Ep8 - The debt miracle you've been waiting for
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Track 1: Are you someone hoping for a miracle when it comes to your debt? Well, there might be one coming your way real soon. Keep listening to find out more. Hello, and welcome to the Wealth Minded MD podcast with your money best friends. I'm Dr. Brittne Halford,
dr--lisha-taylor_2_03-20-2024_121031: And I'm Dr. Lisha Taylor.
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dr--lisha-taylor_2_03-20-2024_121031: All right, Brittne, we are getting this episode started with our Life is Lifing segment. And if our listeners paid attention to the last episode, so segue, if you did not go back and listen, but if you paid attention or listened to our last episode, the listeners learned that you are buying a new house, which I am so happy for you.
dr--lisha-taylor_2_03-20-2024_121031: I am curious because this is life is living. How is that process going? Have you already [00:03:00] started to move? Is there a move end date in mind? What is new and exciting about this home that your current home didn't have? Give us the tea, enlighten us.
Track 1: Yeah. This home has more space. I have two children who are different genders. , so at some point they're going to need their own room and we know that we will grow out of our house. There was an opportunity in which our realtor found a house off market because , this competition.
Track 1: And honestly, I just didn't want to have to deal with a headache. So the fact that we were able to find a home that is a really nice home. In the area that we want. So it doesn't change anything about where my daughter will go to school or where I go to the grocery store, my commute. estate market here in Boston is so robust and sometimes you can go over asking and there's this competition.
Track 1: And honestly, I just didn't want to have to deal with a headache. So the fact that we were able to find a home that is a really nice home. In the area that we want. So it doesn't change anything about where my daughter will go to school or where I go to the grocery store, my commute. We thought that that was a gift from God.
Track 1: So this is a really good opportunity for us. And we're very, very grateful. But honestly, our realtor. I don't know. I think sometimes
dr--lisha-taylor_2_03-20-2024_121031: What's going on? Why are you sighing? I thought you were being excited. What's going
Track 1: No, I am excited because she found this home off [00:04:00] market, and I don't think this is unique to our realtor. I think this is just the way that the real estate market is because they're so tight deadlines that sometimes I feel like.
Track 1: Everyone needs to take an Ativan and just calm down a bit. Like it's going to be okay. So we wrote this large check, but we didn't tell the bank. So there was a problem with the check and we needed to have the check to pass through because of the purchase and sales agreement. And it's just like all of this anxiety, when are you going to go to the bank?
Track 1: When are you going to do this? Where are you going to do this? And I get it that we want to make sure that things go through so that the sellers don't take. the deal back, but I'm also not really anxious about the sellers taking the deal back. if there's a difference of a day, we could just say, Hey, sorry, we weren't able to do this.
Track 1: Let's push it back. And the sellers have done that to us. So I'm just a little Unnecessarily, overwhelmed at times because of these like pressure deadlines that I don't think need to be so pressured.
dr--lisha-taylor_2_03-20-2024_121031: Well, you know, I would love to do a segment in the future about the home buying process because this will be your second time. Right. So I think it will be good for our listeners to kind of hear your perspective on , [00:05:00] what was different from time one to time to, you did drop it subtly and I want to highlight it.
dr--lisha-taylor_2_03-20-2024_121031: You said you were moving for more space. So are you like moving into like a McMansion in Boston? Like what's happening, Brittne? Cause you said you live in an extensive area. You got good schools. I'm jealous. And I kind of, well, not jealous. I'm happy for you. I just am trying to see if I can invite myself to your house.
Track 1: You can always invite yourself to my house. where you sleep may not be a room. Well, It'll be a room. There'll be walls and things, but it may not have a door. Um, room. Well, it'll be a room. There'll be walls and things, but it may not have a door. You know, I always joke that We purchased a mini condo in Boston where if we were to move to Atlanta, girl, we could purchase a mini McMansion and, it's, just a little bit about where we live.
Track 1: So it's definitely more space, but. Arguably, not that much space.
dr--lisha-taylor_2_03-20-2024_121031: Wait. Okay. So you're moving into a home with more space, but you're saying, Lisha, you can come visit. I just don't know where you're going to sleep. So basically that's telling me that maybe we're still pressed for space, I think what you're alluding to is the fact that real estate is really expensive in Boston, , I remember I was preparing for.
dr--lisha-taylor_2_03-20-2024_121031: a financial wellness workshop, actually for some people [00:06:00] in Boston. I was presenting at Boston university about the home buying process for doctors and, talking about different loan products and mortgages and things to consider and documents to have, kind of helping them learn about the home buying process, through this workshop.
dr--lisha-taylor_2_03-20-2024_121031: And as I was preparing for this workshop, I was doing some research because I knew I was presenting in Boston. So I said, let me use Boston numbers in terms of average home price and taxes and things like that. As I'm giving these examples and walking them through this. I remember being shocked at the average home price in Boston.
dr--lisha-taylor_2_03-20-2024_121031: I think it was at least at the area that I was considering was, like around 800, 000 or something crazy like that. Obviously there's different segments in Boston and, average home price can vary depending on what city.
dr--lisha-taylor_2_03-20-2024_121031: And if you're including, surrounding suburbs and things like that, cause I think, for certain areas it can be around like the 400, 500 K mark or whatever, obviously home prices vary. My point in saying all of this was I was looking at home prices in Boston and I was also looking at property taxes
dr--lisha-taylor_2_03-20-2024_121031: and some of these other expenses that you have to pay when you own a home.
dr--lisha-taylor_2_03-20-2024_121031: And I remember being very shocked. So understand your sentiment in saying that Lisha, if you lived in Atlanta [00:07:00] where I live, real estate is so much cheaper here that you would be able to, afford So a much larger home with probably a lot more bedrooms and a lot of things so that people like me could crash your house and sleep.
dr--lisha-taylor_2_03-20-2024_121031: But That's okay. You seem to really love Boston. Your current home's in Boston and you're moving to a home in Boston. So I'm guessing you really like Boston. Have you and your husband, this is probably TMI, have you and your husband thought about moving like outside of Boston or was it really important for you to like, stay in the same area, have your kids go to the same schools and that sort of thing.
Track 1: live in an area of Boston called Brookline and Brookline has really great public schools. So we wanted to have a public school system. Or at least find a property in Boston where we could afford to pay for private school for our children so that they can still have a good education.
Track 1: And when we looked around, we looked both in the area that we currently live in and also areas in Boston, and we just weren't able to find anything that would be very comparable. Also, you have to think about your lifestyle. So one of the things that I've always done since medical school is I've [00:08:00] always walked to work.
Track 1: That's why my car is almost 20 years old and it has like, 80, 000 miles on it because I don't drive that often. so I wanted to make sure that I would have the flexibility to walk to work to, walk to the schools. And the area that we're is actually quite diverse. We have subsidized housing across the street from us.
Track 1: So yes, we pay a lot. We own a property that is very expensive. But what I really love about that is that it adds a level of diversity, not only in ethnicity and cultures, but also socioeconomic diversity, because I don't want to raise children who are so privileged.
Track 1: I know that my children are going to be privileged because both my husband and I are physicians and we're doing well financially, but I'm also a girl from Flint, Michigan. I know that learning that grit of not having everything just presented to you on a silver platter. platter helped me develop my character and my work ethic and I want to be able to do the same for my children.
Track 1: I want my children to also be able to look at a person and [00:09:00] respect them and value them not for , what their fathers do or the labels that they're wearing, but for who they are as an individual. Those pieces are really important to us. So that's why we decided to purchase a new home in the area in which we're currently living.
dr--lisha-taylor_2_03-20-2024_121031: Okay. Yeah. No, I love it. I wish you much success. With all of that, it seems very stressful, but obviously it has some upside in terms of giving you more space. So that's a little bit with our life is life-ing, segment.
dr--lisha-taylor_2_03-20-2024_121031: Now we are going to jump right in to our financial focus of this episode and, Brittne, you were alluding to this of like.
dr--lisha-taylor_2_03-20-2024_121031: There are some people who have debt. A lot of people have, , different forms of debt, whether it is credit cards or student loans you know, a mortgage that they're paying or personal loan or car loan or whatever. There's different kinds of debt that people have. And oftentimes that debt can feel overwhelming and it can feel insurmountable.
dr--lisha-taylor_2_03-20-2024_121031: It can feel like it is going to take forever to pay down or pay off. There's different strategies for paying off different kinds of debt, but today we were really going to focus on, a [00:10:00] miracle that might be coming people's way when it comes to their student loan debt. And that is something that is really pertinent right now.
dr--lisha-taylor_2_03-20-2024_121031: And that is the IDR waiver , IDR stands for income driven repayment. And For some people who have federal student loans. They are enrolled in, one of the many types of repayment plans. And there is a waiver in place for people who are enrolled in certain repayment plans that will really provide a ton of relief for people's student loans.
dr--lisha-taylor_2_03-20-2024_121031: Brittne, why don't you tell the people this waiver is, what it does, and why it's so important to learn about right now.
Track 1: Yeah. So when you think about student loans, there's been a lot about student loans in the media. I'm frustrated and I ain't even got student loans about how much back and forth there has been around student loans as far as how much is going to be forgiven, who qualifies, et cetera. But this is an opportunity that if you have federal student loans, you can potentially get more counts towards that goal of forgiveness if that something that you desire. So the IDR waiver is very similar [00:11:00] to the public service loan forgiveness waiver, but this is more inclusive in which it also allows for persons who have federal student loans, federal student loan borrowers, who also work in the private sector to have more payment counts toward that goal for forgiveness.
Track 1: So when I say payment counts, when you think about like the safe plan, for example, when you If you enroll in that plan and you are striving for forgiveness, you have to have 25 years of payments and whatever remains after that 25 years can be forgiven. Now if you have been paying student loans, since undergraduate, they will count all of those payments, even if you were not enrolled in an income driven repayment plan towards your forgiveness, which I'm like, yay.
Track 1: I
dr--lisha-taylor_2_03-20-2024_121031: Yeah, yeah, so I think what you're alluding to is like, okay, people have student loans, and if you have federal student loans, meaning you took out those loans by filling out some sort of fast form when you were in college or medical [00:12:00] school or whatever. And now you have those loans, you're enrolled in a repayment plan.
dr--lisha-taylor_2_03-20-2024_121031: With a federal government. And oftentimes it's some income driven repayment plan. You can enroll or you have the option of getting those loans forgiven. And a lot of people focus solely on public service loan forgiveness, right? That's a separate loan forgiveness program that says, okay, if you work for a certain employer for a certain length of time, 10 years, then you get your loans forgiven, right?
dr--lisha-taylor_2_03-20-2024_121031: That's one thing that's public service loan forgiveness. And that's not what we're talking about here., I guess if you're enrolled in public service loan forgiveness, you're still qualified for this waiver. But I think what makes this different is that even people who are not enrolled in public service loan forgiveness can also be affected.
dr--lisha-taylor_2_03-20-2024_121031: Because even if you're not in public service loan forgiveness, if you pay on your student loans for 20 to 25 years, the government will forgive what's left over after that time. So regardless of where you work, regardless of how much money you make even if you're not in public service loan forgiveness again.
dr--lisha-taylor_2_03-20-2024_121031: That's a separate program. As long as you're enrolled in some income driven repayment plan and you pay on it for 20 to 25 years, you get your loans forgiven [00:13:00] at that time. And what you're talking about, Brittne, I believe is that there's a waiver in place that says, Hey, if you are. Planning to pay on your loans for 20 to 25 years before you get them forgiven,
dr--lisha-taylor_2_03-20-2024_121031: there's a certain amount of payments that you have to make. So if you have to, pay on your loans for 20 years, 20 years, times 12 months gives you a amount of payments. Okay. And this IDR waiver basically says, Hey, we're going to give you extra payments. We're going to give you extra counts towards that payment clock.
dr--lisha-taylor_2_03-20-2024_121031: And that's important because you may have loans with different payment clocks. If you took out loans in undergrad, then maybe you've been paying on those loans for 10 years. And then your loans from grad school, maybe you've been paying on those loans for four years. So you have different loans with different payment clocks.
dr--lisha-taylor_2_03-20-2024_121031: And I think this waiver says, Hey, temporarily, they were going to do this one time adjustment where we're going to allow you to basically take the highest payment count or take the average of that payment count. And so it's going to work in your favor so that you can get your loans forgiven sooner. So, know, , if you're someone who's in public service loan forgiveness, And you're planning on getting your loans forgiven in 10 years.
dr--lisha-taylor_2_03-20-2024_121031: That still helps you, because if you've got loans from undergrad that you've been [00:14:00] paying on for seven years and loans from med school, you've been paying on for five years, that IDR waiver can make all of your loans had the seven years, and that means you get your loans forgiven sooner. And if you were not in public service loan forgiveness, and one loan has five years, one loan has seven years, it still helps you, right?
dr--lisha-taylor_2_03-20-2024_121031: So get you closer to that 20 or 25 years you may need. There's a few things to take in mind. One, if you're enrolled in an income term repayment plan, you have the option of getting your loans forgiven and. If you enroll in public service loan forgiveness, you can get your loans forgiven in 10 years, but if you're not enrolled in that program, you can still get your loans forgiven.
dr--lisha-taylor_2_03-20-2024_121031: I think that's really important for people to know, cause I don't think everybody understands that. And regardless of which plan you're in, this IDR waiver can help you get your loans forgiven much sooner.
Track 1: Yeah. Yeah. Yeah. And the best part is that this IDR waiver was supposed to end December 31st of 2023, but they've offered an extension of the deadline to April 30th, 2024. So if you are someone who's like, I don't know if I should consolidate my loans, that my loans have not been an [00:15:00] income driven repayment.
Track 1: I'll give an example. I had client that I was working with financial coaching and she was a nurse. She had had various periods of time in which she was working in a hospital that qualified for PSLF in which she had some life turbulence because we know life, life's right. And she had to put her loans in forbearance for a period of time.
Track 1: Then she went into a graduated repayment option, which basically means that your payments are lower and then they get Bigger and bigger and bigger, for the duration of the term of the year alone now, because of this IDR waiver, if she consolidates her loans, if she puts them in an income driven repayment plan, she will get automatic credit for all of those years.
Track 1: And which she was not in an income driven repayment plan for all of those years in which she was in forbearance, depending if, you qualify, meet the technical definition of the forbearance. But this person did, and she currently works for an institution that qualifies for PSLF. So all of that, because she's [00:16:00] currently actively working for a PSLF eligible employer will go towards her PSLF count.
Track 1: So she likely will just get her loans forgiven after she does this process, which I really, really love because it allows for many people to get complete loan forgiveness.
dr--lisha-taylor_2_03-20-2024_121031: Yeah. For someone like myself, like I am very debt averse, so I don't like having debt and I am constantly thinking about, Is there a way for me to get rid of this debt sooner? I don't like having credit card debt. I pay off my credit card statements each month. And, I try to avoid extra loans and things like that, but I recognize that every man may not feel the same way I do.
dr--lisha-taylor_2_03-20-2024_121031: And in fact, I have some friends, some physician friends that I went to med school with that don't qualify for public service loan forgiveness and said, you know what, Lisha, I'm not in a rush to pay back my loans. , they are just so used to having the loans. They, said, quote unquote, I don't want to kill myself to get rid of these loans in five years.
dr--lisha-taylor_2_03-20-2024_121031: There are other things in my life that take precedence and priority and, to each their own. But I think for people that feel similarly to my friends in that [00:17:00] regard, I think knowing that this exists is just so helpful, because there's something different about knowing that you.
dr--lisha-taylor_2_03-20-2024_121031: Can get this six figure, oftentimes six figure amount of student loans forgiven and if this waiver helps you to do that much sooner, think about how life changing that is. I don't know about you, Brittne. But I still have my student loans. I'll have them for a few more years before they're gone.
dr--lisha-taylor_2_03-20-2024_121031: And sometimes I do feel like it's this weight on my shoulder. I feel like I can't. Make the career moves that I want because of it. Like I have to work so many hours a week in medicine and I feel like medicine sometimes monopolizes my time. Yes, I love being a physician of course, but I do wish that had a little bit more flexibility sometimes.
dr--lisha-taylor_2_03-20-2024_121031: And thankfully I now have a job that does give me the schedule flexibility that I desire, but everybody doesn't have that. And I the student loans the burden of having to pay them back can be such a mental burden. And so this waiver can provide a ton of relief.
Track 1: You know, they have estimated that up to 4 million borrowers could get their loans forgiven. with this IDR waiver. That is huge. So if you're like, I [00:18:00] probably don't qualify, you may actually qualify. I had another, conversation with a friend who had these undergraduate loans and he's like, I don't know, should I actually do the IDR waiver?
Track 1: And Lisha, you mentioned this, but I just want to repeat it because I don't know if Our listeners actually picked up on this if you have undergraduate loans. So say you like me, you graduated in 2008 and you still haven't well, I've paid off all my loans. But say, for example, you hadn't paid off all of your loans, then you also have some graduate plus loans from medical school or nurse practitioner school or whatever it is.
Track 1: And you have all of these loans. If you apply for the IDR waiver and you've been paying on your loan since 2008 when you graduated, they're going to give you all of that history towards your current count on the graduate student loans and on the undergraduate loans. So basically it's like you get free payments or free money because now you are that much closer.
Track 1: Towards forgiveness, and that is [00:19:00] huge for so many people who are thinking that forgiveness is the option that they want to pursue for their student loans.
dr--lisha-taylor_2_03-20-2024_121031: Yeah, yeah, I think this applies to a lot of physicians as well, who, let's say when you were in training, when you were in residency, you weren't paying on your loans. You just said, you know what, I'm not going to worry about my loans when I'm in training. I'm going to put my loans into deferment or forbearance.
dr--lisha-taylor_2_03-20-2024_121031: I think this waiver also applies to them, right? Because it's going to, for this one time, count some of those months in deferment and forbearance. I think that can be life changing because that could be years of payments that you're now getting credit for.
dr--lisha-taylor_2_03-20-2024_121031: And Brittne, correct me if I'm wrong. I didn't think people applied for the waiver. I thought it was going to happen automatically. Is there some form that they need to fill out or, cause I thought it was just automatic, but enlighten me if maybe I was thinking about it wrong.
Track 1: No, you're right. So if you are currently enrolled in income driven repayment option, then that's going to happen automatically. But if you're someone who is not, like say, for example, in that case, my friend had not consolidated his loans so that he can get access to an income driven repayment option.
Track 1: So [00:20:00] therefore his loans would have stayed a portion of the loans into the graduate repayment or the standard repayment option, et cetera. If you are that person who has those undergraduate loans and you have not consolidated your loans into one, you will need to do that in order for the automatic income driven repayment account adjustment to occur.
dr--lisha-taylor_2_03-20-2024_121031: Okay. Gotcha. So it's more about consolidating your loans than, filling out some application. I just think it was really important because Before this waiver came about, people used to be afraid to consolidate because the old rule was that if you consolidated or combined all of your loans into 1 loan, with the federal government, let me be very clear.
dr--lisha-taylor_2_03-20-2024_121031: If you consolidated through the Department of Education, then your payment clock would go to 0, right? It would restart your entire payment clock . So So I remember, doing consults years ago when we will tell people don't consolidate, don't consolidate. And now that has changed, right?
dr--lisha-taylor_2_03-20-2024_121031: Because of this waiver in place, because they have kind of gone away with that old rule. Now it may be in more people's best interest, as we just mentioned, to go ahead and consolidate. And so I think that's something to keep in mind because I do think it affects a [00:21:00] lot of physicians who maybe weren't paying on their loans in training.
Track 1: Yeah. Yeah. just want to emphasize the date here, so we're talking about this consolidation piece, allowing you to get these retroactive or historical payment credits to apply to your current loans, which are your graduate student loans, et cetera. But you have to do this before the deadline because all of what Lisha talked about, about that consolidation, it kind of restarts your account and when you consolidate, then now you're creating this new loan and you have capitalization, like all of that will apply.
Track 1: After this date, and who knows the government is always changing things. So maybe they would extend it again. But what I want to just impress upon you is to do this before that April 30th, because you could be missing out on thousands of dollars as an opportunity. And so when we're thinking about, paying off your student loans, you could pay them off in many different ways in which we've talked about, but the name of the game is paying the least amount over time.
Track 1: And so this allows you to pay less money over time to get your student allowance forgiven.
dr--lisha-taylor_2_03-20-2024_121031: Yeah,
dr--lisha-taylor_2_03-20-2024_121031: yeah,
Track 1: another thing that I just want to highlight is the PSLF piece, so for this [00:22:00] IDR waiver, it's a little bit different than a PSLF waiver. You have to actively be working for an eligible employer in order to get that PSLF credit.
Track 1: So, if you're not currently working for an employer. That, allows for you to apply for PSLF and you do this IDR waiver, all of that credit may not apply to your PSLF history. So I just wanted to raise that caveat for you.
dr--lisha-taylor_2_03-20-2024_121031: yeah, and the next question that people may have is Brittne. How did they know that? I'm still working for that employer. How can they double check that rule? How do they know? I don't know the full answer to that, but I think that if I were giving advice to somebody.
dr--lisha-taylor_2_03-20-2024_121031: And I'll take this myself since I'm enrolled in public service loan forgiveness is to go ahead and resubmit an employer certification form, right? That PSLF form that you have to fill out anyway with your name, your address, social security number. And then there's a part in one of the sections that's basically says like, what's the name of your employer?
dr--lisha-taylor_2_03-20-2024_121031: And then it says like, check the box of what date did you start working there? And what date did you end? And instead of putting an end date, you just check the box still employed. And so I think that that. Should suffice I know I just got an email a few days ago [00:23:00] from the department of education, whatever telling me like, hey, Alicia, you may want to resubmit, your form you may want to tell us a little bit more update your information so that we know that you're still working for the same employer.
dr--lisha-taylor_2_03-20-2024_121031: So that's something that's on my radar to do. The form doesn't take that long to fill out for public service loan forgiveness. And so for people like me who are enrolled in that program, it doesn't take that long to fill it out. It's just something I have to remember to do. So for me, it's like, okay, I'm gonna fill out this form and I'm going to give it to my boss to sign.
dr--lisha-taylor_2_03-20-2024_121031: I think now you can actually do it all online. They've updated their system so that you can fill out your portion online and send it to your boss and they sign it online. Back in the day, they used to require hand signatures and all this other stuff, which
dr--lisha-taylor_2_03-20-2024_121031: was very cumbersome and annoying. And I was like, when are we going to transition into the 21st century? But, it looks like they've tried to make that transition. And so now it's a little bit easier to fill out those public service loan forgiveness forms and, appropriateness point. You want to make sure that you have completed those forms by the time the waiver comes into play so that you can make sure you get credit for all of the payments that you can.
Track 1: Yeah. [00:24:00] Now, Lisha, I just want to ask, because we were talking about, taking advantage of this IDR waiver that's going to consolidate their student loans and put them in an income driven repayment option, my question for you is, say this is a new resident who is about to graduate, what would be your recommendation for, doing this and then also thinking about what income To certify for the income driven repayment plan.
Track 1: Do you have any like approach to that?
dr--lisha-taylor_2_03-20-2024_121031: I think what you're asking is, what's the strategic way to, pay the least amount of your loans? Because whenever you are enrolled in these income driven repayment plans, the payments that you have to make are based on your income, and then if they're going to be based on your income, then the Department of Education needs to know what your income actually is.
dr--lisha-taylor_2_03-20-2024_121031: And so they require you to certify your income, aka. Believe it or not, the IRS, which knows your income, does not talk to the Department of Education, who wants your income information. So they rely on you to give them that. And so for a lot of us, to stay on these plans, you have to update your income information once a year, and that has actually changed recently.
dr--lisha-taylor_2_03-20-2024_121031: So, the Department of [00:25:00] Education, and the White House has said that they were going to push back the date in which they are making people recertify their income because like it used to work where you had to certify your income once a year. And then COVID happened and they didn't make anybody recertified their income.
dr--lisha-taylor_2_03-20-2024_121031: And most people have very different recertification dates, my recertification date was March, , some of my friends was July. Some of my friends, November, October, whatever. The Department of Education has actually said, okay, we're going to, stop making people recertify their income.
dr--lisha-taylor_2_03-20-2024_121031: And we're going to push all the recertification dates back to, I think, October or November. Unfortunately, the loan servicers did not get this information. so that has been a source of frustration for me is like saying, Hey, on the federal website, it says this, and then my loan servicer, Mohila is like, We don't know anything about what you're talking about.
dr--lisha-taylor_2_03-20-2024_121031: And so that has been sort of pain in my side and for a lot of people's sides who are enrolled in this program. So I actually just ended up recertifying my income. I didn't want to miss the deadline.
dr--lisha-taylor_2_03-20-2024_121031: As I was thinking about this, I was thinking, okay, how should I do this in the most strategic way?
dr--lisha-taylor_2_03-20-2024_121031: Because my recertification date was, I think, [00:26:00] March 9th or something like that. So I said to myself, okay, I'm going to recertify my income before I file my taxes this year, because if I recertify my income before I file my taxes, and I'm able to use my income. For my taxes from the year prior.
dr--lisha-taylor_2_03-20-2024_121031: So I was actually able to use my income that I made when I was still in training as a fellow versus if I had waited until I had already filed my taxes for this year, it would be based on my 2023 income, right? Cause it's currently 2024. You'll file taxes in 2024 based on your 2023 income. So if I had waited until I filed my taxes,
dr--lisha-taylor_2_03-20-2024_121031: my payments would have been based on my 2023 income, but because I recertified early, I could base my payments based on my 2022 income, which is a lot lower. And so for me, you know, I always tell people to be strategic about when you're recertifying your income and trying to recertify your income, before you file your taxes so that, your monthly payments can be based on a different tax year
Track 1: So,
Track 1: If you're a medical student and you haven't filed your taxes, you can still file your taxes, even if you have no money. That way [00:27:00] you can provide that information. There's also an opportunity on the website for them to just. allow them to get their tax form automatically from the IRS.
Track 1: Right. And I think that there's some hesitancy in doing that and allowing the systems to actually communicate to each other because that may or may not allow you to leverage some of these things that Lisha is talking about as far as like, how do you be strategic about minimizing the amount of your payments, especially if you're going for forgiveness.
Track 1: So say you went from, , I know a lot of people do this in hospital medicine where they're a hospitalist and then they go into a fellowship, right? So if you've done that, then you want to take that paycheck and fellowship and recertify even at a later date so that you can get that payment lower.
Track 1: So there's so many little hacks and tricks that you can do under these income driven repayment options if you're pursuing forgiveness to get that payment to be lower than what you would normally expect it to be.
dr--lisha-taylor_2_03-20-2024_121031: Yeah, yeah. So I think, if your payment went up, you want to recertify based on when your income was lower. And if your income went down, you want to make that payment based on that lower income. [00:28:00] So you got to figure out which year you were the lowest and recertify using that income.
dr--lisha-taylor_2_03-20-2024_121031: But you're right. Okay. So that's our financial focus for the episode.
dr--lisha-taylor_2_03-20-2024_121031: But I
dr--lisha-taylor_2_03-20-2024_121031: think
dr--lisha-taylor_2_03-20-2024_121031: we had a wealthy wonders question.
Track 1: yeah. So we got this wealthy wonders and if you haven't already, please click that link in the show notes and send us your questions because we want this to be about you, what you want to know about finance so that we can give you the tips, the tools that you need to make the most from your money so that you can have the most control.
Track 1: And have some fun with your money. So, I want the wonders for today is essentially someone asking if I have extra money, how should I use that extra money? Should I use it to pay down student loans or is there something else that I should do with it? So Lisha, what advice would you give someone?
Track 1: And, they didn't give that many details so if you want more specific advice and give us a little bit more detail. But just generally what would be your approach to answering that question? Okay.
dr--lisha-taylor_2_03-20-2024_121031: Yeah. Like how should they use extra money? I have in my mind, financial waterfall [00:29:00] and, we should probably do a whole episode on this and in terms of like, if you have money, what are the things that maybe you should prioritize before others? Some of the things at the top of that waterfall is like paying down super high interest debt, right?
dr--lisha-taylor_2_03-20-2024_121031: Like credit cards and auto loans and things like that. Any debt that you have with an interest rate over, let's say 8%. And so if I had extra money and I had high interest debt, like credit cards, then I would use that money to pay down. Once you factor in high interest debt, you're thinking about, okay, do I have enough money in my emergency fund?
dr--lisha-taylor_2_03-20-2024_121031: And for some people, maybe the emergency fund is before the high interest debt, but I'm just saying things at the top of the waterfall might be, high interest debt, as I mentioned, building up an emergency fund, making sure that you're maximizing or contributing the maximum to work retirement accounts.
dr--lisha-taylor_2_03-20-2024_121031: For me, it's saving money in advance for upcoming large expenses. So like, down payment on a home in your case, Brittne, or, international vacation in my case. So I think I would check those boxes first. Like, have I paid down high interest debt? Do I have a good enough emergency fund?
dr--lisha-taylor_2_03-20-2024_121031: Am I maximizing my work [00:30:00] retirement account contributions? And have I saved in advance for upcoming expenses that I know are coming? You know, If those answers are yes, then it's like, okay, I have extra money that I can do things with. I think it depends on your preference. Some people prefer to invest that money.
dr--lisha-taylor_2_03-20-2024_121031: And I think the younger you are, the more that may make sense, right? Cause the earlier you invest and the longer you keep it in those accounts, the higher can grow over time. And so the younger you are and the earlier you can invest, maybe that makes a lot more sense. Some people such as you, Brittne me, we are more debt averse.
dr--lisha-taylor_2_03-20-2024_121031: And so we might say, you know what? Maybe I will. Take this extra money and use it to pay down other kinds of debt. I may have like a mortgage or like student loans. The one thing I will say is if you are someone like me, who's enrolled in a student loan forgiveness program, I wouldn't pay extra on that.
dr--lisha-taylor_2_03-20-2024_121031: The government's going to forgive it anyway. So I'm definitely not paying any extra than I have to. But if you aren't enrolled in a forgiveness program, and if you do plan on paying back that student loan debt yourself, then yeah, I think it's a great use of money to pay down that debt.
dr--lisha-taylor_2_03-20-2024_121031: What would you do, Brittne?
Track 1: I like your financial waterfall [00:31:00] approach. I also would probably just take a step back to say, okay, how are you feeling about these student loans right now? Because for me, at least the emotional side, the emotional baggage and weight really weighed heavily on my decision to refinance my student loans and to pay more and to pay them aggressively, before, the terms of my loan agreement.
Track 1: So if you're like, listen, I am tired of these student loans, et cetera, then I think go for it because ultimately your peace of mind, your energy is going to be more impactful for how you're building wealth. I think if you're completely bogged down now. That may not be the best logical approach. So ideally you can reconcile some of that emotion, maybe get some therapy around it, figure out like what it is that's actually bothering you for your student loans and figure that out.
Track 1: Because for some people they tell me like, Oh, you should have leveraged that debt. a little bit longer and invested the difference so that, you could have had more wealth. But for me, it was really impactful for me to just pay down the student loans because they weighed on me. So I [00:32:00] wasn't able to reconcile my emotions, but maybe you will be able to.
Track 1: And if you're not able to, figure it out, A way to alleviate the baggage, then I would say be aggressive, but you just got to make sure that it's not something else that you're needing, that's making you feel that way. So that would be my approach. First, handle your emotions, figure out how you feel about emotionally, and then you could take the logical approach that Lisha has outlined there.
dr--lisha-taylor_2_03-20-2024_121031: Yeah. Yeah. We should do a whole episode, Brittne, on like, a financial windfall, right? Like, what happens if you get this massive amount of money that you didn't expect, wouldn't that be nice? Like an inheritance or like you sell a home or you sell a large asset or , you have some business that takes off and you make more money than you expected or you get this large tax refund from the IRS or you get this huge bonus from your job, talking about what to do with a windfall.
dr--lisha-taylor_2_03-20-2024_121031: Cause I think that. I would probably approach a little bit different. And I think it might be interesting for people to know. So stay tuned. Cause Brittne and I will be doing this executive decision made.
Track 1: right. Is it time for some fun money?
dr--lisha-taylor_2_03-20-2024_121031: Yes. Front money [00:33:00] segment. I love this one. I love this segment.
Track 1: So, Lisha, because I'm purchasing a home, I'm not doing that much. I'm not having much fun with my money. So, what are you doing with your money? That's bringing you a
Track 1: lot
Track 1: of fun. Um,
dr--lisha-taylor_2_03-20-2024_121031: that's fun with my money. You know what?
dr--lisha-taylor_2_03-20-2024_121031: The thing that's coming to mind is something. haven't purchased yet, but I actually just got a new credit card, business credit card, actually. And it is the American express business platinum card. we could talk on a future show about why I chose that card and why I'm getting it and what I'm doing with it. And what the whole , story behind that was, but point in saying that is I have a new business credit card for business expenses and I think of some of the American Express cards as more perk cards.
dr--lisha-taylor_2_03-20-2024_121031: They have lots of perks that come with them. One of the perks actually with the American Express Business Platinum is that you get all of these credits to different stores and things, and one of these, stores that gives credits is actually Dell. So you can buy things from Dell's website [00:34:00] online and they give you 200 back twice a year.
dr--lisha-taylor_2_03-20-2024_121031: So I have this money that I can use and, to purchase things from the Dell website. Cause it comes as a perk, with the credit card. And so I haven't purchased anything yet, but I was thinking about what I want to, buy with this newfound credit that I have. And I was thinking, let me know what you think about this.
dr--lisha-taylor_2_03-20-2024_121031: Okay. So I have some ideas. So one of the things that I could get is like a really nice, reliable, portable charger. Cause I travel a lot and my phone dies. Although sometimes I can charge my phone in my car, I'm not always near my car. And I don't always want to, lug that thing around. And so I was thinking about a good portable charger.
dr--lisha-taylor_2_03-20-2024_121031: They also have something on the website. It's like a, universal adapter. And this is really at the forefront of my mind. Cause I just came from South Africa and it was crazy. Cause the day before my family and I left to go to South Africa, I was talking to my dad and he was like, Lisha, did you get a charger?
dr--lisha-taylor_2_03-20-2024_121031: And I was like, what do you mean? I have chargers at my house. And he was like, yeah, but you need an adapter. Remember like when we were in Europe, how like Europe has a different outlet. South Africa has [00:35:00] a different outlet. And so you can't just plug in your normal, chargers into the wall. You have to have an adapter.
dr--lisha-taylor_2_03-20-2024_121031: So I'm saying this to say on the Dell website, they have this universal adapter so that no matter what country you travel to, you'll always be able to plug. Things in. So I know it's not like the sexiest gift, but I was thinking about universal adapter. You can also buy like Bose headphones.
dr--lisha-taylor_2_03-20-2024_121031: Like I already have Bose headphones, as you can see here, but like the little buds or the over the ears. So if I needed more headphones, I was thinking about that. And then, they also have like ring cameras. So, I mean, you probably already have one at your house, like a security camera that you can put outside your door.
dr--lisha-taylor_2_03-20-2024_121031: I currently live in an apartment, so I don't know if that's, I don't know if I need one for an apartment. But I'm trying to find like fun things to do with this Dell credit. And so I'm thinking the universal adapter and like the portable charger, would you spend that money on?
Track 1: so I'm thinking about two things is what is going to be the frequency of use. I think you're going to get the most value in that way, and any [00:36:00] upcoming needs. So it seems like there's an upcoming need cause you're going to the south of France is it the south of France for your friend's wedding?
dr--lisha-taylor_2_03-20-2024_121031: I don't even know if we talked. Yeah. Okay. We did talk about this in the previous episode. Yes. My former coworkers, that I had when I lived in Los Angeles are getting married in the South of France. And so I'm traveling to France, at the end of May actually. And so excited about that. I'm also going to Spain as a part of that trip.
dr--lisha-taylor_2_03-20-2024_121031: Which we will talk about on a future episode. So those are some fun things I'm doing with money for sure. But yeah, the adapter to your point is something that I will use since I'm traveling overseas. It seems like pretty frequently at this point.
Track 1: Yeah, so I don't know how much the adapter costs. And the other thing that I'm thinking about is a gift. So if you feel like there could be a way that you could use the money to purchase something for someone else, and then you get the 200 credit. So those are the two approaches I would use is thinking about like the frequency of use and then purchasing something else from someone for someone.
dr--lisha-taylor_2_03-20-2024_121031: No, that's a great idea. I was thinking about that. Like, should I be selfish or should I, should I buy something for [00:37:00] somebody else? So should talk about this on a future episode too, but may is always like a tough. Month for me financially because I have two older brothers and both of their birthdays are in May and then Mother's Day is in May and then usually in May I'm traveling somewhere because it's like the beginning of the summer as I'm usually going out of town or planning a trip later in the summer that I need to pay for and so May is that time where I always look at my bank account and I go, oof.
dr--lisha-taylor_2_03-20-2024_121031: So you're right. If I use these credits to like buy some gifts for my brothers that are pretty tech savvy, then that will maybe save me some money in terms of birthday guests. So hopefully they're not listening to this, but
Track 1: Lisha's giving us a gift from Dale. So what you want, you should probably text her, you know. Well, we want to just thank you for listening to this podcast. We know sometimes IDR waivers. Cannot be very sex y, but we do think that they have the opportunity or just leveraging things like this has opportunity to impact your finances significantly. So we just want to make sure that you stay up to [00:38:00] date on the latest and the greatest, to make the most of your money.
Track 1: We also want to remind you another thing. That's going to help you to increase your income, to decrease your expenses, and to optimize all of that passive goodness that you can get from investing. And that is our Wealthy Minds Starter Kit that you can find on our website, WealthMindedMD. com. Just click that yellow button right there on the homepage and we'll send it right over to your inbox.
Track 1: Oh, and I don't think I mentioned that it was free. So this is a gift from us. So you can thank us later.
dr--lisha-taylor_2_03-20-2024_121031: Yes. Yes. That is exactly right. So head on over to the website, get your free copy of our wealthy mind starter kit. And we cannot wait to come back to your ears again next week. Bye.
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Hello everybody, it's me Brooke. I'm recording a little disclaimer for my mommy, Dr. Brittne Halford and her friend, Dr. Lisa Taylor. Just so you know, they're not financial advisors, tax professionals, lawyers. financial planners. Everything you hear is for education and entertainment. It's not strict financial advice, you know.
So use your best judgment. Chat with a top professional. And all those other people [00:40:00] that you need to talk to. Thanks for tuning in today. Keep cruising on your journey to wealth and wellness. Buh bye.
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