This is a transcription of a presentation delivered by Ben Blanchard from Debt Freeks to two groups of high school students at a business skills conference on December 12, 2017 at Klamath Community College. A big thank you to KCC for putting on this event, and an even bigger thank you to my great friend Luke Ovgard for inviting me out to present. You can follow Luke on Twitter @LukeOvgard

Money Made Simple – Powerful habits to help you dodge debt, simplify saving, and survive young adulthood, college, and beyond. Financial hero status: achieved.

Good morning and welcome to the 2017 business skills academy, I’m stoked to be here and share with you this morning!

I’m Ben Blanchard, personal financial coach and owner/founder of Debt Freeks – Money and Career Solutions. I help people master money, do work they love, and live their ultimate life. I’ve been invited here today to share with you some things that I wish I’d known about money in high school. Specifically three financial super powers that will help you master money, reduce stress, and put you ahead of the game for life: Saving comes first, planning doesn’t have to be hard, and debt is the enemy.

First, you might be wondering who I am and why you should listen to me. For starters, I have a strong background in academic and financial service. I’ve worked in college advising and finance for about 6 years, and I am a certified credit union financial counselor. But most of all, I think you’ll value my perspective because I’m a lot like you. I’m no star athlete, math genius, or millionaire’s son.

Like you, I’ve learned a lot from having to figure things out on my own through trial and error. Most of my learning has come from real-world experience doing things the hard way.

I’m like you because I want to have fun, enjoy life, spend some big money now and then, and be wealthy one day.

I’m like you because I’m constantly tempted and pressured by society to live beyond my means and let money control me.

My Story

Before we start talking about the three financial super powers, let me tell you a little about my money background from when I was your age. I made tons of mistakes, but eventually decided to turn things around. I like to call this my “financial redemption” story:

When I was in high school, I thought the way to succeed in life was to go to a fancy college, spend all my time having fun, and pay a ton of money to do it. I honestly thought $100K in student loans was a good move. I was living high on the hog on borrowed money and squandered inheritance, buying things like cashmere-lined gloves (which my friends still tease me about), and constantly going out and doing expensive things. Not that all these things are bad, but I wasn’t using my money to achieve the goals I really wanted, and I didn’t have a plan. It was just so easy to borrow more money to pay for what I wanted at the time.

After my first year, I took a hard look and realized maybe the true path to success was different than I originally thought. I decided to ditch the debt and worked super hard to get out of the red. I changed schools, bought a cheap car, lived with my parents, took multiple part-time jobs, and graduated completely debt-free in 2014.

Achieving this financial freedom is one of my proudest accomplishments, and it’s allowed me and my family to do some pretty amazing stuff. Because we were dedicated to never borrowing money, kept our expenses low, and diligently saved our modest incomes, my wife and I had the freedom to:

Take a month-long honeymoon on the Oregon coast

Move across the state

Walk away from a crappy job we hated

Move back across the state

Start this business to help others find the freedom and security we’ve found

I’m confident that by mastering these three financial super powers, you’ll be able to do some epic things as well!


Helping hundreds of people find jobs they actually like, destroy their debts, and live the life they want is really fun. I love my job now. I’ve noticed that my most successful coaching clients have one huge thing in common: They’ve learned the value of putting your money where your values are. If they value freedom, they worked hard to pay off debt as fast as possible. If they value security, they master the art of saving to build up a solid nest egg to weather any story. If they value fun, they build an account for it, so they can enjoy their money without harming their other goals.

What does it look like to put your money where your values are? It means paying yourself first – future you will thank you. Having a written money plan (even if it’s on a sticky note). And not borrowing money (seriously!), and NEVER spending borrowed money on things that go down in value (like cars, electronics, rent, and especially food).

Financial Super Power #1: Saving

Magnifymoney.com reports over half (56%) of people have less than $1K in their checking and savings accounts combined! They can’t weather anything unexpected! As a culture, we just don’t save! This means that when Murphy’s Law strikes and your phone screen dies the week after the warranty expires, or your car breaks down, or any of the other super common “unexpected” expenses hit, most people are stuck.

So it’s important to save. Treat yourself fairly, pay yourself first – I once read the story of entrepreneur Roger James Hamilton who, like many small business owners, was plowing all his profits back into his business. The business was growing, but he struggled financially at home – even having his car repossessed while his business was expanding. He realized that he needed to treat himself fairly and pay himself first. He took his saving out of the business first thing, before he even paid the rent on his office space. He says that way, he was extra motivated to find more customers and conduct more business to pay his operating expenses. He was able to reap the rewards of his hard work, and build wealth fast, just by mastering saving.

Saving doesn’t have to be as extreme as that. You can make it easier on yourself by making it part of your routine.

Saving needs to be done on purpose. It takes action, and it takes a transaction. Making a savings transaction is like buying future you freedom and security.

What I do is when my first bill comes in the mail, that reminds me that my first bill is to myself. I actually sit down and write myself a check, which I deposit into a special account that’s just for saving.

You can do it this way, or you can automate saving with online banking. Set it up so when money comes into your account, a portion of it is diverted directly to savings.

I can’t stress enough how important it is to build the savings habit. Once you learn how to save, all other money habits will be so much easier. And as you’ve probably learned in class, building a surplus (being cash-flow positive; think profit) is the foundation of wealth in business and in life.

Financial Super Power #2: Planning

Planning means KNOWING what your money’s doing – where it comes from and where it goes. Systems to track cash flow are everywhere. It’s easier and more automatic than ever with apps like Mint, Personal Capital, You Need A Budget, and Single Dollar. You can even use computer software like Quickbooks, Excel, or Google Sheets. Just pick one and use it. Getting good at managing small amounts now, means it will be effortless to track your cash-flow when the numbers get bigger. Once you have the systems in place, the amounts don’t matter.

What you measure you can improve. Tracking is the lifeblood of getting better at things. MagnifyMoney.com reports that nearly two-thirds of people (65.8%) have no control over their spending! Either they had no plan at all, or they broke their plan and over-spent. This is a problem!

How will you know if you’re cash flow positive if you’re not tracking? For all you athletes out there: How do you know how fast you are if you never time your runs? How do you know how strong you are if you never record your lifts? That’s why we track our stats, so we can improve them. The same goes for money. We have the majority of Americans treating their money this way! They’re working hard, they’re running fast, they’re lifting all they can, but they never know if they’re making progress becuase they’re not tracking their progress.

Planning allows you to do more of what you love to do!
Love giving? It’s hard to give when you have negative wealth.
Love travel and being with friends? It’s easy to do when you build it into your plan.
Want to run a business one day? Planning lowers risk, meaning more profitability.
Want to go to college in a year (or two or three)? Make a plan to save and pay as you go. Start working the plan now.

I want to see a whole generation of grads with no debt – it’s possible, and you can be the ones to pull it off!

Financial Super Power #3: Avoiding Debt

Seriously, avoid it like a flesh-eating bacteria! Stay away. I went on Reddit and asked people what they wish they’d known about money earlier in their lives. I was shocked that every single one of the responses involved the danger of getting into debt.

Debt (especially student loans, cars, and credit cards in that order) is the #1 thing people under 30 say prevents them from doing what they want to do in their lives. It keeps them from saving as much as they want to, investing for retirement like they know they should, or being able to buy a home, take vacations, start businesses, or even change jobs!

Want to know something terrible? It takes the average person 20 years to pay off thier student loans! That means most people pay on student loans longer than they’ve been alive when they take them on. I know you have better things to do when you’re 35 or 40 than pay your loans off.

The good news is, you’re in a special position right now, because the easiest way to get out of debt is to never get in it (think quicksand). If you develop the habit of avoiding debt now, your net wealth (assets/savings – debts) will stay positive, and you’ll be miles ahead of people decades older than you. Nerdwallet.com reports that average net wealth (not counting home equity) doesn’t even climb above $10K until age 35!

Get started early building a positive net wealth – Don’t be Fake Rich! The easiest way to get ahead with money is to stay ahead from the beginning.

All my peers who borrowed money for cars and college are still paying those loans back. Your twenties (and thirties) don’t have to be the years you spend in a just making up for the loans you take out in the next few years. Avoid debt like the plague and you’ll never have that stress in your life. Future you will be grateful.

Summary

Make these habits part of you, and you’ll have no trouble avoiding pitfalls that take people years to recover from. Whatever you want to do, saving, planning, and avoiding debt will help you simplify money and use it as an engine to power your dreams!

It actually is possible to buy good cars, rent apartments, and even buy a house without a credit history. When I worked in the mortgage department of a local credit union, we helped several people do just that. Do your research, and don’t believe the fear mongers that you must have a credit card in order to buy a home or a car.

Let me tell you from experience that it is possible to be a student without a student loan (even if you’re not rich). It is possible to drive a nice car without a car payment. It really is possible to live a great life without a credit card. I’ve done it, all on a modest income, and you can too by mastering these three financial super powers!

Put your money where your values are, practice these three things, and you’ll be able to navigate young adulthood, college, and beyond with calm and confidence!

Thanks so much for listening, I hope you had as much fun as I did. Again I’m Ben Blanchard at Debt Freeks. Find out more about what I do and ask me your financial questions at http://workhardlivefree.com/

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