Universal lessons in debt management and saving

Last modified: Monday, February 07, 2011
Former financial planner Michael Rubin will tour the state this spring, offering advice about something near and dear to many hearts: money. Rubin, who is also the chief executive officer and chief financial officer of a health care company in Hampton, will highlight what people need to know about debt management and savings, and he promises to show how to break out of the cycle of living paycheck to paycheck buy using sensible techniques.

Sponsored by Business NH Magazine, New Hampshire Public Television, Total Candor and the University of New Hampshire Cooperative Extension, the first seminar will be held in Durham on March 9, followed by seminars in Manchester and Plymouth on April 14 and May 4. Tickets are $25 and can be purchased online at eventsnh.com.

The Monitor spoke to Rubin to find out more.

Is this your first time doing these kind of seminars? No, I've done several dozen . . . from Boston to Honolulu and several places in between.

How did you get started giving these presentations? I started my career as a financial adviser to high-net-worth individuals and received my (certified public accountant and certified financial planner licenses) in 1996. Then, I decided at one point that I would like to work with the masses, the people who could really benefit from financial planning. In order to do (so), I decided to change the model, and instead of becoming an adviser, I became an educator.

So, you teach financial planning to people who can't afford to hire you personally. What do the seminars cover? It's primarily to help people learn how to save. We go through several saving strategies and some of the opportunities around debt management.

You said that many Americans are living paycheck to paycheck, even the ones who are making plenty of money. How is that possible? The same principles that apply to high-net-worth individuals also apply to people who don't make that much money. Nearly one-third of people who make $100,000 or more still live

paycheck to check, so it's the same lessons: When you want more than you can afford, you are going to run into problems.

But don't high-income earners have more discretionary spending compared to lower income people? The reality is that one's definition of discretionary changes as their income changes. Almost no matter where you are as far as income, you always want just what's out of reach. It's almost a mind-set shift to realize that at almost any income level, there's someone who wishes they made what you made.

So how do you do help people get out of that cycle? Do you preach restraint? Prioritization, and really understanding what's important to you. Everyone has to make decisions, whether it's time management or financial planning, because you can't over-save, either - you have to live your life. So you need to know what you're willing to spend on. It's not restraint, it's choosing what you really want to spend your money on.

How do you think the recession has changed how people think about money? The recession led to a significantly greater interest in financial education and a significant realization for most people that taking care of themselves is going to take some actual saving instead of just watching their home prices go up. I've seen a big increase of (people) taking ownership of their financial affairs.

What about debt? Do you advise people to spend all of their money paying off debt, and where does that leave savings? It's always a trade-off. The key thing with debt is understanding how to prioritize it.

People make the mistake like having an extra $50 or $100 laying around and they just pay a little extra on their bill that month. They should be prioritizing their debt based on its cost. By doing so, you'll guarantee that you'll pay it off at the soonest possible time at the lowest possible cost.

(Tara Ballenger can be reached at 369-3306 or tballenger@cmonitor.com.)