Cole Stoneman: Good afternoon, San Juan Regional Medical Center employees. It's great to be back here on another edition of the San Juan Regional podcast. My name is Cole Stoneman. I'm a certified financial planner and I have the privilege and opportunity to rub shoulders with many of you.

So, one of the things that we want to go through today is what are some finance hacks in 2024 that we need to know? And one of the first ones that we thought about is the bi-weekly mortgage. How many of you are making a monthly mortgage payment every single month? You pay the interest, you're on a 30-year mortgage. You have to ask yourself, is there another way of doing this? Is there a smarter way of doing it? And the answer happens to be potentially, yes. So, the bi-weekly mortgage works essentially like this. If you have a mortgage payment of $2,000 a month, you essentially change how you are paying that mortgage to twice a month. So, that $1,000 would be split up between two payments of $1,000 each. Now, the sneaky thing is it's going to give you 26 pay periods versus 24, which will reduce the amount of interest that you're going to be paying overall on your mortgage. So, a quick illustration for this is, let's say that your principal balance, you owe $320,000 on a 30-year mortgage. Your interest rate is 5.5% and your monthly payment is around $1,800 every single month. The interest on a 30-year mortgage, believe it or not, is going to be $334,000 is your total interest.

Now, if you switch, just not making more monthly payments and you switch to a bi-monthly savings, you'd actually be saving over $66,000 just in interest by switching to a bi-weekly mortgage. So, if you haven't done that, go to your mortgage lender. Some will allow you to do it, some won't. Some will make it a little difficult, like mine where you actually have to go and download a form, you have to fill it out. You have to can't even fax it send it in electronically, you have to mail it in. So, each place will be different with how they handle the mortgage. So, go there, ask them for the bi-weekly mortgage payment, how that's going to be handled, and see what their terms are. Additionally, sometimes they may charge a fee to do that. So, just see if the fee is going to outweigh the interest. Most likely, it will because over the long term, it's $66,000 of interest on that payment.

Okay, hack number two. As you all know, you are receiving a great 403(b) match. And this might not be a hack to some of you. But to some of us, we may not be contributing to it. Please go to your workday and contribute at least 8%. If you can do only 2%, just do 2%. Because you're going to be getting a 50% return on your money if you do so. It's a no-brainer. We have to save that. We have to save it often.

I did a future value calculation just for someone that might be young, that is just starting out or maybe you're older and you have grandkids or you have kids that haven't started their retirement savings and they have a workplace 401(k) or 403(b) plan as well that is also being matched. In this illustration, I showed someone that's 25 years old working until they're 65 years of age. They're making $50,000 a year. They get a 10% return on their money, which is doable. I'll switch that to an 8% as well just to show you. But let's say that they contributed that 8%. The hospital is going to give them another 4%. So in total, someone making $50,000 are going to be getting $6,000 a year in contributions for that 403(b) account. Now, if they did this for 40 years, they never got a raise, they always kept this amount and they're going to have $2.655 million dollars in their retirement account at the age of 65.

Now, let's say that they didn't get a 10% return, they got an 8% return, that's still $1.5 million dollars. Now, if you just waited two years to contribute to your 403(b) plan, you're going to miss out on about $120,000 a year by not contributing to your 403(b) account. So, pretty incredible the power of compounding. Use it. It is the biggest hack ever known in finance.

Okay, third hack. Budgeting can suck. But you got to pay yourself first. You don't want to be paying everyone else and then pay yourself last. You won't have enough. And in fact, you'll probably be in debt for a longer period of time. So, budgeting can be detrimental sometimes to marriages. It could be hard to talk about, but pay yourself first. Get into a healthy way of talking about budgets with your spouse. But really, start with that 8% into your 403(b) account. If you haven't done so, if you don't have $500,000 or $500 or $1,000 in your savings account, start there. Start by paying yourself there first.

Okay. Our next hack is high-yield savings accounts. Too often, people are putting money into savings and it's not working for you. The banks are paying little to no interest for you, but they're getting 5-6% through the treasuries that they buy. So, one of the hacks that we have for 2024, don't save in the traditional sense over at the bank. Additionally, if you're having a hard time actually keeping money into your savings account, you see it in there and then you just pull it out, put it into an online savings account that's going to give you a much higher interest rate, hopefully, between 4.5-5% just on your cash.

Okay. This may offend some of you Dave Ramsey followers. In fact, I used to be the Dave Ramsey person for this area. I love the model that Dave has created. But I also know that many of you don't have problems with paying off your credit card or spending, and you're going to have maybe a side hustle that you have some business expenses and you want to use credit cards for this. Use credit cards to pay for miles or points that will help you go on certain trips if you want to go on. I went to London last year off of my points. I do the same thing for my business and it helps create some really great experiences for me and my family as I use that credit card. Now, it is paid off every single month. And if you have bad behavior with your credit card, then go back and maybe you don't use that. You just use cash. But if you do have good behavior, use that credit card for those points. Make sure that you set it up on a paid off monthly amount so every single month interest is not going against you.

 Maximize your corporate benefits. So, the hospital is going to give you the 50% match on the 403(b). Now, going back to this real quick, it's a per-payroll match, so don't miss any payroll on your match. Don't fully contribute early on. Maybe just make it every 26 pay periods you have money going into that 403(b) account. Maximize that benefit. Don't give up any free money. You need it.

The HSA, how many of you are contributing to the HSA? As far as ordering, when you have money that comes in, the first order of business or the first place that you should put that money is actually in an HSA account. It is the only place that your money will never ever be taxed. If you don't know those benefits or if you're scared of the high deductible, don't be. If you have an outside IRA, or if you have an old 401(k), there's a little trick to be able to contribute fully to your HSA so that you have a good chunk of money in there to pay for your deductible just in case you don't have enough built up in your HSA just yet. You can move one time, the IRS allows it just once, to fully contribute or move money from your IRA account into your HSA. Now, you can only contribute up to the yearly allotted amount. But nonetheless, it's a great way, a great hack to get in to your HSA and get that funded.

Life insurance. Many of you will have life insurance for free at the hospital. It's one of the great benefits that the hospital provides you. Too often though, we are buying additional amounts on the supplemental side through the hospital where you can get much cheaper rates outside. You can go to anyone that sells life insurance and run a quote. And remember, when you see how much you're spending on the life insurance, it doesn't seem like a lot. But multiply that by 26 pay periods and then go see if you're healthy and can get much cheaper rates. One of the benefits of this is if you did leave the hospital, that insurance stays with you at that amount. The hospital insurance will not go with you. Now, technically, it can, but you're going to be paying an arm and a leg for it. So, just lock in your insurance rates through a term insurance policy. You don't need to buy a permanent policy, just buy a term policy that you can take with you if you did leave or, at some point, if you needed to convert that policy to a permanent policy. God forbid, you were terminally ill or something came up where you did need this permanent insurance, then you would be able to convert that at your current health rating.

So, maximize those corporate benefits, HSA, 403(b). Those are main orderings. Contribute to that HSA. Contribute to that 403(b). If you are buying the supplemental life insurance, go outside and see if you can get a better rate. Most likely, you can if you're healthy. If you're not healthy, use that benefit. Get that insurance because if you are unhealthy and can't get insurance outside, then this is a great way of being able to participate and have some life insurance on your account.

Okay, everyone. Great to be with you. If you have any questions, please reach out to us. We love rubbing shoulders with you. We'll be at the hospital periodically. As you know, you can always call my office at 505-327-5090. Feel free to set up a meeting with myself or one of my associates. We love working with you and have a great day.