All posts by Elle

Want to Make Money as an AirBnb Host? Here’s What You Need to Know

Thinking about becoming an AirBnb host? A superhost shares the scoop about the costs setting up your place, figuring out your price, and how to make money with your space!

The 411 About Making Money as an Airbnb Host

One of the big shifts we've had during this pandemic is how we travel.

We've pretty much gone with renting entire spaces on Airbnb if we're doing a family vacation or getaway so far, it's been a really good experience. The value we get from having a place with a kitchen and yard has been a game changer.

Now the personal finance side of me was looking around and. How profitable was it being an Airbnb host? Also how much work was involved as a guest?

Most of our hosts had wonderful local recommendations, and if we needed anything, there were only a text away, but pretty much they were hands off.

It almost seems like the perfect passive income stream, but is that really. What's going on behind the scenes. I wanted to find out and I discovered I didn't have to venture very far.

During our last trip to Asheville we went out to meet up with some good friends we hadn't seen in a while.

While we were catching up with Barb and Don, I discovered she was an Airbnb host.

Knowing her hospitality, I had a sense that she was a natural candidate for hosting . Airbnb also agrees because she's listed as a Superhost. In case you're not familiar with the term. It means she's experienced highly rated and committed to providing great stays for her guests.

I'm happy to have Barb on the show today to share her story about becoming a host.

In this episode, we get into:

  •  setting her place up, 
  • figuring out prices, and 
  • making her guests’ stays fun and relaxing. 

We have some fantastic tips and even better stories so let’s get started! 

Resources for Managing Your Money and Becoming an AirBnb Host

If you want to chat some more about creating better money habits, questions, or share your own tips please join us over at Thriving Families on Facebook.

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.

As a credit union, Coastal serves its members first including an annual loyalty bonus. We've been members for years and love their service and competitive rates on checking and savings accounts!

As an added bonus, Coastal also offers business accounts, so you have a way to easily manage your side hustle or income stream.

Rollover Your 401(k) Easily with Capitalize

We’re grateful for wonderful partners like Capitalize. Not only do they support the podcast, but they help make managing your money so much easier. 

Did you know that it’s estimated that there are currently over 24 million “forgotten” 401(k) accounts? In fact, the average American changes jobs every 4 years

And because of the Great Resignation, you or someone you know might be changing jobs even more 

It’s an extreme case of out of sight and out of mind. Is your old 401(k) in there somewhere, left behind at a job you're no longer with?

One huge benefit with an IRA is you get to choose how your money is invested, not your old employer. 

If you want to consolidate your old 401(k) and have more options with how you invest, it may be time to roll them over into an IRA.  

With Capitalize, they handle the process from start-to-finish – for FREE. They handle the process from start-to-finish, and yes that includes calling the 401(k) provider on your behalf. 

Find out how and get started today

The Rewards and Risk of AirBnb Hosting

Elle Martinez: How long have you been an Airbnb host?

Barb Kelly: Let's see, this summer will be two years.

Elle Martinez: Okay. Nice.

Barb Kelly: Yeah. We ended up doing that because we were living in a little cabin in a really nice little neighborhood, but it's very scenic.

It's was a safe, good neighborhood with awesome neighbors. We built a smaller house in the same town, but we needed to downsize and get away from stairs and a steep slope.

We ended up having this little cabin afterwards and we're trying to figure out, should we sell it now? The market wasn't terrific. I came up with the idea of Airbnb, because I had been seeing, what everybody else sees, ‘oh, you can make extra money' and we're on a fixed income.

Extra money is always a plus if you don't have to kill yourself doing it. Anyway so I looked into it, my husband's like, ‘I don't know about this. You hate people'.

And I really don't hate people, but I just don't like to get involved in any kind of drama so I wasn't sure how that was going to work out.

I started to research it a little bit and I thought, well, we actually have the perfect setup for it. As long as I wouldn't have to really deal with people, face-to-face a whole lot. I mean, of course I would be available if they needed me. I spoke to him about it and he's like, well, as long as I have to do anything, he has his own stuff.

Elle Martinez: Yeah, so he didn't veto it.

Earning Money Through AirBnb

Barb Kelly: Yeah. I said, well, let's just try it. If we try it for a couple months and it completely stinks. I mean, we're not signing any kind of contract or anything. We can quit at anytime that we want to.

I guess it'll be two years ago this June. It was actually right after we moved. We had not taken all of our furniture with us because we were downsizing.

I thought, ‘oh man, I'm going to have to sell this furniture, get rid of it or do something. When I thought about the Airbnb, I was like, oh, I'll get a pass for a little bit. I won't have to move any of this stuff so it worked out good.

It's a two bedroom, two bath cabin that is entirely on one floor. It has a open concept of a living room kitchen. It has a huge front porch that goes the length of the house that has an, you know, really nice views and it's very quiet.

I just went on Airbnb and read everything I could possibly read and then I looked up everything that I could find about. What's the worst thing that could happen, which is usually my criteria.

Elle Martinez: Yeah, that's good to know. Yeah.

Setting Up a Place on AirBnb

Barb Kelly: be. I want to know what is the worst thing that can happen to me? So I can be prepared, but we listed it on Airbnb and I'm immediately like the whole Summerfield up because we are in an area that has a lot of tourists.

We have a tiny little motel that has like six rooms and the rest of everything in the entire two counties is Airbnbs so I thought, Oh, man, I'm not even gonna make it. Nobody's going to be interested in this.

And I didn't try to oversell it. I didn't say, oh, it's got two twin beds, but you can sleep 12 people. You know, like some of this stuff is ridiculous.

Elle Martinez: Yeah.

Barb Kelly: four people can sleep great and there is a queen size air bed, but I'm just telling you the truth,

Elle Martinez: It's appreciated, as a family that's embraced in Airbnb, we've done them before, but in the pandemic really, that's how we've been taking our vacations.

I appreciate it because sometimes I'll see these and they're beautiful photos, so kudos to the photographer, but I don't know what kind of special lens they use, but I get there.

Huh there's the wall. It just, it felt so great. Then when you have two kids, I'm looking for space and I don't mind paying for that because I just need to have them decompress and relax.

Barb Kelly: Yeah, and you don't want to have to blow up the air bed every single time. Or you don't want to have one with a slow leak in it and the kids are complaining in the morning that they were cold and slept flat on the floor.

I think too, because we like to travel and so we have stayed in Airbnbs and whatever the name they're called all over the world. So we've stayed in enough to know what not to do.

Elle Martinez: Yeah.

Barb Kelly: Like I don't want to take a shower outside unless it's something I specifically asked for, you know, I would go to hip camp if that was the case.

I guess that's the other thing having stayed in the number from really super nice, to just super simple and traveling with other people, you really do want to have a real firm idea of what you're getting, because one place we stayed in Italy, the two bedrooms. They were big and everything, but they were so low. It was like a loft, but it wasn't, it wasn't advertised as a loft. And I got a six foot, three husband that kept banging his head up against the ceiling every time he got up

Elle Martinez: Let's see that makes a memorable trip. Just the wrong reason.

Barb Kelly: Yeah. Or you want to know a place that has really tiny narrow steps or a spiral staircase or whatever, because, you want to know what you're getting. A lot of times I've seen that it's kind of buffed up to look better than it is. And I don't like that.

I rather people come in and Look at it and it's actually better than they thought it was going to be. That's where really good reviews come in so that's, that's kind of the angle I'm going for you get more than you paid for.

Elle Martinez: So kind of rewinding back to when you were first starting, what were your initial goals like? Was this money for maybe your vacations or did you have a particular goal or were you very let's just wait and see, I don't want to budget that money out yet?

Barb Kelly: Like I said, we built a smaller house and so, but that gave us a mortgage so when we did the Airbnb we could pay the mortgage with the Airbnb money.

It wasn't coming out of savings or it wasn't requiring one of us to get a, you know, a full-time job or something like that or go into money that we didn't want to mess with.

But we weren't sure how much it was going to be or how much it was going to cost us to do it. Those were all kind of out there. It was just one of those things where you just had to just jump in there and try it and see how it worked out.

We got through with that.

Elle Martinez: That leads into my next question because yeah, I can see some people say, Hey, you know, I can rent out this room. It's easy to set up and I'll just but realistically, there has to be some costs upfront, to fix it up and get it ready for Airbnb. Do you mind kind of taking me one through what you needed to do to get the place ready?

Then also how complicated or not complicated is it to get on Airbnb and list your place?

Barb Kelly: The getting it ready part was not that hard for us because when we were building our new house we were already doing well and we're good about maintenance anyway. I mean we like a house to be maintained while we were living in it. Mainly it was we had to put in a new parking area.

The slope that we live on was really steep but we did have a pave drive, which was unusual in this neighborhood because most of it is gravel. It's a paved road, but it is in the mountains.

It was pretty, and people will comment on that every once in a while now, but at least it's paved. So you're not sliding and gravel if you're not used to it. It doesn't require you to have an all wheel drive or a four-wheel drive, which a lot of places do.

So we did have to spend some money on that. We, at one point we had to replace our backstairs because they just weren't really up to par. I don't know, we just weren't comfortable that they were completely safe. So we made them a little bit wider and, and the treads a little bit bigger.

We went around and because this is a two story, the front of the house is two story, and it's a rather steep slope. We just made sure that the railings were all in shipshape.

Elle Martinez: As a mom. I'm grateful for that. Thank you.

Barb Kelly: Yeah. We don't want to lose any kids or anything. I went around and I made sure that you, I hate to use this phrase idiot proof, but you do have to kind of idiot proof it.

I put in those little plugs for babies. Cause I don't know if people watch their kids or not. I mean, I'm not there. Really it just updating some things.

The furniture was already really nice so I kind of just added some touches to it, some pictures, some nicer stuff than I've normally seen, but it wasn't expensive because goodwill shopper

Elle Martinez: Oh yeah. You're here. Talented

Barb Kelly: It was those things just made it look a lot nicer; like you just stepped into your home

Elle Martinez: Yeah.

Barb Kelly: just stepped into a hotel room or something like that. We did spend a little bit on really nice linens. I don't like linens that peel up, you know, that get little pills on them.

I bought they weren't real expensive. I got them from Amazon, but a hundred percent Egyptian cotton so that they could be. every single week and they still look like they're brand new.

The same things with towels. I like a hundred percent cotton they're much softer and thicker. Things like that.

We stuck it with hand soaps and things like that and I try to use things that nobody's going to be allergic to. We try to get like organic if we can, but just really Nice things that maybe people wouldn't buy.

Now I can refill a lot of things because we have a little place called Fillmore and it's bulk refills for laundry detergent and all that. They're all organic. We're trying to keep people from breaking out in a rash when they come.

Elle Martinez: Well, I love that. You're being thoughtful with. Both from your own experience, did you do any research, like looking at other in the area, other AB Airbnbs, whether online or , chatting with them?

Barb Kelly: Yeah. What I saw really made me think I could do it because a lot of it was just, I mean, it just, I would have been disappointed if I paid that amount of money to stay at a place that looked like grandma's living room and grandma's bedroom and there were doilies everywhere. I mean, sometimes people would just overdo it or either it was so bare bones that you look like you need to bring your own stuff.

I wanted people to just be able to walk in there and just go, wow, we can just stay here. We don't even have to go out because what I did too in the kitchen, because my husband is a huge foodie. If you come to the cabin, you can make stuff with a blender. There's a crock pot, there's a toaster, there's a there's a french press. There's a drip coffee maker.

Those things weren't expensive to get but people have raved there's even the ice cream maker and a waffle iron. You can do anything that you want to do while you're there.

We've had people really thank us for having such a well-stocked kitchen. You don't have to go out and buy. We keep coffee, tea, and breakfast items really good oatmeal and really good breakfast bars and stuff, because I hate for people to come in. If they come in late, at least you'll be able to have a cup of tea and a power bar before you go to bed.

You don't have to go right to the grocery store. And if we know it's a special occasion, like somebody says, we're coming for our anniversary or we're coming for. Blah, blah, whatever family reunion. I don't know what it is, but anyway, if it's an anniversary, we always leave a bottle of wine and a little bag with candy or something in a card or flowers or whatever.

People flip. I mean, I don't think it's that big a deal, but they think, they think it's

Elle Martinez: Oh, oh for sure. I mean, as a guest, I completely agree and especially like we've been around Asheville during the pandemic, when we go on break and something is relatively simple, you say, like to prepare is such a big help with the coffee.

Sometimes we're not in town and then you have to go like, where's the nearest coffee place and then I got to drive in the morning and I need coffee to get coffee. That's not working for me.

Barb Kelly: I know and that's what I don't want you because we're like seven minutes from town, but there's a most amazing coffee shop, but I want you to be able to get up, have some coffee and sit on the porch in your pajamas and enjoy it.

I don't want you to have to go out and so I do leave the coffee mate creamers, but then I'll leave milk creamers for the people who really want milk like me.

It's just, I have found it really fun because I'm not always dealing with people face to face, but the feedback that I get is. I mean, it's a real ‘attagirl' because it's like, you're doing a great job and you're like, what you enjoyed that?

Oh, that makes me want to do more, that's good part of it. Those are all the good things about it.

I really, I only have one horror story and it was just I would say any horror stories can probably be avoided by making sure that your description that you put on Airbnb has no holes in it because it was somebody who could have, who really did want to make a terrible scene.

It was just, it was awful. And it was because she was trying to say that we're misleading in our listing. And she went to Arabic about us. And they looked at it and they were like, Nope.

She's like my money back. And I don't want to pay for cleaning and I'm going to stay anyway. And then I'm going to leave. And we were like, Nope, you better try this scam on somebody else.

But it's very disheartening. I was really hurt about it because we had had all these good reviews.

And then she left us one that was like, You know, I would give you less than 10. would give you a 10.

Elle Martinez: Well, it's funny. Cause sometimes people reveal themselves because like everybody else before I stay, I look at the reviews and I look at the general tone. Like there's things I'm looking for are the same things broken in every review. Are they like, yeah, the shower

Barb Kelly: my

Elle Martinez: working, you know?

And then the other side is, is most of the reviews, you know, positive. And then there's this one review that doesn't even sound like the same place. And then you click on them and then you're like, other reviews. They just seem angry.

Barb Kelly: Yeah. well, Yeah, hers was like five paragraphs and she only, she stayed less than 24 hours. So and that was because there wasn't a chain lock on the closet door. But anyway, And then they moved all the furniture in front of the closet door. And I was like, oh man, I don't know. And then rated the the neighbors yard and brought in tools and stuff and left them.

I don't know. It w it w I just didn't even want to go over there.

Elle Martinez: yeah.

Barb Kelly: die down. But I did realize when that happened, that Airbnb will support you if you're in the right. Now, if you're not, because he kept saying, do you want to give her a refund? I was like, no. I'm not giving her a read on this is crazy. This is a scam. She just wants to stay for free.

There is nothing broken, but I guess I, she took all my toilet paper when she left. So I don't know. That was kind of ugly because paper was to use that stuff.

There is a reason why they give you a review, but there's also a reason why you give them a review. And she had one review. That was one sentence. It was like, they were good. And I'm like, should I take a chance on his? Oh, sure. This, I mean, somebody with kids, how bad. How bad could it be?

Elle Martinez: You gotta have one memorable story, but I'm glad that overall it's good. I'm kind of glad to hear that story, to know that Airbnb will have your back, should something like that happen.

I do want to ask you with the setup. How does that work on Airbnb when you are listing your place? Because I mean, at some point they have to verify that's actually your place, right?

Barb Kelly: Yeah. Well, All I had to do when I did my own pictures. So I didn't have somebody come out and do it. I have a little experience with it and I didn't want it to give false hope either. Like this place looks, but it's only 1200 score.

I really want it to be very honest about what people were getting, but just a little bit of staging. I mean, I'd just leave it like it is. Like, you're going to see it when you walk in there. It's not got any extra stuff, but yeah.

Going on Airbnb, I just, they verify who I am. I had to verify who I am and then putting the pictures. I don't remember that I had to show like a property record card or anything like that. I think they just go off of my personal information as the host.

Elle Martinez: Okay. Did you have to do like a driver's license?

Barb Kelly: Yeah, you have to have two forms of ID and so that wasn't hard to do. And you know that and normally a host will provide a picture too, that goes on there on their little site that will assure people that, you know,

Elle Martinez: It's a real person.

Barb Kelly: That is a real

Elle Martinez: Yeah. Some of those pitches will kind of worried me. I'm like, maybe I'll stay some other place.

Barb Kelly: I know, right. It's like, I don't know. This looks a little

Elle Martinez: They don't look happy to be on Airbnb, but

Barb Kelly: no. We actually stayed in a place that the people did not look happy to have people staying there. And so Don and I were like, yeah, I don't think so, I don't think we'll come back.

Figuring Out How Much to Rent Your Place on AirBnb

Elle Martinez: So you set it up and fixed it up the way you like it and for guest. Okay. Now the part I am curious how people even figure this out. It was like your rate. How did you figure yours out initially? And did you have to adjust it pretty quick?

Barb Kelly: What I did was because there are so many Airbnbs in my area. I had the advantage that that it was a standalone place in a very safe neighborhood and it's on the side of town that's nearest to Asheville so if you're staying like where I live now, it takes me 20 extra minutes to get to Asheville.

On the other side of town, it's a straight shot, 30 minutes and it's interstate.

Elle Martinez: Very nice.

Barb Kelly: What I did was just did a comparison to what was similar to what I've got and my setup and the proximity to where people want to go. I started out with that and my calendar immediately completely filled.

Elle Martinez: Wow.

Barb Kelly: I've thought, whoa, wait a minute, wait a minute. Then I saw where you could do there's a thing on the, on Airbnb called smart pricing so if you if there are holidays or there are like in the mountains, people want to come in the summer and they want to come in the fall.

Elle Martinez: Yeah.

Barb Kelly: winter, not so much unless it's a holiday. What it does is it raised, raises the rate slightly. You give them the criteria you can go from here to here. This is the lowest you can pick, and this is the highest you'll charge.

Some of them I've seen are ridiculous. I mean, they're asked for crazy amount of money, but mine fluctuates about $25. You're not going to pay a whole lot, even for a special occasion. I do give a discount for longer stays which is nice.

I just had one in December, which was great. The people were awesome. That's nice because you don't have to have it cleaned every week, then for a longer stay, they just do their own cleaning and we provide everything, but, I don't want to come in while they're there.

That's how we did and we're still kind of tweaking it because it just depends there. People have shown a lot of interest in it, but I don't want to make it so expensive that it's out of people's range because I don't need to make that much. I'm not trying to, you know, ream people out.

I'm just, I want them to enjoy it too. It's worked for us so we're trying to keep it real reasonable.

Elle Martinez: Well, that's fantastic. I know for a lot of families that are watching their dollars, that's always good.

Barb Kelly: Oh, yeah.

Elle Martinez: Speaking of expenses, you mentioned making sure for every booking there's cleaning. What other extra expenses including maybe wear and tear or any stories about guests that you've had an unexpected expense after visit?

Barb Kelly: Yeah. We have leather furniture in the cabin, and then we have mean like a leather recliner, that's a nicer one. It's not one that looks like at your grandpa's house, but in a nice leather sofa, which to me is better because people I've heard horror stories of ruined upholstery.

So I thought, well, the kiddies have scratched a few places on this, but it still looks good and it's still super comfortable.

We tried to go with furniture that was couldn't really be killed too much, you know? Like I said, anything that needs to be replaced, I'll replace it with something really nice, but I'm going to get that piece of furniture at habitat. If I need to paint it, I will. But so far there hasn't been too much damage.

Like we had these, a young couple that had a couple of kids and I think the mom and dad just decided to party and just let the kids like run wild with blue cake icing. Let me tell you something, you cannot get it out.

It was just like they had a cake fight, know, and that the tequila bottles, I know they had a good time over there. That's one of the, one of two experiences that were terrible.

Everything else, I mean, I haven't had like people ruining my towels and things like that. And a lot of people do because Ladies that wear makeup and don't use a makeup remover wipe they'll that stuff gets out.

You just have to make it into a cleaning rag because you cannot get that stuff out. But so far we've been really fortunate to have people be pretty careful with it, pretty nice to our house.

Elle Martinez: It sounds like overall it's been a good experience with Airbnb.

Barb Kelly: Yeah. I mean, Airbnb takes their cut, not on don't get me wrong and cleaning during COVID is more expensive because we don't play would that.

We wouldn't do it if we could not make it safe for people, because I don't want to go anywhere that people are saying, oh, we clean to the certain protocol and they don't do it.

It takes longer to do it because we go in the first day, spray everything down with a micro band type thing and leave it. We don't even clean that day. We just leave that everything anybody could touch. And then if it's during warm weather, we'll just open the house up and just let that house air out for a solid day.

In the winter, we'll just turn the fan on and it's yeah you don't want to be in there with micro band sprayed everywhere. It's pretty rough, but, but I feel good that people are safe when they come here.

I provide cleaning the cleaning stuff, like masks and gloves and things like that, because I don't want my cleaner to get sick either. She doesn't want to get sick either, so that's going to work,

Elle Martinez: I'm glad you have a system in place in it. I think everyone feels good when you put the effort upfront, do the right job. Everyone feels taken care of and you get repeats. I know we feel that way. If we find a place that they put that care that you're putting in, that's going to be our go-to place. The first place we look for, you know, if we come back to a certain city or anything,

Barb Kelly: We feel that way too. I mean, there are some places that we have stayed that were just so I mean, the host just went out of their way and we could tell it.

We definitely go back there just because we've actually gotten to know the host. That's kind of cool. He feels like you've made friends all over the world just by and I actually have had some guests that were just so they're so funny and nice.

One lady it snowed while they were there. No, no, not snow it was The leaves, it had, the leaves had just all come down on the driveway and it made it so slippery that they could barely get up the driveway. So Don and I went over to clean the driveway off and as soon as we got there, she ran out, she's going to be here. Let me help you give me that. Right. And so we were all standing out the driveway, just, it was, it was really Nice.

I mean, they were just super nice people. Those are the kinds of people you're going to tell it the really good places to go and.

Elle Martinez: Nice.

Barb Kelly: Give him a discount knock on wood. Yeah. It's kind of fun. It like my husband said, you know, I'm not a, I'm not a real people person.

I'm kind of quiet and introverted unless I really know you, but some of the people we've met have just been so nice that you feel like you made a friend and we've had international travelers, even in our little town, we've had a lot of people From everywhere.

I was really surprised like who comes here, but they do. Where we live is kind of unique. So I'm not going to say that, but I often wonder how in the world you hear about it,

Elle Martinez: I'm glad that overall it's been a good experience for you, and I appreciate you taking the time sharing, like the good side and the bad, and also the investment that it takes to make it work in sustainable so I appreciate it.

Barb Kelly: Oh, you're quite welcome.

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Listener Mailbag: Tax Refunds, Saving a House Down Payment, and Refinancing

We’ve brought back the listener's mailbag. Today we’re answering your family and finance questions about best ways to spend your tax refund, refinancing to pay off debt, and more!

Tackling your Family and Finance Questions

One of my favorite parts of creating Simplify and Enjoy is the community. 

While I’m happy to share our journey as a family, it’s fun when you chime in with your wins, stories, and questions. 

Today we’re going to be diving into your family and finance questions. 

In this episode we’ll discuss:

  • How and where to save up for a big goal like a house down payment
  • Wise ways to use your tax refunds
  • Is refinancing your home to pay off debt a good idea? 

We have plenty to cover so let’s get started!

Resources to Manage Your Money Easier

If you want to chat some more about creating better money habits, questions, or share your own tips please join us over at Thriving Families on Facebook.

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.

As a credit union, Coastal serves its members first including an annual loyalty bonus.

We've been members for years and love their service and competitive rates on checking and savings accounts!

Rollover Your 401(k) Easily with Capitalize

We’re grateful for wonderful partners like Capitalize. Not only do they support the podcast, but they help make managing your money so much easier. 

Did you know that it’s estimated that there are currently over 24 million “forgotten” 401(k) accounts? In fact, the average American changes jobs every 4 years

And because of the Great Resignation, you or someone you know might be changing jobs even more 

It’s an extreme case of out of sight and out of mind. Is your old 401(k) in there somewhere, left behind at a job you're no longer with?

One huge benefit with an IRA is you get to choose how your money is invested, not your old employer. 

If you want to consolidate your old 401(k) and have more options with how you invest, it may be time to roll them over into an IRA.  

With Capitalize, they handle the process from start-to-finish – for FREE. They handle the process from start-to-finish, and yes that includes calling the 401(k) provider on your behalf. 

Find out how and get started today

Where Do We Start When Saving Up for a Big Goal?

The first question in the mailbag is, where and how do I start saving up for a big goal?

The whole process is covered in detail in my free course, five days to 5k. I actually created it because this is one of the most common questions families have. We have a lot of different goals that we're trying to pursue. But where does the money come from?

It walks you through step-by-step on how to analyze and optimize your finances. You can grab it at simplifying. enjoy.com/five K. But let me give you a high level review of the process.

The first step is you should get a ballpark of how much you need to save and when you'll need it.

It's hard to measure progress if you don't know what goal you're working towards. Even if it's not entirely accurate, getting a ballpark figure can give you a measurement of how close or how long it's going to take to hit your goal.

Then you can work backwards to see what your monthly contribution needs to be.

The third step is looking at your current budget calculate the difference between what you can put away now toward your goal () and make sure you automate that transfer right away. And what you need to fill in the gap. You may discover that you're much closer to your goal than you originally thought.

Once you have that number in place and you do have some transfer going into savings, the next step is to look at your budget. You're looking at your income and expenses. You really have to look at both sides of the coin.

The first step I recommend with families is optimizing that budget. And in the course, I go through some easy wins that you can have with your finances. Of course the big one for many families is food, but then I also look at bills where many families are paying much more than they need to for the services that they're getting.

I'll give an example – your smartphone bill. Did you know that the average American cell phone bill is $70 for a single user? When you have two or more lines that can quickly balloon.

The great news is that there are providers out there who use a hybrid model. The technology realized both on cell data and wifi that can drastically cut your bill in half in, sometimes more. Options, you might want to consider our Republic wireless mint, mobile and Google fi.

That's just one example from the course, I look at other expenses where you can save and find better alternatives that makes it easier to keep more money in your pocket.

The other side of the equation, which sometimes families forget is the income.

After all there's only so much you can do with optimizing your budget, even though that can be a big one. Besides getting a second job you might want to look at opportunities in the share economy that fit your schedule and circumstances.

Some obvious ones are doing deliveries or driving for Uber Lyft but you may find that something that's more suited towards you is pet-sitting. Maybe you don't mind picking up electric scooters if that's around your city and recharging them. You could get paid for that and then also believe it or not merchandising.

My friend, Sandy from, yes, I am cheap and the creator of the side hustle crew has a great side hustle selling mugs through Amazon. And she has a course that teaches you how to set that up yourself with whatever item you're thinking of dropshipping.

You want to weigh the pros and cons to find a side gig that fits your schedule and circumstance. But hopefully I gave you some ideas on how to start saving for whatever big goal you have, but don't forget again, sign up for that course. It's completely free. It's at simplifying enjoy.com/5k

What’s the Best Way to Save for a House Down Payment?

Since we're on the topic of saving let's jump into the second question what's the best way to save for a -house down payment.

This is fantastic because this means that you were thinking ahead and making sure that you have a sizable down payment for your home. Having 20% down can be beneficial for you because that's typically the threshold for lenders where you don't have to pay for private mortgage insurance or PMI.

Keep in mind that there are other programs and mortgages that you may qualify for where you don't have to put such a big down payment options like us da loans. FHA VA. And depending on where you live, there could be down payment, assistant grants.

Whatever option you choose, it's always good to have money saved up both for buying the house and when you become a homeowner, having something stashed away for home maintenance and care. So, where should you put that money?

There are a few options. I have to mention the most obvious, which is savings accounts. As boring as it is this can be the right account for you because more than likely you'll be needing to have this money assessable in the near future.

While investing can be a great longterm option for savings such as retirement. They're not so great for short term savings because the market can be volatile year to year.

If you're looking at savings account that you're not happy with the interest rate that's available, then you might want to consider high yield savings accounts.

Look at your community banks, local credit unions, online banks. Typically they offer more competitive rates with their savings accounts then some of the big banks because they don't have as big of an overhead to cover.

Finally, there's an account I recently learned about that might be of interest to you. It's called a first time home buyer savings account. Only a handful of states offer it like Colorado, Oregon, and Virginia so you have to double-check to see if it's available in your state.

It's a tax advantage account that can be used for eligible expenses such as your down payment and closing costs.

If you're thinking of buying a house in the near future. Please catch those episodes where I talk with Daymark agents about one, how to find those hidden gems of neighborhoods so you can get a great location and what you're looking for at an affordable price. And how to figure out if you're really getting a great deal with a fixer-upper or it's a money pit.

How Should We Spend Our Tax Refund?

This third question really fits in with the fact that we're in tax season. It's how should we spend our tax refund?

Tax refunds can be a great opportunity to give yourselves a boost and set yourselves up for an awesome year financially.

There's a couple of ways you can go with this. The key is to figure out what stage you are financially speaking and what are your goals for the year?

The first way you can boost your wealth and make sure that you're taking care of is building that financial cushion. That's right. You got to start with the foundation.

Make sure that you have an emergency fund that is stashed away for any hiccups that can come this year. The rule of thumb is a thousand dollars as a starter. But you want to look at your circumstances. You may find that a thousand dollars doesn't cover an emergency.

We found out these past couple of years, we can't control a lot of things that happen to us. But we can be better prepared. That will not only help us on the financial side but reduce a lot of the stress when you go through these tough situations.

A second way that you can make this tax refund goes so much further is by paying down or paying off your high interest debts.

Yep. I'm talking about credit cards. If you have them, you probably already know that they're basically quicksand with your monthly budget so feel free to go ahead and knock out a few of those.

Another money savvy way to use your tax refund is to increase your contributions towards goals like retirement.

Have you maximize your contributions with your IRA this past year? If the two of you are pursuing a goal of financial independence, have you contributed to a brokerage account? Don't worry if you haven't. You can start now with that tax refund.

Even though it might not be technically financially savvy. One last tip I would say is, do keep a portion of that tax refund for something that you can enjoy.

Perhaps you've discovered a new hobby during this pandemic. You can upgrade that so you can enjoy it even more or you can have that set aside for a family vacation.

Having these rewards can recharge you and keep you motivated with the other big goals that you have in mind.

Finally, as a reminder, if you're getting a rather large tax refund. Double check. Why?

It could be that you withholding too much in your paychecks. While we all love getting a nice big lumps of money. Many families have found that having that money sooner in their paychecks through the year is better than later.

Should We Refinance Our Home to Pay Off Debt?

This last one is a really good question. Should we refinance our home to pay off debt.

First off. Anytime someone asks me, should we do something? I want to be very clear. I'd love giving you information about options that you have or resources that are available but you really have to sit down and consider your family's specific circumstances.

Sometimes those seemingly small details can make all the difference with what's the best decision in your case.

While I do feel great that you want to pay off debts. This is definitely not a decision I would rush into. There are a few things to consider and talk about. So why don't we go into them?

Let's start off with why people use refinancing to pay off debts. Typically it's because mortgage rates have a much lower interest rate than other debts, especially when you're talking about credit cards. Currently the mortgage rate for a person with good credit. We'll say about six 70 to 7 39 is around 4.2%. While the average credit card interest is 16.5% for someone with the same credit. Depending on the balance you're carrying that could be a significant savings in interest if you were refinancing to pay off that debt.

So it sounds reasonable but let's also consider that not all debts are equal.

With things like your credit cards, those are considered unsecured loans. While your mortgage is secured. Unsecured means you don't have anything backing the loan, so to speak. So if you don't pay your credit card, They'll go after you, but there's only so much they can do.

Secured means you have something of value, backing it up. So, if you don't pay your mortgage, you could lose your home.

One of the first steps I would suggest is gathering up all the data and dig into the debt that you want to consolidate. What type of debt is it? Can you negotiate a better rate? Have you gotten your spending under control? For example, if this is a credit card debt, have you decided and have a system where you're not going to go back into that same debt?

I hate for you to be not only back, where you are with the debt but now have your house on the line.

Okay, now that you have that in front of you, let's go over to common refinancing options. The first is rate in term refi and then the cash out refi.

Both of these will require you to qualify in terms of your credit score and have equity in your home.

With a rate in term refi, you're taking out a new mortgage either with a new and lower interest rate, different term, or both.

The goal here is getting a better deal on your mortgage so that your payments go down. Then that monthly savings, that difference you use to pay down the other debt. You're not actually tying that extra debt into your mortgage. It's still separate.

Cash out refi is an essence where you're rolling your debt into a new mortgage. Let me give you an example.

Let's say you have $150,000 left on your mortgage and your house is now worth 250,000. That's a hundred thousand dollars in equity that you have. You also have $20,000 of credit card and medical debt that you want to get rid of.

Because you have enough value or equity in your house to cover it. You can do a cash out refi. With the refi your old mortgage is paid off. You now have a new mortgage of at least $170,000. Remember your original one 50 left on the mortgage and you want to cover that $20,000 of debt. And the reason I say at least is that there are closing costs with a refinance.

You'll get a check for the difference. In this example, we'll say $20,000, which you can then use to pay off and close those debts.

If you decide to refinance, as you can see, there's a lot that goes into it.

First off, will you qualify for the loans with your credit report and score? Do you have the equity in your home to do this? And if the refi has done. Can you afford the new payments?

Besides refinancing. There are some other ways you can consolidate your debt. And I'll include them in the show notes.

Thanks for sending in your questions. It's always fascinating to me to see what goals you guys are pursuing. And what you're trying to work on. So please keep sending them in. I'd love to do this again.

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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Kids and Money: Which Financial Lessons Parents Should Teach?

Today we’ll look at how you can teach your kids to be financially savvy! 

Teaching Your Kids About Money

One of our responsibilities as parents is to teach our kids essential skills they need and finances is part of that. 

Good or bad, if you look at how you handle finances, you’ll probably see the impact your own parents had on you. 

Our example is a crucial part of teaching them, but we also need to consider those conversations we have with our kids. 

What lessons are passing on to them? How can we guide them to not just be financially savvy, but also thoughtful with how they use their money? 

It’s something we talk about from time to time. Our two daughters are now ten and seven. They’ve had their allowance for a few years and overall they’re getting the hang of it. 

Now we’re trying to figure out how to approach other financial topics like budgets and investing in a way that’s engaging to them. 

Thankfully there’s some really good resources out there that can make those conversations easier. 

In this episode, we’ll get into:

  • Creating a flexible game plan of topics and when you want to introduce them to your kids
  • Discuss some of the big questions parents have about allowances
  • How to introduce them to the family budget

There's a lot to cover, so let’s get started! 

Resources to Teach Your Kids about Money

If you're looking for ideas and resources to prepare your kids to be money-savvy, here are some to check out! 

If you want to chat some more about creating better money habits, questions, or share your own tips please join us over at Thriving Families on Facebook.

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.

As a credit union, Coastal serves its members first including an annual loyalty bonus.

We've been members for years and love their service and competitive rates on checking and savings accounts!

Rollover Your 401(k) Easily with Capitalize

We’re grateful for wonderful partners like Capitalize. Not only do they support the podcast, but they help make managing your money so much easier. 

Did you know that it’s estimated that there are currently over 24 million “forgotten” 401(k) accounts? In fact, the average American changes jobs every 4 years

And because of the Great Resignation, you or someone you know might be changing jobs even more 

It’s an extreme case of out of sight and out of mind. Is your old 401(k) in there somewhere, left behind at a job you're no longer with?

One huge benefit with an IRA is you get to choose how your money is invested, not your old employer. 

If you want to consolidate your old 401(k) and have more options with how you invest, it may be time to roll them over into an IRA.  

With Capitalize, they handle the process from start-to-finish – for FREE. They handle the process from start-to-finish, and yes that includes calling the 401(k) provider on your behalf. 

Find out how and get started today

Establish Your Goals and Gameplan 

One common hangup parents have with introducing finances to kids is that they focus on the numbers. 

I get it. That’s the part we see, right? When you’re balancing a budget, watching your investments, and saving up for something, you’re reviewing the numbers.

You may want to jump into a super basic budget and teach them not to overspend their allowance, but for most kids, that’s not going to get them on board. 

Actually one of the first things to do is step back from the numbers and discuss the lens of how we manage their money – your family’s values. 

Once you take care of the essentials like food, housing, and clothes, where are you spending your money and why? What matters most to your family? 

Having that reflection will help you be able to explain to your kids why the budget looks a particular way. Maybe you love to travel and so that’s where you spend your money. Maybe you’re foodies. 

When you understand those priorities and values, you can then show your kids that money can be used beyond a basic budget. It also gives you a leg up on finding a way to introduce money on their level. 

Introduce money from their perspective.

One of the best ways we’ve found talking to our girls about finances is by tying it to something they love and are interested in.

Our very first conversations about a budget was actually over snacks. 

When our oldest was three going on four, she would ask for us to buy this, that, and every snack. We decided to give her a snack budget for the week. She had $5 she could spend. We’d show her the prices and compare how much she could get of them.

Very basic, but it was at a level she understood and it was something she cared about. 

Now our girls are into games, animation, and art supplies so when we discuss savings, it’s tied to those.

Find something they love and start teaching with that as an example. Is there a summer program that they would love to join? Are they looking to get a game system? Upgrade their phone, laptop? 

You can teach the foundational pieces of finances through that lens. 

Play games.

Another way you can begin having those conversations is with games. No, I'm not talking about monopoly. I’ve yet to play a game of monopoly with a group of friends and we are all still happy in the end. 

There are some fantastic ones out there, some of them specifically designed to open up conversations about money and give them a bit of practice. Cash Crunch Junior is one of those games.

They pick up helpful skills like tracking their money, saving, and thinking before spending their cash. It’s also fast moving so 

The idea is to talk about principles of money in a relaxed setting while having some fun. Not only are they passing on a lesson, but also conveying money talks doesn't have to be boring or stressful. 

How Allowances Help Kids

Let’s talk about one of the most common questions I get when it comes to teaching kids about money – allowances. 

  • When should we start?
  • How much is enough?
  • Should they be tied to chores?

All good questions and things we’ve discussed and continue to adjust as our girls grow up. 

In The Opposite of Spoiled, – which you should definitely read when you have the chance – Lieber discusses how allowances can be a powerful tool in helping kids use money as a reflection of positive values including generosity and entrepreneurship.

When Do You Start An Allowance? 

Experts suggest starting an allowance around the time they start kindergarten, but you have a clearer idea on what your child can handle.

This is also a good time if you haven’t already, to open a savings account for them. 

How Much Should their Allowances Be?

As you might guess, there is a wide range of what families are doing with allowances.

In terms of how much to pay,  when I was digging around, I found that a weekly allowance is typically around 50 cents – $1 per year of their age. 

If you have a 6-year old, you're paying $3- 6/week. If you have a 10 year old, it’s around $5-10/week. Of course tailor it to your kids, but the idea is that you give enough so if they’re saving up for a purchase, they can get it in a reasonable time. 

Should We Tie Our Kids’ Allowance to Chores?

There are several ways you can go with your allowance and chores. The popular options include:

  • Allowances are tied to all of your kid's chores.
  • Allowances are separate from your kid's chores.
  • The final is a hybrid where there are some core chores that are required regardless of allowance and other chores where kids can earn some extra money.

They all have pros and cons, depending on your kids.

Right now their allowances are not tied to chores. We're a family and to keep things manageable, all of us have to contribute.

We expect the essentials (tidying up their room, taking care of our cat, and weekly clean-ups) to be done regardless if they get an allowance or not.

If they skip out on their chores (and we expect it will happen), then we'll take away a privilege, like tablet time.

Now we do have some extra chores that do offer extra money. Those tend to be seasonal work like prepping the garden for planting or raking leaves in the fall.

Should We Include Our Kids in the Family Budget?

We’re now at the stage where our girls have a pretty good understanding of saving and can do a really basic budget for their goals.

What we are discussing now is being more transparent with them, particularly our oldest about our family budget. 

It’s important to us to have her feel comfortable with budgeting when she’s an adult. We also want her to have a clear idea of what it actually takes to keep things running. 

Taking our own advice, we’re going to introduce a game. I’m giving each of them a sheet with three expenses we have:

  • Our mortgage
  • Groceries
  • Our last family getaway

Here's wat they came up with:

Looks like we have some work to do.

Going forward, I’ll let them know the average monthly budget and keep them in the loop if we have any special expenses coming up. 

By easing them into it, we’re hoping it makes me feel more comfortable asking about the numbers. 

Handy Tools to Teach Kids About Money

Now if you’re looking for tools that can help you and your kids manage money they are some great ones out there. Two of my favorites are Goalsetter and FamZoo

We use FamZoo as a way to easily manage allowances so it divides it up automatically into spen, save, and share goals.There’s so much more you can do. You can set it up to have your kids Parent-Paid Interest on their savings, reimbursements of family expenses, also loans. 

Goalsetter is another wonderful tool for families. As the name suggests, you can create a goal and work together on saving up for it. As an added bonus, friends and family can chip in.

I think both of these are fantastic options for families looking to work together on their goals and get their kids more financially savvy. 

Key Takeaways

Before we wrap up I focus on a few key takeaways I picked up as I was working on this episode.

  • Focus on values over numbers.
  • Your example and conversations are important. 
  • Incentivize good behavior.

I know we just scratched the surface, so if you want to discuss this more. Come join us in our private Facebook group over at Thriving Families

It’s free and fun! We’re going to swap ideas and stories about our kids and how we’re helping them.

Just head over to simplifyandenjoy.com/fb. We’d love to see you there! 

Photo by Pragyan Bezbaruah from Pexels.

How to Find the Best Personal Finance Books for Your Family

Learn how to find the best personal finance book for you and your family!

Best Personal Finance Books for Your Journey

One of the things I love and appreciate about books is how accessible they are and affordable for a lot of people. When you're starting the beginning of your financial journey, chances are your finances aren't in a good spot.

It’s not always clear what your first steps should be or even what type of budget would work for you. Naturally you’re going to want to see what’s out there. 

If you’re grabbing a ton of them, like when you’re trying to do a deep dive especially with money, your local library can be a treasure trove.

But then there’s this other challenge, how do you find the right book for you? That can be a struggle because there's always a new book coming out.

Today we’re all about finding that personal finance book that lights a fire and gets that spark going for improving your finances.

Which is why I’m thrilled Kate Moody is joining in today’s episode. She’s a personal financial educator and coach and former librarian.

In this episode, we’ll discuss:

  • A way to scan and hone in on helpful personal finance books
  • The three different types of experts to consider when choosing your books
  • Tips on vetting personal finance podcast and videos

I hope you enjoy! 

Resources to Manage Your Money Easier

If you want to chat some more about creating better money habits, questions, or share your own tips please join us over at Thriving Families on Facebook.

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.

As a credit union, Coastal serves its members first including an annual loyalty bonus.

We've been members for years and love their service and competitive rates on checking and savings accounts!

Rollover Your 401(k) Easily with Capitalize

We’re grateful for wonderful partners like Capitalize. Not only do they support the podcast, but they help make managing your money so much easier. 

Did you know that it’s estimated that there are currently over 24 million “forgotten” 401(k) accounts? In fact, the average American changes jobs every 4 years

And because of the Great Resignation, you or someone you know might be changing jobs even more 

It’s an extreme case of out of sight and out of mind. Is your old 401(k) in there somewhere, left behind at a job you're no longer with?

One huge benefit with an IRA is you get to choose how your money is invested, not your old employer. 

If you want to consolidate your old 401(k) and have more options with how you invest, it may be time to roll them over into an IRA.  

With Capitalize, they handle the process from start-to-finish – for FREE. They handle the process from start-to-finish, and yes that includes calling the 401(k) provider on your behalf. 

Find out how and get started today

Note: Interview is edited for clarity and length.

Finding the Best Personal Finance Books for Families Pursuing Financial Freedom

Elle Martinez: one of the things I like about books and we were talking about this just a little bit ago was how accessible they are and affordable. I remember when I had that wake up call that was tens of thousands of dollars of debt and I needed some kind of plan.

I felt like books were so helpful at that stage but how do you find the right book? I think that can be a struggle because there's always a new book coming out.

I wanted to talk to you first off. I saw a video on your channel. I think that really spoke to me and I loved was how you first made that connection with personal finance and books and an interesting book. Could you get into how that all has happened and what motivated you to get into personal finance?

Kate Moody: Yes. Yes. So I graduated from college five beta Kappa. If I can see right there, that's the Phi beta Kappa at fancy pants honor society. The fanciest offensive pants on our societies, as a matter of fact. I got home from graduation. My mom is a public school teacher and she often buys a lot of materials for her classes.

And then she brings them home over the summer and I'm looking through her books.

Elle Martinez: Same. I remember that

Kate Moody: wasn't just my household then. I'm looking through her books and I found this book that looked like it could unlock the secrets of the universe kind of in a way. I was like, ‘Ooh' and I pull it out of the box, go sneak in my room and go to read it.

And let me, I have it for you here. Cause when she retired, I made her send me the bill. Oh. It's called growing money, a complete investing guide.

Elle Martinez: It's a complete investing guide and you can hold it in your hands. What more can you ask for?

Kate Moody: Yeah, I mean, it's written for eight year olds and mind you again, this is like a week after earning a pretty good honors award from my undergraduate degree.

I like to point that out because I always want to tell people that the right book for you is the book that will meet you where you are right now. Because if I were to jump into a regular personal finance book for adults, it probably would have been really scary for me at the time. But this, because it was written for kids, it was super approachable.

Yeah. I think if an eight year old. I can get it too. And it really did it finally like, oh, that's what a stock is. Oh, that's what a bond is. Oh, that's what trading is. Okay. Interest rate, like all that stuff where if you don't have that basic foundational knowledge, you really can't go any further. Yeah, understanding how money works.

This gave me that foundational knowledge, which gave me enough confidence to then go on and to like upgrade to personal finance for dummies, you know, like and then up and up and up and up. Yeah.

Elle Martinez: Yeah. You got to start somewhere, but I think you bring up a couple of good points.

The first one is just because you're an expert in one area doesn't mean you automatically know about finances because that had been my experience. It was a great student, love learning, but when it came to personal finance, that just wasn't automatic.

Also too, I would say on the personal finance side, there were a lot of books. It was just very intimidating. I don't know who they were trying to serve with with the financial terms, especially if they claim that they were going to be for people just starting out with finances. I feel like there were two kinds of problems butting up against each other.

So how do you cut through that? Like say. I don't know what I don't know. I know the basics of a budget, but I'm not keeping up with it. How do you sort through all the personal finance books that are out there and find one that kind of clicks? Any tips?

Kate Moody: Any tips,please…any tips, former librarian. I've got notes in my multi-colored notebook here, color coded and everything.

Okay. So my professional librarian tips and all of these, I'm going to give with a grain of salt because although I'm going to give you a bunch of good things to look for in books, it is 100% possible that a perfectly good book might have these what I'll call sort of a red flag sort of sniff tests.

Like not sure, 100% possible that really good books would fail. Some of these and terrible books would pass. That's just sort of the nature of the beast of anything.

And honestly, these suggestions are anytime you're looking for a source of authority on any subject, these are actually really useful. I did not come up with these myself. These are librarian rules of thumb.

Some of them are actually created by the association of college and research libraries and they're what I used to teach in libraries about how to figure out who is in authority and who to listen to, and when not to.

First off just the things to look for is when I pick up a book, I don't even have to open it up. Like I can basically just look at the front and the back cover and maybe the copyright page and then that's kind of it and I'll know whether or not I should read it or not.

The first thing I look for is who is the publisher? There are five major publishing houses in the United States like Random House, Hachette, Harper Collins like big names that people would probably recognize.

So if it's a big name publishing company that produced this book, that means. That one, a lot of eyes have been on the book. A lot of eyes have been through the material. They've checked it. They've made sure that the information is accurate. As of the time of publication, they made sure that everything that is in there is true and useful and probably somewhat entertaining or interesting, or well-written because they've got copy editors going through it. So there's that kind of publishing company. Generally a good sign.

Other publishing companies, you would see our university presses. Those are for academic works. Although the information would be the highest quality, actually, it is not meant for a standard audience. So. But you don't want to read a university

Elle Martinez: press, not your first book,

Kate Moody: new, new and then there's let me get into self publishing and vanity presses, which are used when people want to just publish really fast very often.

Cause it is a big process getting published by a major publishing house is going to take possibly two years. And so a lot of people are like, I'm not going to deal with that. I'm just going to go and have it done in three months at this other thing. But the problem with that is that you don't have all those eyes.

The material. So when I see that it was a vanity press or self-publishing, those two terms are interchangeable. Like that's just like, okay. And red flag, a little one, like I said, everything here is with a grain of salt, but that's the first thing I look for who is the publishing company?

The second thing I look for is the author.

So usually they'll have their credentials. Somewhere on the publication, usually on the back cover, maybe on the inside back cover. There are three different types of credentials that convey authority on somebody.

One is if they've done research or they have an academic background in this material. These are like PhDs, there's a lot of Nobel laureates have written books, probably all of them actually. Or if they have certifications like a certified financial planner or an accredited financial counselor, CFP and AFC, those are the two biggest ones that I look for. So there's those, those credentials.

The second one that conveys authority their work or their station in life. What kind of authority does that bring them? So there's journalists like financial journalists out there are often write great books. There's people like Michelle Singletary, Beth Kobliner oh, and for academic people or people with good certifications. I wanted to mention Jill Schlesinger.

She's yeah, she's great. And she's a CFP. And she's, and she spent like 20 or 30 years as a trader and helping people with their portfolios. So she has both types of that authority, one, her job, and also the certification.

Lastly is personal experience. Those are the ones that are really inspiring to hear how other people got through the same thing that you're getting through right now.

With them I think the best thing about those is the inspirational, because it makes you feel like you can do this too. When somebody comes at it from the outsider's perspective, sometimes it doesn't make it feel possible. People like Tiffany Aliche, Tanya Hester, and I'm just naming a few names that were the first ones to come to mind. I'm sure that you could name a bunch of people.

Elle Martinez: I think you bring up some really good tips and advice and something I would add listening to you is whenever I'm trying to purchase something new, whether it's finance or anything is if it's a subject, I want to understand, I try to get two to three books.

I don't rely on one book and I like how you have kind of the three different expertise and that can get you covered where you get that inspiration. And then if you want a little more financial technical knowledge, you have that in there too. And some people are really good at piecing everything together.

I do love those tips. I know you've got more.

Kate Moody: I managed to limit myself to this three and only one of them has three subgroups. So you already went through the three subgroups, so, all right. Just like in social media. Like whenever you're buying something from Amazon, you look for social proof.

You probably read the reviews before you buy something from Amazon. Same thing with personal finance books.

They'll have, if there, if there are good reviews, they will blurb them on the back of the book on the inside cover, maybe on the first page or something. So one of the books that I love is millionaire next door and not even so much, the quality of the blurb is what I'm looking for.

I mean, of course you want it to say something good, but who did it? So on the back they have Forbes and the Washington post. And then if you look on the inside, they've got USA today, Boston globe, San Francisco business times like dah, dah, dah, dah, dah, dah, dah, dah, all these major publications, read this book and liked it.

So that's important. The awards, like I mentioned, if somebody won a Nobel prize in economics, I bet you, their book is pretty good. It might be hard to get through, but I bet you it's pretty speaking as an irrational exuberance back behind me was written by [Robert J.] Shiller. I believe he did win Nobel prize. I have not read it. I need to get to that.

Elle Martinez: But you said yet.

Kate Moody: Yes, yes. I have not gotten to it yet. And I did want to note that just because a book is a bestseller does not mean it is good.

Elle Martinez: I agree. I agree. Or it's helpful for you, you and your situation. I've been there too. I've had some books recommended to me and I started. And I did not finish it.

I should put that there. You don't have to finish the book if it's not working for you.

Kate Moody: Yes. Yes. 100% librarian stamped approved. If you don't like the books, stop reading it. Move on. Yeah.

Elle Martinez: I know being a daughter of a teacher, like part of me is like, I got to finish. I got a completed. No, you don't.

Kate Moody: Yeah. So those were my sort of big things just to look for immediately. That's what I look for before I grab a book. And then, I read about, well, what is the book cover? Is it something I'm interested in? And if it is great, I'll read the first chapter, so, and see if I like it. And I love that you mentioned about picking up a few books.

Yeah. Because there's a lot of great information out there. Don't limit yourself to just one and you don't have to read the whole book. You can skip through books. I mean, ideally you would read the whole book, but if there's only three chapters that you want to read, read those three chapters. Great. Give yourself a gold star. Move on.

Elle Martinez: Yeah. And I think also when we talk about books, a lot of it's going to be the same. Like if you're doing a personal finance book many of them are going to have overlapping advice. When you're reading several of them, you're going to see where overlaps and hopefully, they're all giving you good, solid financial advice.

The key is also to find that perspective speaks to you. I think we got into this a little bit before she hit record was, they're coming from personal experience, their journey. For example, when I wrote my book, that was the perspective of I wanted to help newlyweds or couples that had been married.

They're in this marriage, they're ready to go, but they have no idea how to work together on finances. And so that advice, 80% of it is going to be very similar to what you hear for, a single person. I mean, you need to have some kind of goal. You need to have a spending plan, but you're going to have that unique situation perspective. So I'm going to say, well, these are discussions you need to have, and this wouldn't apply to someone else outside here in this situation.

It takes practice. But when you read, understanding, okay, they're writing from their perspective, then it's easier to kind of grab the nuggets that you need and then, oh, okay. Well, that's nice to know, maybe in the future, I might need to know that, but today I'll just skip that chapter because that's not what I'm working on at this point in my season of life or this point in my financial life.

Kate Moody: Yeah and there are a lot of people out there who have written those kinds of books. I like to tell people, if you find somebody that you drive with you, like the way they write, you find them entertaining and engaging, read that person's book. Just because they're all saying the quote unquote like same thing or very similar things. That's not bad. That means that it's time tested advice.

It's like trying to get healthy. If you're trying to get physically healthy eat right and exercise. That's what you should do that we all know eat right.

Elle Martinez: That's bestseller advice right there.

Kate Moody: But unfortunately the bestseller advice is eat grapefruits all day long.

I feel like just find whoever, if you engaged in the material. And there are so many really great personal finance, authors and speakers right now, who you can find online and you can just find anywhere they probably have a book.

Elle Martinez: Before we wrap up, I do want to talk about, you know, we love books, I enjoy books. They were so incredibly helpful. I still read them to learn something new, get a different perspective, but that's not the only way you can learn about finances.

I was curious, do you have any recommendations about other things like YouTube channels or podcasts?

Kate Moody: I don't know if you want specific recommendations, but everybody learns differently by the way to like, so if you're visual, probably something more like YouTube, but if you're need the audio input yeah. Always listened to, as I mentioned, Jill Schlesinger.

Again, because I like her because she's very engaging. She's interesting to listen to. Plus she has decades of experience and the certified financial planner credential.

There's another person on her shows who is also a certified financial planner. So like they talk it out between them and sometimes they disagree and that's fine.

It's important to understand that when it comes to money, there is no one size fits all.

Elle Martinez: Yeah I know there's some guard rails, but there's a lot of leeway and it also depends where you're going, what your financial goals are too. Maybe you don't want a traditional retirement. Maybe you want something different.

Kate Moody: Oh yeah. And like I know a few people who really don't have much in the stock market, but they own a lot of property. Yeah. And they're like, that's my retirement. Okay. Great. If it works for you. Perfect.

As far as YouTube goes, that one, anything online, because it's so unregulated and same with like that book publisher, but there's no other eyes on it. Massive grain of salt and You use your noggin.

There's a lot of people who are fantastic at media and marketing and getting their face out there, whether or not there are any good at financial stuff is kind of something else entirely.

When it comes to YouTube, there are great people like you. I also like the financial diet on YouTube is probably my favorite financial channel. I think they've got a lot of really, really high quality videos, always solid advice on YouTube.

If you're online, the same rules apply that I mentioned with books. What are the qualifications of whoever is writing it? Academic, work, or personal experience?

A giant red flag and most of my red flags, I say grain of salt, this one, no grain of salt. Just go run is if somebody specifically says go buy this stock or bond right now,

Elle Martinez: I think that's also something that we should mention whether it's a book, YouTube channel, if you're doing a podcast. They don't know your personal situation and your financial circumstances, because if you're like most people it's complex, it is full of layers so it's not a one size fits all advice. You really have to do your homework with that.

Kate Moody: Oh yeah. Yeah. Like if you have a multi-million dollar portfolio and most of it is in like index funds and bonds and some real estate, it's very well diversified.

And then you say put in a hundred thousand dollars on crypto. Well, for you that wouldn't be much. If you've got a multi-million dollar portfolio that is a small, small portion of your portfolio. Sure. You can lose it.

But if you then go out and say, well, I just bought a hundred thousand dollars in crypto. You should too. But somebody who maybe is making 30 grand a year and who doesn't have that kind of wealth. I mean, I don't think that there's any certified financial planner out there who would think that that's a good idea to get into something so risky.

Elle Martinez: I think it all comes back to when you're educating yourself, you want to go with trusted sources.

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Getting Good with Money and Dumping Debt

Want to pay off debt, but are on a tight budget? Learn how one family became debt free (mortgage included) on around $50,000 a year!

Getting Good with Money

I love to highlight a variety of stories about how the different families face them, both with making the numbers work and with the conversations they have during the process.

Last week, Toni Husband shared some of the ups and downs of her debt free journey to pay off over $100,000 of debt. 

Knocking out that mountain of debt including getting her husband on board and finding a pace that allowed them to pay it off without sacrificing time with their young kids. 

There are other struggles when it comes to becoming free, including making every dollar go further when you’re making closer to the median household income of around $67,000

Which is why I’m thrilled to have Jessi Fearon on today’s show. 

Jessi and her family paid off their debts including their mortgage on about $50,000/year income.

In her new book Getting Good with Money, she talks about some key changes they made as well as offering practical tips on how families can get out of debt.

In this episode we get into:

  • Identifying your money type, triggers, and key behaviors to adjust
  • How to have more productive conversations about money as a couple
  • How to find and make money to hit your financial goals faster

Are you ready? Let’s get started! 

Resources to Dump Your Debt Faster

If you want to chat some more about creating better money habits, questions, or share your own tips please join us over at Thriving Families on Facebook.

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We've been members for years and love their service and competitive rates on checking and savings accounts!

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It’s an extreme case of out of sight and out of mind. Is your old 401(k) in there somewhere, left behind at a job you're no longer with?

One huge benefit with an IRA is you get to choose how your money is invested, not your old employer. 

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Note: Interview is edited for clarity and length.

Understanding Your Money Mindset and Personality

Elle Martinez: I love following what you're doing online, not just with paying down debt, but the message you're sending with families with hope, especially us parents, where we're juggling so many different things with finances.

You and I know that this time of year, a lot of people are motivated and on their list of things to improve for the year is getting better with money.

They want to either pay down debt, save, invest, but it's hard to stick it out. Something I appreciated in your book, which was before you come up with a plan, kind of assess who you are, what's your money story, and how you interact with money. Cause you go into a couple different like personality or mindsets.

Could you go over first of all, the different types and for yourself, what did you have to do?

Jessi Fearon: Absolutely. The first one is the Daredevil. The Daredevil doesn't have any savings or little to no savings, rather. So they're living life on this tight rope and hoping that no little hiccup, no little bump in the road happens. It does. They're completely derailed and it's financial catastrophe.

I have definitely been all four of these different personalities. So I have definitely been the Daredevil before more times than I care to admit to.

I've also been the floater. The floater is someone who lives at paycheck to paycheck has no idea where their money is coming in. It has no real plan for their money. They keep trying to make progress, but because they haven't gotten really real and honest with themselves and how it is that they're using their money is all a complete mystery to them.

The other one is the spender. Yeah, the spender is, it's not someone who's just necessarily going in blowing all of their money, but it's someone who doesn't actually know what their spending trigger is and we all have them, including savers.

We all have something that whatever it may be, whether it's a good deal or we, again, where we see something and we think, oh, so-and-so would love that. We pull that trigger and we spend the money. If we don't reconcile that within our budgets and within our money management, it will completely derail whatever plans that we have.

The last one is the avoider. I was an avoider for a really long time. And the avoider is someone who doesn't plan for their future. Mainly talking about retirement here, but someone who does it plan for that 70 year old self. They kind of think, oh, that 70 year old self is. Way out there, but you know, it's funny.

Cause then all of a sudden you wake up one day and you're a lot older than 21 and you're like, ‘oh wait, I'm a lot closer to being retirement age than I am to a teenager now. So what am I going to do'?

As I said, I've been all four of these and for me discovering that about myself was realizing the way that money made me feel.

Working Together with Your Money

I'll use me and my husband pat for an example. My husband is a spender. I'm a safe. So for me, I like to have a lot of money in the bank account, but I also don't ever want to spend any, like I like regardless if we actually have to spend the money, I don't want to touch that money in that bank account.

Like I want it to sit there and be really, really big, you know, and with some around in my goal cleans, I want that, that makes me feel good. It's like a little trophy sitting on the shelf that makes me feel safe and secure. Whereas for my husband, he likes to spend money, but that doesn't mean that he wants to honestly spend all of the money and blow all of them.

And just means that he wants to have that ability to spend whenever he needs to or wants to spend. He wants to be able to have that ability to do that because it gives him a sense of accomplishment. And I say that because for us that's one of the key pieces for us was that we had to kind of come to terms with, okay, how does the money make us feel?

Like, what is it about money that we value? And the reality is that we. Something with money that we attach value to. And for me, it was safety and security for my husband. It's a sense of accomplishment and success.

Neither one of those answers is right or wrong. I know sometimes people want to answer in the way they think they should, like, well, I should say it's for safety and security or because I want to give a bunch of money to everybody. But it's okay if it's for you, it's accomplishment and success. That's totally fine.

Just own up to it because then it helps you figure out from there, like, okay, how am I using money? When money comes into my hand, what is my first thing that I'm doing with it? Am I immediately going out and spending the money?

Am I hoping that nothing comes up? So then that way we don't have any hiccups in the road, we don't go broke. The car doesn't break down. Whatever.

In those cases you may be a spender. You may be a Daredevil, or you may be a floater. If you weren't planning for retirement, then you're an avoider and you have to ask yourself why in all of these situations and getting down to that brass tax of why we'll help you reconcile and come to terms with these and then make progress and changes that you need to make.

Conversations Needed Before You Can Line Up Your Numbers

Elle Martinez: I love that. Yes. You not know about this, especially you've written a book about budgets specifically.

Yes. You have to have the numbers line up and there's a process to that but at the same time, if you don't address the root of it, which is why do I view money this way? And why do I act when I'm stressed or I'm coming up with a specific situation.

If you can't answer that, or you can't work through that both yourself. And if you're married, you know, with your spouse, Not impossible, but it's really hard and it's really slow to get through and make real progress on whatever your financial goals are.

I love that you opened up with that with those conversations, because that's something you can't avoid.

We were kind of the opposite. So I wouldn't say I'm like a spender, I guess, like you mentioned with pat, I don't want to spend everything, but I was comfortable with spending.

I would do too much. I was paying down debt. It was also saving a little bit of saving, a little bit of investing. So it was like going everywhere, but not really making any progress.

My husband, Rob was just like you, which is like money for him was security. I think for me, it was like freedom and options. Until we had that conversation, it was like we were just doing the same script over and over again and not really making that progress.

I'm glad you've included in the books. I think that is going to be a big breakthrough for a lot of couples and families.

Jessi Fearon: Especially when you're married, I'm a big proponent of like figuring out for you individually.

Get clear on money with you, like sit with it and really think about it. Because the clearer you get on how it is that you feel you value a new use of money the easier it's going to be when you have those conversations with your spouse.

You're going to be able to articulate your point and your spouse is actually going to be able to hear it because now emotion has been removed from the conversation and you are clear.

You're personally clear on how it is that you manage money and that will help bring the conversation to a much better place than if you're just screaming and yelling. Because I know that conversation really well too.

Dumping Debt on a More Typical Budget

Elle Martinez: I think we've all been there, you know? You don't see eye to eye. And when you let the emotions take over, it's very hard to make any kind of progress or see each other's point of view.

Another thing I appreciated with your story, and I think many people relate to is you did this without a huge income like you and I were fans of debt-free stories.

I love, and I'm rooting for families that open up more opportunities for themselves by becoming debt free.

At the same time, there have been times where I'm frustrated and I'm rooting for them where it feels like you read the story, they paid off this crazy amount of debt in like two years and then you read in the paragraph, they each make like six figures or they've had family help them with buying a house.

Again, nothing wrong but if that's the only money story that's being shared or that's the one that's being shouted out it can be discouraging for a family who has either a huge amount of debt that they're dealing with, or they don't have that large income to throw towards the debt.

First of all, thank you for including your story with that. I think that needs to be shared more, but what advice and encouragement would you give to a family that finds themselves in a more typical situation with their debt?

Jessi Fearon: First any income level is okay. I feel like I have to say that because, for us, we did this on just over $47,000 a year salary.

I know that for my husband, sometimes that was hard for him more than for me. I think he had more pride issues with that. That was really difficult for him because so many of his friends made so much more money. We had in comparison to our income level, a lot of debt and we had to figure out how to pay it off.

I was going to have to go back into the corporate world. So for us, what it came down to was, okay, what do we want more of?

Did we want me to be a stay at home mom? Do we want me to go back to the corporate world and having to put the kids in daycare? Because at the time we had two kids under the age of two, which that would have been even astronomical.

I can, God bless every single parent that has their child in daycare right now, because I can't even imagine what that cost is right now.

I know back then it was going to be crazy and it was with my paycheck, just to put them into daycare.

At the time my husband was working a graveyard shifts. So most of the burden of [taking] kids to daycare and them up from daycare and then doing the cooking dinner and feeding them, getting them in bath, saying prayers, reading the stories and going to bed, doing it all over the next day was all going to fall mostly on my shoulders.

So we had asked ourselves, is that the life we actually want is that what we're building?

I think key piece that any family of any income size has to ask themselves, what are we building like, is this what we want? When we are on our deathbed and we look back on this time, is this what we hope that we had built during our lifetime?

For us, that was not what we wanted and so we knew that we had to either find a way to make that $47,000 a year work, or I was going to have to go back in the corporate world and who, and we were going to have to live a life that we didn't necessarily want to.

Again, sometimes we have to make temporary sacrifices. that's not saying there's any shame that that's a situation that you find yourself in cause we certainly considered that, but for us it just became clear on our why and why we wanted to do it.

From there it made the actual sticking to our plan so much easier because we knew what we were fighting for because if you don't know what you're fighting for, then it's going to go up in smoke.

You're not going to, you're not going to actually try to achieve anything at that point, because once it gets hard, cause it will get hard. Yeah.

Define Your Family's Priorities

Elle Martinez: It definitely will. I mean, it's, it's not a matter of if it's when and I do love how you framed it cause it is included in the book. Like what kind of life do I want? What kind of life do we want?

It's very easy to get into the script of, ‘oh, I'm saving for retirement'. Well, let's just take that. What does that even mean to you? What kind of retirement?

If my husband had a choice, it'd probably be like a cabin in the mountains and I'm imagining traveling. So we were having these conversations and figuring out what does that even mean?

Like ‘I'm saving to buy a house'. What kind of house? Where do you want to live?

Having these deeper conversations definitely makes it easier to kind of work backwards. Okay. Well, if this is the type of house, or this is the neighborhood we want to live in, let's look at the numbers.

You give a lot of great advice and maybe kind of share a few of your favorites about finding money. Again, if you don't have a ton of income, you got to get creative with the budget and at the same make it sustainable, especially when you have kids.

Where to ‘Find' Money on a Tighter Budget

Jessi Fearon: Absolutely. Yeah, because kids have a way to eat at your budget. They really do. Especially the older they get, okay. Diapers may have cost a lot, but then once your boys started growing up, then all of a sudden they're just like eating you out of house and home.

So side hustles, I call them side hustles. I know that sometimes people now don't feel so nice about those words, but anything that you're doing on the side to generate additional income.

One of my favorite ways and one of the easiest ways for any of us to jump on board that is to ransack our houses and sell off stuff that we don't need or use. Most of us have a closet full of stuff that we don't ever use.

We probably don't want to open the closet cause we know there's a bunch of stuff in there and we don't want to deal with that mess. We know and so just pull it out, sell off what you can.

Don't focus on the fact, oh, this thing costs me a hundred dollars. And then like, if I can't get you at least, you know, $89 for this, like I can't sell it. Like, don't focus on that. The money's already been spent. It's a sunk cost move on from that, sell it for what you can, and then take that money and throw it immediately to whatever your current goal is.

Whether it's saving your emergency fund, paying off your debt, saving for retirement, whatever that current goal is and neatly take the money and put it.

The key point there is that action of taking the money and immediately putting it. So if you just sell it and then don't move that money to that current goal, it will slip through your fingers. Trust me, it doesn't matter if you're a saver or spender, it will disappear. I promise you.

So that is my favorite way that most people can generate additional income. The other way is to think about your skill sets that you have.

If you're an administrative assistant, you can take that and become a VA and start doing things, after your kids go to bed at night, you know, spend an hour or two doing VA work. Which VA stands for virtual assistant for bloggers or for other companies.

Same with accounting, as long as your company that you work for is okay with it but if you're you're an accountant or you do bookkeeping, you can do that as well online on the side. Do that for bloggers or for other companies that work online.

Same with photography. Believe it or not. If you're actually really good at taking landscape photography, you can actually. Those landscape photography, photos, that to various companies, because they'll use it in like calendars and stock photos and all sorts of things. So you can sell that for royalties. You know, and just anything like that, just get really creative with the skillsets that you have that you can use.

Also there's places like VIP kid, which you can teach online. So. Cool parent, you can actually teach online.

Same with Outschool. Outschool [is] another fantastic platform that if you're an educator or you're just someone who has some sort of you're a music person, you know how to play the guitar and you want to teach other people how to play the guitar. You can actually make a course teaching people how to play the guitar online and earn money from that.

There's a lot of different ways that you can do that. You just need to come up with what your skillsets are and the time that you have available and what you can do and maximize that time and your skill sets.

Elle Martinez: Yeah. I'd love that. And I do agree with you. Like people have very mixed feelings about side hustles and I think it's the connotation, but then again, what kind of life do you want?

You get to decide like, am I going to spend X amount of time for short knocking this out, or am I going to look for something a little more sustainable or pull back? Because I want to have that time with my kids, especially when they're little and you don't get that time back. Yeah. I love that.

New Opportunities and Options When You're Debt Free

Elle Martinez: Also something that I really appreciated with reading your book is that message of, as you are paying off the debt, you get to decide how. You get to live your life with your family.

You have more options and more opportunities and you know, it's been a crazy couple of years, Jesse. Yes. Yeah, yeah.

Unfortunately depending on where you were in your financial journey, when COVID hit the financial fallout from the you know, you were either I've heard from some families like new opportunities or rose, or when opportunities came up, they were able to take it.

On the other side was, unfortunately, if you were deep in debt, it was almost like you were obligated to make choices, more geared towards the finances versus what's best for your family.

I don't want that and I know you don't want that for listeners. So if there are now. Starting their journey or restarting their journey because they are focused on getting out of debt.

Can you kind of share how that's benefited you personally, what opportunities have opened up because you guys have knocked out that debt, including the mortgage, which is amazing.

Jessi Fearon: One of the best things that we ever did for our family, for our children is becoming a debt-free because my husband actually does not make much more than that. $47,000 now. I'm he makes a little bit more than $52,000 a year right now.

And you know, he's self-employed. He owns his own business and he could theoretically pay himself more money, but then he wouldn't be able to pay his employees.

What he pays his employees. He wouldn't be able to give them the vacations and the paternity, what, you know, these are men that work with him cause he's in construction. So these are guys who are becoming fathers for the first time. So he's able to give them paternity leave and able to do certain things for his employees as well as for his customers and his client that he would not be able to do if he took a bigger salary.

But because we have been able to become debt free and intentionally design our life this way, we don't have to make a whole bunch of money to have an amazing life. My kids get to go on vacations that me and my husband would have never been able to go on as kids and we're able to do it debt free. Now, granted, when we started our debt free journey, that wasn't the case, our vacations of choice were camping and backpacking down the river.

Elle Martinez: Those are exciting.

Jessi Fearon: We still do them today because they are fun and just like you work together as a family and it's really great, you know, but my kids actually get to go to the beach now, you know, they get to go to the mountains, they get to go do these things that, we didn't get to do every year as a kid. And so it's blessed them.

It's also blessed them with the fact that I'm not just a stay at home mom anymore. I'm now a homeschool mom. When the public school shut down. My boys were in public school. We just, we discovered very quickly that digital learning and me did not mix very well.

It did not go over very well, but I also discovered just how far behind my boys were in school. And so that opened up the opportunity for me to be able to homeschool my boys and then now my daughter as well. I'm able to homeschool all three of my children here at home.

I don't have to worry about, you know, the math now, right? Like if this kid's been exposed to, to COVID and, you know, test positive and all this stuff, like how many days until they go back to school, I don't have to worry about that.

My kids don't have to worry about that and it's just been, it's been so nice to not have those disruptions and not having to worry with, well, what's my county gonna decide as far as are we doing digital? Are they going to school or what does this look like?

Having those opportunities has been such a blessing for my family. I'm so grateful to former pat and Jessie who made these hard choices too, in the sacrifices that came with it to go on this journey and become debt free, because it truly has freed our family from just from not being able to live the life that we desired.

We're able to, when these opportunities come up, we're able to assess, okay, is this the right opportunity? For our family, we don't necessarily have to do opportunity or, you know, had to say no to it because we don't have the money or the time available to do.

Elle Martinez: Yeah, I absolutely love that. And I think that's like the best definition of financial freedom.

It's not the number in the bank account. It's the options that you have that's best for your family.

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.

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What to (Really) Expect on Your Debt-Free Journey

What’s the process really like when you’re paying off over $100k of debt? Today we get into the habits and mindset changes Toni and her family made during their debt-free journey! 

Debt-Free Journeys: Different Paths and Strategies

I love a good debt free story. I enjoy seeing others work hard to get rid of the credit card, student loans, car loans, and other debt that is weighing them down. 

I also know personal experience is not always fast or even a smooth process. For us, it began with getting on the same page with how we wanted to tackle it. Then there was the reality of the numbers. 

My husband has his first post-grate job and I had a part time internship. With time, we found our rhythm and knocked it out. 

I’ve also had quite a few episodes on this podcast and on Couple Money sharing people’s journey, including Toni Husbands.

What I loved about her story is that it wasn’t a ‘We paid off ‘$100,000 in year and half story’. 

Which in all honesty, I enjoy watching and reading too, but when that's the main narrative being shared, it’s a bit discouraging because they tend to gloss over key details. 

When you dig into the article, you can see that both are earning six figures or I’ve even seen where parents chip in for them to buy a house in an expensive city. 

My problem isn’t with those details, but the fact that it gives the false impression of how easy it is to become debt free. 

In many cases, it’s a commitment and in that journey not only are you freeing up your finances because you don’t have that debt anymore, but you’re opening up options. 

In this episode we are discussing a lot of the nuances and struggles that can come up. We’ll get into:

  • Some of the hurdles and challenges she had to overcome 
  • Which habits helped and what she would do differently
  • Opportunities that opened up now that’s she’s dumped her debt

Let’s get started! 

Resources to Dump Your Debt Faster

If you want to chat some more about creating better money habits, questions, or share your own tips please join us over at Thriving Families on Facebook.

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Note: Interview is edited for clarity and length.

Starting Your Debt Free Journey in 2022

Toni Husbands: I'm looking forward to what 2022 has to offer and how we can make the most of it.

Elle Martinez: Yeah. I'm glad you say that. Anytime we can make a change is good, but this time of year, a lot of people that's on their minds. They've hopefully had a nice winter break. They could relax their friends and family, but they're looking forward to accomplishing something, especially when it comes to finances.

I think last two years for many families has been a case of let's just tread water. Let's just not, In a worst situation. But they're ready to tackle on, especially debt. That's one of the top three goals every year.

I've had you on the podcast before, and you're like my debt expert buddy.

Toni Husbands: Right, right.

Elle Martinez: Yeah; because you've been through that. You and your husband paid off over a hundred thousand dollars of debt.

One of the things I wanted to point out, which is I find amazing, first of all, that's a huge amount, but second of all, I think you're like most people, it was not an overnight, we paid it off in 12 months story.

So for those are just listening for the first time. Do you mind kind of doing a high level review of that debt-free journey?

The Bumps and Hurdles When Becoming Debt Free

Toni Husbands: Sure. Sure. So you're exactly right. It was not an overnight process, took us seven years to do that. And that was all encompassing of creating that mindset shift.

It took us, it took us a minute. I'd say at least 12 months to even just get on the same page that we both agree that we should be doing this. And we paid off $107,000 of debt over that time, but we didn't start with that much money. Right. We didn't start with that much debt, which kind of shows you like we were making progress and then life would happen or maybe a decision would be made and we will take on more.

Then we would make progress and then something would happen or a decision will be made and then maybe some more debt was, you know, so it was kind of a, it was a rollercoaster.

So while it wasn't a straight shot from a to Z like I said, there was a lot of wind rows. There were some pauses, there was, second guessing and reflection all of that, all of that in there. But the one thing that I'm, that I'm very thankful for on this side of the experience that we didn't stop.

There's a, there's a classic quote. Somebody said, I love it. It's just like, you haven't failed. It's just success in progress.

So that's the thing about wherever you are in your process, whether you started, I feel like it's kind of like that about paying off debt, losing weight -wherever you are in your process. Just remember you're not where you were at when you started.

As long as you just taking that next step, taking that next step. I think even sometimes it's you mentioned, you might feel like you've been treading water for a little time. Sometimes it's like mentally necessary to just kind of press pause, just press pause and just smell the roses for a bit, you know, or breathe for a bit.

Go through the process of getting out of that. So sometimes it just, either things happen to you or decisions that you make and, and it sounds good in the beginning, but you might hit my feet. I might have, yeah. Might have a different result, you know, further down the road. Each time, like you've learned from it grown from it, you've experienced something.

Maybe one person in our case, maybe one person wants to do something other didn't, but there wasn't, you didn't have the details at the beginning to say like, feeling like this is not a good idea, but I don't necessarily have like the facts to back it up.

So we just do it. It turns out not to be such a good idea, but guess what both of you now know you don't ever have to have that argument again. So it's just, it's a process.

That it is a process that we'll get through it. Each experience is another lesson learned and I'll will make you smarter, make you stronger for the end.

And eventually you will be sitting on the side of the podcast telling Elle how you paid out of it, how you cut out.

Don't Let Comparison Rob Your Family of Joy

Elle Martinez: Yeah. I love hearing, you know, when people reach out emails or social media about that success, and it doesn't matter if it took them a year or took them seven or however long. I am so excited for that.

I love you brought out some really good points. First off, you know, when, whenever I share a story on the podcast, my idea is that I would like to give models with people's stories, take ideas from it, rather saying, then giving them a map saying heal. This is the plan. You have to follow it.

Exactly because we are all starting out in different situations for some, they are maybe newly engaged and now they're in, before they get married, they have get their finances squared away. That's great.

Maybe they've already been married and what they're doing, isn't working, you know? And so now there's baggage w whether it's financial or even how they approach their money, that they have to undo first and then, you know, focus on that.

So our journey are going to look different because we're starting at different places and then we all have different goals, the following. So I love how you address that.

Sometimes we're making fast progress, we're going up that hill and sometimes we got to pause or go down.

Exactly. Cause it's all tied together. Right. There isn't a perfect budget. There are some great tools out there. There isn't like this one path that's going to make sense because we're in situations where maybe you mentioned, and this happened with us. We weren't exactly on the same page with the how.

We had an idea, like, okay, definitely want to pay off the debt, but the how the pace at which to go with. Also give yourselves grace for that. As you figure out a budget that you're both happy with, especially with families.

Staying Motivated to Pay Off Your Debt

Elle Martinez: Now that you're on the other side at any point while you were paying off this huge amount of debt, were you frustrated either at the speed of it or even the process of it?

If so, like how did you stick with it?

Toni Husbands: So, yes, yes, yes.

So, hello. Good question. I think that number one and most important for me in terms of sticking with it. It's like celebrating small wins, celebrating and appreciating small wins. So when you pay that first thousand dollar credit card off, that's a win, that's a milestone, and don't like the little that something, or when you pay the first 500, whatever.

Maybe it's I haven't overspent in the last 30 days, whenever you see changes or progress, like celebrate those, appreciate those.

One of the things that I did. So we were still kind of using just basic spreadsheets and printing it out. And I would print out my budget and put it on my refrigerator. Then after the month was over, I would file that. Over the over time I built kind of a nice little. File folder of budget sheets.

I would actually go back through and look at my budget sheets to see progress. And it was like for me, therapeutic to see cross offs or little notes that we had made, okay, we can do this or whatever. I would start to see my list. I had listed all of my items and my debt items in a little section and I had a whole section and I would see those numbers shrinking.

That would, especially in the times where things were not so dynamic because, paying $400. Oh on, $40,000 of debt in the beginning it's like trying to, I'm looking at last now. So trying to move the snow with a star, something like that.

doesn't seem like it makes me feel like it doesn't feel like it, but you look at that over over months then years and stuff like that, then you can kind of remind yourself like, oh wow. Even though I'm feeling like this is kind of slow going. When I look back at where I started, because I have this record and we can even do that now with our tools.

Go back and look at your history, you know, pull up your go back and look at your progress and all the graphs and all the pie charts and everything, all the nice colorful tools and stuff like that.

Look at that history and, and reflect on that and just remember like, wow, I haven't, I'm not where I want to be, but I'm not willing to start it much further beyond where, where I've started. So keeping a records, but even maybe journaling, the system journaling and go back and read that.

Breast you were about not being able to stay on budget and now you're budgeting in your sleep. Those things are, even if you can't necessarily see them or maybe you can't touch them and in a physical sense, but that's still like concrete progress.

That mindset shift on Monday just to the point where now I can even see this in my budget sheet. Where my husband started to come on board and so now you see more of his notes on the budget sheet. Whereas before he was just like, I don't agree with this, but now he's like making, then once we got out, we were still arguing about how to approach, our finances and you can start to see more of his notes and stuff like that.

That was another milestone for me. I would don't minimize even small wins. Those are going to be huge fuel for your momentum or just your mental sanity or your personal motivation.

Cause it's going to take some of that. You have to figure out what it is that you can keep yourself motivated to go because the debt, I don't want your snowball list or however you doing there, you know, there, there might be an extended period of time. And so how are you going to keep yourself going and, and, and excited and do stuff around about continuing to make that progress in each of them? For me, it was looking back at my budget.

Elle Martinez: Yeah. I love that. I never would've thought like how powerful journaling could be cause we're all different. Some of us are visual, our mutual friend, Michelle she loves the vision mood boards, like establishing that and tracking progress with that, but journaling is also a great one.

It sounds like you've picked up some really good financial habits as you're developing that muscle and paying off. What habits have stuck now that you're this new phase, you're more on the investor side and which habits or mind shifts did you have to make because now you're no longer paying debt and you're investing?

Toni Husbands: Good question. I will say honestly right now, the habit that I don't even struggle with anymore. Recognized thing needs versus once that's something I don't struggle with at all anymore, or I don't allow the temptation for the shiny new thing, because I am thinking now about, okay, so I can go.

I spend my money and basic my heart on time on this shiny thing, that'll look nice and Instagram photos, or I can stay focused on, the goal right now, which isn't investing.

We're having a save more and invest more, which again, they don't have immediate payoff. You know, like it's not something I can touch. I'm not buying a piece of property every month, right? I'm not buying something here or I don't know what the next thing is, but I know that I'm going to want to do something. So I have more of a focus on using my money or diverting my money to things that are going to build wealth versus spending for trinkets that don't have any long-term value.

Now there are some things that I like to eat , like travel. I like to do so those are things like, I plan for makes sure that we're doing with cash. That we can pay cash for it that I'm not traveling with strings attached. Cause I like to say I'm not coming home and having to worry about how I'm going to pay the bills later.

I think the thing I think about too is I don't want to be in that place.

I do that. I don't want to be in that place where I am burdened by debt. for me, that was a sense of, it was stressful, you know, source of anxiety. I don't like that anxiety. I like the the options. I feel like doing, like investing money or buying property or thinking about, oh, I'm buying this and my children will one day be able to benefit from this.

Those are the things that give me like joy and a sense of freedom and like even creativity.

Having to spend on things are items that are just going to pile up interest in it terms of debt or, or that I'm going to have to be kinda juggling or, or shifting or borrowing from Peter to pay Paul. Like that was not an existence that I enjoy at all. I don't want to go back down that road.

I think those are kind of the things both the positive and I'll say the thing I want to avoid that kind of keep me in this place now wanting to maximize and be super, super efficient with the money that I have.

You know, it's like, we only have this, we have a finite amount of time and, years of energy, I don't want to like maximize it. And I don't want to spend that time. Yeah. It's enough. I don't wanna spend.

Elle Martinez: Yeah. I agree with you and you brought up something interesting, like opportunities. COVID and the financial fallout, depending on where you were; if you were in a good financial spot, I've heard from a lot of people, new opportunities, or they took advantage of opportunities.

On the other side of unfortunately seeing where they were just at the beginning and their employers put pressure on them to kind of leverage that they had to keep their job. And maybe they made decisions that they felt didn't put their families interests first.

So for those listening and they're at the beginning of their journey, I'd love to maybe share some encouragement for them.

Now that you've paid off that weight, got that debt off your shoulders. What opportunities have opened up for you because of that?

Toni Husbands: Okay. Oh, I left my pursuit. So we have in the last, I'm going to say five or six years, maybe a little bit more in the last five or six years. Been real estate owners for about probably not going on 20 years now.

We've had real estate, but in the last maybe five or six years, we've really started to Think about developing a portfolio portfolio and we're like rental income and would become a major passive income source for us.

One of my goals is to achieve a financial independence. Basically financial independence is where your passive income exceeds your monthly living expenses. And and so we have Dell delved into some things that I never would have thought before. We've obviously started adding to our real estate portfolio from a perspective of rental income, but we've also taken advantage of the opportunity to save and build a patch so that we've been able to like purchase real estate purchase houses and flip them.

That was something that I did in 20 maybe 2018. I bought my first home water for cash and then,

Elle Martinez: wow, that's a big accomplishment.

Toni Husbands: We flipped it and we were able to sell it. Now I will say in that experience, we didn't make a profit in the actual transaction. What that transaction did was give me the confidence to know that I had like assemble a team and going, cause I know nothing about construction.

I'm not even interested in like swinging hammers. That's not something I'm interested in at all, but the idea of acquiring property, fixing it up and then adding that to our portfolio over to income is something that was a good thing.

The next year from that experience that we've made no money from, I think we on paper, we lost $5,000 from that experience. We ended up purchasing another property and two years later, I think we made 70,000 from that.

Those experiences have come because we, number one, freed up my our cashflow to do some different things with, and also just Taking that, that burden of stress of worrying about finances off the table.

Now we're now some creative ways for adding to our bottom line. After that experience again, and I say just meeting the people that I work well with on, on renovating houses has led to now we've purchased talk about the opportunities that happen in as a COVID.

I probably wouldn't have thought about that had not everybody come home and been remote. So we ended up moving to a vacation town, which is about eighty miles outside of the city that I currently live in. We bought a property that our teaching right now, we're in the process of renovating it now to turn it into a vacation rental that number one we can use when you want to come up here, because this is a nice place, but also that pays for itself and also generates it.

We're looking at the passing it on so that we can accomplish our goal of financial independence. So these are some things that when we're not stressed about finances.

We're not fighting each other about finances. So just whether to buy a place here or where to buy this place, so those are the kinds of the base that we have now.

Right. It's about progress about like how are we going to build wealth? How are we going to provide for our family? How are we going to leave a legacy, for our children's children, which is something that is definitely very important to me.

Those are the discussions we're having now because we're not bogged down in. You know, do I pay my car note or did we pay our chase bill and we pay it, you know, or do, or do I buy some little shiny thing to make me feel okay for, you know, make me feel a little bit better for, for the next 30 days, but then I have to keep up the notes on it.

You know, those are the types of things I'm looking at now, purchases that will put money into our packet versus taking money out.

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

Music and Photo Credits

Music in this episode was provided by artists from Audiio.