Getting Good with Money and Dumping Debt

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

Getting Good with Money

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

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

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

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

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

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

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

In this episode we get into:

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

Are you ready? Let’s get started! 

Resources to Dump Your Debt Faster

• Best Budget and Money Apps: Personal Capital, Tiller, Mint
• Grab Your Copy: Jumpstart Your Marriage and Your Money
• Join Our Thriving Families Community on Facebook
• Debt Free Divas
• The Great Debt Dump: Running Toward Financial Freedom with the Power of Community
• When You Can’t Agree on How to Pay Off Your Debt
• Pay Off Your Debt Faster Through the Power of Community

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

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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.

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

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Note: Interview is edited for clarity and length.

Understanding Your Money Mindset and Personality

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

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

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

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

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

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

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

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

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

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

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

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

Working Together with Your Money

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

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

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

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

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

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

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

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

Conversations Needed Before You Can Line Up Your Numbers

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

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

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

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

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

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

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

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

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

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

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

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

Dumping Debt on a More Typical Budget

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Define Your Family's Priorities

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

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

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

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

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

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

Where to ‘Find' Money on a Tighter Budget

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

New Opportunities and Options When You're Debt Free

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

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

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

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

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

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

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

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

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

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

Elle Martinez: Those are exciting.

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

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

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

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

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

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

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

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

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

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Music and Photo Credits

Music in this episode was provided by artists from Audiio. Photo by olia danilevich from Pexels