what these seven life goals are in a second. First let's talk a little bit about one case study that I had to happen a few years ago so there's a couple chiropractors each of them had about 200,000 alone so each made about 50,000 they came to us with like a very very strong predisposition towards a anti-debt personality this person was both them would go through this program at their church and they like had been taught debt is so bad debt is like almost anathema to your faith like it was that level of like hatred of debt and so we told them like hey you should probably go for pay a repay kind of thing and they're like now I think we're gonna go our own our own path on this and so they paid about 40,000 towards their student loans and came back to us with about 380,000 down from 400,000 in debt after a year and they felt pretty defeated people don't understand like the interest so why would someone with 400,000 loans who's paid half their income on loans come back and only have like a small chunk of their loans pay it off why why did that happen to this couple? Yeah so a few things could have happened they could have been on an income driven plan previously they could have been on an extended or graduated plan where they were pretty much only paying interest and interest accrues in a separate bucket when you're not paying enough toward your loans so what sometimes it is people switch gears they say oh yeah I'm ready let's do this and they start throwing everything they can toward the loans but they don't realize those that they have to first pay down the bucket of interest empty that out and then start tapping into their principal and then when you have a really large loan balance a lot of interest is accruing on an annual or a monthly basis so you have this big amount of interest and you're paying just enough to cover the interest you might not be tapping into the principal so in their case they might have been paying down 100 bucks a month toward principal and you know just covering the interest because the loans were so big a lot of the chiropractors I've worked with through student loan planner are you know 50 65 K of income and it even with their full income going toward it it's just not enough to make a big dent when you have 400 K of debt. Yeah so they it sacrificed so much of their lives like when they came back for a follow-up consult it is up to the borrower what path they take like you can act against advice kind of like you go to the doctor and it's like they make you sign something that's like you were acting against medical advice right but like that's still your right to do that certainly financially that's like less serious maybe than in the medical world we'll say like this is our recommended path if you're not gonna go with it we that's your choice but we want to make sure that you have it that this is our recommended path so they came back to us and they had sacrificed a year of putting off having a family buying a house starting their business like they had sacrificed everything just to pay their debt and so they ended up kind of working for free for a year what are some like just emotions of people that you've talked to that have sacrificed so much to pay their loans and it really hasn't made much of a dent like what have what have been some of those emotions that people have come to you after sacrificing all that not not seeing a lot of results yeah debt fatigue is very real some of the emotions I encounter are you know anger frustration anxiety depression a lot of people you know kind of just take the opposite behavioral route it's like I did everything right I was so diligent and I don't feel like I got any payoff so now I'm gonna do everything wrong I'm gonna go credit card debt I'm gonna buy myself the Ferrari the fancy car the fancy house all the things and just go completely 180 you know opposite direction because I'm I'm so angry at how hard I worked and I didn't see any result yeah you can only suffer so much before you just give out isn't there some sort of like expectation for like POWs that there's like a level where you're just gonna give the information because humans can only take like so much suffering and I think the same thing is true with debt I don't know if you have any stories but like some of my stories are like people that do decide hey you know what I'm just gonna pay down my debt regardless specifically people who have debt to income ratios above two to one like they owe more than double their income they do it pretty good for like one to three years right and then by like year two or three your in-laws basement starts feeling like prison and you feel that you feel like I can't take this anymore like I'm going to like jump off a bridge or I'm gonna go get my own apartment like one of the two right yeah and so I guess it doesn't often end up being sustainable like the rice and beans approach can work for like two or three years but beyond that like people sort of give up have you seen something different no I've seen exact same thing where you know we kind of map out a plan and say okay well this is how much you can afford you know it's gonna take you seven years to do this instead of ten seven years is a quite a bit of time and so like you said for the first two years it sounds like an awesome thing to do but 24 months later you're just like man you know my friends have gone on this vacation my friends have gotten to do this and there's a lot of you know comparison and FOMO you feel like you're missing out on something and you're just like I I can't do this anymore I want to live what's the point of going to work just to pay bills and just just to pay this one specific bill pretty much I have to have a life beyond this and I cannot continue on this path I guess for the Gen Xers in our audience FOMO is what fear of missing out yes just kidding but we got FOMO we've got YOLO we've got a lot of acronyms here so YOLO you only live once so there's all this FOMO YOLO economy going on right now right so I guess in terms of the seven life goals because we promised people seven life goals so we're gonna kind of attack this you know in a structural way otherwise people will just hear about all of the misfortunes of Travis's cars getting hit by trees you know for for an hour so I think we I want to try to keep it on track yeah you know I can get off track pretty easily right never fear I am here to keep you on track let's get into that first goal it is being happy in your career okay say I'm you know I've got a lot of loans and say I'm not feeling like I love my job what are some options that people have so that they can try to be more happy in their job well what can you do well one of the first things you can consider is these income driven repayment plans so a lot of times I see this with lawyers burnout for lawyers is very very real they go to law school they take on quite a bit of debt they clerk for a year just to get in so they go big law and they're earning a great income but those billable hours are hours of your life hours of your time less hours sleeping and you're just like I am exhausted what can I do that's meaningful I have this great degree I have all this knowledge and information but I want something more meaningful I mean they end up going to you know some other job maybe private practice family practice something like that way less income than that big law job you get on an income driven plan and you ride that out for 20 or 25 years depending on when you borrowed it's affordable you set aside some money into a tax bomb account and now you can kind of have your cake and eat it too in the sense that you have a career that's very rewarding you get to go home at a normal hour and your loans are not going to stop you from having that career so in other words if I'm in big law because I feel like I have to make my student loan payment what you're saying is is I don't actually have to go earn that huge salary just to make a loan payment that's exactly what I'm saying there are other options out there money is not everything I said that's what this is all about the seven things you can do outside of having to prioritize your student loans are seven things you should do you prioritize over your student loans you can definitely have a life with a lower income that is very meaningful and really really awesome well let's talk a little more about that let's say that I feel like I've made the wrong field decision like I'm just in the entire wrong field I've got 200 grand in loans and I became a whatever a physical therapist a chiropractor a lawyer or something and I feel like I dedicated like five years of my life to this you know and I can't do anything else because I have all this debt so there's this thing called sunk cost fallacy where people look at the past and they like overvalue the investment they made and then there's also a misconception around people being able to go back to school even with a lot of debt so I don't know if you which one you want to tackle first so that sunk cost fallacy and then people feeling like they can't go back to school like why do those cause issues for people and making the best decisions yeah so you know it's sunk cost fallacy is kind of like anchoring to well I've come this far I can't turn back now and the truth is you can you can become anything be anything like said I was a track and field athlete for three Olympic Games and you know while it was not a negative experience in my life you know I could have thought of myself as only a track and field athlete instead I said ha new opportunity ahead let me go take this new path and see where it leads and little did I know I would become a winter Olympian I would compete in negative 17 degrees and you know there was a whole new path that was completely opposite of the previous path and in my case it was actually less earning so I had a good earning potential in track and field and way less earning potential in bobsled it's much more blue-collar as a sport we did a lot of fundraising to be able to afford things but I had anchored to I can only do this one thing I can only stay here then I would have missed out on something I mean that is the idea of the sun sunk cost fallacy for listeners alike don't know you like I do you became a financial planner but before that how many gold medals did you win I have one gold and two silver medals I am a four-time Olympian and the first American woman to earn a medal in both the summer and the winter Olympics so we're gonna talk more about that with like the entrepreneurship question later but like that's pretty amazing that you transition from professional athlete Olympian to financial planning to you know you do multiple things now you're a financial planner for your own business and you're also a consultant for student loan planner from a loan perspective though because a lot of people be like oh great I'm not an Olympian you know like you hear you say 17 degrees like you know winning medals in negative 17 or practicing they I don't want to walk in negative 17 degrees like you know so like in terms of the people having debt already what's set up about the loan program that allows people to take on like another 200k of debt to change fields like why is that even possible yeah it's possible because you can you can borrow in an unlimited capacity to be able to take on your master's degree or whatever graduate program you're going to pursue but in addition to that once you get done you can get on one of these income driven repayment plans so it's not all about paying the debt back some people are on the side of everybody needs to get there all their loans forgiven everybody needs to pay everything back we talked about you know some of that mindset but in reality the education system is really what's broken and until that part gets fixed we've got to make the most of the plans that are available to us and the income driven repayment plans are a really great option for you to be able to take on some additional debt because it's going to be tied to your payment is going to be tied to your income so if you go on and get a second degree in your 40s decide you want to go and become a physician quite a bit of schooling that you got to do quite a bit of debt that you might take on to be able to become a physician but all is not lost you get done you finish all the prerequisites to be able to become an attending and you're off and running to the races and then you decide well I want to go you know abroad and do something like you know help people with this medical degree that I've gotten in third world countries well you may not earn a lot doing that and that debt will be based on your income and you can be actually in a very affordable situation have the education you need to be able to make a difference in the lives of so many people the federal loan program allows you to take out unlimited amounts to cover the cost of attendance and the grad plus programs unlimited you know so you know if you're unhappy in your field go back and get another degree if you are unhappy in your job I had a dentist one time Lauren that was driving two hours each way just to go to like a National Health Service Corps eligible job site where he would get I think 25,000 alone forgiveness a year his wife was driving like an hour in the opposite direction like they were living in between the two jobs I looked at their situation I was like okay do you know that you're better off on pay as you earn and like you're going for a 20-year forgiveness like anyway and so like the very most you're getting is a little bit of money towards income driven repayment but even then the way the program worked at the time like you know he was having a hard time matching up that loan repayment to the look you know it required payments that he had to make this is what he said he was like so you tell me that I'm driving two hours like one way every day for like no reason I'm like yeah and that was the silence you know if you're at all unhappy in your career like that's so important it's so much more important than your loans it's so much more important than how much you have what your payment is because your payments probably gonna be about the same just 10% of your income regardless so don't overvalue the loans when you're talking about like being happy in your job trust me I've been I don't know if you've ever felt this Lauren but I've been miserable in a job before and it was so not worth it the extra money that I got sticking it out a little bit longer not a good life plan yeah some might be saying that oh that's so millennial to to think that you should be happy in your work but it is true no matter your age no matter what it is that you're interested in we all deserve to love what we do and you do it so much better when you really enjoy it so to really take some time and think about what it is that excites you and you know it's okay to make a living for those things so go and make a living doing what you're passionate about it sounds a little bit cliche but I know for Travis and I we can definitely speak to the joy that we feel when we finish a consultation and someone's life has been changed and this work being very incredibly meaningful to us and I wouldn't do something else like what you said we'll get to that in the entrepreneurial part of why I choose this over something else but you definitely should be happy in your career because you can make a much better difference when you are so number two life goal is why that you should have the relationship that you want or don't want when it comes to long-term partnership or marriage so like why would people think that student loans hold back marriage and why does it not well the first thing is I like the don't part you know you don't need to stay stuck in a relationship so if you married a rich oil baron I'm just so they can help you pay off your student loans and you don't like that person very much you can go the other direction but so many people reach out to us and they're paused and they feel like they can't get married because one person is going to be inheriting the other person's student loan debt they're worried about how this is going to affect the overall family will they ever be able to purchase a home when they get married because this debt is going to show up and there's all these different kind of misnomers and misconceptions but you can actually get married if that is a value that is near and dear to your heart you can choose to do marry filing separately if you live in a community property state there are some extra benefits if you are say the breadwinner we call it the breadwinner loophole where you can take some of your income and put it over into your spouse's bucket income bucket if you will and actually get a lower student loan payment so there's lots of different strategies that you can use once you're married but student loans don't have to hold you back and when we're talking federal debt if you were to pass away your loans would pass away with you so your spouse is not going to be on the hook for them so that's not a reason to hold back from getting married so what we're saying is that if you're using your student loans as a reason why you can't commit you got to fess up it's because you can't commit it's not the loans it is not the loans do what you love with whomever you love and don't let your student loans get in the way of love so number three is what number three is being content with your housing whoo this is a good one so what I mean by this is people feel like I can't buy a house because my student loans so why is it not the case that you just can't buy a house because you have 400,000 of student loans yeah well the housing market is crazy right now and we've been getting a lot of questions around student loans and how to be able to purchase a home and one of the things that we've come up against quite a bit is that because of the COVID forbearance people's loans are showing 0% interest and zero dollar payments and how most lenders are going to calculate your payment is based on your monthly debt to income ratio so that's a really important first factor is that a lot of people think oh I have 600,000 of student loan debts I'll never be able to purchase a home because my debt to income ratio is so high what matters most is what is your payment on a monthly basis for the majority of lenders however if your payment is zero what they generally do is take 1% of the debt balance so you need to be really careful and figure out if this lender is only going to use 1% and there's no way that they're going to let me you know submit some sort of alternative documentation to show them then maybe I need to go find another lender because there are lenders that are accepting additional documentation that says like hey this is what my payment usually would be if COVID forbearance wasn't happening and then they're getting approved for their mortgage based on that so just because you have student loan debt you're not going to be stopped from purchasing a home I mean there's a lot of different strategies you need to understand so we're like talking to this relocation person with our move she's a realtor and she has us on this email distribution list and it's so bad because it like sends emails like including my wife when like a status has been changed on the house and so they'll send out the list and it'll show like for sale and then the next day a lot of times it sends her like an update it's like status update under contract oh my gosh I hear about it like every day my wife's like oh no oh no there's another one oh it's gone oh my gosh there's you know it's so it's like this feeling like there's no way we could be a homeowner right now and it's it's tough too because you feel like you got to get that mortgage you're gonna get pre-qualified and then you got to put an offer in like way above asking because you know you're gonna miss out to a cash offer so you have to get this really high offer so the thing is is like because usually the banks will just say well what is your income based payment like that's what they usually do in normal times and then they say okay we're gonna lower what you'd qualify for mortgage for like a little bit but you can still get a mortgage like a lot of people don't really realize that until they apply on an income based plan for mortgage and they get surprised how much they qualify for right exactly one thing we haven't talked a whole lot about you know I feel like I've been driving home the income driven's today and that's not appropriate for everyone some people do need to refinance their loans and pay them back but you also need to be strategic about how you pay them back if a home purchase is in your near future so as an example you may be able to pay your loans back really aggressively it may be the most cost-efficient thing to do and you may have the earnings to support that but if you do a five-year refinance you're gonna have a really big student loan payment on a monthly basis and we were just talking about your monthly debt to income ratio that could really majorly mess up your home purchase potential so what would make a lot more sense is if you're you know brand new a dentist or a doctor are people that we frequently run into that are you know maybe in a residency in a lower amount a lower earning and they're gonna jump to a higher earning so you could use repay end up with a low payment overall and then refinance your loans once you're into the mortgage or if you're ready to refinance right now maybe do a 20-year with a fixed interest rate that way you have a lower monthly payment so that debt to income ratio looks really good and then once you're done you use what we call the refinancing ladder to be able to take advantage of paying down the debt more aggressively and you know kind of arbitraging the interest rates yeah and there's some areas where it really doesn't make sense from a math perspective to buy a house ever like Manhattan San Francisco the price is relative to the rents or at a level where it just doesn't make sense to buy a house so we try to tell people find a house for like two times your household income or less if you find something that in terms of not just the list price to you right it's like the price you're actually gonna pay like way over asking if that price divided by your household income gives you a ratio better than two then go buy a house if you want to that's totally fine and you can obviously go above that but I definitely think that there's gonna be some people left out in the cold when this current phase that we're in of everybody's like house hungry like crazy mm-hmm I'm just talking about it to my brother today who's having a hard time buying a house in Atlanta what's like the reason for this like house housing market just being on fire it's just like no supply right demands always been there it's just right now it's just supplies not there and so eventually people are gonna be able to travel again and old people are gonna feel like it's okay to go to a nursing home again and downsizing again right so like eventually those sales are gonna start up like they do it normally and then also everybody sees all these super high prices so all the home builders are going out building tons of houses right now and that takes a while to catch up to that demand so I don't know so I was just say if you buy a house right now great you can do that but also don't feel scared like if I don't buy right now I'm gonna miss out on a house forever that's how you get stuck in a really bad situation yeah and I think it's so important you know we called this one be content with your housing even though we talked a lot about a home purchase to reflect on what are your values what are your goals what is your vision for yourself and your family because sometimes we buy a house just because it's like the next adult thing to do you know I've done this I've secured my job and so I'm going to purchase a home if travel is super duper important to you and you're never gonna be home to to be in that house anyway then maybe you don't need to take on as much house you said this pandemic has kind of skewed things where people have been at home a lot more on top of each other ones a lot more and there's like I need more space I need I need more more stability in my life and so they they do that but as soon as the world opens back up you're gonna be on a plane every other minute like me because I love to travel then maybe housing is not the thing that you absolutely need to do so being content with the housing that's appropriate for you and knowing that this is just a blip in time and this is not what things should look like for the long term for us if you're doing a pandemic purchase it's easy to say that Lauren but when you've had five people in one bathroom and a thousand square feet for the past year right the trauma of that that's kind of what's happening right is anybody who's had too small of a place right now during this freaking pandemic is like you know what what do you want like my firstborn and a million dollars like done right I don't know how I might get a million dollars but I'll find it people are so desperate because of this year which has been so different from what every other year and the rest of our lives will probably be like you know I mean this is probably an aberration thank goodness so I think that's really sage advice so what's number four number four enjoying experiences so whether that be traveling dining out parties we want to make sure that you are enjoying your experiences as a business owner I really fear recurring expenses and when I see a one-time expense I'm not scared at all because a lot of times like I make a bad decision and a recurring decision is like something that I have to actively stop you know what I mean and so there's like there's nothing special about like a one-time expense versus a recurring expense if it's a big recurring expense the stress level it's just like way higher from stopping that bad decision whereas if it's a one-time thing I recently had a project that we worked on I spent you know four figures on it it was like a complete failure and I just lost all that money thank goodness that's not a recurring relationship because I'm like I'm not a very good I feel like I'm not a very good business person sometimes Lauren because I feel like I really don't like conflict and I really don't like making like mean decisions if somebody's not cutting it like I really dread those conversations of like hey I don't think we can keep you around anymore oh my gosh well I do eventually get to the right decision I do eventually like have the gumption to say okay it's I can't this is not working out but I don't know I feel like people are like that in their own personal finances a lot more than we think where it's sort of like you've got that big expense and you're like feeling really bad about canceling it because it's awkward or it's you know something that you feel like how maybe I'll use it next month whereas these like enjoying life experiences things like yeah going to Disney is like ten grand or going to Europe is like ten grand but it's also that one decision that one expense versus like a mortgage is like $4,000 every month for your forever home versus like a one-time expense like it's something that you can handle a lot better so I don't know I mean what are your thoughts about like one-time expenses like life experiences versus big recurring expenses yeah I kind of like the reoccurring because I like stability in my finances I don't like these blips that make things kind of you know extraordinary but I completely see your point about like you said 30-year mortgage at $4,000 and that just being something that hangs over your head and in that regard I am very adverse I don't want to feel kind of strapped down to anything and so most of my expenses you know as I'm kind of thinking through this are more discretionary expenses that are not reoccurring because I've you know gone out of my way to do things like make sure that I don't have a car note so I don't have five years of paying that thing off over and over so yeah it makes a lot of sense but I think one of the big things to do is like you said you can't enjoy these experiences but make sure you kind of save up for them so that $10,000 trip to Disneyland you don't have to feel bad for because you maybe swipe your credit card and then you pay it in full that month or you know you write a check for it or I don't know if anybody writes checks anymore but you can pay for it in full by doing it and not feel bad at all about that one-time expense so I'll give you an interesting example so my wife is really into global health and does a lot of like global health trips at least she did pre-pandemic and so one of the things that we talk about all the time because we laugh about it and we're like man that was dumb of us is she went to Rwanda and she had the ability to go up close and see the super rare gorillas and like the rainforest or something and it was only $800 she was like asking me like whether or not she should put that on her credit card because she didn't have any money at all because she you know she's been training and all these big cities and everything so I was like I don't know I mean I guess I could give you the money if you want to do it or something but I think she just decided like you know that's just too much money right now we laugh about it now because we're like man you know even when she's just in attending we're making a lot more money than we ever thought we were gonna make and if we could go back in time and tell our 20-something year old selves oh my gosh go up close and see those rare gorillas that was such a dumb decision of us to not do that I think back a lot about that when I was in my 20s all the things I could have done that I can't do now having more responsibilities like so I don't know I I kind of advise a lot of young people this it's sort of like the consequences of you not going and having that life experience that you want to have or like so much worse if you don't do it then if you like have a little bit of extra credit card debt or a little bit lower savings rate that month or something you should go do it because if you're a responsible person you're already gonna have more money than you need like if you're at all worried about your finances listening to a show like this you're already self-selected as somebody who is trying to be responsible so to that person we would say anything you can think of life goals dreams kind of thing with travel experiences those kind of things go do those that makes a ton of sense and I'm just thinking about like base jumping skydiving swimming with the dolphins all the fun things that I have on my to-do list um yeah I would definitely spend the money in that moment because I am of the the idea that you know if you're not living then you're dying so you know even if I could die from doing these things like base jumping then you got to live so yeah when we get back to the YOLO if you will you literally do only live once and if you get an opportunity to fly halfway across the world to Rwanda you know what's the odds of you coming back there and being able to see those gorillas spend the money it's okay yeah so let's do number five so having the family life you want or don't want should be your priority so in other words if you don't want kids that's great you should spend that money and other things that you want to do maybe you want pets maybe whatever it is right spend that money if you want kids loans should not at all hold you back so in terms of child care expenses and just the expenses associated with kids I'm sure you've had a lot of clients Lauren that have expressed you know anxiety about this like they can't have kids even though they want them or something what are some of the words that you've heard from people that are worried about how their loans are preventing them from having kids well yeah I just had a conversation recently with somebody who said you know my job as a parent is to be a parent even before the child exists and I don't feel like I'd be a very good parent to be bringing someone into this world knowing that I'm strapped with this debt and I'm also going to have the expenses related to them their child care their education and so as a good parent I'm not going to have kids it just broke my heart to hear that you know as a thought process for someone but it was really great to get to the end of that consultation explain to them that they can you know in fact afford to have children and also pay their student loan debt one of the parts that's really cool on the spreadsheet is there's a part of the that asked how many children or when will kids be joining your family we kind of throw in a date so if you wanted to have two kids maybe you wanted to do it in 2022 2024 and we kind of talked right then in the moment about the way that they calculate your payment for an income-driven plan is 1.5 times the federal poverty rate based on your family size and so if your family size goes up the federal poverty rate number that they're using for that calculation is different and that's going to actually result in your student loan payment going down so you know I always joke with clients you know go ahead and have 10 kids but be wary that the expenses are gonna be more for those kids then what you're gonna save on your student loans however you are getting a small decrease in your student loan payments by having the children ultimately it's about getting to the numbers and understanding what your monthly income is gonna look like and your other expenses in light of children to that person that's being responsible and saying I have to conquer my debt first right I would say okay by that logic we also have to defeat climate change we also have to defeat racism you know the economy has to get fixed we have to lessen inequality like take all of the world's problems we have to stop gun violence and get gun control or something I mean you know whatever your things that you're worried about disarm the North Koreans right like I don't know you could literally make this list a mile long at the end of the day do you want to be optimistic about the future or not and this is if you want to have kids obviously a lot of people make an intentional smart choice for themselves not to but if you feel like you want to I don't know like I'm you know this Lauren but I'm super weird right so I'm watching this British castles thing on Netflix right now and one of the things I learned was Mary Queen of Scots had like three wills I was like why would you have three wills and it's because there was like a 20% chance of dying in childbirth or something like that and I'm thinking oh my gosh like and I'm worried about my kids 529 or something I mean there will always be concerns that you have about why now is not a stable time there's never been a parent I think in history that has brought the kid into the world and felt like things are super stable right now like it's right it's the most destabilizing thing you could possibly imagine I get wanting to wait so you don't have other stressors like adding to things one like great example this is like I have this family that we're friends with and they have four kids I don't know how they do it but they just kind of like stopped caring or worrying about everything they're the most chill people I know I don't know how they figured out what they do and so you'll figure it out too and I told this friend I was like do y'all know how much money you're gonna get with this like child tax credit this year and they're like there's a child tax credit this year yeah like you guys are gonna get like $20,000 because you have four kids under six all at once in monthly payment starting in July they're like whoa 20 grand like we're gonna have so much money like that's not a usual thing but I guess I think these things have a way of working themselves out and from a student loans perspective like you mentioned like people can pay less when they have a bigger family size right for sure do not let your student loans stop you from procreating the world is gonna be a better place with your kids in it oh yeah I mean like you're listening to the show you're already a self-selected group that cares that wants to do the right thing you will be fine yeah you won't sleep I can attest to that as a new dad but you'll be fine um so number six is taking risks especially like related to your business or entrepreneurship side hustling new skills things like that so so Lauren like you could be anything you want to be you could have a executive job on Wall Street making great money great benefits very stable why did you take a chance at starting your own business first before you and I met and why did you do student loan consults for a student loan planner but you could do other things yeah there's so many things in this world that where there's so many needs in this world is a better way to say it and there's people that can fill those needs that are not filling those needs because they are living in fear not willing to jump off that ledge and really make this world a better place so for me it was very much I saw a gap so you can listen to a previous episode where I kind of talked more about my overall financial situation and what brought me to financial planning but the short story is I had financial advisors that didn't do a good job for me and I realized that young professionals didn't have a financial person that they could go to so most financial professionals are gonna tell you need a million dollars in assets before you can be a client or you know they have a annual minimum of seven or eight thousand dollars a year there's all these kind of barriers to entry I had a really good living at 20 years old and I really wanted help with my finances and I realized that there was no one that could help me in the way that I needed to be helped so budgeting first-time home purchase how much to set aside for taxes all these different things and now I get to fill a gap and that's much more rewarding than going to make you know six figures working for someone else maybe with some golden handcuffs having established myself and understanding finance the way that I do now I think I'd be a good asset to some big stable company but I don't want to work nine to five I don't want to you know ask permission to take vacation and I definitely want to make sure that when I leave this earth that people realize oh she made an impact she really helped me and I can help far more people in this way than I can by being at a firm and doing that kind of boring nine-to-five job that's quite eloquent our clients are really grateful that you made that decision I know I'm grateful that you made that decision I think like in terms of the people listening to this like applying this to their own lives right like you said don't live in fear and to quote my 20-something year old brother Yolo you should take a risk and it might not work out but realize that with the stability of your graduate level education you always have something to come back to as long as your skills haven't completely atrophy to the point where they're absent so yes like as a medical professional you can't be out of the workforce for longer than X amount of years I know that's the thing my wife talks to me about all the time where she's like if I ever stopped doing medicine I could get away with it about a year and then I feel like my surgical skills wouldn't be up to par right feel comfortable operating on people even though I could get a job so yeah that there's some things to consider but like if you want to go start your own practice go do it the worst thing that can happen is it doesn't work out and you can define what that looks like right if you want to ask your boss for like a weird job situation you know my my wife and like this latest job negotiation I kind of encourage her which shocker right I give people advice for a living so it's like sometimes the wife's like shut up Travis but but this was a good suggestion I was like well you want more time to do global health and we don't need the money thank goodness so can you just ask your new employer like you create more time for me in a way that works for you and so for them it was all about kind of aligning her salary with what the revenue she was gonna bring in was and so then we found this new way to structure her contract where she gets off extra time for doing what matters to her and if she hadn't asked for that she wouldn't have gotten it and so I think that's just so key like because with loans like you've stated a couple times on the show you can pay based on your income so if you want to go take that risk with your business your income driven payment might be zero for a while and if you're successful it will jump back up and if you're not successful you can go back to doing something like you were doing and put food on the table that way so number six I think I'm really passionate about I'm always trying to convince people to go take a risk because I know how positively it's impacted my own life like I was really pretty unhappy and that mine was like a seven to six kind of a job but you know I was pretty unhappy and then you know it took me several years of failure but now I at least right now who knows what the future will hold but right now I earn more than I did and I have more flexibility than I did so I think that that's pretty exciting to have that option in life you want to take us home with number seven and last but not least living in the location that you want I think this is huge I have a friend that is living in Bali right now and I am eternally envious because my husband is location dependent so we've got to pick a place where there is a linear accelerator so that he can cure cancer and that is a very important work but I am trying to build a life where I can get over to Bali or down to South America for a couple months each year and we still be building the kind of life that we want that is location independent yeah I guess us poor medical spouses right like I guess you know everybody is like oh shut up you guys have so much income stability and great benefits that's true that's true but the cool thing is is you know it's a journey right you're gonna figure out where you're going as a couple or as an individual over time you don't have to have the answer tomorrow the thing about the housing thing if you have a house you're kind of stuck in in one specific area and that might be what you want you might like that that might be what you're going for great I mean I guess try to make the best situation of whatever you're going through like I guess you know there's two ways to look at not being able to afford a house in Southern California one is like dadgummit like I can't even afford like a three-bedroom house here this sucks the other way is like this is awesome I'm in such a desirable location that the rents and the prices are so high because like the weather is freaking amazing and I never have to shovel eight feet of snow out of my driveway right you know I mean so there's always this like negative way to look at things and the positive way to look at things and the good news about student loans is you can live anywhere in the world because you know if you want to be in California you can you probably need to do income driven repayment for a lot more often for people than you know if you lived in like a lower cost of living area if you want to be in New York City you can do that if you want to be in Europe or Australia we have a lot of people like I have a whole contingent of veterinarian clients that moved to Australia because they met some Australian person you know Australian people they just travel everywhere I don't know so there's probably like a one in 20 chance that if you're single and you travel you'll end up with an Australian I guess I don't know but they move there and they can pay zero for their loan forgiveness program because it's based on US taxable income and they exempt the first hundred K that you earn abroad on your US taxes so they're paying zero a month in their loans and you can move states if you don't want to live in one state you can move to another one and if it's more expensive to live there you can pay based on your income and just go for forgiveness or if it's a less expensive place you probably might have an easier path to getting out of debt I don't know so I feel your pain Lauren about the location independent stuff about wanting to get over to Bali that sounds really nice right now but any travel sounds nice right now right very much so and I just think it's so important that like you said you align your mindset with what it is that you're trying to accomplish so focus on the opportunities not the obstacles and you can in fact live anywhere you want you can pursue the career that you want you can have so many things that are on this list and still have that student loan debt and it not hold you back so I just I think it's really really key that you say instead of looking at oh my goodness I can't do this because and all the things that are in my way here's an opportunity here's a way to do this here's how I can get here how awesome is it that I live in California like you said and this beach is right down the street you know it's all about the way that you choose to shape your perspective basically be your own Prince Harry you know because he just is this huge obligation this massive debt that he owed the British crown he got out of it he figured out a way to manage it you know he's still kind of you know has to deal with it but you know he's able to live where he wants to live his relationship he can have whatever he wants for his spouse right being married to Megan he can have kids being happy in his career so basically the student debt is like this burdensome obligation that you can get out of I don't know I'm terrible with analogies Lauren you know you are 100% right go be Prince Harry or Princess Harina I'm gonna just change them to a girl name in case you want to yeah there's plenty of interesting examples you can use but the takeaway from the show right is you need to go live whatever your life goals are life is too short you can do it in a responsible way by planning and having an approach to doing so and so you can also you know minimize your payment and have a very specific approach to like achieving those goals which makes them more likely that you actually accomplish them and that's what like Lauren and our team is so good at Lauren how many hundreds of people have you worked with so far I think I'm around 900 now 900 people right so even if we were bad at giving student loan advice like we would figure out something after having 900 conversations about people feeling really burdened with their student loan debt and like I think that we've figured out how to help people compartmentalize figure out exactly what it is figure out how it doesn't affect your life eliminate the anxiety we know that student loan payments are gonna be starting up again in only a few months we probably are expecting our calendars are probably gonna get over overrun think about like our calendar like single-family homes right there's only so much of our calendar that exists right when everybody wants one and we can't increase the supply it might be waiting a while I'm joking this is terrible jokes here but if you need to get a plan studentloanplanner.com slash help Lauren what days of the week do you work now you can find me on Thursdays and Fridays from 11 to 7 or 7 to 3 you know a lot of times people want to work with a specific consultant we tend to just you know have you book and you get who you get but like Lauren's fantastic so if you end up working with Lauren you're gonna be lucky so take care of those life goals and dreams don't let student loans get in the way until next time thank you for listening to student loan planner podcast