All posts by Elle

How to Negotiate and Pay Your Debts Off Faster

Are you frustrated with your debt and feel like you’re stuck in this rut? Today we’re going to see how you can negotiate your debts to lessen the stress and get you closer to your debt free goals!

Paying Off Your Debts and Dealing with Debt Collectors

Usually when people make money goals for the year, paying off debt is in the top three but many struggle to achieve that goal.

Depending on where the pandemic caught you on your financial journey, you may have had an extra struggle. Perhaps a drop in income meant slowing down or even pausing your debt payoff plan.

That can be a real and huge burden because those balances are lingering or worse, growing. If it makes you feel any better, you're not alone. Debt is weighing down on a lot of families.

According to Experian, 90% of adults in the US have at least one credit card on their report And of those 75% carry a balance month to month. The average balance for that group is over $5,000.

The average balance on a car loan is $19,700. And Then you have student loans. In 2020, the average balance was $38,000. While there is some relief for federal loans, with the pause in payments, if you have private loans, you're still dealing with them on top of everything.

Hopefully things have improved in stabilize but now you're at the point where you're trying to figure out how to jump back, in which debts to tackle first, and what payment plan makes the most sense for you.

Which is why I'm happy to have attorney Taylor Kosla be a part of this episode.

Taylor is a partner at Agruss Law Firm, a team that's focused on helping people deal with debt collection.

In this episode, we're going to look at:

  • ways to negotiate with your creditors,
  • protections available to you through the fair debt collections act, and
  • a possible opportunity for you to have an attorney assist you without you paying out of pocket.

Are you ready? Let's get started!

Handy Tools to Pay Your Debt Off Faster

Thank You to Our Sponsor Coastal!

Support for this podcast comes from Coastal Credit Union! If you’re living in the Raleigh Durham area and looking to bank better, come check out Coastal today.

We’ve been Coastal members for a few years have been happy with their services.

They have wonderful services and accounts to make saving easier including their competitive money market accounts!

As I mentioned in the episode, if you're a Coastal member and are thinking of consolidating your debts, check out Coastal's options to refinance!

Debt Negotiation

Elle Martinez: Let's start off with the best case scenario. Your finances have stabilized and you're now ready to get back into your debt free plan. Perhaps you've kept payments, but it was the minimum or maybe little less than that. So the balance has grown or you've had to pause your payments while taking care of more essential bills.

So now you're ready to get back into the swing of things. But you're wondering. How can you approach this?

Attorney Taylor Kosla walked me through a few key steps with negotiation that you can use to work with your debts and make them more manageable.

The first is be proactive and reach out. You have to resist that instinct of avoiding and ignoring calls which is difficult, especially if you were dealing with financially tough times.

Something that you want to consider though, is that because so many people have been financially affected by the pandemic, creditors may be more eager to work with you then you expect.

Taylor Kosla: I'd like to start off by saying the biggest advice I give to our clients and just about everyone I meet is if you have debt, don't ignore it.

Based on my experience debt collectors creditors, they'd rather get something rather than nothing.

Elle Martinez: The second point is verify the debt. Before you send any money over, verify the numbers.

This could be a situation where your original debt has been sold to another company. Sometimes they don't have correct information on the accounts. So you want to make sure that that balance is accurate.

Taylor Kosla: People that have debt, especially post COVID, they're getting hit with their behind them auto bills, credit card bills, medical bills, especially with COVID.

It can be an overwhelming experience. So you'll want to negotiate the debts down, but you also want to be well-informed of what your debts are.

What are the balances? What amounts are due? How old is this debt? I think now is the time because the debt collection industry is booming, that collectors are probably going to try and sneak in some of those old debts.

If you make a payment on an old debt, that'll actually revive, the statute of limitations. Do your homework know what the accounts are, and you can ask a collector, ‘I want you to verify this account for me', and they should send you documentation showing, what they're collecting on when the account was open, when it was charged off, what the balance is, and what fees or interest has been incurred ever since.

Elle Martinez: Third, run the numbers yourself. When you're working with creditors and debt collectors, they're going to try to get you to commit to a higher payment. That's their job. But you're the one that has to live with this so go through your budget and work out the numbers beforehand.

You should consider both what you can afford on a monthly basis and as Taylor points out a one-time payment to settle it.

Taylor Kosla: You should negotiate your debt on and you need to be honest with the collector. Collection agencies get more upset, if you commit to something that you can't maintain so be reasonable.

I think 99.9% of consumers with debt, they want to pay it off. Often times either with a payment plan or a lump sum payment. Debt collectors and creditors really like a lump sum payment.

They're oftentimes willing to shave off decent amount in order to get that money in their pocket, because the longer that debt sits out there longer that you wait to start making payments to get that resolved, the more fees and interests are getting tacked on it.

That balance just keeps going up and up and it's going to be a lot harder for you to dig out of it.

Elle Martinez: If you are able to come to an agreement, make sure that you have it in writing. You want the terms to be clear and to make sure that they honor that agreement.

Now if they aren't willing to work with you on a sustainable payment plan. You do have a few more options. You can work through your own debt payoff plan, whether it's using a method like the debt, snowball, avalanche, or lasso. I have entire episodes that walk you through the details and one this year about how to find the best solution for your situation.

Another route that you may want to take is consolidating and refinancing your debts. Some families have found it to be a very helpful option because they can take multiple high interest loans and merge it into one that's at a lower, more manageable rate.

If you're happy with your current bank or credit union, reach out to them first. See what they have to offer, but then also shop around. You want to make sure that you're getting a competitive rate.

If you are a member of coastal credit union here in the triangle area, I'm going to include a link in the show notes to make it easier for you to find that page and reach out to them.

Hopefully you can take this information and use it to come up with a payment plan that you feel comfortable with but if you're dealing with an aggressive debt collector, That's beginning to harass you We're going to go over some ways that you can protect yourself and what rights you have.

How the Fair Debt Collection Practices Act Can Protect You

Elle Martinez: Debt cannot only financially squeeze people but when the collectors start harassing you it can be emotionally stressful as well. In some cases, it crosses the line and becomes abusive. That's where the fair debt collection practices act comes in.

The purpose of the FD CPA is to help give you some protections and limit abusive debt collectors.

Your credit cards, medical debts, and consumer debts like your mortgage or car loans are covered under this.

We'll get into how it can protect you from creditors that are harassing you, but it can also help you with your credit report.

Taylor Kosla: a good way to keep track of your accounts and what's going on with your credit is regular check your credit report. By federal law you're entitled to a free copy of your credit every 12 months.

I recommend going to annual credit report.com and go through that report line by line to see if there's something inaccurate, especially with medical debt.

I see a lot times consumers have health insurance that should have paid a bill, or maybe the insurance company paid the hospital bill, but they didn't pay the physicians bill that was associated with the hospital.

Those bill slipped through the cracks. They ended up on your credit report, that collectors are coming after you now for it. You want to keep ahead of that stuff by checking your credit report.

My firm handles fair credit reporting act cases, which allows us to help consumers get an inaccurate information removed from their credit report.

There's a dispute process to request, a negative and or inaccurate information be taken off your credit report. If the bureaus don't fix it after that, you can file suit.

Elle Martinez: Now here's where it can help you with a collector or creditor that is harassing you under the FD CPA, that collector can't contact you at unreasonable hours. Either before 8:00 AM or after 9:00 PM, unless you agree to it.

They can't contact your work. If you inform them, they're not allowed to.

And they can't contact you. If you have already have informed them that you hired an attorney. Plus they can't discuss your debt with anyone except you, your spouse or attorney.

If you're thinking, okay, I'm in debt. I don't have money to hire an attorney. Taylor has some good news for you.

Taylor Kosla: One of the great things about that law and the debt collection is there's, what's called a fee shift provision.

So consumers don't actually have to pay my attorney's fees. The bureaus and the debt collectors do.

on top of that, you're entitled to statute for damages, which are between zero and a thousand dollars and actual damages.

If something was inaccurate on your credit and you were denied an auto loan, or maybe you got a higher interest rate on a loan on that actual money out of pocket as a result of the inaccuracy is something that you can claim under the statute.

The debt collection act, which is a protection for consumers being harassed by debt collectors.

It also is a fee shift provision. It's great because again, our clients can reach out to us and we can help them at no cost to them. They're entitled to statutory damage between zero and a thousand. Now.

Actual damages for a debt collection case usually occurs when a debt collector threatening to file suit, or they're making these empty threats that they don't intend to take.

That consumer then pays them $500 because they're afraid of getting sued. That's actual damages, money that they spent based on the false representations made by the collector.

Elle Martinez: These are just a few of the big provisions that this act has that can cover you when you're dealing with creditors that are harassing you. And if you want to learn more about the services that Taylor's firm offers, just go to agrusslawfirm.com.

Support the Podcast!

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Choose Your Own (FI) Adventure

Want more options and time to do more for the people and projects you love? Learn how to create a path to financial independence that is flexible and fun!

Finding the Right Pace and Path to Financial Independence

As a kid, one of my favorite kinds of books to read were those choose your own adventure stories.

Do you remember those? No, it's pretty much began the same, but based on the choices you made you could go on so many different adventures.

Some of them had dozens of different endings. You could discover buried treasure, time travel, go to space, whatever the adventure was.

Fast forward a few years and now my favorite type of video game to play include RPGs. Why? Because you have some room to craft out your own adventures.

I feel like financial independence is like those books and games. You decide how you're going to go through it.

Yes, there is an end point, which is when you hit financial independence or financial freedom but in the middle, you have flexibility not just the goal but also the journey .You want it to make it work for you and your family.

It doesn't always feel that way though. There's this narrative that gets pushed, that there's a certain type of way to fi- specifically as fast as possible.

Yes, sorry, but no thanks.

I think that the journey is just as valuable as the destination. If you've been turned off by that segment of fi, or you just want to have more flexibility with your plan, I think you'll enjoy today's episode.

To help me out is Diania Merriam. She's the founder of EconMe who knows firsthand the joys and challenges of carving out your own FI path.

In this episode, we're going to jump into:

  • how Deanna paid off. $30,000 of debt and jump-started her FI path
  • how working towards financial independence opened up more options and allowed her to take risks to pivot her career plus more
  • we're going to get into how you can create a plan that fits you and your family.

Are you ready? Let's get started.

Handy Tools to Start Your FI Journey

If you’re looking to get ahead with your finances as a family and look at pursuing financial independence, here are some resources to check out:

Want to be a part of EconMe this year? Sign up for your ticket!

Because you're a listener, Diania was kind enough to pass on a discount code. Type in SIMPLIFYENJOY to save 10% on your ticket!

Thank You to Our Sponsor Coastal!

Support for this podcast comes from Coastal Credit Union! If you’re living in the Raleigh Durham area and looking to bank better, come check out Coastal today.

We’ve been Coastal members for a few years have been happy with their services.

They have wonderful services and accounts to make saving easier including their competitive money market accounts. Check out their rates here!

Financial Independence is About More Options

Elle Martinez: One of the joys to me about financial independence is that flexibility and freedom you have, but it's also a little confusing when you're first coming into the space.

There are certain voices that may be more popular or louder. So if you don't mind, could we kind of jump into what exactly does financial independence mean to you?

Diania Merriam: Financial independence to me is really about creating options. It's about having that financial security for you to explore what you want.

I think some people approach financial independence because, they know that they want a homestead, right? We were just talking about Frugalwoods.

That's the reason why they did everything that they did, or they know that they want to reach financial independence so that they can have kids and stay home with their kids. Some people have very specific goals of why they're doing it.

Other people I think – I fall into this camp – is like, maybe we don't know what we ultimately want. Maybe we're looking for financial bandwidth to explore.

I like to think of it as it's creating options. I'm very attracted to the idea of having full autonomy over my time.

And not really having to subscribe to the whole nine to five until you're 65. That's really exciting for me. Yeah, I think that that pretty much sums it up the way that I look.

Elle Martinez: I feel the same way. That was the initial draw for that. I know the idea of never having to work again is a pull for some people, but for my husband and I, it was like you said, having this bandwidth there, having these options available to us to see, Hey, is this something we want to do or explore.

Discovering Financial Independence and Dumping $30K of Debt

Elle Martinez: I want it go a little bit back in time, because I was looking at your journey and, the amazing accomplishments you had, especially paying off like $30,000 a debt in less than a year.

How did you, first of all, initially find out about financial independence and discover that?

Diania Merriam: Yeah. So it was the fall of 2015 and I was 28 at the time I'm approaching my 30th birthday, like it's looming.

I think 30 is one of those really reflective years where you're just like, what am I doing with my life? I actually ran a credit report on myself during that time.

It was the first time that I've ever done that because I knew I had debt, but I was just kind of paying the minimums on my credit cards and I had some student loans.

I never actually looked at my collective debt. That was like the real eye opening moment for me that oh, wow. I'm in $30,000 of debt.

I didn't realize like that just kind of slipped under the radar for me. I was trying to wrap my head around what to do about this.

A friend of mine had sent me a post from Mr. Money Mustache. It may have been the one where like your debt is an emergency. You got to treat this like your hair is on fire, but it really impacted me.

I think up until finding that blog, most of what I read about personal finance had this tone of struggle to it.

Like this is going to be so hard for you get to get out of debt. It's going to feel like deprivation to reduce your expenses.

When I read Mr. Money Mustache, there's just this tone of optimism to it. This kind of realization that I am so privileged and I really wasting my privilege. That's what really struck me.

You know, making my lunch every day to bring to work, that is not a hardship. That's actually a first world problem. I have a food, I have a roof over my head.

It made me really grateful for the things that I had and, and also to recognize that money is an incredible resource that can open up a lot of options.

Revaluating Priorities and Spending

Diania Merriam: I used to think that I was going to figure out my debt when I was making more money.

Right. I think the realization that I didn't have so much of an income problem, some people do, right. Some people really do need to increase their income.

I don't think that was my situation. I think my problem was the wasteful spending and being completely mindless about it. Recognizing that this isn't something that's going to get solved by increasing my income.

This is a money management issue. I had this realization that if I can't manage a thousand dollars, what makes me think I'm going to be able to manage a million dollars. Right?

Money management is a lot about habits and behaviors and so I really wanted to dive into that. At that point in my life, and I would say Mr money mustache really inspired me in that.

Elle Martinez: Yeah. I remember reading that article as well. It's funny how you say there's this undertone of optimism.

I would agree because on the surface level, though, he's very like blunt and direct and how he feels about certain situation, very strong feelings like, ‘Hey, your debt is like your hair's on fire, get rid of it. ‘

Kind of want to break it down a little bit further, especially like you said, $30,000 of debt. Was that like student loans, credit cards or a mix of everything?

Diania Merriam: So half of it was student loans, which doesn't sound too bad, right? Like $15,000 in student loans is nothing. However, I went to college on a full academic scholarship.

I should have had no loans, but the student loans were offered to me for living expenses. No one explained to me, you don't have to take this money.

I just thought like, oh, What I do, you know, like I'm just taking out these loans and so, yeah, that was half of my debt. The other half was credit card debt just from living beyond my means.

Again, I thought it was something that I would solve when I was making more money and I just didn't really worry about it too much in my twenties.

Getting Creative and Optimizing Budgets

Elle Martinez: Yes. Want to talk about that, how behind, you know, paying off that debt. Everyone has the choices that they make. Like where do I cut back?

You mentioned it wasn't an income problem. It was more your expenses with that financial independence mindset. When you were reviewing your budget, what were some changes that you made? So you're able to one, tackle that and then two, start making progress towards your FI goals?

Diania Merriam: Yeah. I would say probably my biggest area that I cut back on was going out. Like I was partying a lot in my twenties. I was going out nearly every night, spending money on meals out and drinking and partying with my friends. Right. So that was probably the biggest area that I cut back on.

I did adopt this kind of process, whenever I was thinking about spending money. So if I wanted to buy something, I would kind of pause and have a moment to think, is this a want, or is it a need? That's probably the hardest question, right? Because a lot of us think that we really need something when it's actually much more of a want.

So really meditating on that was like a whole new way of looking at spending for me. So I spent a lot of time thinking about that kind of stuff. Then I would ask myself, okay, if this is an actual need, Is there a more resourceful way for me to meet this need?

Can I borrow something from a friend? Can I repurpose something that I already have? If I'm going to buy it, can I buy it used at a lower cost? I would go through this mental process and then ultimately, we'll get to if I was going to spend money or not. I think that really helped open up my creativity and resourcefulness in a way that I had never experienced before.

For example we all have clothing needs, right? We need to close ourselves. During the time that I was getting out of debt, I wasn't spending any money on clothing, but what I did is I would host these clothing exchanges with my friends.

So we'd all clear out our clothes. We'd spend an afternoon in my apartment, like drinking mimosas, listening to music and trying on each other's clothes.

I walked away from that with like a full closet of more fashionable clothes than I would have ever bought for myself. Not only was that a more resourceful way of getting my needs met and that I wasn't actually spending any money, I would say that that solution was far superior than mindlessly swiping a credit card. It was more fun.

I got to spend time with people. I walked away with clothes that I probably wouldn't have thought to buy for myself. And I had a lot of experiences like that.

Example, I had a new neighbor that moved in the apartment below me and, I just see them passing in the hallway. I welcomed them.

They said, we're waiting, we're trying to get our internet set up. Do you mind if we just use yours for like a couple of days until they come and, and get our internet installed?

I said, sure, just figured, Hey, if they abuse it, I could change the password. Like no big deal. Right? So I give him the password to my internet. They lived right below me.

I just noticed that it didn't affect the functionality of the internet for me at all. It didn't slow it down for me. It was like, I didn't even notice that they were using it.

So I said to them, Why don't we just split my bill? Like, why don't you just stay on this? Don't get your own. Let's cut that bill in half for both of us, you know? That is probably not something I would ever think to do if I didn't discover financial independence in this mindset of really being mindful about spending and figuring out ways to cut back.

Exploring Options Because of FI

Elle Martinez: Yeah, I love that because the examples you've given, I think also speak beyond the financial benefits of looking at the FI lifestyle, which is one being more mindful and conscious of any spending that we're doing and then too, like you mentioned, with that clothing exchange, it's beneficial for the environment.

We're not producing, more goods. We're reusing in the best way, what we already have so I'd love that.

I know for different people, financial independence opens up opportunities either professionally or personally. You've paid off the dead and saving up like 60% of your income.

Yeah. Significant amount. What changes or opportunities now became available that you took advantage?

Diania Merriam: Oh, my gosh, my life looks completely different than when I was in debt. So a big motivator for me is that when I started this process is I really wanted to walk the Camino for my 30th birthday. And the Camino is a 500 mile Trek across Spain.

It was something way outside my comfort zone. Not only was that trip kind of intimidating, then the financial aspect of it was really intimidating, but wanting to do that trip kind of propelled me to figure this stuff out.

I was able to negotiate with my employer to take a leave of absence, to take a sabbatical that was unpaid. So I didn't get paid for two months. Plus I had to fund that trip. It, it probably cost me around six or seven grand to be able to go and do that.

But that was an incredible life experience that I wouldn't trade for the world. So that was kind of like my initial opening up an option that I don't know that I would have ever had the courage to even ask for that if I didn't have a financial safety net.

I like to say that if they would have denied my request for a leave of absence, that, I would have just gone anyway. Who knows if that was true, but I told myself at the time that my financial resources and the savings that I was doing would have made that option possible if I wanted to exercise that option.

So not only asked for the two months off, but I also asked for a remote working arrangement, which was not the norm. This was in 2017.

So now let the pandemic, it's a lot more common to look for opportunities to work remotely but I was in New York city and I just felt like I wanted to try something else.

I felt like, look, I had no debt, no man, no kids. I had the kind of freedom that people dream about and I wanted to go explore and do something with this.

I had a friend who I was really close to in New York and she went to school in Cincinnati and then ended up moving back to Cincinnati.

I visited her like three times in 2016, and I just really liked it. Cincinnati is obviously a much smaller city, but to me it has all of the benefits of a big city with like none of the downsides.

It just felt like time slowed down when I got here and not in that maddening way that new Yorkers hate where there's no sense of urgency. Like it wasn't like that. It was like a good slowing down.

I just thought I want to try this. So I negotiated with my employer to let me work remotely. So let me take the two months off. Then after I got back from the Camino. Working from home allowed me to I've always wanted a dog, you know? And so I adopted my best friend. He's like the love of my life dog named, buddy.

And I also bought a house, which is something I never thought that I would do.

Led to funding my own business, which I know we'll talk a little bit about the economy conference and ultimately this year I actually quit my job in January. I quit my full-time job without being financially independent.

I think that FI opens up a lot of doors when you're separating, like your need for your livelihood to come from your work. That is like the ultimate right. To reach FI.

But I actually think there's a lot of freedom that opens up along the way that I don't think is talked about enough.

I think at a certain level of savings so I reached coast fi which means that I have enough money in my retirement vehicles that I no longer need to save for traditional retirement. That's a level of opening up a level of the game, I guess you could say.

I also have something I like to call peace out money for the polite among us, which means that I personally have two years of living expenses, liquid that I could easily access.

So I've got a year in cash and a year in an after tax brokerage. When I came to this crossroads with my employer, it was like, okay, I still need to work, but I no longer need to work somewhere.

That's not ideal. Yeah. That is an option that is opened up to me even though I'm not yet FI.

I like to talk about this because I don't think enough people do that. I think people are waiting for five. Oh yeah. Take these risks. Right. Or to walk away from a job that no longer serves them, which I don't know that we necessarily have to wait that long.

Elle Martinez: I completely agree. I know again, there's like different flavors and they come up with different names, you know, in the five space, a slow where I believe I was talking Brad from ChooseFI about this. Like it's not an off on switch.

I think that's the misconception is like, okay, when I reached this, then all this opens up.

It's like, no when the debts paid off, you have a little bit of freedom here. You've built up that savings.

The FI Community and EconoMe

Elle Martinez: I want to talk to you a little bit about your business, because comes from this space of financial independence and spreading it.

Starting any business is a lot of work. Live events are like another layer up for me the way I see all the logistics and then to run a conference. First of all, why did you start economy and what was your reason behind it? What do you hope people can get from it?

Diania Merriam: Sure. Well, economy originated from me dreaming up, like what would I want to do with my time if I no longer needed to work for money?

I mean, When people would ask me, like, what is your, why for five? And like, what are you going to do when you reach five? I used to say, I'm going to create this party about money. Like, that's what I thought that I would do. I just got so excited about it that I couldn't wait.

That's why I did it sooner, but I'm actually really glad that I didn't wait because I think starting a business has a lot of risks to it.

There were a lot of things that I couldn't anticipate like a global pandemic. And so I ended up taking a huge loss on the business in the first year. And I think if I didn't have my 60% savings rate and my good income. It would have probably been too much of a risk for me to handle if I didn't have that.

I was able to really kind of self fund this startup phase because I had an income while I was building this.

I would say really what inspired me is I love to go to in-person events. There's this one event that I go to every year called the world domination summit, which sounds crazy right?

Like who produces that pinky and the brain, but, but actually Mr. Money mustache spoke at it one year and that's how I found out about.

For someone that's as frugal, as I had learned to become through getting out of debt, you know, a ticket to a world domination summit is like $700. I will tell you that it is worth every penny.

I don't think the pursuit of FI is about right. Not spending money or spending as little as possible. I think it's spending it on things where you get the most value and just being very critical about where those dollars are going.

Every time I would go to world domination summit, I would leave feeling like my life is so full of possibility. I would meet these incredible people that were living very unconventional lives and being surrounded by that energy. Just, it has an effect on you and you start to like, think more expansively about what, what you could do with your time.

I wanted to create something that gave that feeling to other people, but about their money. That was really exciting to me.

I think economy and what people get out of it. Now as far as tactics and how to manage your money and how to pursue fire, there are so much many blogs, podcasts. There's so much out there for free that, that you can learn how to do this. Like you don't need to go to a live event for that.

I think the live event is much more about inspiration and community. One of my favorite quotes is if you look at your inner circle and you're not inspired, then you don't have a circle. You have a cage.

I think a lot of people feel this way on their pursuit to FI. They can't talk to their friends and families about this. People don't understand them.

When I was first getting into this, I was making my own facewash and laundry detergent. Like people thought it was so weird. Right? And so to be able to connect with other people that have a similar interest on this taboo topic, I think is really important for the journey.

I look at the people that I've met from going to like camp fire, camp mustache, and even world domination summit, like my social circle today, or like all people that are pursuing fi and there are some of the smartest, most generous people I've ever met. And I just feel like my journey is richer because of the people that I've surrounded myself with.

First of all, if I could say like, there's any kind of dream for EconoMe, I would love for someone to meet their spouse there, honestly, like that would just thrill me that like either someone met their best friend or their spouse at economy, that would be so much fun.

But yeah, we have main stage speakers that are talking about FI from the tactical side of things. What do you do about student loan debt? How do you approach credit card hacking? What do you do when you get a big medical bill?

There's those kinds of tactical topics, but then there's also a lot of inspiration, like the most popular speech. The first economy, which was last year, one week before everything shut down was from Jackie Cummings Koskie and she was a single black mother who found the fire movement at 38 and she never made six figures and she was able to retire before.

She did it in like a decade and her presentation was called the real numbers behind firing and she showed all of her numbers. Like she showed specifically how she did it.

I think it was really inspirational for people because fire can feel unattainable for a lot of us, but when you see people that maybe have similar circumstances to you doing it and succeeding and thriving in how they're able to save and invest, it just makes it feel more possible.

So yeah, all of that and more at the economy conference. Wow.

Elle Martinez: I know there's going to be those listening. They're like, I am ready to go plus after this year that we've had, they're ready to connect. So if they wanted to learn more, what's the best way they can do that?

Diania Merriam: Yeah. So if you go to economy, conference.com and that's economy with an M E not an M Y I, if you look at the spelling of that, Name you'll notice that I, I really enjoy misspelled words.

So anyway, economy with an Emmy. There you can check out the speaker lineup. You can buy tickets. They're on sale.

Now the event is actually happening at the university of Cincinnati on November 13th and 14th of this year.

You can also go to just search for economy conference on YouTube. And all of the speeches from last year, I put up there for free. I've got professional videography, just like Ted talks where you can watch a Ted talk on, on YouTube.

It's a similar idea. So yeah, you can check out the speeches from last year and kind of get a feel for the vibe.

Support the Podcast!

Thank you so much for listening to the podcast! If you enjoyed this episode and found it helpful, here are some ways to support it.

  • Spread the word! If you enjoyed this episode and think it can help a buddy get on the path to dumping debt and become financially free, please share.
  • Leave a review. Honest feedback and reviews make a big difference and gets the word out about the podcast. Leave your rating and review on Apple Podcasts.
  • Grab a copy of Jumpstart Your Marriage and Your MoneyMy book is designed for a busy couple to set up their finances in 4 weeks. Get tips and tools that have worked for other couples on their journey of building their marriage and wealth together!

How Your Family Can Become Financially Free

Despite popular opinion, you don’t need a million dollars to be financially free. We’ll go over how you can create a financial independence plan that fits your family and is actually fun!

How Much Do We Need as a Family to Be Financially Free?

Simplify and Enjoy is about families working toward financial freedom using core ideas from financial independence and minimalism. 

But how does that work in times like these? 

Can we take this foundational question we talked about in an earlier episode – finding your FI number – and actually craft a plan for a family now going through the pandemic?

Let’s be honest, depending on where you were in your own financial journey, the pandemic could’ve shifted things in so many directions for you.  

I think it’s reasonable to acknowledge that a family who’s carrying debt like car payments or student loan is going to experience things much differently than a family whose paid off their

Non-mortgage debts and are using that money to invest. 

So how do you create that path for those families? Is it possible to work towards financial freedom and perhaps independence during times like these? 

First off, let’s start off with the good news. 

You don’t need a million dollars or more saved to achieve financial freedom. In fact, with some planning, you can really open up a lot of options for your family in a relatively short amount of time. And you know, what it can be rewarding and enjoyable. 

I want to show you how. 

In this episode, we’ll get into:

  • Making financial independence approachable by doing it in phases
  • The key numbers to watch 
  • How to craft a plan that fits your family

So we’re going to start with concepts but then go into some real numbers so you can see how the process works.

Ready? Let’s get started!

Handy Tools to Start Your FI Journey

If you’re looking to get ahead with your finances as a family and look at pursuing financial independence, here are some resources to check out:

Thank You to Our Sponsor Coastal!

Support for this podcast comes from Coastal Credit Union!

If you live in the Triangle area of North Carolina and you’d like someone to work with you on your goals, you really want to check out Coastal’s Wealth Management team.

They’d love to help you start investing for retirement and more!

The Phases of Financial Independence

One of the biggest barriers families have with tackling FI is the feeling that financial independence is an all or nothing deal. 

You have to go all-in until you hit that number and then you can quit that job you hate and never have to work again. 

And look, for some people that’s their path. 

But that doesn’t have to be yours. 

You can approach your finances through levels or phases. With each phase, you can adjust your plans based on what’s currently going on and give yourselves more options to improve your quality of life bit by bit. 

And if I had to break it down to the most basic stages, I would say that families typically progress from:

  • Financial Stability
  • Financial Agency
  • Financial Freedom

An idea I picked up from City Frugal really clicked for me. It’s switching from “enough money” to “enough money to”.

‘Enough’ is this nebulous term that can be hard to pin down.

But ‘enough to’ can allow you to get a  number (ballpark or not).

And it also gets you into this mindset of money serving a purpose rather than being the goal. 

So let’s look at finances through that lens – ‘enough money to’ and line them up with a few big milestones families strive towards. 

  • Phase #1: Enough Money to Cover the Bills: It might seem like an obvious goal, but many families are now experiencing hardship because they realize with even a small drop of income that they are not able to pay their bills.
  • Phase #2: Enough Money to Ride Out a Financial Emergency: Look, no one could have anticipated this global pandemic, but the truth is emergencies do happen to all of us. So this would be the stage and phase where you're trying to build up a financial cushion.
  • Phase #3 Enough Money to Start Investing: Now we're gaining some margin. You're able to cover your bills. You do have money that you can put towards building your financial cushion a bit more. Or paying down your debt. It's not a bad spot to be in, but there's still more phases that you can continue with.
  • Phase #4 Enough Money to Switch Careers/Negotiate: Here is where your quality of life starts becoming more of a factor. You're not just trying to survive, but now you're opening up some options. You're feeling a little bit more secure and confident that when you do come up for a promotion, you can push back maybe a little bit more for better pay or better benefits.
  • Phase #5 Enough Money Where Saving More is Optional (CoastFI): You've done really well. You've invested enough money to have a traditional retirement. So now you can decide, do we want to go all-in and speed up the date? Or are you looking for more quality of life choices?
  • Phase #6 Enough Money to Where Work is Optional (FI): You can live off the money that you have saved and invested and your covered.

This list isn’t meant to cover every point, but instead, give you a guide of progression a family can make. 

Key Numbers to Watch to Become Financially Free

Last week we talked about credit scores. While your credit score can affect your finances, it’s not really a key metric to hone in on. At best it gives lenders an idea of how likely you’ll be able to pay back.

In the grand scheme of things, you’ll better off putting your energy towards numbers that give you a picture of your financial health. 

As you work through financial stability, agency, and freedom, you’ll see a few crucial numbers pop up. 

  • Net Worth
  • Cashflow, in particular, essential and typical expenses
  • Saving Rate

Phase #1: Enough Money to Cover the Bills

  • Your Cash Flow: How much are you losing or having at the end of the month? 
  • Your Essential Expenses: How much money do you typically need each month to provide the essentials and stay current on your bills? 

Phase #2: Enough Money to Ride Out a Financial Emergency

  • Your Cash Flow: How much are you losing or having at the end of the month?
  • Your Saving Rate: How much can you sock away in your financial cushion? 

Phase #3 Enough Money to Start Investing

  • Your Net Worth: Big picture view of your finances. 
  • Your Cash Flow: Look for opportunities to optimize your expenses. 

Phase #4 Enough Money to Switch Careers/Negotiate

  • Your Net Worth: Big picture view of your finances. 
  • Your Cash Flow: How will it be affected during the transition? 
  •  Your Saving Rate: Do you need to crank it up? 

Phase #5 Enough Money Where Saving More is Optional (CoastFI)

  • Your Net Worth: Big picture view of your finances. 
  • Your Cash Flow: How will it be affected during the transition? 
  • Your Saving Rate: Do you need to crank it up? 

Phase #6 Enough Money to Where Work is Optional (FI)

  • Your Net Worth: Big picture view of your finances. 
  • Your Cash Flow: How will it be affected during the transition? 
  • Your Saving Rate: Do you need to crank it up?

Creating Your Family FI Plan

So how do you create your own FI plan? 

Let’s go through the process to give you an idea. 

The first thing I would suggest is to talk it over as a family and define what kind of lifestyle you’re going for and getting a really rough estimate of the annual expenses. 

And if you don’t have an anchor point, you can use your own spending. Would you say you’re pretty happy with things? Now imagine if you had no debts, how would that affect your financial needs and expenses? 

It’s interesting because some families realize that just the debt payments alone were hindering their lifestyle.

But let’s continue…..

You can then take that amount you feel is reasonable for what you want and multiply it by 25 to get your ballpark FI number. 

  • So if you need $30,000/year -> $750,000
  • $40,000/year -> $1 million
  • $80,000/year -> $2 million
  • $100,000/year -> $2.5 million

Now it’s time for some analysis and reflection. 

If you haven’t already, look at your annual expenses for the last couple of years. Where are you in those phases? Are you financially stable? Do you have some wiggle room with your cash flow so you can save and invest? 

Do this exercise – take away all the debts. If those were gone, how much do you need now?

Now as we’ve discussed plenty of times on the podcast. It’s definitely a smart money move to go through your expenses and see where you can lower them, but keep in mind you don’t want to compromise your quality of life

Sure you can live on the bare minimum, but it wouldn’t either be enjoyable or healthy.  

Let’s say you can pay the bills, but you’re worried about being able to ride out an emergency. Like the one we’re in now. How much is enough to be able to do so?

So now you can craft that budget so you’re meeting that more immediate goal of getting your financial cushion solid with an eye towards that long term goal of FI! 

Support the Podcast!

Thank you so much for listening to the podcast!

  • Spread the word! If you enjoyed this episode and think it can help a buddy get on the path to dumping debt and become financially free, please share.
  • Leave a review. Honest feedback and reviews make a big difference and gets the word out about the podcast. Leave your review on Spotify, or Apple.
  • Grab a copy of Jumpstart Your Marriage and Your Money. My book is designed for a busy couple to set up their finances in 4 weeks. Get tips and tools that have worked for other couples on their journey of building their marriage and wealth together!

This episode was originally released in July 2020.

Family Guide on How to Start Investing

With so many different options for investing – 401(k)s, IRAs, taxable accounts, you might be wondering where should we put our money? 

Today we’re looking at how you can invest for you and your goals!

Where Should We Invest?

How

You talk to most families about investing, whether it’s for retirement or another goal and you get this sense of overwhelm. 

Part of it is due to having so many things you’re working on. 

Taking care of the kids. 

Saving for emergencies. 

Dealing with work. 

Paying off debts. 

It keeps you busy for sure, but because you’re doing a little here and there, many times, you’re spreading yourself and money thin. 

And you’re not making the progress you want to make. 

We had a bit of this when we were first got married and were figuring out what our priorities. 

It took a bit of time to really nail those down, but once we did it made things so much easier because we could then work on things one by one. 

It was less stress and we were actually making progress. 

So today I thought we could do with investing – break it down so you can see what options are available to you, like 401(k), Thrift Savings Plan, or IRA and then see how they fit in with whatever season of life you’re in. 

Drew Snider is here to help out. He’s the director in Financial Planning at Coastal Wealth Management. He’s also a husband and father so he gets it. 

In this episode we get into:

  • Conversations to have at certain milestones about finances
  • Major investment accounts you need to know about and how they work
  • How to align your money including investments with your priorities

Let’s get started!

Handy Resources to Start Investing and More

Whether you're new to investing or looking to level up, here are some resources to get your there faster!

Thank You to Our Sponsor Coastal!

Support for this podcast comes from Coastal Credit Union!

If you live in the Triangle area of North Carolina and you’d like someone to work with you on your goals, you really want to check out Coastal's Wealth Management team.

They'd love to help you start investing for retirement and more!

How Investing Fits in With Your Financial Plan

Elle Martinez: Some couples, they feel like, ‘OK, like financial planning and how does that fit in?'

What we've noticed, [when] we've met with a financial planner, it just makes things so much easier, especially when you're talking about something as big as retirement.

I wanted to discuss some conversations you suggest couples have to keep the ball rolling about planning for retirement. What should they sit down and chat about first?

Understand Where You Are In Your Financial Journey

Drew Snider: Well, I would first say that I think it's age-dependent and sort of where you are in the process.

If you're just starting out in your single or just married twenty five to thirty five, I think the first conversation is really about budgeting and making sure that as a family you're putting aside 15 percent of your income for retirement.

If you've been started doing that when you first form your household at that age, you should be very well prepared for retirement.

Those folks who are 35 to 50,so a more established family and younger children getting into middle school age children. Your goals start to get conflicted. It gets a bit more challenging.

You really start realizing that these kids are actually going to go to college and that you really need to actually have some money saved for them.

You're also reaching mid career and so you're being pulled in directions for work, which can be challenging.

That requires vacation time to to get away for a bit as your kids get older. You're starting to enjoy that vacation time, too. So you have these conflicting goals.

It becomes very important at that time to really have a goal focused financial strategy.

How Drew and His Wife Define Their Goals and Plan

I can tell you what my family does. So, yeah, we have specific goals. I have a twelve year old daughter who's going to go to college, no doubt about that.

My wife and I want to retire someday so we specifically fund those goals.

As we're getting older now, we definitely and my daughter is having fun with us on vacation for now. So we definitely have some goals for that to to visit National Park.

We put aside some money specifically for those goals. I call that goal based budgeting where you're you're putting that money into the account design for those specific goals.

You can feel like, well, the rest of the money that you have coming in and outside of that is disposable income.

It's really up to managing that on the day to day basis to make sure you've got, you know, that the bills paid and food on the table and everything else is really up to you as a family to decide. But you've got your goals paid for effectively. So that's, you know, for that mid-range middle period and then fifth age 50 to retirement is really the conversations with the spouse or significant other is really about what do you really want to do in retirement? They think retirement starts to come a little bit more into focus.

Where do you want to be? How do you want to spend your time? You really should start having those conversations because. That, in view of your future, is going to back into how much money you really need to have set aside to accomplish that, and then hopefully your kids are getting older and and and you might be becoming an empty nester. No kids in the house.

You can focus a bit more on saving and getting those goals a little bit more in focus on target. So those that's the way I would kind of look at it from an age standpoint and what the focus should be.

Which Investment Accounts Should Families First Focus On?

Elle Martinez: Yeah, I definitely agree. And I love that the focus is, first of all defining the goals.

We're kind of in the middle of it right now, we're in our late 30s we have two little ones. And so are our goals are like you mentioned, going in different directions, two little ones preparing for the future. We're also trying to save up and be wise and enjoy the time we have now with them. So it makes sense to make a plan.

I love that you said even before you pay the bills, [take care of] those important goals. You already set aside that money.

I think if you wait until the end of the month or until after everything's been spent, you find out there's not enough. There's nothing at all. So I do appreciate that.

I know a lot of couples. They know what they've us to do. They signed up for the fall and can't work or the fallen 3, B or whatever, you know, number and letter combination that's out there.

There are so many different accounts. Could we kind of go over the benefits and the differences of the accounts that are typically offered at work, either raise and so forth?

Drew Snider: Yeah, I'd be happy to. Primarily the accounts that you're going to be offered at work. As I said, most people are going to be offered a 401(k) plan.

Basically, you're taking money directly from your paycheck and depositing it into a retirement account. It's easy. Often there's some sort of an employer match. So there. So your employer is helping you reach your retirement goal and then there's often an option to do it either pre-tax or after-tax people. Maybe you hear that as the Roth option is the after-tax options.

Basically, when you're deciding there is, do you want to pay taxes today on your income? Or do you want to pay taxes later? And really, that decision you should decide with working with a CPA or a financial planner to determine which is the best approach for you. I

personally just do a 50/50. I do half in my Roth for one day and I do half the traditional four or one K. So I'm getting some of the tax benefits today and then some of the tax benefits in the future. So the following K is the primary option for a lot of people. If you work for a nonprofit or a state organization, you'll have the four or three B which roles are effectively the same.

They're just under a different part of the tax code. They operate very similarly less likely to have a Roth option within the four or three B and then there are others various smaller plans if you work for a small company, but effectively they're all kind of doing the same thing. They're making it easy for you to choose to invest for your future. And within the plans you and you're going to have choices of investments.

Almost every plan these days has what's called a target-date mutual fund portfolio, which effectively is here deciding, OK, what day or year am I going to retire in the future?

If it's 20, 30, then the portfolio manager is going to invest it in a basket of mutual funds, stocks and bonds that are geared for someone who's retiring in 20, 30.

And over time, it's gonna get more conservative, less stocks, more bonds, and that's going to happen automatically for you. So all you have to do is show up for work, do a great job and continue to save money into the plan. And it should work for you over the long term outside of your four okay plan or outside of the company plan.

Looking at IRS. OK. And one thing to know is, is that if you are contributing or participating in a company plan, you are limited to putting money into a traditional IRA account and getting a deduction. So that's something that you're in. If you're interested in saving outside of your own K plan, it's important that you talk to a CPA or a financial planner to make sure that you're doing the right thing from a tax standpoint and you're not get trouble at the IRS. But the the Roth IRA is really the IRA that most people should be focusing on if they're contributing to their Forum K plans or other work plans.

The Roth IRA Ray is a way to save money today where you don't get a tax deduction by contributing today, it still grows tax deferred, meaning you're not going to pay any taxes on the money as it grows.

And then when you retire at age fifty nine and a half or older and you start taking money out of the account, it comes out tax free. So what I encourage a lot of our members to do is to consider having some money savings in the Roth bucket.

And then in a traditional bucket so that when you hit retirement, you have some tax free income. In some of the income that you're going to have, it's going to be taxable. And that's going to come from your Form K plan and the traditional IRA.

Elle Martinez: So you're you're trying to coordinate your different accounts to work well to get the tax benefits both now and in the future. That is correct. Yeah. OK. So that's why it would be great to have an expert. Because when we file our taxes, I mean, they're fairly straightforward.

But again, I wouldn't know or be familiar unless I'm digging around with contributions and I need the requirements if you're required contributing, you said to an employer versus a traditional IRA array. So it's great having an expertise advice.

Drew Snider: One other thing I should mention is with the Roth IRA? You can be limited in how much you can put in there or put in there at all based on your income. No. That's at another point where you need to talk to your financial planner or a CPA to learn if you can actually make that contribution.

How Spousal IRAs Work

Elle Martinez: Yeah, that completely makes sense.

I know I've gotten some e-mails. From members in the community, they had a question.

Some of them have decided, child care is expensive and at least for a few years, one of them is going to stay at home, either work part time or just focus on the kids for a few years.

They're worried about, how is this going to affect our retirement planning? I had read about spousal IRAs. How did how would that work?

One spouse sat for a few years, was taking home, taking care of the kids at home, but they still wanted to make sure that their retirement accounts are growing.

Drew Snider: Good question. So as a non-working spouse, you can contribute to a traditional IRA or a Roth IRA. Based on your spouse's earnings, everyone needs to have.

If you want to contribute to an IRA or a Roth IRA, you have to have earnings in order to make those contributions to qualify as a non-working spouse.

You can qualify based on your spouse's earnings as long as the spouse's earnings are more than the contribution you put in. If that makes sense.

If your spouse makes and we see this sometimes with older folks who are kind of semi retired but have some income. In order to make a six thousand dollar a Roth contribution, if your spouse has to have six thousand dollars, that makes sense.

Finding the Right Financial Planner for You

Elle Martinez: We want everything above board we can, right? Yeah. Yeah. OK, thank you. That's really important. We've kind of been discussing this about the benefits of working with a financial planner. You're a certified financial planner? No.

For some couples, it seems intimidating. And sometimes they'll tell me like I want to go. My husband doesn't want to go or vice versa because they feel like we're gonna be sold something versus actually getting advice.

And I look at your take, Drew, what are some signs, good or bad, that couples should look out for when they meet with a financial planner?

Drew Snider: That's a good question. Yeah. I've been in that business as a financial planner for almost 20 years, and it's changed a lot. And I think it's changing for the better.

In that more financial advisers are taking a planning approach, which means that when you sit down to meet with them for the first time, they should be talking about your goals, not your family. Learning about you and what you are trying to accomplish, what your pain points are, what your concerns are.

And then from there, they really should be taking a more personalized approach to figuring out how to solve those problems for you. And I can tell you, a coastal, that is definitely what we do. That's precisely why I have the job that I have, is so that when a member comes in and meets with one of our seven financial advisors, they know that they're going to be asking them lots of questions.

Be prepared for that to learn about them and their family and understand what they're trying to do and then working with me. I do kind of the work behind the scenes to make sure that we're covering all the bases. We're looking at their tax situation.

We're making sure that they have appropriate insurance coverage. We're making sure that their estate plan is complete. You know, they've got a will in place. And then we might start talking about investments. And if their investment strategy is appropriate to reach the goals that they've set out for us and we start with creating a financial plan for them. So if you meet with a financial adviser and they start talking to you about investments right away and products that they can put you in, you should be concerned, honestly, because they haven't learned enough about you to make those recommendations. I feel like the advisors here, coastal entity, really good adviser in twenty nineteen should be taking the time to learn more about you before they're making investment recommendations.

Elle Martinez: That makes complete sense. Yeah. And so I know this has happened to us in the past and I've heard people's back and something that they're scared of talking with advisors, they feel like. Well, when I was starting to ask questions, the person felt challenged because they were putting me in these vestments and then they were saying I was the expert. You should trust what I say. You as a financial planner. And you knew seeing how your team works and when they meet with the clients. How how did they feel if a client does not push back but ask questions? Dig around is fine with that or is that encouraged? How does that work?

Drew Snider: Oh, that is definitely encouraged. I mean, we want people in investments that they're comfortable with that we together agree upon is going to help them reach their goal. So just as an example, you know, we're going into a financial plan for somebody and we're going to realize that, you know, based on their risk tolerance and the goals that they're trying to accomplish, that they may need only a 4 or 5 percent rate of return on their investments to be reached there. Their objective? Whether it's for college or retirement, but also still feel comfortable about their investments. So if they come back to us and they say, hey, I am I'm not comfortable with what happened with this, whether the investment didn't perform well or if it lost money during some sort of a correction and that kept them up at night, that we need to make some changes to that. We're definitely open to that. We want you know, but we're going to tell them, you know, if we make that adjustment, this is the impact it's going to have on your financial plan over the long term. So we we don't have a lot of those conversations, I'll be honest with you, because I feel like if you're doing the work up front.

Yeah. To understand someone's goals and their risk tolerance and what they're comfortable owning inside their portfolio, then typically you don't have those conversations. Now, what can happen is people's risk tolerance changes. They think they're more aggressive than they really are because they become complacent and comfortable with what really what we've had for good 10 years is a rising market. And so a lot of people feel like, you know, they're pretty comfortable with that. We haven't really had a big correction in a while. So, you know, we anticipate people changing their risk tolerance when we go into a recession and there is a market slump. But, yeah, we're we definitely want to talk about that for sure. And I think we see ourselves as partners with our members and making investment decisions. We're not telling them what to do. And that's in my opinion, that's really another red flag. When you're meeting with somebody who's last minute buys, is it they're telling you what to do rather than you doing it together? Chances are they're putting them in an investment that they're comfortable with that maybe you're not comfortable with.

Optimizing your Financial Health

Elle Martinez: Yeah, I've I've had quite a few that got taken in with an investment and they couldn't explain what exactly it was. So definitely that's a big red flag. So thank you.

I mean, it's it's good. It's kind of like I see. Going to a financial advisor, almost going to a doctor. Of course, the doctor is the medical expert. You want them to be like on top of everything. But it really does. Hey, to be very aware of like your health habits, your routines have that basic knowledge. So you can't ask the question. So you feel comfortable working like you mentioned being a team member for your health. So, you know, that's physical health, but also for your financial health. So. Right.

Drew Snider: We do see ourselves that way. It's kind of like your financial doctor, for sure.

Support the Podcast!

Thank you so much for listening to the podcast! If you enjoyed this episode and found it helpful, here are some ways to support it.

  • Spread the word! If you enjoyed this episode and think it can help a buddy get on the path to dumping debt and become financially free, please share.
  • Leave a review. Honest feedback and reviews make a big difference and gets the word out about the podcast. Leave your review on Apple or Stitcher.
  • Grab a copy of Jumpstart Your Marriage and Your Money. My book is designed for a busy couple to set up their finances in 4 weeks. Get tips and tools that have worked for other couples on their journey of building their marriage and wealth together!

Music Credit

Like the music in this episode? Music is by Lee Rosevere and Music for Makers.

This episode was originally released in August 2019. Show notes have been updated July 2021.


Frugal Foodie: Eating Well on a Budget

Learn the frugal foodie tactics and strategies on how to slash your food bills while eating well!

The Art of Being a Frugal Foodie

How much do you spend on food? 

If you’re like most families, chances are it’s a big part of your budget. 

The USDA puts together a monthly report that looks into average food expenses.

They break it down into thrifty, low-cost, moderate, and liberal spending plans based on how old your kids are. 

And the monthly costs for a family of four vary from $567 – $1296.

Like I mentioned last episode when you’re working as a family towards financial independence, you have to look for big wins. 

Mastering your food expenses is a big win, but….

If you think I’m going to tell you to skip eating out or only make these basic dishes, I’m not. 

Food is something I don’t like to skimp out on.

We want to eat better and enjoy our meals, whether it’s at home (which is most of the time) or when we’re out. 

So if you look at our budget, it’s a big category for us relative to other expenses.

But it doesn't blow our budget and we’re still able to save for other important goals.  

And looking over the past year, our spending is around the USDA’s thrifty and low-cost plan. 

The challenge – besides being smarter with money – is also finding ways to get meals up and ready in a relatively short time. 

After work it’s tempting to grab some food on the way home. 

So we need to have things set up so preparing a tasty meal is a snap. 

And when we do it out – because yes, we like to go out sometimes, we try to maximize the experience. 

So if you want to get a handle on your food bill and still have a good time, I think you’ll enjoy this episode. 

I’ve recruited some others to help. 

Besides having a masters in nutrition, author Shanah Bell is also a busy mom of five.

Finding meals are all of her kids enjoy can be tricky, but she has strategies that make meals less stressful, healthy, and fun. 

Patrick Livingston is also a foodie and loves trying new things that are off the beaten path.

He also has some creative ideas on how to make those nights out even more special while still sticking to your budget. 

We’re going to look at this from two sides:

  • How to make tasty, quick and affordable meals
  • How to enjoy a meal out so that’s it’s special and you’re not breaking the budget

Let’s get started!

Resources to Become a Frugal Foodie

If you're looking to eat better while sticking to your budget, here are some resources to check out:

Thank You to Our Sponsor Coastal!

Support for this podcast comes from Coastal Credit Union! If you’re living in the Raleigh Durham area and looking to bank better, come check out Coastal today.

If you're looking for a rewards card that fits you, Coastal has a Signature Premier Rewards Visa Credit Card with some great benefits!

Eating Well (and Prepping a Meal Quickly) at Home

Elle Martinez: I hope it’s not shocking news to tell you that eating more at home is both a wallet and waist saver.

One way you can set yourself up for some food wins is by making sure your kitchen is stocked with the essentials so you can whip something up fairly quickly.

Nope, you don’t need a ton of fancy tools or ingredients. Actually one of the best investments you can make is typically some of the cheapest items you can pick up at the store – spices and herbs.

Note: You want to save even more and have something fresh? You can also grow your own, either in a back yard garden or in container pots around the house!

Shanah Bell: Spices and herbs for us said the biggest thing that a lot of people don't think about that we use as staples are a diverse blend of spices.

We have a huge cabinet full of a lot of different herbs and spices because there was not a lot of nutritional value and do different things for your body and your overall health but they completely change what a dish can taste like.

So even if you're making some like rice and beans and rice and beans happen to be things that we keep on hand it can be done here one day to the next depending on what spices we put in there and what else we put in and it can be a completely different meal.

Elle Martinez: This may seem like a small tip but I can not overemphasize how important it is to have these essential ingredients in your pantry.

You can have a dish – Shannon mentioned rice and beans – but by changing the urban spices you can have several different dishes and mix it up every week.

Thinking Like a Chef

Another related idea and tip that you can use when you're shopping?

Think of items that you can use in several dishes.

I'll give you an example of three kinds of categories of food where it's the same thing on paper but when you're cooking it can be completely different each time. Pizzas tacos and stir fries

I'm just going to use Chipotles and as an example, we're going with tacos.

Yes, it's a simple dish but depending on the meats the vegetables even the seasonings that you use it's like a different meal each time.

So when you go grocery shopping don't get items that you can only use for one meal for the week actually go for items that you can use repeatedly.

If you have the herbs and spices to mix things up it will help. You not only save money because you're getting that discount buying in bulk but also reducing waste.

Elle Martinez: You can really make a lot of different things on your own with herbs and spices for example.

Support the Podcast!

Thank you so much for listening to the podcast! If you enjoyed this episode and found it helpful, here are some ways to support it.

  • Spread the word! If you enjoyed this episode and think it can help a buddy get on the path to dumping debt and become financially free, please share.
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  • Grab a copy of Jumpstart Your Marriage and Your Money. My book is designed for a busy couple to set up their finances in 4 weeks. Get tips and tools that have worked for other couples on their journey of building their marriage and wealth together!

Music Credit

Like the music in this episode? Our theme song is by Gentle Regime. Additional music by Lee Rosevere.

this episode was originally released July 2019.

Enjoying Financial Independence and Parenthood

Can parents pursue financial independence with kids at home? Today we’ll go over the five biggest myths and show how you can enjoy parenthood and FI!

Are CoastFI and Parenthood Compatible?

Even before we were familiar with the term financial independence, we were intrigued about this idea of gaining flexibility and freedom.

When we were first married, we had two immediate financial goals – getting rid of the car loan and building our emergency fund.

Our car payment wasn’t a huge burden, but seeing that money going out month after month..ugh..

Not having that weighing our budget down was one benefit, but then there was also this potential in the future.

What if we used that money for things we actually enjoyed and really wanted – travel, a house, or starting a business?

So I started digging into personal finance blogs and found books like Total Money Makeover, Automatic Millionaire, and The Money Book for the Young, Fabulous & Broke.

Taking what I learned, we came up with a plan to pay off our debts and grow our financial cushion.

Don’t get me wrong, seeing our net worth go from negative $30,000 to the positive side felt great. The real pull for us, though, was not how much money we can stash away or how fast we can hit.

We loved being in a position of having options. Like leaving a bad job. Becoming an entrepreneur.

During this time, we discovered financial independence, with that classic book – Your Money or Your Life.

There are some wonderful benefits with discovering the FI community. Many in the space love swapping ideas about what’s worked for them.

Hopefully like you’re doing now, we listened to stories and picked a few ideas to try out.

Some worked really well, some needed to be adjusted for our circumstances, and some didn’t work. Either our situation was too different or honestly, we didn’t enjoy it.

The ones that didn’t resonate with us usually came from this segment in the community who had very specific ideas about financial independence.

Both with what it was and what it wasn’t. One complaint I kept seeing was how hard or in some cases impossible for parents to hit FI.

I believe that belief is not just discouraging to parents, but really misses the actual resource financial independence is about – time.

Finances can be a tool, not the goal. We're more focused on quality of life and having options.

So today I want to wrap up this series of episodes before our summer break and discuss how you as a parent can work towards your FI goals while enjoying the journey with your kids.

In this episode, we’ll get into the five biggest myths around financial independence and parenthood.

Are you ready?

Let’s get started!

Resources for Parents Interested in Financial Independence

If you're looking to get ahead with your finances as a family, here are some resources to check out!

Thank You to Our Sponsor Coastal!

Support for this podcast comes from Coastal Credit Union! If you’re living in the Raleigh Durham area and looking to bank better, come check out Coastal today.

Slash Your Phone Bill with Republic Wireless!

Special thanks also to our new sponsor this season -Republic Wireless.

If you’re looking to hit your family’s financial goals faster, optimizing your expenses is the way to go. Chances are you’re paying too much for your smartphone and not getting the value you deserve.  

Same thing happened to me years ago. Wanting to become debt free faster, I switched to Republic Wireless and saved big time. 

Nationwide coverage, fantastic phone options like the Samsung Galaxy and Moto g, plus seriously affordable prices (plans start at $15/month!) make it a smart choice for families looking to save without sacrificing value. 

See all they have to offer at Republic Wireless

5 Biggest Myths About Financial Independence and Parenthood

Although I believe that all families can benefit from including key FI principles into their finances, it’s not a one size fits all approach.

These myths that I see and hear can be discouraging and stop people from even trying to pursue their dreams.

In some cases, it’s debunking, but it also clarifying some concepts.

I’ve seen how this focus on making things short and catchy for social media distorts or confuses people about financial independence and making it their own.

Myth #1: You Have Live Like Paupers to Retire Early

I think this is a huge turn off for many families.

You have to cut things down to the bone to be able to retire early. And that's not the case. The truth is however with financial independence it is a mindset shift. You absolutely have to be more mindful of your finances, schedule, and goals.

That means you're going to make decisions that are different from other people.

You do need to be conscious of your spending.

  • Your Essential Expenses: How much money do you typically spend each year? What are your usual monthly expenses?
  • Your Savings Rate: How much are you saving and investing each month?

When you're aware of both numbers you can then start on a plan to build up your savings rate and get you to FI faster.

Myth #2: Raising Kids Will Make It Impossible to Pursue FI

USDA estimates that it takes $233,640 to raise one child to an adult.

Not counting college.

Breaking it down annually, that means according to the USDA you’re spending around an additional $13,743.

Years ago, I wrote an article that challenged some of those assumptions. You can read my take here, but here are a few key points.

  • Assumptions about food, housing, and
  • The biggest chunk of money for most parents I spoke to is daycare.

Parenthood and financial independence aren’t mutually exclusive. It does take mindful prioritization and budgeting.

Myth #3: Only Rich People Can Become FI

First off if anyone tells you that income isn’t a factor, that’s a lie. Having more income can certainly help. However there are plenty of people who:

Make some good money, but still live paycheck to paycheck
Have more modest income, but have done a fantastic job stashing away

While income is a factor, it's not the main one when it comes to financial independence. It goes back to your savings rate and that gap between your income and expenses.

Myth #4: College Savings Will Kill your Retirement Savings

Two things to consider:

You don’t have to pay for your kids’ college.

Thank you for coming to my TED talk.

Seriously though. I’m not that old, but the price of some universities has gotten ridiculous. And for what?

One study found that 43% of college graduates are underemployed in their first job.

The second thing to think about is how college may not look the same or be the path your kid takes.

Certifications can give them the skills and training they need. They may also want to pursue trade school, which can be both fulfilling and financially rewarding.

If you do decide to help your kids with educational expenses, it doesn’t mean you have to sacrifice your retirement or financial well-being.

It does mean guiding your kids towards being more mindful and intention with their education. Which I think serves them better in the long run.

Myth #5: FI is About Never Working Again

There is a big subset of financial independence called FIRE which is financial independence, retire early but financial independence iis a much larger space that group.

There are some who do want work after they hit their FI number. However they want freedom of choice in deciding what kind of work that is. It could be a profitable business, volunteer work, or something seasonal.

I did an episode on the different paths within financial independence, which I’ll link to in the show notes.

For us, CoastFI made the most sense. So the kernel behind it is that you’ve saved enough so you could retire at a traditional age even if you never add another cent again.

That’s money tucked away in tax advantaged accounts like 401(ks) and IRAs. With that milestone out of the way we have a bit of stress taken off our shoulders.

We have more flexibility with work and other choices. It was especially helpful last year as our girls did remote learning. With both of us working from home, we’re grateful we could make it work.

Not going to lie, there were days and weeks when we were trying to find our footing, but it was worth it to us.

So yes, you could retire early – if you want. There are plenty of options you can choose. Make sure that it's based on your family and priorities.

There you have it – the five biggest myths people have about financial independence and parenthood.

Key Takeaways for Parents Pursuing Financial Independence

Before we wrap up, I want to focus on a few key takeaways I got from preparing this episode. 

  • Define what financial independence means to you. 
  • Know your numbers. 
  • Develop your plan in stages and on the season of life you’re in. 

Ask questions, swap ideas, and talk about your progress for the year– don’t forget to join us in the Thriving Families group on Facebook.

We’re all about helping one another out with our family and financial goals. 

Hope to see you there!