End of Year Wins | Part 1
Episode 281
Episode Guide
Episode Summary:
Episode Timestamps
ChooseFI Podcast Show Notes: Christmas Edition - Win Series Part 1
Episode Summary: The ChooseFI Christmas edition launches the Win series, where community members share their financial achievements over the past year. This episode features inspiring stories that highlight the importance of community and shared experiences in personal finance. Guests share how they improved their financial situations, reduced expenses, and maximized contributions, emphasizing actionable steps toward financial independence.
Key Takeaways:
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Community Wins: Celebrating individual financial victories can inspire broader community engagement.
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Financial Strategies: The episode shares actionable insights, including reducing monthly expenses and maximizing retirement account contributions.
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Real-life Examples: Featured guests Valerie, Michelle, Chris, and Lauren discuss their personal finance journeys and the changes they made this year.
Timestamps & Topics:
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Podcast Intro
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Win Series Overview
- Introduction to the series where community members share wins.
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Valerie's Story
- Valerie shares her year of major renovations, refinancing savings, and debt payoff.
- Achievements:
- Paid off $34,000 in debt and saved over $1,000 a month.
- Maxed out her HSA and increased 401(k) contributions.
- Emphasizes the impact of reduced spending due to COVID.
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Michelle's Journey
- Discusses her path to financial independence after discovering financial podcasts.
- Highlights:
- Joined finances with her partner, maxed out 401(k)s, and sold a rental property for a short-term rental.
- Broke up with her financial advisor to save on fees.
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Chris's Experience
- Shares how he introduced financial independence to his family.
- Wins include saving $15,000 in a year and maximizing contributions to retirement accounts.
- Notable savings from renegotiating insurance policies.
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Lauren's Progress
- Found a side gig as a census worker, paying off $7,000 in consumer debt.
- Moved into a caretaking position, eliminating rent costs.
- Plans to contribute more towards retirement after getting pregnant.
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Podcast Extro
Actionable Takeaways:
- Join Community Events: Engage with others to share and learn from financial wins. [Timestamp: 00:01:43]
- Maximize Retirement Contributions: Ensure full contributions to retirement accounts and HSAs. [Timestamp: 00:08:53]
- Reduce Monthly Expenses: Actively shop for better rates on services and insurance. [Timestamp: 00:30:34]
- Explore Side Hustles: Consider additional income streams to facilitate debt repayment. [Timestamp: 00:34:11]
Related Resources:
FAQs:
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What is the Win series?
- A series featuring community members discussing their financial wins and achievements. [Timestamp: 00:01:17]
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How can I effectively save money?
- Reduce recurring expenses and explore side hustles for additional income. [Timestamp: 00:11:21]
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What did Lauren learn from the podcast?
- Taking actionable steps towards paying off debts through budgeting and side gigs. [Timestamp: 00:34:34]
Key Quotes:
- "Crowdsourcing personal finance is about community!"
- "Witnessing such drastic changes in just one year is truly remarkable!"
- "Cut just $100 a month and you've effectively reduced your FI number by $30,000!"
Celebrate the journey towards financial independence with real stories of triumph from community members on this special episode of ChooseFI!
Unlocking Financial Independence Through Community Wins
The journey to financial independence is often a solitary path, but the strength found in community can significantly enhance this experience. In the ChooseFI Christmas edition focusing on the Win series, listeners are shared encouraging stories from community members who have achieved remarkable financial wins throughout the past year, even in challenging circumstances. This article distills the key insights from these inspiring narratives into actionable strategies for achieving your financial goals.
The Power of Community in Financial Growth
The foundation of financial independence lies in community support. Engaging with like-minded individuals who are also on the pursuit of financial literacy can elevate motivation and provide valuable insights. Participation in community events, whether through local meetups or online forums, allows you to share experiences and learn from others' triumphs and challenges.
Action Step: Join local or online financial communities like ChooseFI to share your wins and learn from others' experiences.
Cost-Cutting Strategies
Many community members in the podcast shared their success in significantly reducing monthly expenses. One of the standout principles is the concept of cutting recurring costs. For every hundred dollars you manage to slash from monthly expenses, you reduce your Financial Independence (FI) number by approximately $30,000. This strategy provides a clear and tangible pathway to financial independence.
Takeaway:
- Assess your current subscriptions, services, and recurring payments. Reducing these costs can have a profound impact on your overall financial position.
Building Income Streams
Another key theme in the podcast was the importance of creating additional income streams. Community members shared how they engaged in side hustles—ranging from mystery shopping to focus groups—to generate extra revenue, which was then directed towards debt repayment and savings.
Actionable Strategies:
- Identify skills or hobbies you can monetize through side gigs or freelance work. Your spare time can yield significant financial benefits.
- Explore income opportunities through gig economy platforms or local community boards to find jobs that fit your schedule.
Utilizing Travel Rewards
Travel rewards can be a fantastic way to maximize your spending and save on future travel expenses. While some community members have put travel rewards on hold due to the pandemic, many others capitalized on opportunities to earn points and strategically use them to explore future travel plans at minimal costs.
Recommendation:
- Research travel rewards credit cards that offer points for everyday spending, especially in categories you already purchase frequently.
Debt Reduction Tactics
Several community members emphasized the importance of tackling debt aggressively. A systematic approach, often referred to as the "snowball method," can help pay off debts more effectively. This method encourages you to pay off smaller debts first, granting quick wins that boost motivation and gradually chips away at larger debts.
Takeaway:
- List your debts from smallest to largest, and focus on paying off the smallest first while making minimum payments on the others. This approach can provide a psychological boost and propel you forward in your journey.
Investment Contributions and Financial Literacy
Maximizing contributions to retirement accounts and Health Savings Accounts (HSAs) is pivotal. These accounts not only offer tax benefits but also provide a robust foundation for long-term wealth building. Implementing strategies to educate yourself continuously about personal finance elevates your ability to make informed decisions about investing and saving.
Action Step:
- Investigate your 401(k) or other retirement accounts and aim to contribute at least to the levels of any employer match available.
- Take advantage of educational resources, such as books and online courses focused on financial literacy.
Transformative Mindset and Lifestyle Changes
A notable insight from the podcast was the transformative mindset shift experienced by many community members. The pandemic, while challenging, offered a unique opportunity to reevaluate spending habits and make drastic changes towards achieving financial goals.
Action Step:
- Reflect on your personal values concerning money and spending. Embrace frugality in areas that don't align with your priorities.
Embracing Changes and Seizing Opportunities
Lastly, many guests shared stories of how embracing unexpected opportunities led to substantial financial benefits. For instance, taking up caretaker roles allowed some to live rent-free, providing significant savings. This adaptability is crucial in a world full of uncertainties.
Conclusion: Achieving financial independence is within reach when you leverage community support, apply strategic cost-cutting measures, build additional income streams, reduce debt, and maximize investment contributions. The journey is not just about numbers and accounts—it's about improving your quality of life and discovering freedom from financial constraints. Embrace these strategies and inspire others as you embark on your path to financial independence. Join the ChooseFI community and unlock the full potential of your financial journey.
Additional Resources
This pathway offers not only financial benefits but aligns with a lifestyle deeply rooted in community and shared success, paving the way toward a brighter financial future.
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What You'll Get Out Of Today's Show
It's the ChooseFI Christmas Edition where we hear end-of-year wins direct from our community members. During this live event, listeners shared the actions they've taken during the past year that have helped them to spend less, earn more, and enjoy the journey.
This year, the year-end-win episode took place in a three hour live Facebook and YouTube event featuring around 20 members of the community.
Despite how tough this year has been, many people were able to implement some of the strategies and tactics discussed on the show into practice and find more margin in their lives.
The first featured win comes from Valerie. She purchased a condo a couple of years ago and has been working on renovating it. While not a financial win, Valerie says putting it behind her is her biggest personal win.
Finally closing out the permits allowed her to refinance her mortgage, saving her $466 a month. She was also able to pay off her credit card renovation debt, saving her an additional $600 a month. In total, Valerie paid off $34,000 of debt.
Besides the debt, Valerie also maxed out contributions to her HSA and because she now has an additional $1,000 a month, she increased her 401k contributions from 8% to 11%.
Valerie opened her first taxable investment account and rebalanced her portfolio, while her side hustles earned her $4,000, mostly from participating in focus groups.
Due to COVID, Valerie wasn't spending as much money and it allowed her to focus on things she might not have had the time to do and she's now one-third of the way to her FI number and hoping to retire by 2030.
Brad comments that cutting $1,000 in monthly expenses is $300,000 less Valerie needs in retirement when using the 4% rule.
Valerie has been sharing her copy of ChooseFI: Your Blueprint to Financial Independence with family members.
The second end-0f-year-win comes from Michelle who learned about ChooseFI after Googling financial independence while attending a conference. To convert her husband, she had him read ChooseFI's book and then scheduled a date night to discuss it.
Michelle's husband, Greg, never thought he could retire early. They didn't have a lot of debt but bought into the concept of getting 1% better and things began to snowball.
During the last year, Michelle and Greg joined their finances, maxed out their 401k, sold a rental home, bought a short-term rental, and broke up with their financial advisor.
They opened a Vanguard account and moved their accounts over after discovering their financial advisor was making a lot more in fees than the $50 per month to come up with an investment plan.
Because Michelle and Greg met later in life, they had maintained separate accounts. After joining finances and being transparent, they found making small 1% better changes each week didn't hurt at all.
All of the extra money that came in from COVID refunds or bonuses went toward paying off the debt from new windows. They also started maximizing travel rewards.
Michelle says when breaking up with your finical advisor, chances are they won't understand FI, so state that it's you not them and feel free to contact her for help breaking up with your advisor.
Up next is Chris, who has been a member of the FI community for about three years. He got started by reading The Simple Path to Wealth and Your Money or Your Life.
For Chris, the pandemic has been an opportunity allowing him to save $15,000. He's been able to max out his HSA and Simple IRA.
Chris also has two adult children to who he has introduced the concept of FI, as well as his nieces and nephews who have been very receptive to the information Chris has provided. He says to reach out and if they are interested they will let you know.
One of the actions Chris took this year was to switch to Policygenius, which saved him 50% on policy premiums.
The next end-of-year-win comes from Lauren. Lauren found ChooseFI in late-August and is on Episode 61R.
Lauren got a side gig in August being a census worker which enabled her to pay off all $7,000 she had in consumer debt. With all of the premium pay she earned, it ended up being $1,300 a week. She says she wouldn't have taken on the side hustle if it wasn't for the podcast.
After learning about 403b's, she switched from stocks and bonds to VTSAX. She and her husband also opened up a joint VTSAX account and reduced all of their monthly recurring bills to as low as they could possibly be. She's currently looking for hacks for satellite service.
In July, they moved into a home that they are caretakers for, which is an upgrade that eliminated $1,100 in rent. They found the caretaker job through her mother but says other caretaker or home sitting positions can be found online.
Since August, Lauren has earned or save roughly $9,000 since finding ChooseFI and taking action. They are now trying to pump as much money as possible into retirement accounts.
When an old job asked her to come back to work for them, she opted to focus on what things were important, like the baby she and her husband are expecting and how they can raise it frugally.