New Podcast with Emily Rassam: Plan For Your Financial Future

Hello, this is Shellee Howard with Parents, Is Your Teen College Ready? And today I am so excited to introduce our guest Emily, who is a financial planner. And parents, you definitely want to listen to this. Her— she has a 1-year-old. We were just talking before the show, we're already starting to plan for what college is going to look like. So Welcome, Emily, to the show.

Thank you, Shellee. I'm happy to be here.

Excellent. So today I wanted to kind of dive into, you know, really our conversation about where do you even start? So you have this 1-year-old and you're thinking, how do I— when should I start planning for college? Or when, when should I start really building that into my financial plan?

Yeah, so you can certainly start planning at any point. I'll tell you, I'm a crazy budgeter kind of person, and I plan way ahead. And 5 years ago, when my husband and I got married, so 4 years before having our son, you know, we started thinking about and planning and setting our goals together and understanding, you know, what type of support and contribution would we, would we make to our future children in their college. Um, you know, and you can actually start saving before you actually have a child. And so while we had, you know, two incomes and no children, it was easier to start building that savings at that time. And so we've actually been building that savings well before our son was born.

Outstanding. So then the question comes up, if I'm going to start that early, which is— oh my gosh, if every family started that early, with compound interest alone we would be good. Um, but I was like you, the day my son was born is when I started saving. And so I was a bit like you, and I'm like, I'm gonna— my parents didn't save a dime. I'm not gonna do that, right? I'm gonna be different. And so I didn't know where to put the money. How do you even help families when they're like, Emily, we have two incomes, a new little one. What does that look like? Where do we even put that? Where do we begin to start? Yeah.

And, you know, the answer to that in many financial planning questions is it depends. There are a lot of different vehicles that are available. You know, certainly you can actually start a college account or 529 account before you have the child. You can put it in your own name and transfer to the beneficiary account at a later date. But to keep things flexible, you know, we didn't know if we were going to be able to have a family or, you know, what that would look like. And so we just started saving separately in an investment account. But there are many different types of vehicles and The best idea is to educate yourself on what all of those options are, to work with a professional who can explore all of the different types of funding options and what your goals are and help you find that best vehicle.

Right. So when I, when I meet with, let's say, middle and high school students and their families are like, we've saved plenty of money, but we want scholarships. And then I ask them, where is your money saved?— and this is what I want to talk about for the families who are listening. If you want your student to be able to go to college without debt, you have a couple different vehicles. You can either save all that money ahead of time yourself, you can put it in the right investment accounts that the FAFSA does not look at, or you can invest it in things that are strategic. So there's many different ways, and like I tell my clients, I am not a financial advisor. Therefore, I'm bringing you into my world so we can help them understand how do we know what to do now if we do want our— like, it's a non-negotiable. Like, for me, there was no doubt my kids were going to college. So therefore I was like, but I don't want to take myself out of the game of being able to get them scholarships. Merit-based and all of that. So what would be your thoughts? I know it depends. I get that. But I totally— I'm with you on that. And listeners, like, we're all about— we need to know, are you double, you know, paycheck? Are you self-employed? Like, there's so many things. I get that. But maybe help the average person who is listening understand what are possibilities.

Yeah, my number one first rule is to not just file the FAFSA. Don't file the FAFSA before understanding how your assets need to be titled, understanding what your funding options are, or applying for scholarships, because that can hurt you if a college sees, you know, what's on your balance sheet as it stands right now. You might not be eligible for as many, you know, merit-based types of scholarships. So our very first step is we say stop, you know, don't fill out the FAFSA and go talk to Shellee or talk to a professional who can help you to strategize all of those different types of options for those different scholarships that might be available and to think about how to title assets or how to potentially move those assets into more favorable buckets. And so that's our number 1 tip. And it's a very highly specialized field. So although I'm a certified financial planner and I have additional education in all different areas of insurance planning and tax planning, estate planning, and planning for the investment of college, there are so many specific rules about that FAFSA that we feel that people who work in that all day, every day and understand the admissions process and understand what's needed, we think that's very valuable. So that is one thing that we always refer away.

And the amazing part about it is the FAFSA is only one thing. Then you get into the CSS Profile and people are like, what is the CSS Profile, Shellee? And I'm like, Well, it gets all in your business. Like, you think the FAFSA is bad? Like, the CSS Profile is just about— they know everything about you. I used to joke that would I have to give my firstborn when I gave them everything else because it felt so invasive. When my son went to Harvard, we had never planned on him going to an Ivy school, and so I never really planned my investment strategy for a CSS Profile. I never really talked much about it. I thought, okay, the FAFSA, that's the financial thing. I'll, I'll like get my house in order. And then the reality of the CSS Profile hit and whoa. So can you speak to how can one prepare themselves for both the FAFSA and the CSS Profile?

Yeah. And just like with many things with financial planning, the first thing is just organization of data. And so we do recommend going through a comprehensive financial planning process first because, you know, I like to think about the financial planning process as an organization. And so, you know, there's been different shows on TV lately, you know, Marie Kondo and Home Edit, and people really visually like the idea of seeing, you know, a space transformed. So, you know, everything taken out of the pantry and labeled and put in beautiful containers and put back, you know, neatly on the shelves. And the best thing to do to begin is to do that with your money. And so that becomes a process of, you know, understanding the different buckets that you have. And that might be different income sources or different savings vehicles that you have, how they're titled, you know, what the tax plan or estate plan strategy is for each different bucket. And so the very first thing that will help you with filling out those profiles is, is having a great understanding of money in and money out into your household, what the different sources are, what the different, uh, titlings of the different buckets are, and what your overall plan and strategy is. And it also makes sense to go through a process of setting short-term and long-term goals ahead of time as well, because sometimes it can feel like when you're preparing to send a child off to school, you're very narrowly focused on that, and we want you to zoom out and look at that big picture because there's a lot of competition for every dollar that we earn, and we've got to make those decisions about are we going to use that dollar to pay off some of maybe our own debt, if we have a mortgage maybe, or other debt? Are we going to use that to save for or allocate towards this education, either cash flowing it or saving towards it? Are we going to save towards retirement or other goals that we have set? And so it's good to have those conversations and have that goal setting occur first. And the more organized that you are going into that process, the easier those types of profiles become because you have a understanding of your balance sheet as it stands today and how the college education process fits into your overall life plans and life goals.

Wow, I love that. So when people ask me, when is the best time to start planning for college?

That's—

I get that every single time I talk to a new client or I'm interviewed. And what I tell people is the sooner the better. Just like planning financially for your life. If you, you know, if you wait until you retire to start planning for retirement, it's not going to look pretty. And it's the same thing when I talk to people who haven't done any planning for college. It is a scary thing for them. And the worst thing that a family could do, in my humble opinion, is let their child apply to college and say, we'll figure it out when they get in. Because that's terrifying to me. That's called debt, and that's called loans, and that's called graduating with having to work for free. And students are like, whoa, whoa, whoa, I'm not going to college to work for free. And I'm like, well, that's called a loan. And how long is it going to take you to pay that back? They don't understand because high schools don't teach financial literacy to our children. So to approach it as let's wait and see is a very scary thing. Or when families say we'll take it from our retirement and we'll figure it out later, that also, you know, when I was 23, I remember my first job, they said, oh, and you get a retirement benefit. I'm like, no thank you. Ah, no, I want the cash, I want the paycheck. Forget the retirement at 23, right? And now I'm like, Whoa, I really am thankful for that added bonus that I couldn't say no to. I am now approaching that time where I'm like, oh, compound interest is real. This is outstanding. So helping families understand when, right, is what you're, you're recommending is as soon as you can talk about it. Now, how much money? This is another thing people ask me. How much money do we need to make to start planning?

Um, I mean, you can start planning before you have an income. I'm actually going tonight to speak to college students about entering the, the real world and kind of what it will take to financially prepare for, you know, launching into your first career. So, you know, you make the, that budget ahead of time, and budgeting is so important regardless of your income level or age. I mean, I have people that are well into retirement that we talk about that cash flow, the money in and money out, and So we tell people who are entering the workforce, before you get there, put that mock budget together and understand the money coming in the door from this expected paycheck, less what's going to come out of it, less all of those deductions. And we talk about that take-home pay and how to allocate that potentially. And so it's so important to plan ahead of time. And planning ahead of time for making those college decisions, I like to kind of shock clients sometimes with some phrases. And one of them that— always makes my husband laugh is that I tell people we don't want to let a 17-year-old make a $200,000 decision. And so, you know, it's preparing ahead of time and understanding, you know, what is our budget and, you know, what can we afford and how does that impact everything else and how does that impact, you know, that student after they've graduated and what type of, of career is available and what type of income is available and, you know, what kind of budget will that look like and you know, how would a student loan impact their ability to do things? And so, you know, when we talk about that competition for every dollar, you have, you know, 3 places you can send money. You can send it into the past, you can use it in the present, or you can send it into the future. And so when you're paying down college debt, you're sending that money into the past, and that's not enjoyable. You know, same thing with credit card debt. If I, you know, went to a big dinner out in February and it's sitting on my credit card still, I'm paying that off right now and I'm not enjoying that dinner. That taste has long left my mouth. You know, same thing with paying down student debt, you know. And so I paid off my— I went to college for 3 years. I had decided I'm not going to be here for 4 years or 5 years. You know, I immediately looked at the course load and figured out, you know, how do I pack my schedule accordingly? Once I learned that colleges try to keep you for longer and stretch people into a 5th year, and I paid off my student loans, you know, as quickly as I could kind of coming out of college. And so, um, I was very lucky to have, um, you know, financially savvy parents that helped me understand the impact of the decisions of selecting the college and, you know, how to work during college and pay those, those loans off and immediately after pay them down as quickly as possible. And so I try to talk to parents about trying to look at that curriculum and understand, you know, is it possible to get through in a certain number of years or do we need to budget more? You know, how to kind of stay on track with what the financial goals are that are related to that college experience.

I love that it ties in beautifully because, you know, we have students who are amazing. We, we work with students 3.0 to 5.0, and I often will have students who are already doing Advanced Placement or college placement or college work. They can start as a sophomore. That saves a whole year of tuition. Now, it's not for every student, but there are plenty of students who are so close, they just don't know it. And so helping families understand that every class they take in college costs money. There's no more free. And so the challenge is, how do we get in and out? I talk about it as it's the stepping stone to their future. It's not the end result. And if we think about it like that and return on investment, which is our goal, you know, I, I liked your analogy because what we tell families is, would you allow your 17-year-old to buy you a home without being involved? That's what we're talking about. In a lot, maybe not California, but in a lot of places, that's what it would cost to get this education. That's terrifying. I don't know any parent who would be like, yeah, that's a great idea. Or even would you allow your student to go buy a car without your involvement? And that's significantly— no, this is no time to step away and go, you know, it's time for them to adult and figure this process out. I'm like, no, no, no. This is lean in and get support. And it's kind of like you could do your own taxes, or you hire a CPA who knows tax code and can save you a ton of money. That is what we do. That is how I see College Ready helps, how Emily helps. We're here to provide that foundation to give you options and knowledge to make the right choice, right? You know, the FAFSA is coming up here October 1st. It opens up and we are screaming loud and proud that families really need to work on understanding. The FAFSA looks at your second semester of your sophomore year and your first semester of your junior year. So going back to when should people start planning, I think that's a really good idea. You know, as you're meeting with your families and I'm meeting with my families, I'm helping them understand, is your financial house in order? And what I'm asking them is, Have you spoken with Emily to know if your financial house is in order? Can you speak to how do you get a financial house in order in order to be ready for the FAFSA?

Yeah, that's a really good point. We do start that process, you know, typically when the child is about 12 is when it really comes on my radar for, you know, asset titling and, you know, potentially building other income streams or vehicles. To hold assets. And so, yeah, it's starting with sitting down and doing that comprehensive financial plan, setting those goals, and understanding based on if you are working for a corporation, you have certain options that are available versus if you have a small business. So just kind of laying all those cards on the table and getting a good understanding of that. I agree with that. I think a lot of people don't realize that the process starts so early. So it's really when your child is in middle school to start really thinking about, you know, also how that child approaches and enters high school is going to impact their scholarships available and all of those different types of choices. So, and we, we know how teenagers make choices, you know, if they blindly go and visit multiple campuses without understanding ahead of time financially the impact or the scholarships available or the degree program or likelihood of graduating on time, all of those types of things. They might choose a school based on the fact that it was a beautiful day outside and people were throwing football around and, you know, that the person they happened to stay with seemed cool, you know, versus if they went to another campus on a rainy day and it wasn't, you know, it's the much better fit for them. But the weather, you know, impacted this 4-year decision that dictates the whole rest of their lives and impacts their finances well into adulthood. And so, you know, I like to think about, you know, making those types of decisions and doing that planning well ahead of setting foot on that campus and having the weather dictate that decision.

I had to smile. I often tell students when— or parents when they call me and I start getting into, so what major, what college? And I had a young lady the other day She said, yeah, my colleges are set. I got my plan together. I'm like, outstanding. Where do you want to go? And she said, UC Santa Barbara. And I'm like, excellent. What do you want to major in? She goes, well, I have no idea. And I said, well, how did you pick UC Santa Barbara? And she goes, have you seen the view from the dorms? And I'm like, oh. So we had a little giggle, and then I helped her to— I have a program that I can show her. That they may not have her major at that school, and she had no idea that that was even a possibility. And so starting the college search by how a student feels, to your point, is terrifying because they may not have the college, and therefore they may not, or may not have the major, and therefore may not be a good fit. And then the student transfers, which is another $100,000 in loans, and it just gets way out of, out of whack. So I totally understand. So approaching it as a business decision, I think, is what you're saying and what I'm saying, and help take the emotion away and really look at the return on investment. I have a student who signed on with us who wants to be a botanist, and I thought, wow, that's interesting. And then I realized their parents signed her up with me because they were hoping I would convince her otherwise. There, I was like, wait a minute, there's something going on here. And her parents were like, wink wink wink wink, come on, help us out. And then I really started understanding what was going on with the dynamic. The parents were trying to educate the student that maybe going to NYU and paying $80,000 a year to be a botanist didn't provide the return on investment. So we didn't tell the student no, but we helped the student to see what kind of career they could do and how much money that career could make and how long that they would work for free. Well, then it was a very easy decision for that student to go, oh, maybe I better own nurseries. And look at being a business major who has a passion for bot— whoa. It like all that just happened before my eyes, and I was like, that was brilliant for the parent who would be pounding heads with that adult. So obviously you have the similar dynamics where you're dealing with emotions and parents. They want what's best for their child, and I get that. I have 4 kids. You now have a little one. You're having to make those decisions. What advice can you give for a parent who is trying to do the right thing for their child and yet maybe not see eye to eye with that student as far as planning financially? Mm-hmm.

Yeah, and I think that sometimes what can be really helpful is instead of making that a conversation just between the parent and the child, to involve that third party, because, you know, I think that children are much more likely to listen to, you know, a consultant or an advisor or, you know, somebody else because, you know, the parents can be saying all the right things and phrasing it perfectly. And, you know, just by merit of being the parent, that can be lost. And so, you know, I do believe that it's important to engage a third party, especially if, you know, there are those conversations. I think what that third party can do is objectively zoom out and share those facts. I love that you share that return on investment figure. I think the same thing in any area of financial planning is once you kind of see the numbers speak for themselves a lot of times. And so I never go and tell somebody, you know, to specifically change something on their budget or stop going to Starbucks or, you know, anything like that. It's let's look at all the facts, let's look at all of the information in one place and the numbers will speak to you. And, you know, it helps to influence behavior and, you know, influences, you know, your saving and spending. And so the same thing with, you know, what you did with the botanist, the future botanist or nursery owner, whatever this person decides to do, is, you know, relaying all those facts and making somebody think through and work through, you know, to the end. And I think that a lot of times people try to just stay in this exact moment of what they're feeling and what they're thinking and not doing the work of zooming out and looking at what does this look like in 5 years, 10 years, 15 years from now? And what is the lingering impact of the decisions that I'm making today?

So powerful. So as I think about some of the clients that I work with and the things that go on in their mind, like, I don't make enough to have somebody manage my finances. How can you help somebody who's just like, man, I'm just struggling to, like, pay my credit cards, or I'm already in debt with my credit cards. How can I be leaning forward? Like, what can you tell that person who may be just feeling really frustrated? Like, I don't even have enough money to pay rent. Yeah.

And so a lot of it is, you know, that organization can be so helpful. I feel sometimes when we feel overwhelmed or feel like I can't make ends meet, or I don't have enough income, or whatever it might be. You just kind of ignore the problem. And I think that facing it head-on, you know, it doesn't take paying for a financial planner even, or utilizing, you know, an expensive investment strategy. It really comes down to that organization. And so you can download different budget worksheets or apps, um, you know, on your phone, and it's really just having a system in place to map everything out and make those decisions. And so one thing that I tell everybody of every income level and every age is to at least once a year go through and scrutinize the entire budget. And especially with inflation that we're facing right now, it's important to relook at that budget and say, you know, what has crept in or what has crept up? And, you know, have I been paying for subscriptions? If I downloaded an app or downloaded a website or something that has a recurring fee, um, you know, what is coming into my life that maybe I can weed out for a period of time. And, you know, working on just getting things kind of as tight as possible and working with any surplus that you potentially have in your budget and then making some goals around that. What can I use those funds to do? You know, what's the most important thing? What are the priorities? Do I need to pay down debt? Do I need to save more in my emergency fund? Do I need to save towards college for my children, or do I need to save towards retirement? And sometimes you know, even if you feel like you don't have the assets to, you know, fully fund a college education, that might mean, you know, using those funds to help work with a consultant or somebody who can help really optimize, um, the scholarships and that type of experience. So, you know, saving in a bucket does only one thing— that allows you to have money to utilize for college— but, you know, paying for the experience of somebody who can help you through that process might be more meaningful than actually having those dollars to specifically pay the school. You'll get more return on that investment and more leverage from that.

That is so well said. I try to explain that to people all the time because it is an investment to work with me or you. But what I tell students or families is in the last 2 years, our students have earned over $17.6 million in scholarships. If you look at 51 divided by, you know, that, you're like, whoa, that's better than the stock market. Yes, it is. So making a small investment in years of knowledge will get you so much further along. So that, that is so well said. So if somebody wanted to reach out to you and talk about how to even do this budget or start to map that out, how can they reach you? Yeah.

So the best way to reach me is on our website, which is archerim.com. And, um, I'm also active on LinkedIn, so you can find me Emily Rosam on LinkedIn. On both of those different, uh, channels, I have blog posts and videos that we post as well. Um, but I have a 15-minute consultation phone call that you can book with me. If it's not a fit for us to work together, um, there's, there's many reasons why somebody may or may not be a fit to, to mutually work together. I have a great network of other advisors and planners that I work with that I feel do great comprehensive work and look at the whole picture. So, you know, if it's more of an hourly planner that you need, I have different resources for that versus we do more comprehensive planning. Um, so we're always happy to help connect you. And if I can answer a couple of quick questions for you on that consultation, I'm happy to help you right away, even if it's not a fit to fully engage in a relationship with us.

Thank you so much for that resource. Sometimes it's just a quick question of, I'm still paying off my college loans, how do I even get started. I hear that one a lot, unfortunately. Or my firstborn has so many college loans, what do I do now? Um, so I am not a financial advisor. I bring resources into the world of my students because return on investment is the goal for me. When my son graduated from Harvard and at 23 had no debt, and was making over 6 figures. That is a good launch to life. That's what I want for all my listeners. So thank you, Emily, so very much for your time, and it has been a pleasure speaking with you.

Yes, thank you for having me as a guest. I've enjoyed our conversation.

You got it.