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OPINION | SAVE YOURSELF: Financial discussion this evening could change your life

by Sarah Catherine Gutierrez | May 4, 2021 at 1:56 a.m.

The most memorable financial advice, I find, is the kind that is parroted. How do I know? It gets parroted back to me all the time.

Here are just a few:

• Stop throwing away money on rent. If I had a dollar for every time I have heard someone say that to me, just the ones looking to buy a house when they were neck-deep in credit card debt and student loan debt and had not a dime to their name, I could buy a Tesla.

• Go buy a car. Interest rates are zero. You know what else is zero? Your paid-off car with zero car payment.

• Sign for a student loan; everyone has them. Last week a gentleman mistakenly attended a session on student loans. He was a dad interested in helping his son get student loans, but the session was geared toward people who had student loans figure out how to repay them. He stuck with the session and said that was all he needed to hear. The complicated repayment programs, the high interest rates and just the anxiety and stress level of the young people on the call trying to sort out their loans was all he needed to hear. He would never wish that on his son or his wife and himself. They are going with the affordable local college and paying in cash.

• Get a credit card with the best cash-back or travel rewards. Ah, my favorite. A free vacation. All you have to do is spend a whole bunch of money on a credit card and hope you are in the lucky group that doesn't get into trouble. Four out of 10 of the next people you pass on the sidewalk are carrying a credit card balance month to month and pay $1,100 per year in interest. How much does a vacation cost again?

Honestly, the list goes on.

Here's the good news. The advice works, even if it's not good advice. These casual "truths" ping pong around the brain of the recipient, especially because they are relayed by loved ones.

So folks, here's the plan. Let's meet up this evening at 6 p.m. and in one session change up the future of financial advice. Let's manufacture new parroted advice and then go a step further to share financial goal-setting with these people you care about.

Let's start with the knee-jerk advice:

• Save 10% into your work retirement plan. And if you don't have a plan, save 10% into your own Roth IRA.

• Pay off your credit card in full each month. Never carry a balance month to month.

• Calculate what three-six months of expenses would be, and maintain that in a savings account at all times.

• When you buy a house, make sure the payment is no more than 14% of your gross monthly pay. Always put 20% down to avoid private mortgage insurance, or PMI, and make sure it's set to be paid off by the time you plan to retire.

• When you have a baby, the moment the Social Security card arrives in the mail, set up a 529 college savings plan.

Now, who should be giving this advice? Obviously family, to begin with. Parents and grandparents are obvious choices, but let me expand that list to see if it might spark an idea with you.

How about a physician with a passion for finances. He and his wife comanage their finances. They educated their children about finances and are happy that they are all financially independent. But when he went on to describe his staff as part of his financial world, I was blown away. He was willing to be a source of trusted financial advice and to encourage them to save. He was also willing to challenge them to think differently when they were on the cusp of making financial decisions that could challenge the ability to save.

But how odd, right? When do people openly talk about buying their car with their boss or getting out of credit card debt or saving into the retirement plan? Hardly ever? In this case, he stepped across that taboo line that our society has drawn and started the conversation. And it never stopped. He established a safe zone where financial discussions are fair game.

Another physician, by coincidence, found himself answering his staff's questions informally. He was so gratified by the experience that he arranged a dinner and a discussion with about 10 of them after work one day, where they could have a distraction-free and long-form discussion of lots of financial topics. At the top of the list? Saving 10% into their retirement plan, of course. Many took action immediately. The conversation has only continued from there.

[Video not showing up above? Click here to watch » https://www.youtube.com/watch?v=JAVzbrdSJpE]

Or places of worship? I was running a retirement booth this week, and a woman came up to me to talk about the retirement plan. After I explained our goal of employees getting to a 10% savings rate, she shrugged her shoulders and said she had been saving 10% since she started working. She asked, "Doesn't everybody know the 10-10-80 rule? Save 10%. Give 10%. Spend 80%."

How about an aunt to two young women by marriage? The aunt was hitting her career stride and seeing the power of managing her finances proactively. What if she had started this even earlier in her career? The answer was obviously to provide for her nieces what could have been helpful to her. So even though they had a relatively new relationship, the aunt suggested they meet once a week by Zoom and read a financial book together. They had a modest job to read 10 pages a week, but they kept meeting long after the book was read. Through it, they all crafted and shared financial goals and opened up about financial anxieties.

One of the nieces decided a major financial goal was to eliminate financial worry, and she has already gotten a taste of it. She described the feeling of buying a shirt guilt-free for the first time in her life. How? Well, in her financial plan, she allocated a small amount each month to a savings account for clothing. When she made the purchase, she knew it was within her means. The other niece? Well, her car died last week. Was it stressful? Not as stressful as it could have been. She had a car fund savings account ready to go.

Marriage conversations are probably the most important to me, and unfortunately still not an obvious place where healthy conversations are happening. I find that most couples I run into have one spouse who manages the money, and they rarely discuss it. Heck, even in my own marriage I can see how just general life can keep us from having an in-depth check-in on our financial plan. That's why once a year we sit down and review it all, distraction-free, and change or reaffirm our savings and investments. Wouldn't it be great if couples saw the value of and committed to an annual "business" meeting?

Tonight, I hope to get this conversation sparked in many more trusted relationships in the Arkansas Democrat-Gazette All Access discussion. If you are someone who wants to build a tribe of family or friends who you can have an ongoing conversation with, bring them along. If you are someone who wants to launch a conversation to help bring a spouse, a child or a mentee into a financial discussion, bring them. During this conversation, I will offer new, specific parroted advice to start using right away, some building blocks for group financial goal-setting and then the jumping-off point for lifelong, empowering and meaningful conversation between you and your money tribe.

There's still time to register, and this particular event is open to the public in case your friends and/or family are not subscribers. You can register at the link here: www.arkansasonline.com/all-access-2/.

Sarah Catherine Gutierrez is founder, partner and CEO of Aptus Financial in Little Rock. She is also author of the book "But First, Save 10: The One Simple Money Move That Will Change Your Life," published by Et Alia Press. Contact her at sc@aptusfinancial.com.

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