In this episode, I delve into the concept of reverse budgeting as a stress-free approach to managing your finances. The idea is to automate savings and debt payments first, ensuring that your essential financial goals are met before any spending occurs. After prioritizing taxes, savings, and fixed expenses, establish a target checking account balance for your monthly spending, giving you the freedom to spend confidently knowing that your financial responsibilities are already covered. By automating these financial activities, you eliminate the need to track every expense, making it easier to maintain financial discipline. Regularly monitor your checking account balance to ensure your spending aligns with your goals and adjust for variable expenses like vacations or property taxes. Through examples, I demonstrate how reverse budgeting can simplify your financial management, allowing you to focus on what matters most without getting bogged down by detailed budgeting.

Key Takeaways:

• Reverse budgeting simplifies financial management by prioritizing automated savings and debt payments before any spending occurs, ensuring essential financial goals are met upfront.

• To implement reverse budgeting, start by calculating your take-home income and set up automatic transfers to various savings and investment accounts, such as 401(k)s, IRAs, or high-yield savings accounts.

• Establish a target checking account balance for your monthly spending, allowing you to confidently spend the remaining funds knowing that your savings and fixed expenses are already covered.

• Regularly monitor your checking account balance to ensure spending aligns with your financial goals and adjust for variable expenses like vacations or property taxes.

• Reverse budgeting eliminates the need to track every expense category in detail, making it easier to maintain financial discipline and focus on broader financial health.

• Be aware that spending can vary month-to-month due to seasonal or unexpected expenses, and adjust your budget accordingly to maintain a healthy financial balance throughout the year.

Key Timestamps:

(00:00) Introduction: Why I Like Reverse Budgeting

(00:43) What is Reverse Budgeting?

(01:03) Automating Your Savings

(01:46) Monitoring Your Spending

(03:01) Example of Reverse Budgeting in Practice

(06:21) Caveats and Considerations

(08:05) Outro and Additional Resources

Key Topics Discussed:

Erik Baskin, Baskin Financial Planning, BLUF, Bottom Line Up Front, The BLUF Finance Podcast, Military Money Manual, veteran finances, reverse budgeting, taxes, savings, income, cash flow, debt

More of Baskin Financial Planning:

Download the Ultimate Military Finance Checklist⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠, with 7 pages of critical things to be thinking about to clarify your journey to financial freedom.

Think you might need some financial help? ⁠⁠⁠⁠⁠Book an intro call with me to see if we would be a mutual fit.

Questions or comments, drop me a note at: erik@baskinfp.com
www.baskinfp.com/post/46

In this episode, I discuss the concept of having a "cowboy or cowgirl account" as a way to enjoy some speculative investing without jeopardizing your financial future. The idea is to allocate a small portion, ideally less than 5%, of your investable assets into high-risk, high-reward investments such as cryptocurrencies, NFTs, or individual stocks, while keeping the bulk of your assets in long-term, diversified portfolios. I emphasize the importance of maintaining financial discipline by ensuring that these speculative investments do not exceed a manageable percentage of your portfolio, allowing you to indulge in adventurous investing without significant risk to your overall financial stability. Of course, it’s important to remember, you do NOT need to have a cowboy or cowgirl account. Through examples of good and bad usage, I illustrate how you can responsibly balance fun investments with serious, long-term financial planning.

Key Takeaways:

• A "cowboy or cowgirl account" allows for some fun and speculative investing, using a small portion of your investable assets for high-risk, high-reward opportunities like cryptocurrencies, NFTs, or individual stocks.

• It's crucial to keep these speculative investments to ideally less than 5% of your investable assets to avoid jeopardizing your financial future.

• The majority of your assets should remain in long-term, diversified portfolios, ensuring stability and financial security.

• Responsible use of a cowboy account means accepting the possibility of significant losses and not letting it impact your overall financial well-being.

• If your speculative investments grow substantially, consider rebalancing to maintain a responsible allocation within your portfolio.

• While not everyone needs a cowboy account, those who enjoy speculative investing can do so safely by adhering to these guidelines.

Key Timestamps:

(00:00) Introduction: Cowboy and Cowgirl Accounts

(01:02) What is a Cowboy or Cowgirl Account?

(01:38) Setting Boundaries for Your Fun Account

(04:25) Examples of Good and Bad Cowboy Accounts

(06:56) Conclusion and Final Thoughts

(07:47) Outro and Additional Resources

Key Topics Discussed:

Erik Baskin, Baskin Financial Planning, BLUF, Bottom Line Up Front, The BLUF Finance Podcast, Military Money Manual, veteran finances, cowboy and cowgirl accounts, NFTs, individual stocks, stock picking, speculative investing, the 5% Rule

More of Baskin Financial Planning:

Download the Ultimate Military Finance Checklist⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠, with 7 pages of critical things to be thinking about to clarify your journey to financial freedom.

Think you might need some financial help? ⁠⁠⁠⁠⁠Book an intro call with me to see if we would be a mutual fit.

Questions or comments, drop me a note at: erik@baskinfp.com
www.baskinfp.com/post/45

I hope you enjoy my conversation with Jamie and Spencer from the Military Money Manual.

More of Baskin Financial Planning:

Download the Ultimate Military Finance Checklist⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠, with 7 pages of critical things to be thinking about to clarify your journey to financial freedom.

Think you might need some financial help? ⁠⁠⁠⁠⁠Book an intro call with me to see if we would be a mutual fit.

Questions or comments, drop me a note at: erik@baskinfp.com

In this episode, I delve into the important decision of choosing the right savings account for your child's future, a critical step for new parents aiming to ensure financial security for their children. I cover essential account options such as 529 plans, UTMA accounts, taxable brokerage accounts, and Roth IRAs. Using a comprehensive analysis, I demonstrate how to evaluate these options, offering practical examples and considerations. I also explore the tax benefits, flexibility, and impact on financial aid eligibility of each account type. Finally, I highlight how a family's specific financial goals and situation can guide the choice of the most suitable account, stressing the need for tailored advice based on individual circumstances.

Key Takeaways:

• What are the major benefits of a 529 account? What do I do with the account if my child chooses not to go to college?

• What is the Uniform Transfers to Minors Act (UTMA) and how can it be used to set my child up for financial success?

• Should I use a taxable brokerage account? What flexibilities would this offer my child?

• How soon can I set up a Roth IRA for my child?

• With all of these accounts, how can I layer them to make the most of my preparation?

Key Timestamps:

(00:00) Introduction: Best Accounts to Use for a New Child

(00:37) Exploring Account Options: 529, UTMA, and More

(01:57) 529 Accounts: Benefits and Considerations

(03:41) Taxable Brokerage Accounts: Flexibility and Benefits

(05:53) Roth IRA: Long-Term Savings for Your Child

(06:41) Conclusion: Building a Financial Framework for Your Child

(07:21) Outro and Additional Resources

Key Topics Discussed:

Erik Baskin, Baskin Financial Planning, BLUF, Bottom Line Up Front, The BLUF Finance Podcast, Military Money Manual, veteran finances, family financial planning, college funds, 529 accounts, UTMA, Roth IRA

More of Baskin Financial Planning:

Download the Ultimate Military Finance Checklist⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠, with 7 pages of critical things to be thinking about to clarify your journey to financial freedom.

Think you might need some financial help? ⁠⁠⁠⁠⁠Book an intro call with me to see if we would be a mutual fit.

Questions or comments, drop me a note at: erik@baskinfp.com

www.baskinfp.com/post/44

I tackle the frequently asked question of whether to buy or rent in a new location, which is especially pertinent for military families or those with jobs requiring frequent relocations. I cover essential considerations such as mortgage interest rates, down payments, and financial health. Using NerdWallet's calculator, I demonstrate how to evaluate these factors, offering a case study of a client's situation. I also explore the impact of interest rates, transaction costs, and the amortization schedule. Lastly, I discuss how financial stability may influence the decision to rent or buy, emphasizing the importance of personalized advice based on one's unique circumstances.

Key Takeaways:

• How long should I stay in a place if I choose to buy?

• How can I take advantage of the different financial tools, like a VA Loan, to help me make my decision?

• How does the interest rate and down payment affect the amortization schedule?

• How to factor in savings, debt rate, and other budgeting factors into a decision to rent or buy a home.

Key Timestamps:

(00:00) Introduction: Buy or Rent?

(00:51) Calculating Cost to Rent vs Buy

(01:43) The Impact of Interest Rates

(03:55) Down Payment Considerations

(05:46) Client Case Study

(07:35) Conclusion and Final Thoughts

(08:13) Outro and Additional Resources

Key Topics Discussed:

Erik Baskin, Baskin Financial Planning, BLUF, Bottom Line Up Front, The BLUF Finance Podcast, Military Money Manual, veteran finances, cost to rent, mortgage payments, interest rates, amortization schedule, NerdWallet

Mentions:

https://www.nerdwallet.com/

More of Baskin Financial Planning:

Download the Ultimate Military Finance Checklist⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠, with 7 pages of critical things to be thinking about to clarify your journey to financial freedom.

Think you might need some financial help? ⁠⁠⁠⁠⁠Book an intro call with me to see if we would be a mutual fit.

Questions or comments, drop me a note at: erik@baskinfp.com

www.baskinfp.com/post/43

I explore the common question of whether to keep a house as a rental property or sell it. Using a recent case study of a 39-year-old client from Virginia, I break down the detailed financial analysis involved. The client's home, valued at $480,000 with a $431,000 mortgage at a 5.63% interest rate, would result in a monthly deficit of $1,074 if rented out. My comprehensive walkthrough includes considerations of rental income, property management fees, taxes, maintenance, and vacancy rates. To wrap the episode up, I compare maintaining the property as a rental versus investing in the stock market, ultimately guiding the client to sell the property. Listen to this episode if you’re considering renting or selling your next home.

Key Takeaways:

• Is it always a good idea to keep a property as a rental investment when moving to a new home?

• How does a high-interest rate impact the financial viability of renting out a property?

• What are the comprehensive costs and factors to consider when deciding between renting out a property and selling it?

• How do the long-term financial outcomes compare between maintaining a rental property and investing in the stock market?

Key Timestamps:

(00:00) Introduction: Rent or Sell Your House?

(00:36) Case Study: Analyzing the Numbers

(01:18) Financial Breakdown: Costs and Considerations

(04:17) Comparing Investments: Real Estate vs. Stock Market

(08:32) Conclusion: Making the Right Decision

(09:34) Download the Ultimate Military Finance Checklist

Key Topics Discussed:

Erik Baskin, Baskin Financial Planning, BLUF, Bottom Line Up Front, The BLUF Finance Podcast, Military Money Manual, veteran finances, property management fees, taxes, HOA, insurance, home maintenance costs, vacancy rates, real estate vs stock market, real estate appreciation, stock market return, mortgage interest rates, investment viability, monthly cash flow analysis

More of Baskin Financial Planning:

Download the Ultimate Military Finance Checklist⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠, with 7 pages of critical things to be thinking about to clarify your journey to financial freedom.

https://www.baskinfp.com/checklist

Think you might need some financial help? ⁠⁠⁠⁠⁠Book an intro call with me to see if we would be a mutual fit.

https://calendly.com/erik_bfp/intro

Questions or comments, drop me a note at: erik@baskinfp.com

www.baskinfp.com/post/42

Let’s discuss how to take a holistic view on finding a mortgage that works for your situation. There are various mortgage types, including 15-year and 30-year conventional loans, 5 year adjustable rate mortgages, 30 year VA loans, all with different down payment options, and FHA loans. With buying a house being such a large decision, let’s examine these options, emphasizing the importance of considering both qualitative and quantitative factors in your financial situation. We’ll go through detailed breakdowns of what your monthly payments and total interest costs over various time periods might look like, highlighting how different choices can impact the lifespan of your loan. Tune in, as I aim to empower you with comprehensive insights to make well-informed decisions regarding your next home purchase tailored to your long-term goals.

Key Takeaways:

• Given your timeline and down payment, what will your mortgage cost in fees and interest?

• How does putting 5% down on the VA loan drastically improve your home buying situation?

• Should you plan on refinancing your mortgage in the near future?

• What qualitative factors should you consider when getting ready to purchase a home?

  
  

Key Timestamps:

(00:00) Introduction to Mortgage Types

(01:12) Overview of Mortgage Options

(02:56) Loan Calculator: Down Payment, Monthly Financing, Loan Term, & Interest

(04:36) Comparing VA and Conventional Loans

(06:02) Long-Term vs Short-Term Mortgage Considerations

(08:53) Final Thoughts and Recommendations

(10:48) Conclusion and Additional Resources

Key Topics Discussed:

Home mortgage, conventional, government backed, fixed rate, adjustable rate (ARM), Veterans Affair, VA loans, FHA, first time user, subsequent user, refinancing, interest rates

More of Baskin Financial Planning:

Download the Ultimate Military Finance Checklist⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠, with 7 pages of critical things to be thinking about to clarify your journey to financial freedom.

Think you might need some financial help? ⁠⁠⁠⁠⁠Book an intro call with me to see if we would be a mutual fit.

Questions or comments, drop me a note at: erik@baskinfp.com

I tackle the common question, "Should I stay in the military or get out?" by diving into a real client case study. And I promise, if you do, you don’t have to live under a bridge or eat cat food the rest of your life. My client, an Air Force major with 13 years of service, is contemplating leaving the military and is exploring three scenarios: immediately transitioning to a civilian job, joining the reserves, or completing 20 years of service. I analyze each scenario in depth, examining the financial implications, potential VA disability benefits, and retirement income projections. Throughout the episode, I underscore the importance of combining quantitative data with qualitative aspects to make the best decisions for one’s future. In conclusion, I also provide a detailed breakdown of the pension's value and its civilian equivalent.

Key Takeaways:

• What’re the Financial Benefits in Retirement Pension of Joining the Reserves?

• A Walkthrough of a Quantitative Analysis of 3 Scenarios: Leaving the Military, Joining the Reserves, and Staying for 20 Years of Service

• What Will Your Monthly Retirement Income Look Like?

• Calculating True Military Pension Value: Will a $509,000 Salary Compare?

Key Timestamps:

• (00:00) Should I Stay in the Military or Get Out?

• (00:22) Case Study: Air Force Major at a Crossroads

• (02:26) Scenario Analysis: Getting Out with No Reserves

• (03:52) Scenario Analysis: Getting Out and Joining the Reserves

• (05:28) Scenario Analysis: Staying in Until 20 Years of Service

• (07:37) Financial Comparison: Military vs. Civilian Income

• (09:39) When a $509,000 Salary Still Doesn't Replace Military Benefits

• (10:32) Download the Ultimate Military Finance Checklist

Key Topics Discussed:

Erik Baskin, Baskin Financial Planning, BLUF, Bottom Line Up Front, The BLUF Finance Podcast, Military Money Manual, Veteran Finances, Military Pension, VA Disability, Military Reserves, Civilian Income

More of Baskin Financial Planning:

Download the Ultimate Military Finance Checklist⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠, with 7 pages of critical things to be thinking about to clarify your journey to financial freedom.

Think you might need some financial help? ⁠⁠⁠⁠⁠Book an intro call with me to see if we would be a mutual fit.

Questions or comments, drop me a note at: erik@baskinfp.com

40. Stay In or Get Out? The Military Pension (baskinfp.com)