4 Effective Strategies to Achieve Debt Freedom The last couple of weeks we talked about investing and the power of compound interest. But keep in mind, compound interest can work FOR you as well as AGAINST you. Before you consider putting investing dollars to work, it's critical to get control of any debt you're carrying. Whether you're dealing with credit card debt, student loans, or other obligations, the key is to choose a strategy that aligns with your financial situation and personality. Below are four proven strategies to help you eliminate debt. ___________________________________________________________________________________ 1. Debt Snowball Method: Build Momentum with Quick Wins This approach focuses on psychological motivation by tackling smaller debts first, regardless of interest rates. The idea is to gain quick victories to stay motivated. How it works: List all your debts from smallest to largest balance. Continue making minimum payments on all debts, but throw every extra dollar at the smallest one until it's paid off. Then, roll that payment amount into the next smallest debt, creating a "snowball" effect. - Pros: Boosts morale with early successes, helping you stick to the plan. - Cons: May cost more in interest over time compared to other methods. - Tips for success: Track progress with a visual chart. Aim to free up extra cash by cutting non-essential spending, like dining out or subscriptions. - Who it's best for: People who need emotional encouragement to stay committed. ___________________________________________________________________________________ 2. Debt Avalanche Method: Minimize Interest Costs This strategy prioritizes high-interest debts to reduce the total amount paid in interest, making it a mathematically efficient choice. High-interest debt like credit cards charging 15%-25% can quickly compound against you and spiral out of control if you don't get ahold of it.

Last week, we highlighted the power of compound interest and why it’s never too late to start investing. This week we’re going to cover 5 common investing mistakes you’ll want to avoid right now. ________________________________________________________________________________________________ 1.) Avoiding Investing Due To Uncertainty There’s always something in the headlines that can make investors second-guess whether now is the “right” time to invest. Last year it was the election, this year it might be tariffs or job numbers, and next year it will be something else. The truth is, there will never be a perfect moment with zero uncertainty. If you wait on the sidelines for absolute clarity, you could be waiting forever and miss out while the market keeps moving. History shows that markets tend to rise over the long run, even with constant uncertainty in the background. (Check out one of the attached images that shows the S&P 500 Annual Returns from 1994-2023.) ________________________________________________________________________________________________ 2.) Always Expecting “The Next Market Correction” Some investors stay on the sidelines because they’re worried a recession or major market drop is right around the corner. It’s easy to let alarming headlines fuel that fear as news stories can spark short-term volatility, but the bigger risk is letting fear keep you from participating in long-term growth. By focusing too much on the negatives, investors can miss opportunities in what may actually be a relatively strong environment. Right now, many U.S. companies are reporting better-than-expected earnings, analysts project S&P 500 profits to grow around 10% in 2025. That doesn’t mean a recession is impossible, but even if one does occur, history shows the market has always recovered, often starting to rebound before the downturn officially ends. The key is sticking to a well-thought-out plan instead of trying to time fear and headlines. ________________________________________________________________________________________________

"The Sooner You Start, The Better" Now that we’ve established our Growth Mindset and set up an Emergency Fund, it’s time to move the conversation to investing. One of the most common questions I hear is: “Is it too late for me to start?” The good news—absolutely not. It’s never too late to begin your investing journey. That said, the earlier you start, the more powerful your results can be. The real secret isn’t about picking the perfect investment or timing the market. The key to investing is giving your money TIME in the market so it can benefit from the power of compound interest. That’s where the true magic happens. Let's run some hypothetical numbers based on an average 9% annual return: - If you start at 40 and invest $15 each day, you would have $516K by the age of 65. - If you start at 30 and invest $15 each day, you would have $1.3M by the age of 65. - If you start at 20 and invest $15 each day, you would have $3.4M by the age of 65. Craziest part is, you've only actually deposited $246,540. The remaining $3.1M is all compound interest! Poll Question: How old were you when you bought your first stock or investment?

Emergency Fund Essentials: What is an Emergency Fund? Why should I have one? What are some strategies to getting one started? An emergency fund is a dedicated pool of savings set aside to cover unexpected expenses, such as medical bills, urgent car repairs, or temporary loss of income. In financial planning, it acts as a safety net, helping you avoid high-interest credit card debt when life throws surprises your way. Having an emergency fund established and funded provides peace of mind, financial stability, and the flexibility to handle emergencies without derailing your long-term financial goals. The industry standard is 3 to 6 months’ worth of essential living expenses in a highly accessible, low-risk account. ________________________________________________________________________________________________ 5 quick tips for starting and managing your Emergency Fund: 1.) Set Clear Savings Goals: Calculate 3 to 6 months worth of essential expenses as a target. 2.) Automate Contributions: Set automatic transfers to your emergency savings each payday. 3.) Use a Separate Account: Keep emergency funds in a dedicated high-yield savings account to avoid any temptation. I like a High Yield Savings accounts like Ally Bank or Synchrony Bank both currently offering 3.5%+ with no minimum balance and no fees. Ally Bank’s 'Savings Buckets" feature lets you divide one savings account into up to 30 virtual “buckets,” each dedicated to a specific goal—like an emergency fund, travel, or a new car—without needing multiple accounts. Your money still earns interest as one balance, but the buckets help you stay organized and track progress toward each goal. 4.) Save Incrementally: Start small if necessary and gradually increase your savings amount over time. Start with $50 per pay period. Once you realize that $50 per period isn’t lowering your standard of living, then gradually increase to $75, $100, etc. until you hit your 3-6 month target. 5.) Define “Emergency”: Establish clear rules about when funds can be accessed to prevent misuse.

Please wish a very happy birthday to our very own @Matt Wedan!! Appreciate ya coach 💪