Category Archives: Financial Independence

Choose Your Own (FI) Adventure

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

Finding the Right Pace and Path to Financial Independence

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

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

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

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

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

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

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

Yes, sorry, but no thanks.

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

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

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

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

Are you ready? Let's get started.

Handy Tools to Start Your FI Journey

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

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

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

Thank You to Our Sponsor Coastal!

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

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

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

Financial Independence is About More Options

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

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

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

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

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

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

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

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

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

Discovering Financial Independence and Dumping $30K of Debt

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

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

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

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

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

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

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

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

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

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

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

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

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

Revaluating Priorities and Spending

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

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

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

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

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

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

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

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

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

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

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

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

Getting Creative and Optimizing Budgets

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Exploring Options Because of FI

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

The FI Community and EconoMe

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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How Your Family Can Become Financially Free

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

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

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

But how does that work in times like these? 

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

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

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

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

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

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

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

I want to show you how. 

In this episode, we’ll get into:

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

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

Ready? Let’s get started!

Handy Tools to Start Your FI Journey

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

Thank You to Our Sponsor Coastal!

Support for this podcast comes from Coastal Credit Union!

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

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

The Phases of Financial Independence

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

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

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

But that doesn’t have to be yours. 

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

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

  • Financial Stability
  • Financial Agency
  • Financial Freedom

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

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

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

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

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

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

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

Key Numbers to Watch to Become Financially Free

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

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

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

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

Phase #1: Enough Money to Cover the Bills

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

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

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

Phase #3 Enough Money to Start Investing

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

Phase #4 Enough Money to Switch Careers/Negotiate

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

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

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

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

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

Creating Your Family FI Plan

So how do you create your own FI plan? 

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

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

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

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

But let’s continue…..

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

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

Now it’s time for some analysis and reflection. 

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

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

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

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

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

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

Support the Podcast!

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This episode was originally released in July 2020.

Enjoying Financial Independence and Parenthood

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

Are CoastFI and Parenthood Compatible?

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Are you ready?

Let’s get started!

Resources for Parents Interested in Financial Independence

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

Thank You to Our Sponsor Coastal!

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

Slash Your Phone Bill with Republic Wireless!

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

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

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

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

See all they have to offer at Republic Wireless

5 Biggest Myths About Financial Independence and Parenthood

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

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

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

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

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

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

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

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

You do need to be conscious of your spending.

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

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

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

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

Not counting college.

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

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

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

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

Myth #3: Only Rich People Can Become FI

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

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

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

Myth #4: College Savings Will Kill your Retirement Savings

Two things to consider:

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

Thank you for coming to my TED talk.

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

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

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

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

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

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

Myth #5: FI is About Never Working Again

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

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

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

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

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

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

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

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

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

Key Takeaways for Parents Pursuing Financial Independence

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

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

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

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

Hope to see you there!

How to Savor and Enjoy This Summer without Breaking Your Budget

Today we’re digging into how to live well and enjoy this summer without breaking your budget!

Enjoying Summer as a Family, Staying on Budget

Saving money can be a smart and practical move when it comes to your finances. Sometimes though, you can get caught up with savings that it becomes your goal.

In the personal finance space and in particular with the financial independence community, there’s a segment that is intensely focused on how cheap they’re living. 

They spend only $25,000 year or save half or more of their income. 

First off, I think it’s commendable to look at ways to save. You want your hard-earned money o go further. But I think it misses the point of it all. 

Instead of focusing on living cheaply, I think it’s more enjoyable and sustainable to focus on living well. 

As parents, we want to enjoy the time we have now with our kids. We can’t get that time back with them.

While working towards financial freedom does take getting our numbers into a good spot, it’s really to serve the bigger goals, savor the more precious resource time. 

So today we’re digging into ways we can find that balance that is right for us and whatever season of life we’re in. 

This is why I’m happy to have author, speaker, and podcaster Michelle Jackson on the podcast today.  

In this episode we’ll get into:

  • Defining your priorities and creating a budget that includes those while tackling paying off debt
  • Finding ways to live well (foodie, health, and more) while keeping it affordable
  • How to remove stress and automate your money

Let’s get started!

Resources to Help You To Reset Your Finances and More

If you’re ready to get your budget up and running this summer, here are some handy tools and resources you should check out! 

Thank You to Our Sponsor Coastal!

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

They not only have fantastic customer service but they also have competitive rates on their checking and savings accounts!

Michelle is one of those people you meet you instantly like; she's just so sweet.

I first met her about eight years ago in Denver at a conference. One thing that I respect and appreciate about her is how she's carved out this path where she is doing work that she loves, she's paying down her debt, and she still makes time for health care. 

With everything going on now, it can be difficult for you to find your footing when there are so many things that are changing. 

So I was thrilled we got together to chat about the art of living well and how to start making that journey and making those adjustments. 

And a heads up – Michelle was at a coffee shop while we were doing our chat. But I like to think of it as extra ambiance.

Shifting Finances to Free Up Options and Dump Debt

Michelle Jackson: One of the things that I would say is in 2020; we're all familiar with all of these ways to save money. 

I think that is the marriage of technology and financial goals. It's so interesting to experience and observe during this time, like really evidence. And it's because there are so many things out there that are created to help us win money, especially in those areas that we struggle with. 

As far as living our best lives and doing it for less… One of the things I spent a lot of time thinking about several years ago was how do I want to live my life?

I was commuting 30 plus miles a day. They were actually working on the highway at a time. So a 30-mile commute. It should be like 45 minutes or whatever was typically two hours each way.

Elle Martinez: Wow.

Michelle Jackson: I did. Yeah. And so I was commuting with the same people for years. And you would just sleep on the bus. This was really nice. Spread over and we'd both sleep and then wake up and be. And the town that I worked at, I was just like, what do I look like with this or want my life to be? But the problem was that I had a lot of debt. I had a lot of things going on.

And then finally, one day, I was just like, I need to start trying to figure this out because I don't want to live like this. And so I started and I should say I had a huge financial mess. I had thousands of dollars of debt. I just had a lot going on.

So what was the mix of it, if you don't mind me asking? Like, what kind of guy?

I had a zillion credit cards, like lots of little credit cards like that, and I had lots of large credit limits. So it's just a lot of them.

I had random little, you know, amounts of personal loans like my lunch money, just lots and lots of little things, things built up over time and became a huge financial mess. And for people who have never experience like having creditors call you or having more than one day. Horrible. 

I was getting at the height of it all; I was getting calls, text messages, letters, and emails, typically from the same creditor. Multiply it by like 30.

So it was a lot of stress that I was dealing with and work for things that I couldn't even remember.

Reworking Your Budget to Align with Your Values

So one of the things I thought about was like, how can I just lower my over overall overhead in general, like I'm paying all this money after like buying somebody to pay off the debt.

So I started methodically going through my budget. So I started going. I had to do a couple of things. One is I had it knowledge of who I was as a person. Like, I'm not a fancy person. I'm not going to do it to save money. I'm not playing to not live my life. Like there were certain things that I was unwilling to stop doing.

I believe with food and particularly that food is medicine and that it would make no sense for me to eat poorly and then get sick. And I was already stressed out like I was already genetically unwell. So to exacerbate that make sense.

I knew that I wanted to do this. I knew that I wanted to take trips within reason. So the richest certain things, I was like, OK, this is what I value.

This whole conversation, I look at your budget, how you value it. And then I was like, how can I do this for less? So, for example, with groceries, I started shopping multiple times during the week, which I just had a habit of shopping multiple times.

I just went shopping once. It was a small thing, it saved me a lot of time because clearly I didn't have a lot of time with. Four hours a day, you know.

So I just literally was like, this is what I need to pick up once a week. And that was it. And maybe I would go also to the farmer's market if it was during the summer season. So maybe it would be too tight.

But like, very quick, easy. And my grocery bill dropped significantly, actually, just by doing that one thing.

Focus on Living Well, Not Living Cheaply

Elle Martinez: I think that's fascinating. It was great. You pointed that out because a lot of times in personal finance, there's a lot of advice turn out and one that was almost a badge of honor.

We spend so cheaply, you know, whether it's food or whatever, and that's how we save and pay down the debt. But what you're saying is you pause to define your priorities.

Michelle Jackson: Yes.

Elle Martinez: And then honed in on that and then try to, you know, still what you valued with your health, with finding cheaper ways.

That's fascinating because I think we have a desire, you know, not to just spend money to spend money, but we're in such a rush to get that quick fix of dropping the spending that we don't look at -what are you working towards?

It is not just saving money. Align yourself and your spending on what matters to you. So I thought that was fascinating.

Michelle Jackson: I like align yourself. So I was out of alignment with all the debt. So where I analyzed a life with my values.

Staying Fit and Healthy with an Expensive Gym Membership

Michelle Jackson: Another thing I valued was fitness. And so I was like, OK, maybe right now I can't do a lot of classes or maybe I want to take classes are going to do that. So the city has three classes that teach provided by the city of Denver, like hip hop power sources like that.

Elle Martinez: I'm curious, how did you find out about that?

Michelle Jackson: Literally, I found it because I know my town. But a lot of times you'll find it by means of defense. Actually, it's a good place to start. Instagram right now, it's a little tricky because we're still finding our city to be copied.

Even now, recently I found a yoga studio here, Dufort, that this woman on black woman-owned and they have made it a priority. A part of the mission to offer free yoga for people of color. So now I'm going to be adding that to my fitness.

I also trade hours for this. How work even now. So I actually this is weird. Literally, like two weeks before the shutdown orders happened in my state, I had signed on to do like a work exchange. And literally, this looks like almost fescue is like relatively easy. Yes, occasionally. And then, like Slade claimed the studio every once in awhile, like every other super easy, then corona virus happens. And the scope of work change. And so I like crafting these letters. So I didn't have to write them. I just had to like, do the final, which looks like super bracing batch. And then I got our sprayed business since March.

Not no, but that's important because also to fitness can be expense. A lot of, you know, categories that people spend can be pricey, especially fitness. Sometimes we go overboard and get all this equipment, but you families to kind of hack it so that you still are getting the fitness, you know, and health benefits. But you're not spending a ton of money.

And also, I wanted to have the actual experience that I wanted. So I didn't want to. I like my can do YouTube videos, but I don't join them as much like … I value in-person classes. Those are a lot more interesting for me.

So that's the other piece too. It's like, yes, I could have just totally forgone classes altogether and just done YouTube videos. But for me, that was a bit. The other thing that I did was I signed up for speedups and this is very specific touring with. But we have a lot of fitness meetups in Colorado.

So at the time that recording this day as we work this, I'm going out backpacking weekends and I think like thousands of steps that I'm going to get Major. And so I did a lot of that. You instill fear. And those were freaks. And so I wish I would carpool with someone. Thought, you know what I mean? So it was just incredible. So if you're a person of color, I'm nervous about that because there are ships for that. So there are literally meetup groups for people of color. I like to go and be out in nature. I fly into all kinds of groups.

I grew up going outdoors, but I just hope for a lot of reasons to do the same thing for less. And then the other pieces, if you're like, well, what about the equipment? I have friends who left and they gave me their snowboard. And so I got a lot of free equipment.

But you got to buy goodwill and get very inexpensive equipment for companies that all they do is sell outdoors equipment.

The other thing I looked at was transportation because I'm not a car person. I actually offered to drive as the whole time it was. It was. It was, yeah.

Learning to drive. I'm proud of you.

I will. To anger preprint to my Russian brand, Midia and my Colorado friend who got in the car with the. How to drive my car out front, actually. And that saves you a lot of money, because if I paid for lessons, I would've been very, very expensive. But what I did, which was the same as I actually buy a used car catch for like fifteen hundred dollars. Yeah. And I had to learn to drive. I owned a car. And so my friends would get in the car and I would drive. Now I actually don't have that car. I use a car share instead. So I've found that as a single one without ABC, I. I don't need to have a car outside. I also do by light rail. And I bike. So for me, I was like, maybe I don't need to own a car. It's not a car person, clearly. And so I noun's car. Sure, I'm accessible by 2020. So far I think that I was paid for fifty dollars for transportation. Wow. Great. Not even. Not even. And that's including a trip that I'm taking a couple weeks from now for Camp five.

I upgraded my personal membership for the highest level insurance. So I have a million dollar policy that I'm paying into. So if something happens and I'm in the car, I'm coverage quite a significant amount of coverage. And I think that that's great. So this year, January and April, I think I spent 50 bucks on transfers.

And it's so cool because the program that I use is actually a nonprofit here in Colorado. So it's not a for profit. And they have hybrid cars that exist specifically focus on I care about the Earth. So it's really about alignment with how I like to live my life. I really care about my footprint. And so I'm really happy with the program. I'm like obsessed with the rap for that. I drove last week. That's my favorite car in the fleet. But it's not close to my house. So I have to I have to go downtown to get the rap sports. So I went on my road trip. I got the rap for it. And that was a lot of fun. And that's cool because you get to test out these hours before my. So, yeah, this is for the rest of the summer. I mean, I spend about two hour, 45 dollars for the next time they drive a couple of his mouth. And then in August, I'll take another road trip. It'll be another ten point five dollars. And then for the rest of the year, it's going to be like 30 bucks a month.

The average car payment right now for a new car is like five hundred and change. I want to say five thirty and I dunley for a used car. It's like three hundred and eighty five a month.

And that's not counting car insurance on top of that. And, you know, fuel and all that maintenance. So that's a really clever hack. I do want to kind of switch gears, because since I've known you, you have like built different income streams as a as a successful businesswoman. You're an author. You speak. You are running this course to help other people pursue their dream of writing. You have two podcasts, Square State about all about Colorado. And Michelle is money hungry. So you are managing a lot. I want to talk to you one. How do you step back and kind of recharge yourself so you're not burning out? And then like, how do you view self care? Because that's kind of like throwing around and I hate now that I see it more in advertisements than actual conversations.

So for me, I think with entrepreneurship, entrepreneurs will try a lot of things. And it's a really exhausting part of the journey, I find, because you're trying to figure out what's the right fit freedom, especially as a kid, to watch where it's very intangible, like there's a lot of love for you to experience. And it just took me a while to figure out what worked well, technically. And it was really tiring because it was a lot of things because well, to be honest, this year I haven't really any refinement mode. So, you know, when people are like, oh, that person's an overnight success. And they're like, dude, I've been at this for like seven years.

That's kind of the experience where I've been at this for eight years now. And so I'm at that point where I've just had enough lessons and I know what doesn't work. So, for example, what doesn't work is I don't do coffee. I don't do, like, take your breaks. Yeah, I don't do that. But that's time. I could be a money issue. I don't want so. So that's a boundaries that I set because I already create free content and podcasts and websites. You know, I do stuff on Mitsuse, my Instagram and all that. So I don't need to do this one one at once. So I started reading people when it came up to me. If you want to meet with me, you can just pay me like your boss. And then that's actually proven to be. So I got a payment this week. A person that I spoke to in China and stuff. Nothing crazy out of the conversation.

So just be really clear about the boundaries you set as entrepreneur. So, Keith, one of the easiest things, I think that the biggest impact is changing my email responder's. I cannot explain what a big difference I made because what I did was I was like, look, I'm available Monday through Thursday. I'm like 10 to 4:00. And then I'm on Friday. I'm available half the day and then I'm out. And what happened was it was very clear to people what to expect for me.

So it wasn't just that I was like, I'm not available. It was like I'm not available now. This is why during usually the mountains when I get back. This is where the next 24 to 48 hours. That one change has saved me so much hassle. I love that so much. And so that was an unexpected bonus result. Carrie, others thinks we're just saying, no, don't explain your no.

Like a lot of people are like, well, no. And this is why no one cares why. Just say no and move on. The other thing was there is I. Because I work online. I can choose where I work. And so I will make a point going into the mountains and staying for shootings, mountains just decompressing. So I think you need to make sure to get away. And we we charge. Energize yourself. It's so important. I think people just keep going and going and going. It doesn't serve them or their skill to want us.

Yeah, that's that's key.

I know as parents for us, we have to have like our alone time. And my husband, I are complete opposites. So I'm the morning person, you know, like straight up to morning routine that you read about like 5:00 in the morning.

But for me, that is when I can have that quietness that I need to to think whether it's for work, for relaxing, like for me to be my best self. That's my time. And my husband's more than night owl. And that's his time. So, I mean, finding the even if you can't physically get away, you gotta regularly scheduled some kind of time. To recharge, have that solitude, you know, it can also be outdoors, I've been doing a lot more walking in the neighborhood still. Of course, social distancing. But. You know, health care doesn't always have to be like buying this product, you know, taking this expensive, you know, retreat. It's finding pockets of time. You can use however you see fit.

And I should also mention about the retreat's, because this this is actually important.

They said when I go over to the mountains for my retreat. I still the hospital is like my favorite hospital ever. And I suspect that you've seen so many pictures of the. They are, actually. So I'd say that I saw my breakfast. They had a hot tub like it was awesome. They're actually opening another property in Telluride, Colorado. I can't not reach. So I will be reserving my space because of rotavirus. I don't feel comfortable, really. Same thing with people. So before I would be fine. Yes. Now I want to be a little more reserved, my own space just fine. So instead of a thirty five dollars, so it's significantly more. But it's so value to me and my well. So is he okay with it. It's not like I'm always new. It's like not always. But that's a different balance. Switch back to when I saw it. Yeah. Right now I have to spend this.

Yeah. I think that actually kind of circles back and a good place to wrap up because we see money, you know, as we've been writing about personal finance as a tool.

But I think a lot of times when you're starting it, some people see it as the goal. Right. Your you're paying down a certain amount of debt or if you're in the you know, if I space, you know, you're talking about how much you're saving. But at the end of the day, that's not really what you should be using to teach. I think you should look at time, you know how I was able to spend my time and I spend the time with the people in the projects that matter most to me. Even if you're not, you know, at your retirement number 10, you little by little make decisions with your money.

You bring one step closer, either, you know, more flexibility or more options when it comes to things that you need for self care and taking care of others.

Hopefully hearing Michelle's share, some of the ways that she's saving while still enjoying and taking care of herself has given you a few ideas for your own summer schedule and budget. So now how can we use that to craft our own plans for the summer and beyond? I want to share a few things to consider. The first is another popular idea within the personal finance space automation. Most of us have regular bills. We have rent, mortgage, utilities, cable, cell phone, you know, the deal. And they tend to be fairly consistent. Instead of worrying about the bills, his paycheck, you can automate much of it. Take advantage of options like free online banking features that can make your financial life so much easier. This definitely shifted things for us at the beginning when we were paying down debt. We needed a path forward and we needed something that we can maintain. So automating those payments with our bills car in student loan payments were so much easier. Taking advantage of free online banking can definitely make things simpler for yourself. And I do want to explain that there is a difference between automating on your side through your bank or credit union and then having someone a bill draft from yours. And I tend to prefer to do the automation on my side. I have more control. Should something happen. Because there have been times when I've had family members tell me that a bill took too much or they took it earlier than expected.

So I prefer to have that on my end. Now, there have been a few times when I've had it drafted, but in those cases there was some financial benefit to us. For example, with student loans, when you do those autographs. There was a reduction with the interest rate. So that definitely saved us money in the long run. And then with insurance companies, they tend to give you a discount if you do a semi annual or an annual plan. So keep that in mind when you're trying to decide between the two. And when you automate your finances that way, you free up time because your bills are set. Now, that doesn't mean that it's set in. Forget it. That's when that's too much of a good thing. And it can go bad. Just because you're automating your money doesn't mean that you're not still on top of it. Having monthly check ins to review everything that's been transferred and making. Sure, the bills are paid. Is a smart thing to do. It doesn't take much time. And you'll be able to catch any mistakes or if bills have been raised. And that's happened to us a few times over the years, especially with things like cable and insurance. Now, you have some free time because you're automating it and you can use that to maybe negotiate a better deal with your bills.

And if right now you're still overwhelmed, there's so much to do and you really don't have time to take care of the negotiation. There are options like trim where they can do that on your behalf, where they work to get you the best deal on cable, Internet, phone, medical bills and also cancel old subscriptions. Every dollar counts. So if you do it yourself, that can be fantastic. But realistically, some of us may need some help. So it's great that there are options like trim. Another way automating can benefit you is that it gives you more time as a family to focus on the big picture, just like we mentioned last episode. And Michelle brought up today. You need to define your priorities. And I totally get it. If now, with current circumstances, your energy is focused on just getting through 2020, but still try to find ways that you can move your money towards you and what matters most to you. This will pass. So laid the steps. Now you can then ramp it up as appropriate. And if you want to talk about this some more, maybe swap some ideas, stories. Please join our free and private Facebook group. Thriving families were there to support and encourage one another, no matter where we are on our financial journey. 

Just head over to simplifyandenjoy.com/fb. We hope to see you there! 

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How to Live Well on Less This Summer with Michelle Jackson

For some in the financial independence space, there is almost a badge of honor of living your life as cheaply as possible.

They talk about how they only spend $X a year. While I respect keeping expenses in check, I think it’s not really a healthy way to approach things.

With us still dealing with this pandemic, it's a reminder that money is simply a tool and not the goal.

Instead of trying to live cheaply, let's focus on living well.

Let's try to take a step back and see how we can simplify things including our finances so we can have more time with the people and projects that matter to you.

Michelle Jackson is someone who's already made significant changes to her life and finances and is in a much happier spot.

Michelle is one of my favorite people and I was thrilled we got to sit down and chat about the art of living well.

She's not only an author but runs two podcasts (Square State – which is focused on Colorado and Michelle is Money Hungry – all about lifestyle design for entrepreneurs, specifically women).

She’s here to discuss with me:

  • her journey from being in debt and overwhelmed to finding fulfillment while paying down her debt
  • how being a frugal foodie taught her to live well without breaking a budget
  • why self-care matters and how to do it affordably

You can watch our chat right here or go through an edited transcript below!

Meet Michelle Jackson

Michelle Jackson is mission-driven to help her readers and listeners empower themselves financially. Whether it is by improving their personal finances or learning how to sell what they already know, she loves having those conversations.

Michelle runs the website and podcast Michelle is Money Hungry, and is the founder of the Money on the Mountain retreat focused on financially empowering single women one conversation at a time.

When she's not geeking out about personal finance you can find her hiking in the mountains of Colorado.

The Art of Living Well

Elle Martinez: Thank you for joining me, especially during this little lunch chat. I'm glad we can catch up.

Michelle Jackson: Thank you for having me. I'm so excited. And for those of you listening, if you can hear some awesome tunes behind me, that's because I'm a really nice coffee shop and having a golden. Tumeric latte and enjoy my life during the road.

Elle Martinez: Well, I think this is important because that's what we want to talk about is living your best life with the circumstances that we have.

I know right now we're in the middle of the summer in the middle of a pandemic. Coronavirus has not gone away and we are trying to find a way to stay healthy, stay sane during this time.

So I wanted to talk to you because personal finance has some great principles, but I also think there's some misconceptions and certain attitudes that can be harmful to many people, especially as they're trying to tackle their goals. So I kind of want to talk to you about this. How do you live well on that?

Michelle Jackson: So one of the things that I would say. In 2020, we're all familiar with all of these ways to save money.

I think that the marriage of technology and financial goals is so interesting to experience and observe during this time, like, we're really at an advantage because there are so many things out there that are created to help us win with money, especially in those areas that we struggle with as far as just, living our best life and doing it for less.

Defining Who and What Matters to You

Michelle Jackson: One of the things I spent a lot of time thinking about several years ago was how, how do I want to live my life?

I was commuting 30 plus miles a day. They were actually working on the highway at a time. So a 30-mile commute. It should've been like 45 minutes or whatever was typically two hours each way.

And so I was commuting with the same people for years and we would just sleep on the bus because it was really nice plus whatever. And we'd fall asleep and then wake up and be in the town that I worked at. I was just like, what am I want my life to be. But the problem was that I had a lot of debt. I had a lot of things going on.

And then finally, one day I was just like, I need to start trying to figure this out because I don't want to look like this. And so I started, and I should say I had a huge financial mess, so I had thousands. $2 a day. It just had a lot going on.

Elle Martinez: What was the mix of it? If you don't mind me asking, like what kinds of debt?

Michelle Jackson: I had a bazillion credit cards, like lots of little credit cards. Like it wasn't that they had lots of large credit limit, so it was just a lot of them. I had random little amounts of personal loans, money, lots, and lots of little things that built up over time and became a huge financial mess. And for people who have never experienced, like having. Creditors call you or having more than one day.

Horrible. I was getting at the height of it all. I was getting calls, text messages, letters, and emails, typically from the same creditor multiplied by like, So it was a lot of stress that I was dealing with and for things that I could even remember.

yeah. So one of the things I thought of, I thought about was like, how can I just lower my overall overall overhead in general? Like I'm paying all this money. I have to like find some money to pay off the debt. And this is like crazy. See, like I got to figure this out. So I started methodically going through my budget.

So I started going, I had to do a couple of things. One is I had to acknowledge who I was as a person. Like I'm not a fast food person. I'm not going to eat bad food to save money. I'm not going to not look my life. Like there were certain things that I was unwilling to stop doing. I believe. With food in particular, that food is medicine and that it would make no sense for me to eat orally and then get sick.

When I was already stressed out, like it was already physically unwell. So to exacerbate, that made no sense. I knew that I wanted or getting groceries. I knew that I wanted to take trips within reason. So there were just certain things that I was like, okay, this is what I value. This whole conversation of look at your budget, know what you value.

And then I was like, how can I do this for less? So for example, with groceries, I started shopping multiple times during the week, which I just had a habit of shopping multiple times, starting the week just went shopping once a week. It was a small thing. It saved me a lot of time. Cause clearly I didn't have a lot of time with the four hours a day.

So I just literally was like, this is what I need to pick up once a week. And that was it. And maybe I would go also to the farmer's market if it was during the summer season. So maybe it would be two times, but like very quick, easy. And my, my grocery bill dropped significantly actually just by doing that one thing,

Elle Martinez: I think that's fascinating there and I don't want to.

Like interrupt you. But I thought that was great that you pointed that out because a lot of times in personal finance, there's a lot of advice thrown out. And one that, you know, is like almost a badge of honor, we spend so cheaply, you know, whether it's food or whatever. and that's how we save and pay down the debt.

But what you're saying is you pause to define your priorities and then honed in on that and then try to, , still what you valued was your health with finding cheaper ways. That's, that's fascinating. Cause I think we have a desire, not to just spend money to spend money, but we're in such a rush to get that quick fix of dropping the spending that we don't look at. Well, what are you working towards?

It's not just saving money, you know? Trying to align yourself and your spending to what matters to you. So I thought that was fascinating.

Staying Fit (without the Expensive Gym Membership)

Michelle Jackson: I like, I like the whole align yourself. So I was already out of alignment with all the debt. So where I aligned with my values. Yeah.

Another thing that I valued was fitness. And so I was like, okay. maybe right now I can't really do a lot of classes or maybe I want to take classes. How can I do that? So the city has free classes that they teach, like provided by the city of Denver, like hip hop like that.

I'm curious, literally I knew about it because I know my town, but a lot of times you'll find it online.

Like on Facebook events, actually, it's a really good place to start Instagram right now. It's a little tricky because we're still. Finding are studying during COVID, but even now, recently I found a yoga studio here in Denver, black woman, and they have made it a priority part of the mission to, to offer free yoga.

So now I'm going to be adding that into my fitness regimen. I also. Trade hours for [classes] how's that work even now. So this was weird, literally like two weeks before the shutdown orders happened, I had signed on to do like a work exchange and literally like, all I was supposed to do is like really easy occasionally.

And then like flame clean the studio every once in a while, like every other. Super easy then coronavirus, the scope of work changed. And so I ended up crafting newsletters, so I didn't have to write them. I just had to like do the final, super easy.

Elle Martinez: That's important because also fitness can be expensive.

A lot of, you know, categories that people spend can be pricey, especially fitness. Sometimes we go overboard and get all this equipment, but you found ways to kind of hack it so that you sell are getting the fitness, you know, and health benefits, but you're not spending a ton of money

Michelle Jackson: And also I wanted to have the actual experience that I wanted. So I didn't want to, like, I can do YouTube videos, but I don't enjoy them.

I value in-person classes. Those are a lot more interesting for me. So that's the other piece too? It's like, yes, I could have just totally forgone classes altogether and just done YouTube videos, but for me, that wasn't a good fit.

The other thing that I did was I signed up for meetups. and this is very specific to where you live, but we have a lot of fitness folks in Colorado. So we're recording this the day after we record this, I'm going on. It.

I'm going to get nature. And so I did a lot of that too, and those were free. And so I would, I would carpool with someone thought it was just incredible. If you're a person of color, you're like, I'm nervous about outdoors. There are shirts for that. There are literally meet up groups or people of color allies to go.

Yeah. I belonged to all kinds of groups. Cause I love going outdoors, but I just looked for a lot of ways to do the same thing for less. And then the other pieces, if you're like, well, what about the equipment? I had friends who they gave me their snowboard. So I got to be so worried. and so I got a lot of free equipment, but you can also go to Goodwill and get very inexpensive equipment or companies that all they do is so outdoors equipment.

The other thing I looked at was transportation, because I'm not really a car person. I actually learned to drive as an adult. And it wasn't, it was, it was learning your job as an adult. I will forever be grateful to my Russian friend media and my Colorado friend who got in the car with me and taught me how to drive my Colorado and got safety, a lot of money because if I paid for lessons, it would have been very, very expensive.

But what I did was I actually bought a used car. $1,500. Yeah. I had to learn to drive because I owned a car. Like it was, it was, I had to learn. And so my friends would get in the car that I owned. And I would learn to drive in my car and they would just meet me at my house. We'd just pop into the car. And that's how I learned now.

I actually don't have that car. I use a car share, so I've found that as a single woman, without babies, I don't need to have a car.

I'll buy the light rail and I bike. So for me, I was like, maybe I don't need to own a car cause I'm not a car person clearly. And so I now harsher I'm obsessed with it. Last week I went on a road trip.

I actually kind of made a mistake because right now they're running a. Five day special for $245. And then the first a hundred miles are free or some, something like that. So I made a mistake and I rented it for two or three days and paid $160. So I will only do the week long rental moving forward because that was, I clearly overpaid or the 20, 20 so far.

I think that I pay. $450 for transportation. Great. Not even, not even. And that's including a trip that I'm taking a couple of weeks from now. So if you have two cars and you live in a city that has a car share, I would strongly recommend you don't have small. I would say really using a card, share a second.

Look, I paid $12 a month. To be a member. I upgraded my person membership for the highest level of insurance. I have a million dollar policy that I paid. so if something happens and I'm in the car, I'm covered like, like the significant amount of coverage. And I think that that's great. So this year, January through April, I think I spent 50 bucks on transportation and it's so cool because the program that I use is actually a nonprofit here in Colorado.

So it's not a for profit and they have hybrid cars that they specifically focus on. I care about earth. So it's really in alignment with how I like to live my life. So I, I really care about my footprint. And so I'm really happy with the program. I am so obsessed with the Rav four that I drove last week.

That's my favorite car in the fleet, but it's not close to my house. So normally I have to, I have to go downtown to get the rabbits. So I went on my road trip. I got the Rav four with, and that was a lot of fun. And it's cool because you get to test out these cars before my, so yeah, this, this for the rest of the summer, I'm going to spend about $245 for the next time that I drive a couple of weeks from now.

And then in August, I'll take another road trip. It'll be another 20, $45. And then for the rest of the year, it's probably going to be like 30 bucks a month. That's significantly.

Elle Martinez: the average car payment right now for a new car is like 500 and change. I want to say five 30 and I believe for used car, it's like 385 a month and that's not counting car insurance on top of that and, you know, fuel and all that maintenance. So that's a really clever hack.

I do want to kind of switch gears.

Michelle Jackson: Literally, that was fun.

Elle Martinez: Okay. My husband would be proud of that, but I do want to talk about you since I've known you, you have like built different income streams as, as a successful business woman. You're an author, you know, you speak, you are running this course to help other people pursue their dream of writing.

you have two podcasts square state. About all about Colorado and Michelle is money hungry. So you are managing a lot. I want to talk to you one, how do you step back and kind of recharge yourself? So you're not burning out and then like, how do you view self care? Because that's kind of like thrown around and I hate now that I see it more in advertisements than actual conversations.

Michelle Jackson: So for me, I think with entrepreneurship, Entrepreneurs will try a lot of things. And it's a really exhausting part of the journey I find because you're trying to figure out what's the right fit for you. Especially as a digital entrepreneur. Where, it's very intangible, right? Like there's a lot of what you do is very intangible.

Like you're waiting for feedback. You're looking at HB news, things like that. So maybe he could get a hundred thousand page, but then no one emails you. Right. So what I found with online entrepreneurship was that. It just was so confusing, like what was the right fit? And it just took a while for me to figure out what works well for me, energetically, and it wasn't really tiring because it was a lot of like throwing spaghetti at the wall, to be honest.

This year, I am really in refinement mode. So, you know, when people are like, Oh, that person's the overnight success. And they're like, dude, I've been at this for like seven years. That's kind of the experience that I've had where I've been at this for three years now. And so I'm at that point where I'm really finding, this is what I know.

Right. So I'm at the point where. I've just had enough lessons that I know what doesn't work for me. So example, what doesn't work is I don't do coffee. I don't do like pick your brain. I don't, I don't do that. That's that's time I could be making money. I don't, so that's a boundary that I said. Because I already create free content and podcasts and websites.

And you know, I do stuff on rice instead of Brown and all that. So I don't need to do these one on ones. So I started meeting people and saying, Hey, when, when it came up, if you want to meet with me, you can just pay me what your mind. And then that's actually proven to be a little bit. So I got a payment this week that I spoke to nothing crazy, but I could've made them.

Yeah, it's great other money because I value my time. So I'm just being really clear about the boundaries you set as an entrepreneur is so key. One of the easiest things I did that the biggest impact once changing my email responder, I cannot explain. What a big difference it made, because what I did was I was like, look, I'm available Monday through Thursday, like 10 to four.

And then on Friday, I'm available to half the day and then I'm out. And, what happened was. It was very clear to people what to expect from me. So it wasn't just that I was like, I'm not available. I'm not available now. This is what I'm doing. Usually in the mountains, when I get back, this is where the next 24 to 48 hours.

That one change has saved me so much.

Elle Martinez: I love that.

Michelle Jackson: And so that was an unexpected bonus for self care. Like let's just. Fabulous. I think the other thing is just, and being very, like, don't explain your note. Like a lot of people are like, well, no, and this is why no one shares why they just say no and move on.

so I don't explain my nose. I just say no. And that's it. So that's it. The other thing was soft care is. I, because I work online, I can choose where I work. And so I will make a point of going into the mountains and staying for shootings and not just decompressing. I did that last week, I went to a town called Salita really, really beautiful town in Colorado, which has the oldest, historic district in the state.

Or the large largest historic district in the state. and I just like chilled out and it was so great. I got work done there. Actually. It was funny. I was referred to the night before, like they were like, Hey, can you down? I was like, yeah, cause I got paid 300 bucks to write about. And I felt like, and it was great.

Actually, I was kind of shocked.

So I was like, we're an hour and a half I've hustled. I got it done in the car. I thought about it as I drove down for a couple of hours I did out and then I still enjoyed my time. So I think you need making sure to get away and recharge energize yourself is so important. People just keep going and going and going and it doesn't serve them or their business, to be honest.

Elle Martinez: Yeah. That's that's key. I know as parents. For us, we have to have like our alone time and my husband and I are complete opposite. So I'm the morning person, you know, like straight up the morning routine that you read about like five

o'clock in the morning. But for me, that is when I can have that quietness.

That I need to think whether it's for work for relaxing, like for me to be my best self that's my time. And my husband's more than night owl and that's his time. So, I mean, finding the, even if you can't physically get away, you got a regularly scheduled some kind of time.

To recharge, have that solitude, it can also be outdoors.

I've been doing a lot more walking in the neighborhoods, still, of course, social distancing, but you know, self care, doesn't always have to be like buying this product, you know, taking this expensive, you know, retreat, it's finding pockets of time. You can use, however you see fit.

Michelle Jackson: I should also mention about the retreats because this, this is actually an important thing.

When I go to the mountains for my retreat, I stayed at a hostel and it is like my favorite hostel ever. And I'm obsessed with it. You've seen so many pictures, so I paid $35 a night, including breakfast. They have a hot tub. It's awesome. They're actually opening another property and Telluride, Colorado.

That'd be enough. I cannot wait. And so I will be reserving my space because of a virus. I don't feel comfortable really in the same room with people before I would be fine limit. Now, now I'm going to pay a little more to reserve my own space, which is fine. So instead of paying $35, it's a hundred dollars.

So it's significantly more. But the value to me and my wellbeing is so key that I'm okay with it. It's not like I'm always like, I'm not always doing that. And then after the front switched back to what I was doing anyway, but right now I have to. Yeah,

Elle Martinez: I think that actually kind of circles back and a good place to wrap up because we see money, you know, as we've been writing about personal finance as a tool.

Right. But I think a lot of times when you're starting it, some people see it as the goal. Right. You're, you're paying down a certain amount of debt.

Or if you're in the, you know, FIS space, you know, you're talking about how much you're saving, but at the end of the day, that's not really what you should be using.

For me, I think you should look at time, you know, how am I able to spend my time?

Am I spending the time with the people in the projects that matter most to me, even if you're not, you know, at your retirement a number.

Can you little by little, make decisions with your money. You bring you one step closer, either, you know, more flexibility or more options when it comes to, things that you need for self care and taking care of others.

And then like finally, even if you decide to give more like a lot of people I've seen once they reached a certain amount of, financial freedom. Oh, that's natural out courses. How can I help others? And it can take manifest in so many different ways.

So I love how you've done such an incredible job of not just saving money, which is great, but making sure that your money is moving in the direction that matters to you.

Michelle Jackson: And I want to say two things. One is I have no savings number, so I want to be very candid about that. I accidentally so fired five years ago. And so, I want people to design your life. that you're working towards. So how do you live your life now? Especially if you're in the fires space, right? Like people are so focused on the numbers, but I'm like being focused on the light.

So in March when everything got shut down and I was like, I am so thankful that I so fired and I'm living my life and I've learned how to make money outside of nine to five. Like I was really. Because there are moments when I doubt I have like, maybe this was the dumbest thing. Yeah. Actually the spring has confirmed that I did the right thing.

I am so happy that I took a stand for my life and decided to do what was best. I don't know that I would have been happy.

Elle Martinez: I, Oh, I hear you on that.

Michelle Jackson: You know what I mean? So like, I can go see my mom when I feel like it. I can, if I needed to go to the doctor, I could go whenever. If I want to go to a road trip, I can do that last week. Want to go? You know what? I finished my work today. Now it wasn't easy, especially because I work on myself.

It was very hard and I had debt, which made it hard, but I was not, I don't regret it at all. Hmm. I'm, I'm so thankful that I made those hard choices because I've had five years of living a really wonderful, challenging life, but life is challenging, right? So I just picked my challenge. And now ironically things are because I've put in all these years, things are so much easier for him now.

Right. So making money online, helping other people. You hear that? Yeah. There's that? Well,

Elle Martinez: that's awesome. So Michelle mentioned you have a lot of projects going on and I know people listening want to like. Connect more with you. So do you mind mentioning just a few ways that they can reach out and connect and join your community?

Michelle Jackson: I run a website shows. I love to talk about all things, lifestyle, design, entrepreneurship, and personal finance. I'm really interested in. the conversation about earning more versus trying to out verbal they're like, I want you to earn more wisely. So an example of that is I just got contracted to do a fun, freelance, I now freelance again, I'd stopped doing it for nine months.

I only work with clients. I like, I literally am just testing out. So I'm going to test out Fanny packs. When I hike. Normally I'm just going to use that as the piece of equipment that I use during my height. And then I will go on several Heights that I normally do because I hike every weekend. And then I'm going to get paid to share my experience with this product.

And that's an ongoing, actually an ongoing project. So I'll test out other outdoors. Sometimes I can keep the equipment. Sometimes I give it away, whatever, maybe a couple hundred bucks do that. No problem. So I love that kind of thing. I want people to really maximize and their earnings.

you can follow me on Twitter at Mitch Mitch loves money more on Instagram at Michelle's money. And I also run a course eight money with eBooks, but right now it is being worked on. So that's on hiatus and I launched an Academy. Called make money with eBooks Academy or wa as I liked it, you know, like that's what, that's what I call it now, because I think it's hilarious where we need support would be first time nonfiction fiction authors, get their books out in the world.

So definitely check that out.com/academy. Awesome.

Elle Martinez: Well, thank you, Michelle. I've always enjoyed chatting with you.

Family and Financial Independence: Should We Pay Off Our Mortgage Early?

Not having a mortgage payment sounds like a dream, but is that a realistic goal for a family with young kids?

Andrew shares how his family ‘found’ money to pay their mortgage off early and still have fun together!

Paying Off Your Mortgage Early

How did you feel when you bought your home? 

After you moved in, got all your stuff inside and arranged, what did you feel? 

Were you thrilled? Exited about having a place to call your own? Or did you feel like Andrew- suddenly aware of the long road ahead before you actually own your house free and clear? 

Did you know that right now in the U.S. around 37% of homes didn't have a mortgage on them

Many homeowners are those who are approaching retirement, but there is a chunk of millennial homeowners – almost 16% – who are mortgage-free now. 

Let's just think about that for a bit – how would you feel if you had paid off your house early? How would you feel if you had no mortgage to pay? 

Today we're going to look at that option – paying your mortgage off early.  

Is it, one – a realistic goal? And if so, how do you set yourself up to knock it out faster? 

Today I'm talking with Andrew Daniels. He's the co-creator of Millennial Homeowner and one of the founders of Thriving Families about how he and his wife paid off their mortgage early. 

And if you're thinking of buying a home soon, you'll want to hear what Karen Ashley, who's the Mortgage Sales Manager from Coastal Credit Union about how you can buy a home you love and can afford. 

In this episode, we’ll get into:

  • Why he and his wife decided to pay off the mortgage early
  • The strategies they used to make it happen
  • Options you should weigh before you start your debt-free plan

Let’s get started!

Resources to Help You Pay Your Mortgage Off Faster

Looking to see if paying off your mortgage is the right way to go? Would you like to set up your finances to make it work? 

Here are some handy resources to try out and use! 

Thank You to Our Sponsor Coastal

Support for this podcast comes from Coastal Credit Union!

If you’d like someone to work with you on your goals, Coastal has the people, accounts, and services to help you hit your goals. 

They can also walk you through different options you have to make your mortgage more affordable! 

Why Would You Pay Your Mortgage Off Early?

Elle Martinez: Paying off the mortgage – this is one of these areas of personal finance were definitely your feelings have a huge and significant impact on this decision. 

Typically, when people are thinking about paying off the mortgage early, they've paid off like the high-interest debt, like their credit cards and other loans like car and student loans.

This is the last big debt left.  

And it's kind of different. Lower rate spread out over decades. 

You don't feel like, well, I don't know your experience, but it doesn't feel like a fire like it is with credit cards or carrying a car loan. 

But you decided, you and your wife, that you were going to pay it off sooner. 

 What motivated you to put this as a priority to pay off that mortgage faster? 

Andrew Daniels: So the how this all started for us was about 10 years ago, we moved into our dream home and we built it, picked every little thing, flooring, paint, all that stuff.

And I remember the day we moved in like it was yesterday. It was a rainy day in August. And we had family and friends helping us move in. And, you know, it's just a whirlwind.

You're going back and forth from the old place and a couple of moving vans doing all that fun stuff. And I remember getting to the end of the day, sitting down.

We're doing the whole drinks and pizza thing to thank everybody because that's just what you do. It's always fun.

I remember sitting there and it's like somebody walked by and just punched me in the gut.

It was that feeling of. Oh, my gosh, I've got 30 years to pay this off now.

It's you know, it's it wasn't a shock, like it's not like somebody just came up to me, goes, hey, here's your debt. I knew this was coming. But until we're in the house, it's not really real.

Then we went to the house and we're…and it just it it really sunk in. And it was like. Right. This is my reality now. And this is our reality.

We have one child with another one on the way shortly. We're in this amazing house that we love and, you know, are super excited with, but…I got this debt. And I don't like it.

I remember in the spring we bought some trees to plant. And I was digging these trees. I had to a couple of our neighbors, we all kind of went in and bought these trees that were all in a new development.

So everybody's got to do landscaping, which I did not know was a thing you had to do with the house. I just figured you the grass would come up and that would be it. But it doesn't happen like that.

So we're planting these trees and it's like day three in the sun. And I have had a lot of time to think about this. And I'm thinking like this is what it's going to be like for me.

If I don't change, I'm going to have to be digging holes. I'm going to have to be figuring out how to make things work. I don't like this.

I really, really don't like this. And that's when the idea kind of sunk into my mind, like something, needs to change and I need to be the one that does that. Otherwise, it's going to stay the same.

Understanding Your Feelings About Money

Elle Martinez: And something I've noticed with couples who have paid off their mortgage early. There was this feeling that carrying this debt, even though was a, quote, responsible dad, it was a low-interest debt and they could afford it. It was something that nagged at them and it bothered them enough that they were willing to go ahead and pay it off sooner. And so I asked Andrew, if he could dig in a little bit deeper and kind of talk about why he was uncomfortable carrying around debt, it was something I was raised with.

Andrew Daniels: One thing I don't know if I've shared on the blog, but my sister has autism and very severe autism, so my mother had to stay home with her. So we were a single income family and I didn't really get that. You don't get that growing up. You know, your life is normal, just as everybody lives in their own lives and thinks that they're under percent like everyone else's. And I would find out later that the reason why my mom could do that was that my parents paid off their house extremely fast, too. And I think knowing that you don't borrow from today to pay for tomorrow. Really kind of stuck with me, and I always kind of had that like almost maybe inherent guilt that, okay, I'm really boring. From tomorrow to pay for this house today and, you know, and just kind of went like that, so. But I just don't like the idea of owing someone because in my head, when you owe someone money, you are beholden to them. And that is just not a good feeling. It's not a good feeling. Knowing that you could wake up tomorrow or something can happen the world. That's completely outside your control. And the bank could call you and say, you know what we're calling the loan. I know that's not likely to happen. But those are the kind of fears that I would build up in my head. And it's like, you know what? I don't I don't really like this. I I don't like owning people. And it's kind of what move me forward.

Should You Pay Your Mortgage Off Early

Elle Martinez: Now, whether you agree or disagree with his reasoning, I do think that this is a good point to really talk about, especially when you're discussing an option like paying off your mortgage early, which is what is your comfort level? What is your quality of life, having your finances a certain way in? For some people carrying a huge amount of debt, even if it's low interest, debt just does not make them feel comfortable. And the whole point of talking about simplifying and enjoying life is that enjoying life. So if you were looking at your finances solely through the numbers, it only from a financial optimization standpoint, paying off your mortgage does not make sense. But if you are looking at your financial decisions as a way to build a life that you love so you can spend time with the people and projects that matter most to you, then paying off your mortgage early may be a part of your financial plan. And while it might not be the financially optimal decision, there are some benefits to knocking out that debt early.

Andrew Daniels: When I sat down and did that night was I grab a spreadsheet and built a spreadsheet of trying to figure out how much could happen. And what I ended up figuring out was that if I stayed on this course that I was on paying off a mortgage over its lifetime and we were around the 5 percent mark. I was super cautious. And I want to lock into a 10 year rate at the time because I was just one of that cost certainty. Then I realized like I was going to pay almost the same amount of interest as I was paying for the house. So yeah. So if you're paying off $100000 mortgage, you might be paying 80 to 90 thousand dollars extra in interest over your life. And that kind of got the snap me awake and it made me realize that I have to stop thinking about everything as week to week, month to month. I need to start thinking of things as my lifetime earnings and as a lifetime earnings. Do I really want to buy a second house that's just interest or is there something else I can do? And all these things kind of merged in my head.

Elle Martinez: If you haven't already looked at the numbers, it may surprise you.

Even with the low-interest rate, how much you're going to be paying at the end if your mortgage if you pay on schedule. And that's because of how this mortgage loan is structured as Karen explains.

How Extra Mortgage Payments Make a Huge Difference

Karen Ashley: Your mortgage is amortized over a term whether or not you pick a 30 year at 15 year, 10 year term, and it's amortized to where a portion of the payment goes for its principal. And in the portion goes towards interest.

Now, in the beginning of the loan, the majority of your payment does go to interest. And then over the life of the loan, that ratio will reverse to where more we'll start going towards principal. And then you're actually going to build more equity. You know, we do suggest people make extra principal reductions.

Elle Martinez: Now, if you're in the first seven years of your loan and you have a 30 year loan, you are paying a significant amount toward your interest. But the good news is, even if you start off small, you can have a big impact on dramatically shortening your mortgage payment by making extras now.

Karen Ashley: And initially, if you would just make an extra payment, say you take you make 13 payments in a 12 month payment period. Yeah. I mean, you can actually start cutting off years of that mortgage. So it is really easy to turn a 30 year mortgage into a 15 year mortgage without having your payment doubled. And I think sometimes that's a misconception. Yeah. When people want to pay their mortgage off early or rather than doing a 30 year, they would love to do a fifteen. But in their mind, I think they think that their payment is going to double. Well, you can still take that 30 year mortgage and into a 15 year despite making those extra principal reductions. And then on the the mats that you don't have that extra money, then you are only making your contractual payment for the 30 year mortgage. But on the other months that you do have that extra, just pay it towards the principal and you will see that balance from shaving off there.

Finding Money to Pay Off Your Mortgage

Elle Martinez: Of course, to make those extra payments, you need to have some extra money within your budget. So where do you find it? For Andrew, his family looked at their entire budget and optimize it with their goal in mind.

Andrew Daniels: We were lucky in that my wife and I loved to travel. You know, we liked like nicer things. And when we had our kids that they were so young and we kind of just looked at each other and said, let's just not go anywhere. Like, let's cut out travel. We don't the kids aren't. It's not going to matter. Traveling with young kids, I don't know if you've done it before, but it's not all it's cracked up to be. And they don't remember it. You remember is taking them somewhere, but you're not really having the greatest time. So we kind of we took a little maybe a harsh reality, look at that and say, OK, we can put off travel, which is I think for us that was one of the hardest things because we bonded the first night we met. We bonded over travel. And we've you know, we did months in Europe and we'd like our conversations always go to like, where do we want to go next? So that was hard. But at the same time, our life had just drastically changed. We had, you know, two kids that we had to look after and everything else is getting changed. So we figured let's just change all the everything. So, you know, everything else is up in the air. Why not put our money up in the air and figure it out? So we we looked at cutting a lot of our food.

We eat out a lot. And we just we started to figure out how to make better food, like we like pizza. So we got Papa John's recipe for sauce and, you know, figured out how to make better pizza. We figured out how to cook steaks. We figured out how to make mashed potatoes, like all these things that we didn't really care about when we was just my wife and myself. We just kind of started looking. It's like, OK, well, how can we kind of hack our life to still feel like we're not giving up, but we're not spending that money either on the things that we like. Another thing, another big one was cars. I just retired my 2004 Toyota minivan. There should be a round of applause for that. That was I said I would drive it till it died. And it it literally I drove it into the dealership and it pretty much died. Yeah. Yeah. It got to the point where. Couldn't put any more money justified going any more money into it, so anyway. But that was like, you know, I would say in the time that we were paying off our house. The people around us on average had three new cars. And that's a huge that's a huge expense, right?

It's a new cars are a lot of money. So, yeah, I would say travel and food were travel, food, vehicles, you know, like it it might sound a little fashion, but we just learned to kind of enjoy being as a family and spending time together, and that's easier. You know, like a lot of little things got cut, like go to the movies. We you know, like we like everything became an option to be cut because everything we looked at, we were doubling or tripling the cost. Right. Because if you have if you can put a thousand dollars down on your mortgage today extra, well, you're saving that money over time. And the interest that you save on that is almost the same amount that that thousand dollars is. So when you look at the newest iPhone. That's a thousand dollars, give or take. You put that on your mortgage, you're saving another thousand dollars in interest roughly. And we kind of did that. That was another one. And I totally forgot we for the first, I think three or four years, the first couple of years, my wife and I shared a flip phone. That was our plan was a $10 a month plan.

And, you know, I couldn't text area, but that was like when texting was just start. Everybody, like all the adults, were starting to text. So. And I'd sit there at my friend's house where everybody's texting and I got a flip phone that doesn't even have snake the game snake on it because it's just that.

But that's again, like, you know, I think our cell phones now in Canada are really expensive. They're like a couple hundred bucks a month. Like they're. Oh, wow. I think both of our plans together, like if you put a phone like paid for a phone monthly on it. It would be around $200. So. The money's there, it just depends on what you're willing to sacrifice.

Paying Off the Mortgage

Elle Martinez: Yeah. Well, I think you've done a fantastic job. How long have you paid off the mortgage?

Andrew Daniels: I guess I was just. We when we started, we made a goal of, I thought five years. I wasn't happening. So I kind of stretch my goal out to 10 years. And then when we started going, we we could see the amounts and it kind of just became this thing. This I'm very goal focused. And it just kind of became this thing like, no, we're doing this. We're just gonna keep putting down. It got to the point where when I would call the bank, they would see my number come up and they're doing another match payment today. Yeah. And that was the conversation. It's that it wasn't really all like it was 20 second conversation with the bank a couple weeks. Sometimes it was super funny.

Mortgage Free Masterplan

Elle Martinez: And the two of you are listing now and you're thinking paying off your mortgage early is something you do want in our account together, but you're not sure how fast you want to do it or how much you can put in towards it. Andrew has your back. He's created quite a spreadsheet. It's more than that. It's really a guide and a plan that you can run the numbers yourself in. Look at different scenarios to find the right time frame in the right payment plan that fits you and your goals when we're paying off our mortgage.

Andrew Daniels: We didn't tell anybody like it was. When you do something that nobody else is doing, you look crazy. And it's only afterwards that they look back and go, Wow, I wish I could do that. So I started to have people, friends and people online asking, you know, how how can I do this? So I just I had this spreadsheet. I cleaned it up and made it look nice. And then I basically would sit down with people for an hour and say, OK, like, let's, you know, let's go over your numbers.

What's your goal? What are you going to do to to do this? And I would show them the spreadsheet and the system that kind of goes around it. And with the mortgage free master plan is designed to do is just to give you a plan of seeing what could be possible when you pay off your mortgage and.

It walks you through kind of like what are your goals? And you do this. You should be doing this with your spouse like none of this happens without mice. My spouse supporting my crazy ideas once in a while. I try not to have too many crazy ideas because it's just it's it's what it is. Right now, you got to straighten out. We'd have time to breathe sometimes. But with this mortgage free master plan. It's it's really designed for.

And it's like an I would say it takes about an hour to kind of go through it and you can answer the questions as a QuickStart guide to where you can just go through it really fast, or if you're a spreadsheet person, you jump and you can play with the numbers right away. And what it does is it allows you to see what's possible with paying down your mortgage faster. You can find out, OK, what happens if I only put down $50 every biweekly or. And how does that change? If I put down two hundred pounds, if I do like the full thousand? Or if I can only do twenty five this week. But what happens if I put down a lump sum of $5000 this month? And what does that do over the lifetime of it? You know what it does?

It kind of gets you thinking about. Becoming mortgage free. What it is and you're trying it on to see what plan might work for you, and like you said, you guys sat down with it and like 10 years. It's it's mindboggling that you're I mean, we always think that I paid it off so fast. But what we never talk about is the 20 years of freedom you're gaining after that. We haven't even touched on that. And that is way, way nicer. My my kids don't complain that they didn't get to go to Disney when they were five and 6. They complained a bit when they were 7. But when we went when they were, you know, 8 9. You know, it felt good. I didn't go to Disney feeling like, oh, my gosh, this is all on credit cards and whatever it was like, OK, we saved up and we're there and we're good to go. And now we get to do the traveling that we've been longing for and researching for, you know, all those years. So I kind of jumped the track there on on this. But you know what? What it does is that the plan is really allowing you to. I would say come together as a couple and see if this is what you're ready to do. And if you're not ready to do, you don't have to do it right away. But you will see what small amounts can add up to over time. And they know, I'm sure, you know, from your own experience, they add up very, very quickly.

Buying a House Your Love and Can Comfortably Afford

Elle Martinez: Hope that helps the two of you really to sit down and understand whether or not paying off the mortgage early makes sense for you. But what if the two of you haven't bought your house, but, you know, down the line, you would like to do that. How do you find a house that you can afford? And if you do decide to pay it off early, it wouldn't be a burden. Karen was kind enough to share her take of how she processes those mortgage applications and explains to couples how to get a mortgage that they can comfortably afford.

Karen Ashley: When a couple or a member is shopping for a house, one of the main things that they need to consider first and foremost is affordability. Whereas their comfort level, we get the question so many times, what do I qualify for? Well, we can run the numbers and tell you you qualify for, you know, four or five hundred thousand dollar house. But I never like to tell a buyer exactly what they qualify for. My question to them is, where's your comfort level? Where is your your comfort level with that payment? Where's the payment that, you know, where do you not want to go over it? So then I back in to that payment, because the last thing you want to do is put someone in a home where that's all that they're working for. It's just that house payment because you are going to need some money for the incidentals, the maintenance, the the care of the home. So I always want to know where is your comfort level? And then from there, we just we back into what that sales price looks like. And then we would talk about do they want to do the hundred percent financing? Do they qualify as a first time home buyer? Does it make more sense to maybe keep your money in the bank? With rates being so low right now? So we would just run some scenarios for them to just kind of show them. It makes more sense to do the hundred percent if they qualify or put 3 percent down with mortgage insurance versus 5 percent. And then we just kind of back into what fits that member best financially, both money out of pocket downpayment and for their comfort level is it cost coastal. We're more concerned about your financial well-being going forward, not just the here and now. Okay. So you qualify for this amount. I want to put you in that house. It's more about your financial roadmap, making sure that you're stable going forward. Not just putting you in a house.

Elle Martinez: I hope you enjoyed this episode and found it helpful. What do you decide to pay off your mortgage early or not? That's up to you. But I want you to feel comfortable with your decision. Remember, personal finances is not just about the numbers, but creating a life that you love and enjoy!

Next Week on the Podcast…

Since we’re on the topic of setting yourself up for big financial wins, have you ever thought about how you can capitalize on your taxes? 

Next week we’ll look at some big tax deductions and credits to look into and how to set up things this year to make next year’s taxes less stressful! 

So if you haven’t already, make sure you’re subscribed. You don’t want to miss that episode. 

We’re on iTunes and wherever you get your podcast from! 

Our music today was from Lee Rosevere. 

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We’re all about encouraging one another with our goals. I hope you have a wonderful week, take care!