Part 1 of the Finance & Law series
00:05 S1: Welcome to the Legal Learning Podcast. I’m your host, Jolene, with the Legal Learning Center. I help pre-law students and law students with their legal journey. This is part one of a three-part series on finances, and today’s guest is a financial coach. Stay tuned to find out how a financial coach can help you, even if you’re drowning in debt, after I’ll give you my top takeaways, but first, a quick word from our sponsor, Financially Free Aspiring Attorneys is a course with over $300,000 in money saving tips. If you’re interested in attending law school but are not interested in paying for it, this course is right for you, visit legallearningcenter.com/financially-free. For more information on how you can avoid law loans. Today we are joined by Christine a financial coaching. Christine, go ahead and introduce yourself.
01:01 S2: Thank you, Jolene, for having me. So I’m a financial coach, I start my business in September 2016 part-time while keeping my day job, so I advise everyone, when you start something, start on the side while keeping your full-time job. So I did it nights and weekends before I quit my job, so May 2019 was my first month full-time doing this entrepreneurship.
01:24 S1: Are you considered the financial coach or financial advisor? And what’s the difference?
01:29 S2: So I’m a financial coach, so to be clear, financial advisor or investment advisor, so they can tell you what to do with your investments, meaning give you specific recommendations say, Okay, you have $50,000, what to do with it. So I can not do that unless I’m licensed, so that’s really the only thing I can’t do because I don’t like to manage people’s money. I follow the philosophy, I will teach you how to fish. So I educate how to manage investments… All the different investments -asset location, risk diversification, and it’s not really rocket science, once you understand it, how it works, you should be able to figure out how to invest afterwards, so I truly believe in that. But before, when I was looking for someone, some money advisor or whatever, a financial advisor, but it seems like they just care if you have money, usually it’s a six-figure range for them to manage, and then I was turned off by that industry, I was like… I just want to learn about finance myself, I don’t want anyone managing my money because no one should care… No one should care.
02:32 S2: Will care about your money, but you… So that’s my philosophy. So I was turned off by that, and then so I decided to be a financial coach, I’m about empowering people, and then I also… There’s a lot of people out there, who don’t have six-figure money for you to manage, so I want to help those people. First of all, they don’t have money, they might have a lot of debt, and then these are the ones that are kinda hurting the economy, I like helping them because they don’t know what to do. So I’m really into financial literacy.
03:03 S1: That definitely happened to me, I went to get financial advice and they were like, unless you have six figures in cash, not just assets… We don’t wanna talk to you. And so it’s very discouraging. So yeah, I always felt like, Okay, I don’t have any money, I’m not really worth a lot or worth anything really… Yeah, I just have tons of debt, so I can’t really talk to anyone. So do you talk to people who are technically worth negative money…
03:31 S2: Yeah…There’s a lot of my clients who aren’t like that, look, for example, you might make good money, they have a master’s degree or… I had a veterinarian, she… owed a couple hundred thousand dollars, right? So she makes very good money, so I help her cut her student loan, so she was a 30-year loan… I cut it to 15 year, and then now her monthly payment is less than that, so your net worth is all your assets, pretty much all your savings, checking, investment, house, whatever you own, minus your liability, everything that you owe… You’re student loan, the mortgage. So assets minus liability is your net worth, so that’s an important number to track, so you kind of know, are you moving towards retirement if you sell everything you own, pay all your debts, how much money is left, a lot of clients have negative net worth. And then that’s fine. It sounds like it’s increasing to the positive and that’s what matters, so yes, I do have clients and negative net worth, and then a lot of them have credit card, that student loan did, and then I do get clients who only have mortgage, and that’s usually…
04:37 S2: For the ones where a good with money, they only have mortgage that they didn’t have any other debt… That’s totally normal. So those people, I don’t work a lot on their money behavior or their past or money mindset, ’cause they don’t have that much issue, most of them is on the practical stuff, like tax planning, retirement planning, and an investment education for those, but the ones who have negative net worth and have all this debt, I had to work on their money mindset, their behavior, they believe their… Our money, so we really have to dig into their past, so we have to heal the past trauma and then change whatever money mindset they have a belief about mine, so that takes several sessions for those people,
S1: so what do you mean by money mindset?
S2: Pretty much how you think about money when you’re thinking about money, how you believe about money, do you think money is evil, money is like you don’t believe your worth, money coming to you, what do you think of rich people, so all of those things, like I make my client track that, meaning they’re gonna have to carry a diary when you’re shopping, how do you feel…
05:43 S2: How do you feel when you pay the bills, how do you feel when you look at your budget, how do you feel when you look at your debt? So we have to explore all of that, so it’s about mindfulness and awareness on money, and then a lot of that is connected with a lot of your stuff from the past or life because this very integrated, so that’s why. In a way, I’m sort of doing some sort of life coaching, but it’s just involving our money…
06:05 S1: Yeah, I saw on your website, the phrase, let’s see, it’s”emotional money traumas”, that sounds so dramatic and scary. Can you give me an example of an emotional money trauma,
S2: your parents, they just never treated you right with money or they’re always holding back on things, so basically you learn that, Oh, I’m always the price. So once they get money, they feel like I deserve, and then they don’t even say anymore, they just want to deserve because they’re so repressed from the past. So that’s one thing. And also, for example, I had a client, her parents never saved for her college education, so she rack up six-figure debt.
06:49 S2: So she was very pissed about that, so she’s so focused, I just wanna get rid of… But I think that I have to balance that, you have to forgive your parents for not saving you money because they only did their best, they don’t know any better, and then you can’t blame a six-figure loan on your parents. A lot of people have six figure loan, so it’s not… healthy we have to heal that because in the relationship with your parent to first of all… So yeah, so we have to work and then also, so she doesn’t have one linear focus on just that because everything has to be balanced, we have to look at… We have to save for your emergency fund, then yes, you can pay to loans, you can have like, it’s okay, it’s healthy to have a 15-year plan, If you have a six-figure loan, you can’t pay that off in a year or two, right, so a healthy way of looking at 15 years, you have a plan, let’s have a plan in place, and let’s have a plan to get your emergency fund build up, and let’s have a plan on building your wealth as well, ’cause everything is building…
07:50 S2: Work building emergency fund, you need that because that’s the foundation, so people always worry about your savings or say this is only less than 1%, whatever, but you need an emergency fund, something happen, covid happen, or let’s say the market tanked, or the market goes down, but it’s like going up again, so let’s say it did tank and something happens, you lost your job, you don’t have much emergency, so where are you gonna get the money? How are you gonna pay for your costs, you need that, that’s the only primary purpose, so do not even worry how much percent you get, how much interest, because it’s not to make money. So you need that. That’s the financial foundation. Positive cash flow, we need to get a positive class flow, ’cause, you’re not able to live your lifestyle or your cost of living, so you need positive cashflow… Once those two are met then we can… Are building your wealth, so how do you build your wealth to your retirement to do the different investment vehicle outside…
08:59 S2: So we’ll talk all about that.
09:01 S1: So it sounds like you give your client’s homework…
09:05 S2: Yes, every week usually have homework, so that’s why I only want a client who are committed… That makes sense.
S1: And how long do you normally work with a client?
S2: So it really, really depends. So my package is four sessions for more the practical aspect of finance, so it’s like the one I told you, they don’t have any money behavioral issue, whatever they’re investment type, or they just wanna learn about the practical like retirement… So important, I do tax projection for them, I do tax Education, Four Session is the practical, and then the other one, eight sessions, the minimum for the money mindset, but I do have clients after the eighth session because they enjoy working with me, so I actually… I have two clients in their 20s that they’ve been working with me for at least a year now, so we just see each other once a month, and then… So it’s really depends sometimes once they’ve finished the eighth session, and I think there’s value in having maintenance once a month, maybe just half an hour or one hour because sometimes they do fall off the wagon. So one of my 20-year-old clients, she was doing really good and she fall of the wagon, so we’re doing one month spaced out and she’s like, Yeah, I need some more accountability partner, so we switch weekly that I think she’s getting better.
10:15 S2: So not just moving back, so it’s like we’re just going with the flow of how things are going with them, so because I’m a coach, I’m here when you need me, and if I see something off, then we’re gonna suggest, Okay, maybe we might talk more or less or whatever, they’re doing it really well, maybe I can check in every two months, so it really depends, I’m happy when my client, get there, I say, graduate from that class, I really want them to get to the point where they can actually handle using credit card because then if you think about… credit card has a lot of benefits. Okay, so I actually prefer people use them only when they graduate and they’re in positive cash, they pay on the card and they can 100% commit to paying off all the money when the statement calls, but ideally move on to that and you know you’re only spending as much as you can afford, and if you can’t afford it, you plan for it in your savings account like, Oh, I’m gonna go on the trip that cost $2000, you save for it, you have that in your savings and that’s okay to put that in your credit.
11:16 S1: That sounds great. So I think one of the fears of some people is I’m afraid to get too involved, I’m afraid of how much work it’s gonna be or how long it’s gonna take, so it’s good to have at least a frame of reference that I’ve got some maybe negative things from my past on money then… Okay, eight sessions. And then we’ll go from there. I think that it’s hard for people to admit that they’ve made money mistakes, and I also don’t think they realized that almost everybody has…
So most people’s parents haven’t had some type of chat with them, and even if they have, they’re still gonna make their own mistakes. I know when I graduated from law school, I needed a new car. My car died, and I narrowed it down to two cars, and to this day, I regret the car I bought, I should have bought the other one, and it was a huge money mistake and a professional mistake, I thought my clients would like the nicer car and respect me more… And it turned out my clients were older and they were the penny pitching sort, and so the cheaper car, even though it was gonna be a brand new car, was a cheaper car, they would have appreciated it, so it would look better to them, so we live…We learn
12:28 S2: Forgiveness can be hard ’cause we sometimes tend to be very hard on the one person we should love and be the most compassionate about – ourselves, so… Yeah, so that’s why we have to learn how we make mistakes for to embrace that love ourselves like… Yeah, Christine, you didn’t know any better. You did the best you could. I’ve learned my lesson and then how so I have to preach up to my client to just… Sometimes they get very like, Oh, my dad did that, I didn’t buy that. It’s okay, it’s okay. We’re just learning through your budget right now.
13:03 S1: Yes, for sure. Yeah, I’ve talked to a lot of pre-law students about just meeting with someone before they start law school, because when they graduate from college, a lot of times their debt is at a manageable level, you can kinda understand the numbers, but once you get out of law school, your debt load is just unfavorable, so just to have a little bit of peace of mind before you go into that debt of, Okay, am I at least on track, more or less, am I understanding what I’ve done and where I’m going and then… Okay, I’ll come back either next year or when I graduate, and I feel like they would be in such a better position when they graduate from law school if they just at least had an idea of where they’re headed…
13:47 S2: Totally Agree with you after undergrad school, and then I also interview financial psychologists, what you think about this law degree, whatever, anything that you have to look at it as a business perspective was the ROI… Also the other thing to point out is that when you finish undergrad… You’re like, What? 22 years old, right? Do you even know what you want? I mean, you’re so young, I mean… Most people probably don’t even know what they want in their 30’s or 40’s, right? They’re like, That’s why they change career later on, so just imagining 22, college, you’re like, Oh yeah, this pre-conceived notion, I’m gonna be a lawyer, I’m gonna make so much money… Cool being a lawyer, right? But you don’t even know who you are really. Most people don’t know. So I think it’s best you actually work at Corporate America, find a job is related to the undergrad, whatever Good job you can find, get experience being corporate, you can see that. Oh, you couldn’t figure out, Oh, I like this, I like doing this. And maybe, I think, do that for at least two years before even thinking about going back to grad school because who knows, your decision might change, you’re like, Oh, I don’t think I really wanna be a lawyer, paralegal or whatever, you can be around lawyers than you could get to know lawyers, you can talk to them, and then then you might realize, a lot of lawyers don’t like their job, or I don’t think I wanna be in law, I don’t like what they do.
So we just don’t know that would be my advice to people. So I believe in the money is that it’s just a means to an end, so even when people ask me, Oh, how much money they need? Whatever, most people don’t need millions of dollars, okay, people who think, Oh, they might need neither, because they don’t know what their life purpose or they don’t know how they wanna live their life. I go from a high level, how they envision your retirement… What in life will make you happy? For me, I love my life now because I quit my job, I have my own schedule. I moved to Las Vegas a state with no income taxes and my cost of living went down, and then I just really enjoy this and then I love what I do, I’m taking easy with my business, I feel like I have a constant flow coming in that’s from my mindset abundance, I don’t have to work as hard.
16:04 S2: When you’re doing what you love, when you figured it out, things just flow, ’cause you either go with the flow or you forcing… That’s how the universe work. Are you flowing? Are you forcing? Okay, so that’s why I think when you actually work at Corporate America first and you kind of figure out what the flow is… What feels good in this… Going for law school, does this feel good, but two is more enough for you to really know, it’s like, Yeah, I really like this, this excites me to actually defend criminals or whatever… I actually interviewed a divorce attorney, he loves what he does, so if that excites you, then go for that, then you know you’ve really made a decision from your heart and not just from the ego like, Oh, I is a cool job I go make so much money, then You have six figure debt, and then you’re like… A couple of years that I was like, Yeah, this sucks. And then you’re trying to change a career and you’re like, yeah, you have a six figure debt, and then you can have to take another loan, and then how are you gonna afford a mortgage and the family. We want a family this is ridiculous. So take your time, there’s no need to rush with life.
17:24 S1: That is so funny ’cause I actually, in my course, talk about it, your life, it’s not a race. To find out what you like, because the worst case scenario is that you’re happy doing something else, so… Yeah, there’s nothing wrong with being happy, a lot of law students do find about one year in that something’s not right, and it’s… Well, not too late, I also counsel people on how to leave, but it feels too late.
17:50 S2: How much do you accrue after one year in law school.
17:53 S1: It varies, right? But it’s at least $150,000. I had a friend drop out around Halloween time, I forget, I think it was $10,000 that she owed. And that was 20 years ago. So it accrues quickly, it’s a lot of money very quick, and if you take time off, you can save up and if you pay cash for that first year of law school, then you can walk away with no debt and just say, You know what? That was a nice experiment, not for me. So again, that’s not really how you wanna spend your $50,000, but yeah, it’s better than paying for the next 10, 20 years. You brought up a good point. So a lot of lawyers end up in this weird situation, and we’re all kind of shocked by it, so I need to get the word out more, but what happens is about five years after we graduate, we’ve had enough raises where we are making enough money that now our tax advisor says, Okay, for the tax benefits you got to buya house, but we already have a mortgage in our student loans, and if you live in an impacted area like San Francisco, LA, New York, you need like a $100,000 deposit so it’s ridiculous.
19:01 S1: Technically, they’ll take less, but in the competitiveness, they won’t, so you can’t save that money while you’re paying a mortgage already to your loans, and so then you’re stuck in this… Your tax advisors harassing you, you wanna buy a house, but you can’t quite do it. Do you have any advice for someone who’s just graduated from law school, has all this debt and knows, Okay, I need to also start saving for a down…
19:26 S2: You don’t really have much choice to begin with, you’re gonna have to start at lower end, and I don’t know, but the best advice I could give is like the first year maybe just accept whatever salary you can find, but then I would really, really focus… Let’s say you figured that I would really, really focus and help to up your income, ’cause you know, I mean, you can only cut your debt so much, you can’t cut your student loans… Right, it’s what it is. Maybe the first year you don’t have such a luxury apartment, wherever you might have to rent a room and that’s totally fine. Maybe the first year, I just sucked it up. At least it’s easier for younger people to actually rent the room first… ’cause later on when they’re in 30’s, 40’s, then they don’t want that. The clients where the PhD already, and they’re like, I don’t wanna rent a room, they have a lot of debt, but their mindset… You’re just like, No, I make this money. They just don’t wanna do it, right. So basically, so I would just focus on how can they move on to the next level, how can they make as much money as fast as possible or even like consulting on the side, I mean, Your law degree costs you a lot of money to utilize that and then you can get a lot of money… What a couple hundred dollars per hour on the side. Consulting, do it. Now you can work full-time, so yeah, the stability and do a consulting and just really figure out or just start working on the side, what can I do in my lower… I’m sure you can do a lot of things that will make you money on this side, Okay, while you have that full-time job, then maybe who knows, you might be like, Yeah, I don’t like corporate world, I like to be my own boss, like what you did… Then you might put it earlier so that… I mean, just start exploring that already… Early on, so you can get rid of your debt.
S1: A lot of law graduates are so stuck in their in prestige that they just acquired that they buy the new car. That’s one thing they do. They might have a roommate maybe, but for the most part, they don’t wanna live at home, they don’t wanna do all these things. Some do, some are great. A lot of times people don’t want to make those sacrifices, and then when it’s too late, when they’re married and they have kids, and they’re like, Oh, I wish I had lived at home for a while because I can’t really save money. Now, I can’t rent out a room when I’ve got little kids screaming. Alright, so my last question for you, Christine, is, do you have any overall advice for students as they’re going on their legal journey, whether they’re in college or in law school that would just help move the needle a little bit financially while in school.
22:11 S2: Well, when I was in college, I was working full-time and going to school at night part-time at least, and sometimes I think even full-time, so… Okay, so my background is a little different, so I was born raised in the Philippines, so we don’t have a two years middle school, so you graduate high school, 16 and college 20. So my aunt petition for me to be able to immigrate here in the US, I was 20, so I moved all my courses over here, but they didn’t move everything, and then I didn’t have any money. I didn’t wanna be in debt so I was working full-time and going to school at night. It took me longer to get my degree, I probably got my degree at 26-year-old ’cause I was doing part-time working full-time, plus the first year I couldn’t go to school mainly because as a non-California resident, they were charging $100 or per unit. I didn’t have money. So how can I afford that, right? So versus $10 per unit, that’s a big difference for me.
23:10 S2: So I didn’t go to school for first year, I just worked. So yeah, so I didn’t finish until 26 and then I was working full-time, and then I didn’t have a life. Okay, so I didn’t have a life. It wasn’t the most fun. Of course, if you can afford to, you maybe go to school and then maybe kind of work on the side, maybe do full-time and then just figure out how can you lower your financial burden… There’s always options working as much as possible to avoid student loan debt, that’s even better. So I would just say, just look it up and then just live with your parents. It’s not forever, I know we’re in a society where, Oh, we want something right now, right now, right now, I don’t wanna live with my parents, but just think it’s just temporary, and money is important as much as you don’t wanna believe it. Money is important, you have to embrace and accept that, you know… Money does make the world go around, I always tell my clients like, you know, I love money, money, it’s okay to have… It’s healthy to love money because then if you’re a good person, more money, it’s not gonna make you a worse person, people are afraid that, Oh, I’m gonna be greedy when I have money, whatever, but generous people, the more money they have, the more generous they are.
24:29 S1: Well, thank you so much for joining us today. I really appreciate you spending your time here.
24:35 S2: Thank you, I really appreciate you inviting me.
24:38 S1: Now, before we get into my top takeaways, let’s check in with our sponsor, Juno can often offer students 1-2% less in interest rates on their loans, below government loans with no origination fees and cash back. All this at no cost to the student. Even if it’s just for refi, Juno can save you thousands. Visit joinjuno.com/p/legallearningcenter to sign up today. Alright, now all the tips, links and so forth will be in the show notes, but here’s my top takeaways from today’s chat, a money coach is someone who helps you with your money mindset, if that’s what you need, they can help you get through issues from your past, that may be holding you back and give you guidance for a better future, tip number two, you don’t have to have money to work with a financial coach, a financial coach isn’t worried about your net worth, they are there to help you make a life plan for your money number three, there’s no rush in life, take your time, Christine took her time, making sure she could pay for college, she wasn’t worried about finishing by a certain age or within four years, and she started her business on the side and didn’t leave her job until she could afford to do so.
25:57 S1: There’s no rush and before you begin law school, make sure you can afford it, make a plan. Talk to a financial coach. The more you plan, the more likely you will actually be able to reach your future goals financially and otherwise, that’s it for this episode, but be sure to check in next week when we speak with Nick, Nick graduated from Harvard and didn’t like his student loans, so what did he do he negotiated $15,000 off his loans. Now find out how he did this and how he can help you, and if you learn something today, please leave a review like subscribe, share, so that others can see this podcast too and benefit from it as well. Thanks.
To hear more on our Law & Finance series, be sure to check back for our chat with Nick, Founder of Juno http://www.legallearningcenter.com/Juno and David, Founder of CreditMonkey.pro http://www.legallearningcenter.com/creditmonkeypro
