Pursuing Financial Independence While Raising Kids with Matt Becker (Podcast Transcript)
Featured Photo Credit: Matt Becker
Elle Martinez: [00:00:12] Becoming financially free.
It sounds good. It flows very nicely for a podcast intro. But what does that mean?
Today we're going to discuss that topic. Usually, couples who are working on their finances have some end goal in mind.
If they're in debt, their first step is to get out of it. That's something we talk about often here on the show because it is such a huge burden on family finances and marriage.
But what about the main goal once you're done getting out of debt? What are you two working
For my husband and I, it's about having more freedom with our work schedule and money so we can spend more time with our kids and projects that matter most to us. You may have a different goal my hope with the podcast is to give you the tools ideas and resources to help you find and work towards your goals through finances while building up your marriage Matt Becker a financial planner has recently released a book entitled The New Parents Guide to Financial Independence. And it is here sharing how parents can take the steps to move closer to their goals. He discusses why working towards financial independence can be a more fulfilling goal than simply saving for retirement. How financial independence can be done in intervals so you can explore your professional and personal options in life and why your savings rate is far more important than your actual investments even though this episode is coming from a parent's perspective. It really applies to anyone looking to use their finances to live a more meaningful life. Matt Becker is passionate about family and finances. For those who don't know
Matt Becker: [00:02:11] Fueled by a personal milestone my web site my company Mom and Dad money basically my my mission is to help new parents make good financial decisions as they're starting their families and to use their money purposefully just to build a life they enjoy a happy family environment and everything like that and really the company's kind of came from my personal experience as a new dad. I have two boys three year old and a 1 year old and when when we were pregnant with our first you know I have a financial background so of course I immediately started thinking about all of that the money side of things everything we needed to handle there and it was it was overwhelming for me even even with kind of my. Even with my financial background it was still a lot to take on a lot of new responsibility. I felt kind of confused and overwhelmed and you know I went out in search of resources to help me to kind of help guide me through this process and I really couldn't find anything that that felt comprehensive and detailed and helped me make kind of really good decisions for my family that I was confident in and and that was tough for me. And eventually you know we made it through and I mean I'm still here today. We had a second chance and the first one didn't scare us off too much and eventually I realized that I could to take could take that personal experience and kind of combine it with my financial background to really try to be the resource for other new parents that I had wanted to find and couldn't. And so that's how Mom and Dad money got started and that's still what I'm trying to do today is basically to take take this transition that was so difficult and stressful for me and to make it easier for other new parents as Matt worked on his business and was writing for his site.
Elle Martinez: [00:03:57] He started getting feedback and questions from other parents. He shared some of his thoughts in more depth with his e-book the new family financial roadmap it he gets into building your family finances and covers topics like life insurance saving for college and investing from there. Matt began to see a need for another resource that parents could use.
Matt Becker: [00:04:20] I've always had an interest in in finance and financial planning and so I started the blog really as a way to just kind of start expressing my ideas and get them out there and as a way to document some of the things I was going through in a way that I that I hoped would be helpful for four other people. And you know that kind of grew and grew over time I've been doing that for a little over two and a half years now and as my audience has grown and I've gotten to talk to more of them and get more questions. I really you know the question I kept getting over and over again was how do I save and invest for the long term. You know some version of that that's you know far and away the most common kind of question I got. And so there were two parts that one I wanted to be able to answer that in a really kind of comprehensive way that I that I couldn't really do on the blog you know which just kind of blog posts after blog posts and I also you know I I was learning about this kind of new just way of thinking about it you know moving from this kind of the common idea of retirement to what I think is a more exciting and accessible idea of financial independence. And so I wanted to both answer the questions I was getting about in about investing and how to do that in a in a single resource in a comprehensive way and introduced this new idea of financial independence really just to help people you know give them one resource they could go through and and use to get their entire investment plan on track in a way that was kind of easy and accessible and easy to understand.
Elle Martinez: [00:05:54] Matt's transition with his investing and savings goals is a reflection of a growing shift with how people view financial independence. Usually it's been associated with retirement. You have enough money saved so you don't have to work again. The popular practice is putting in decades into building that retirement fund or collecting that pension. Now though with the current economic situation some have reconsidered that notion to them financial independence is about saving enough to have more options.
Matt Becker: [00:06:27] And it does change how you approach your finances as Matt explained so well for me financial independence really just means the freedom to make decisions based on what makes you happy instead of what makes you money. So it's just it's having the financial resources where you're not so dependent on the next paycheck that that's the only thing you have to worry about where you have some freedom to make make lifestyle choices that just increase your overall happiness your enjoyment of life. You know the fulfillment you get from your days. And so one of the reasons I like this a lot as opposed to retirement is similar to retirement. There's you know there's this concept of kind of full financial independence where you have enough money where that could last you forever and that could happen kind of in your 60s which is kind of the typical view. It could happen in your 50s or 40s. You know you'll even find stories of well getting there in the 30s but that's one way to look at it. And then the other way to look at it I just called partial financial independence where you have enough money or you know you have the financial resources to to make a decision like quitting your job and starting a business or switching careers and maybe taking a pay cut or you know being a stay at home parent and foregoing that kind of income where you may be taking a at at least a temporary step back in the amount of money that's coming in.
Matt Becker: [00:07:47] But it's in pursuit of something that gives your life more meaning and more joy and more happiness. And I use my personal example because I actually took a huge step back. I was kind of the sole income earner for our house and basically left my job and started the company that I'm running now and started from scratch. And the only reason I could do that was because we had money in savings and it wasn't enough to last us forever but it was enough to last us for a year or a year and a half or maybe even two years depending on how we approached it. You know enough time for me to get this business off the ground. And so I always use that personal example as kind of the partial financial independence that that I like to to show people is possible and can get them you know can allow them to live basically a life they enjoy a whole lot sooner than having to wait till they're in their 60s.
Elle Martinez: [00:08:38] As you heard the man himself has made this leap starting a new business while still making sure his family was covered. Being married meant that he and his wife Casey had to talk and plan together for this big change. I asked him about their process for this.
Matt Becker: [00:08:54] We'd been saving for a while. It's something that you know I guess we kind of just naturally good at but but also just from learning and figuring out you know we got better out over time but we'd been saving for a while so we weren't necessarily saving up for that specific thing. But basically what happened is the opportunity came up and and we realized that now we we had the savings in place and that gave us this opportunity. So it wasn't it for us it really wasn't all that planned. It was just it we kind of we just kind of realized that that that that that that was an option to actually make the jump in know once we had realized it that took a lot of conversations and to be honest I was the most nervous about it because I'm a fairly conservative person when it comes to money and you know we already had one child we were pregnant with her second child. It was due in just a couple of months. And so I was nervous about it. My wife is really the one who pushed me encouraged me to do this and what she eventually said. That kind of triggered into my head. She said you know we have all the savings. If it isn't for this then what's it for. And that really resonated with me and kind of was the final push that got me to actually make the leap.
Elle Martinez: [00:10:07] Personally I believe that experience has made the New Parents Guide to Financial Independence an even better book. It's comprehensive without nit picking over the small stuff. He goes to a lot of material but it doesn't feel dry or boring before getting into the how map begins with the why. What are you two saving towards. He gives steps on how you can come up with clear goals and figure out how much you need to save even if you're completely new to investing. Matt takes the time to show you how to create an investing plan that you can understand and follow through on. He also demonstrates how your savings rate is a much bigger factor than your actual investment or returns.
Matt Becker: [00:10:53] You're one of the things that I see that stops people from getting started with investing is it feels like this very big complicated overwhelming topic with where you need to learn a ton and there's a lot of weird language and terminology and people are just kind of afraid to to make a mistake and and it's a little overwhelming to dive in. And so what I'm trying to show there is that actually when you when you start out and really for the first 10 years or so what you invest in and the returns you get don't actually matter all that much. What really matters is just simply how much you're saving your savings rate is far and away the most important part of your investment plan for really the first decade. And I give this example I show you know two people and one of them is saving 10 percent of her income and earning no returns. Like not literally nothing just put it in a savings account doesn't earn anything the other person is saving 5 percent. So a little bit less and is getting a 10 percent return and it takes it actually takes 14 years for that 10 percent return to overcome the fact that he's saving less. So that's not to say put all your money in a savings account and I go into a lot of ways you can. You can invest your money better than that. But simple point is just that if you're going to focus on one thing the one thing to focus on is how much you're saving. Because that will go further than anything else to getting you ahead. And it's also it's not all that complicated it's just it's not always easy to find the room to save money. But it's it's not complicated. You don't have to learn a lot to do it.
Matt Becker: [00:12:28] You just need to get started saving.
Elle Martinez: [00:12:41] Special thanks again to Matt please pick up the New Parents Guide to Financial Independence. It's a step by step guide through the process of creating an investing plan that helps you to reach your biggest personal goals. You can get a copy at mom and dad money.com or if it's easier. Just use the link in the show notes. You'll also see plenty of resources to help the two of you get started with saving and investing. Don't forget to hear the latest episodes as the release. Go ahead and subscribe to the couple Money podcast. It's easy and free. We're on itunes soundcloud and Stitcher. You can also leave a rating and review the show on any of those sites. I'd love to hear what you think and it would be a huge help in getting the word out especially with iTunes. So please take a minute when you have a chance. The feed is also available on couple of many podcast dot com so you can grab on whatever service you prefer please take care and have a wonderful week.
