#RichLifeLawyer Show 006: Pay Debt or Save? Which Should You do First?
Today we’re going to answer that universal question: pay debt or save?
You’ve finally gotten that job that gives you a little extra money left over after taking care of your bills, food, etc., and you are thinking about what to do with it.
You’ve got some outstanding credit card bills but you also know the sooner you start saving the more money (exponentially more money) you can make. If you don’t know what to do, the estate planning attorneys at CMS Law Firm will give some helpful suggestions.
Here’s the latest episode of The #RichLifeLawyer Show!
Christopher Small knows how to help people get rich and live forever. He is more than just a Kirkland estate planning lawyer. He wants to help you create legacy.
That’s what The #RichLifeLawyer Show is all about. It’s his way of providing awesome value for free. The goal of this show is to give you life hacks that will help you build wealth, create generational wealth, and protect your family.
You’ll find information here on estate planning, financial planning, productivity, finance, self-improvement, family protection, tax avoidance, and anything else Christopher thinks will help improve your quality of life (and after-life).
Kirkland Estate Planning Lawyer Question of the Day
If you had sixty thousand dollars, cash, I gave you today, what would you do with it?
P.S. Do you have kids? Have you completed guardianship paperwork? Have you done it correctly? Click here to find out what happens if you don’t do anything: Are you okay with a judge choosing the guardians of your children?
P.P.S. Do you own a business? Do you have a plan so the business, and your family, can survive if something happens to you? If not, click here to learn how simple it is to protect your business and your family from tragedy: 5 Ways to Protect Your Business from Catastrophic Failure.
P.P.P.S. Do you have no kids and think you don’t need an estate plan? Single and think a will is only for married couples. You couldn’t be more wrong. Click here to learn more: 5 reasons estate planning is a must have even if you don’t have kids.
Christopher Small is a Kirkland estate planning attorney who helps people get rich and live forever. He is also the owner of CMS Law Firm LLC.
Transcript of #RichLifeLawyer Show 006
Hello everybody and welcome to episode six of The Rich Life Lawyer Show!
As always I’m your host, Christopher Small, and I’m excited to be here with you today and talk to you about this question. And you know, a lot of the things that I would here on the show are questions that people have asked me but sometimes I’d like to talk about things that I am also asking myself and thinking about. And this is one of those questions.
I don’t know about you but I have some debt. I’m going to sort of pull back the curtain here a little bit. I’m not going to act like everything that is related to my life around financial planning and estate planning and everything is rosy, right?
I think we’re all on the timeline working towards those ultimate goals that we have and I’m the same way.
I was talking to a friend of mine the other day and I said, “Hey, you know, I really want to focus on getting rid of like all my debt. You know, as soon as I can. And I was wondering what your thoughts were on how to approach this. Should I just sort of stop saving for a little while and just really just boom! pay it all down, or should I mix it up and you have any suggestions on what that ratio would be like.”
And he said, “Well, first of all, I don’t think that you should pay it all and stop saving, okay?” And he said, “Here’s the perfect question, alright? To sort of put this in a perspective. If I, right now, just walked over to you and gave you sixty thousand dollars in cash. If I just gave you sixty grand. Boom! It’s yours and you had this debt. Would you pay, would you use that money to pay off all of your debt? I mean would you only use that money for debt repayment?”
And I said, “You know, no, I probably wouldn’t. I would probably, you know, save a little bit, pay down some debt, and probably use it for something else.” And he said, “Exactly.”
And that’s really what you should do. That’s what your plan should be. You know, you want to continue to save so you could have those cash reserves and you could have some of that financial security that you need and in case something bad happens, you obviously want to pay down this debt so you’re not, you know, because here’s the thing:
If you’re just trying to save for retirement, at 6% interest but you have credit cards at 16% interest, you’re actually not saving any money, alright? You’re actually losing money.
It’s better to pay back that debt before you start seriously investing in that way.
But if you’re trying to build a cash reserve, you know, to protect your house, to protect your family in your down time, some liquid stuff that you can get to easily, then you still do wanna set some of that aside.
So, if debt reduction is one of your priorities, like it is for me this year, then,you better think about how you want to allocate that and then go back to these other videos I would talk about automating, so that “x” amount of money is going over here, “x” amount of money is going over here, “x” is going in here, and it all get to work out.
Over time your debt goes down, your savings goes up, your life goes happy and it’s all good to go. Alright?
That’s it for today, I think this might be a short one but I really appreciate it.
Let’s see, why don’t you answer this question? If you had sixty thousand dollars, cash, I gave you today, what would you do with it?
Let’s not talk about debt or anything. If I gave you sixty grand today, what would you do with it. I’m excited to hear these answers because I think they’re going be fun, they’re gonna be creative. So that’s it. If you have questions, I have answers, @richlifelawyer on Twitter. Facebook.com/richlifelawyer use the hashtag, #richlifelawyershow alright? I will answer your questions, I’m excited to hear them. I’m excited to talk to you. So, take care, have a great day, have a great week, have a great life, bye bye.