Personal finance is simple. Often, people make it something more due to their intent to profit from those with less understanding.
That is according to Brennan Schlagbaum, a 30-year-old, Ohio-based ex-Deloitte CPA helping people understand and navigate their financial situations through Budgetdog.
Benzinga chatted with Schlagbaum to learn more about his personal finance tips and ways Budgetdog is helping followers find their path to financial freedom.
Debt Is Black Hole: In 2014, Schlagbaum and his wife graduated from school and bought a home.
This left them with more than $300,000 of debt.
“We were only 23 years old and it really took a toll on us,” Schlagbaum recollected. “We were taking loans out on our bed and the ring we bought for the engagement.”
At one point, the couple turned intentional with repayment and, a year later, cleared their non-mortgage debt obligations.
“We crushed it and saved for our emergency fund and investing. This totally flipped the script.”
Soon, after speaking with peers, Schlagbaum founded Budgetdog to help others realize their financial potential. After growing the business, he left Deloitte to focus on Budgetdog full-time.
Budgetdog’s finance products and services include courses, consulting, and educational content on social media such as Twitter, Instagram, YouTube, Facebook, LinkedIn and TikTok.
Schlagbaum even works with schools and small businesses.
“My sole passion is to help as many people as humanly possible.”
Tip 1 | No Plan, No Progress: At the outset, Schlagbaum felt as if he was spinning in circles.
“We were really general with everything,” the young founder said. “We had no goals.”
That’s a mistake; with no intention — a plan and process to enact the plan — there’s no progress.
“We created financial statements with a budget and balance sheet. We got organized to the point the process only took about 30 minutes per month.”
Tip 2 | Stay In Your Lane: “Never keep up with the Joneses.”
Often, spending increases proportionately to income. That is crippling.
“Lifestyle creep can crush people,” said Schlagbaum, who is closing in on a million net worth. “That’s the biggest reason we’ve succeeded so quickly. Our incomes rose substantially — maybe four times — but we have not increased our lifestyle.”
Tip 3 | Track Your Money: “Tracking your finances, whether that be a budget balance sheet or amortization schedule, is akin to planning and tracking your workouts at the gym,” he said.
“You’ll be more effective at the gym.”
Tip 4 | Grow Your Wealth: Invest in stocks crypto, and alternative assets across a variety of accounts.
“401(k) plans work for most people,” he says. “Individual retirement accounts (IRAs), taxable brokerage accounts, child investing accounts like 529 plans and health savings accounts (HSAs) work, too,” he added, emphasizing HSAs.
Why the HSA? Triple tax savings. The money put into the account is pre-tax. Its growth is not taxed, either.
“The third savings comes if you pay out-of-pocket for any medical expense that you have. Then, you can pull up to that amount, at a future point in time, tax-free.”
Schlagbaum has put this theory into practice. His daughter has been in and out of hospitals for seizures. He paid $6,000 out of pocket and saved his receipts so that, in the future, he may pull the money from the HSA, tax-free.
The HSA is a hybrid, too.
“It turns into a traditional IRA at the age of 65, regardless.”
Tip 5 | Degrees Matter: The typical student comes out of school with up to $50,000 in debt.
“Going to college without any idea of what I was going to owe was an expensive lesson.”
Tip 6 | No To FHA Loans: Many new homeowners bought in at low-interest rates and small payments and, therefore, are paying private mortgage insurance (PMI).
“If you want to refinance out of that PMI at higher rates, that may negate the PMI,” Schlagbaum said. “You’re kind of locked in that for life.”
Additionally, home expenses should net under 25% of a family’s take-home pay.
“As your income increases, that will offer you more flexibility and a head start” for investing.
Tip 7 | Roth Makes Sense: Often, young investors opt for traditional retirement accounts, such as an IRA, 401(k), or HSA, when investing.
“If you’re in a lower tax bracket, then it makes sense to be … in the Roth bucket,” Schlagbaum says. “The seed you’re planting is taxed and not the actual tree 45 years from now.”
Tip 8 | Stop Waiting: Address finances, now.
“Being able to focus on the right things in life, meaning that our finances are on autopilot, makes enjoying life and focusing on family easier, later.”
To contact Schlagbaum or access his free budget templates, click here.
