Learn how one couple came together to pay off $400k of debt, become financially free, and give over $1 million!
Simple Money, Rich Life
Let’s start off with some good news: You don’t need a complicated plan to achieve financial independence or freedom.
In fact, that’s probably either slowing down your progress or keeping you from even starting.
I’ve seen and personal experiences how a simple plan can be an effective way to keep you moving in the right direction.
Bob and Linda Lotich are on the show today to explain how. They’re the creators of SeedTime and the authors of Simple Money, Rich Life: Achieve True Financial Freedom and Design a Life of Eternal Impact.
Linda and Bob are coming on the podcast to discuss how families can reset things and have a rich life.
I had a chance to read their book and loved how it had s money great takeaways.
I thought Bob and Linda did a really good job of balancing the head and the heart with this. You have this story of getting out of debt and showing the bits and pieces, but more importantly, those conversations they were having about the purpose behind this journey.
Besides working towards financial freedom, the book also examines doing something meaningful with the money, especially on the giving side.
In this episode, we get into:
- how Bob and Linda synced up with their finances and goals
- tactics and strategies they used and recommend to pursue financial freedom
- creating an easy to manage financial system that allows them to live debt-free and be generous givers
Hope you enjoy!
Resources for Families Interested in Financial Independence
If you're looking to get ahead with your finances as a family, here are some resources to check out!
- Best Budget and Money Apps: Personal Capital, Tiller, Mint
- Jumpstart Your Marriage and Your Money
- Connect with Linda and Bob: Seedtime
- Simple Money, Rich Life
- Why We Began Giving Our Age As a Percentage
- Should You Have a Giving Fund?
- Retire Early By Rethinking Your Priorities
- Setting Up Your Retirement with the Right Tools
- Mortgage Free Master Plan
- The New Family Financial Road Map
Don't forget we have the free course 5 Days to $5K. It's a week-long email course designed to help you find, save, and earn extra cash so you can reach your family and financial goals faster!
Thank You to Our Sponsor Coastal!
Support for this podcast comes from Coastal Credit Union! If you’re living in the Raleigh Durham area and looking to bank better, come check out Coastal today.
Rollover Your 401(k) Easily with Capitalize
We’re grateful for wonderful partners like Capitalize. Not only do they support the podcast, but they help make managing your money so much easier.
Did you know that it’s estimated that there are currently over 24 million “forgotten” 401(k) accounts? In fact, the average American changes jobs every 4 years.
And because of the Great Resignation, you or someone you know might be changing jobs even more
It’s an extreme case of out of sight and out of mind. Is your old 401(k) in there somewhere, left behind at a job you're no longer with?
One huge benefit with an IRA is you get to choose how your money is invested, not your old employer.
If you want to consolidate your old 401(k) and have more options with how you invest, it may be time to roll them over into an IRA.
With Capitalize, they handle the process from start-to-finish – for FREE. They handle the process from start-to-finish, and yes that includes calling the 401(k) provider on your behalf.
Find out how and get started today!
Syncing Up on Money and More
Elle Martinez: In case you miss Bob on an earlier episode, discussing forming new habits. Here's a quick overview of how he started his financial journey with Linda. Those initial conversations, not only began setting the tone for their money but their marriage.
Bob and Linda: I think we need to start with the shoe box. All right. So we would explain the shoe box. It was kind of our first money conversation. I'm not great at setting up systems or organizing things, right?
Or spreadsheets. I I'm bored by it. I get lost in it. I get distracted easily by shiny objects. My filing system was a, well, it was actually like a file folder that I had in a drawer. That was not meant for filing.
Once that got overloaded and about yay thick, I would start putting things in a shoe box and then that would go in my closet. That was my official filing system.
So we are engaged and it is what it is. I know, but it's helpful because we're not like this anymore and it's valuable people were there. So we were engaged. We're not like this. I'm still like that around so much. So we're engaged and we get to that point where it's like, all right, let's have the money talk.
Where we both kind of like show our cards and reveal what's on the table and, Come and tell her, I was like, all right, I've had a lot of credit card debt, but I'm working to pay it off. I'm making some progress. I got a plan, blah, blah, blah. Then I say, all right, so show me yours. What's going on?
Then she takes a shoe box and just slides it across the table. I'm like, oh, what's this? I pop it open and we'll tell her to test. A lot of credit card on envelopes in there may be some of them on opened. Hadn't been looking at that is why at that point, you're getting calls from debt collectors in your parents' house while you're living there.
It wasn't a great start. So, yeah, so that was her start. I mean.
I was in a similar situation, does about three months ahead where I was living off of a credit card, living off a macaroni and cheese, you know, I had nothing else. And I had just kind of come to my financial head where I was just realizing I was a complete mess.
So we didn't have great beginnings, you know, and we came from middle-class homes and, you know, just buried ourselves in debt and doing silly things but that's where the journey began for us.
Talking About Money (without the Judgement)
Elle Martinez: I can definitely relate. When we had our first chat about money. I also, after we got engaged. It was an eye opener and to be honest, a bit awkward. Part of it is you're coming at it from a perspective of. This way of handling money makes total sense. But your other half is also thinking that.
What's interesting and encouraging from reading Bob and Linda story is how they felt comfortable enough to open up about finances because so many couples who are married or getting married. They have the shame and a lot of guilt and that stops them from really opening up and getting on the same page.
Uh, having a judgment free space where you can go over more than just the numbers. I can be a game changer. And this may be a new thing for one or both of you.
Bob and Linda: I mean, for me, honestly, I didn't grow up in a judgment free zone so it took me a little time. He was not judgmental. He wasn't trying to put shame or guilt on me for the mistakes that I had made in the poor decisions that I had made, but it did take me a while to get that off of me, because that was something that I grew up with.
It was like, well, you just kind of hide all this stuff. If you don't want anybody to know, you just hide it. And I think part of this is just growing in my relationship with the Lord where he doesn't put that on us and he doesn't want us to feel ashamed in front of him.
And Honestly, that was kind of the journey that I went on and I, a big part of it for sure was Bob not trying to put any of that on me.
I think just walking through all of that. I think it really came down to what was already in my heart. I don't know if you've ever heard that analogy. It's like, if a glass is full, here we go. This glass has a chai latte in it. If Bob bumps into it, chai latte is going to come out. If I'm already filled with shame and guilt and, tension around a subject, what's going to come out.
I think is helpful for me growing in this whole thing, because we got into this and again, I'm the spreadsheet guy. I'm the math guy and So I'm looking at the numbers. I'm like, all right, this is right. It's like, this is very black and white, you know?
This is a quantitative thing. It's like, this is right. This is the answer. This is the thing, what you are doing the way you're spending money, whatever, like that's wrong, that's wrong filing system, whatever the thing is.
The thing that I grew to realize that helped me a lot and helped our marriage a lot and I think bring a lot of healthy balanced is that she isn't wrong. And that I'm not necessarily right. This, honestly, this is really funny, but helped me just kind of understand that God creates people differently.
He wires people differently, and everybody has different strengths and weaknesses, and they're oftentimes offsetting and corresponding, with the person you're marrying. I was able to, and I'm really thankful, but I start to get an understanding for some of the value that she brought to the table and how I needed it.
I needed what she brought to the table, instead of just assuming that her way is wrong, my way is right, because I have the numbers, you know. That I think a lot with all of this and with our marriage health when it comes to money.
Yeah and that also gave me confidence to say, I actually do have something to say, I actually have value to add. Instead of, for a long time, I just thought, well, he knows what he's doing and I don't so I'm just going to do whatever he tells me to do.
I started going well, instead of coming out at well, like, wait a second, I'm going to do I want to do it this way? I didn't have to come at it from an anger point of view. I could come at it like, actually, what if we did it this way? Have you ever thought about that? You know, because he was treating me with so much respect in this area.
Simplify Your Money with this Framework
Elle Martinez: I'd love the honesty about the give and take with working with one another respectfully. Because sometimes it is difficult when you have such different approaches. After working on this foundation. Linda and Bob were able to get some real momentum with getting out of debt and building up their finances.
A huge help was systemizing things with what Bob likes to refer to as the straight a approach. Attention. Automate adjust an accountability.
Bob and Linda: One of the things I'm always trying to do with money, and I've been in this world now for over 20 years from banking to financial services to now being a whatever online blogger podcast or all that stuff, just talking about money for so long. I'm always obsessed with trying to simplify things and like trying to pull them out of the complexities and make them digestible and put them in a little package.
That was a big part of what we tried to do in this book. As I was taking this big picture perspective of right. How would I start over now, knowing everything I've known, everything I've learned from these last couple of decades, how would I start over now? How would I talk to myself in my mess and say, all right, this is the simple little path you can follow to get out of that and to get on a firm footing?
So the first one, like you mentioned is paying attention. This is something that I think, for people like you and I, and honestly, probably a lot of people are listening to a financial podcast, probably already do this, but most of the world doesn't.
We have to actually pay attention to what's going on with the money. This is the same thing what'd you hear with nutritionists? Have you ever been a nutritionist and you go talk to them and say, all right, I want you to write down everything you eat every day. Let's do a food journal and see what you're eating, see where the problem spots are and whatever. Simply by writing everything down, you suddenly start eating better.
It's like, you don't even have to try to eat better. You literally just write everything down and because you see clearly what's actually going what what's actually happening. Like, you'd get your behaviors begin to shift and change.
You know this, but it's the same way with money. Like when we actually see what's going on, when we actually are paying attention and some people do write everything down and that's a great exercise. It works well, but, but even simply using a tool like mint or personal capital just to actually be able to look back and say, all right, the last 30 days we've spent this much on groceries, or we spent this much on eating out because so many people, like Starbucks have no idea how much they're actually spending.
Right. So to be able to do that, like, it's just such a headstart for so many people. I don't know how you really succeed with your finances. If you're not paying attention to what's going on. You know what I mean?
Elle Martinez: I think most people will be shocked by certain areas with their budget. Like, you know, there are certain ones where you look at and you go, okay, that makes sense. And then there's always one where you're just completely surprised.
Bob and Linda: Something's wrong. Somebody hacked my
Elle Martinez: that's not right.
Bob and Linda: yeah,
Elle Martinez: It seems small, but just being aware of how your money is being used. Can shift things in a better direction. Another key way to get more control over your finances is by automation.
The Power (and Ease) of Automating Your Money
Bob and Linda: I remember reading probably four or five different books that just talked about automating, saving for retirement, building up savings, emergency fund or giving or whatever the thing is. Okay. Like, I'm like, oh yeah, that's fine. That'll probably help a little bit.
I'll get to that eventually and I just kept on putting it off and, and I don't know why it's like a five minute thing. It takes like no time. But I kept on putting it off, but if I trace back my trajectory like there is a clear inflection point from the day. I decided I'm going to automate this to not because again, so many of us depend on our willpower.
That's the thing that financially successful people like they don't have more willpower than everybody else they just learned to automate. Like, it's just that simple. They automate the things that are most important that they know they need to do. They don't depend on waiting till the end of the month to see if there's enough money to see if they remember if they feel like it, whatever any of those things.
And so automation is such an important key and it's the way to like set it and forget it and make your life easier. So you don't have to think about it. Like it's just a no brainer. This is super important for people like me who want to have it together, but just don't is it's like you just make it so that you don't have to ever think about it again.
You think about it once and then you're done. Yeah. Yeah, cause for me, there's no way I could remember, or it just wouldn't happen for one reason or another. Yeah.
Elle Martinez: Automation has always been helpful for us, but in all honesty, These last two years with everything going on. It's been a huge time saver.
During the pandemic, we were taking care of things: switching the kids to remote learning work, had shifted for both of us, and then my mom in the middle of the pandemic wanted to move closer to us. So we had a lot on our plate. What gave us some peace of mind is that we knew that our system was mostly automated.
All we had to do was check in with it once a week, just to make sure everything was paid off.
So you might think of it as a small thing, but it can have a huge impact. It can help you have the space to focus on the more important things instead of stressing over the bills. Again we're trying to go with a effective yet simple plan.
Keeping One Another Accountable
Bob and Linda: That's the thing it's like, so many of these things are just quick and simple. It's a one-time decision that you make that will pay dividends. I mean, literally and figuratively, you know, for years and years to come.
Elle Martinez: I definitely appreciated how Bob and Linda also covered adjusting things. You have to have a flexible financial system. Life happens and you need to be able to change. And switch numbers as needed, or as you were getting more comfortable with your new budget. You might find ways to further optimize.
And then of course, accountability, which is kind of built in when you're married, you're encouraging one another. You have someone you're accountable to.
Now I know sometimes people hear accountability and they think this is another word for the blame game. But Bob and Linda have a different approach with that.
Bob and Linda: I think the thing I would add to that is just again, like I'm always looking to systematize things as much as possible because it's how I roll. With that accountability, it's like yeah, we do have an accountability factor with each of us, but at the same time, like we both need external accountability.
This is where having a budget that actually will hold you accountable is so important because I think, you know, one of the things that we struggled with for so long was we were using budgeting tools. The extent of the accountability was that the number on the screen would turn red and it would let us know.
And it's like, is that really, at least in our case that did not keep us from going over it. Didn't like, it's just, now we're just like, well, we'll fix it next month. We just keep on kicking the can down the road in any way. We just found that wasn't holding us accountable financially. It wasn't giving us a wall to actually bump up against.
So finding that finding tools that actually help you stay accountable are just really, really important.
Staying Balanced with Financial Independence
Elle Martinez: between how they communicated and the system they built, Bob and Linda were hitting some major goals, including financial freedom and independence. Many people get excited about this part.
This idea of, I don't have to work again. I'm free. I can appreciate that, especially if you're not happy with work and how things are handled at your company or in the industry you're in. However with financial independence. There's so much more to that.
One of the things I appreciate about the journey.
Is how it helps you become more aware. It can also nudge you to prioritize your goals and start shifting your habits so that you can reach them. This framework can be a game changer, but as Bob and Linda noted in their book, There's a balance to keep.
You have to be careful that this path to financial independence is not just focused on the numbers and optimizations. I've seen conversations online, hearing from others about how it's all focused on getting to a million dollars or whatever that number is. Or trying to get to this number as fast as possible.
There's no mention of quality of life, maybe shifting your work schedule so you can have more time with the family and no discussion of what you're actually working towards. It's simply getting out of the rat race.
I thought Bob and Linda had some fantastic thoughts about that.
Bob and Linda: A lot of people forget, and I know that I forgot this or never realized it and it's so common sense, but you have to be wary when you have moving goalposts.
Oftentimes with a lot of these financial goals, especially when it's an arbitrary number or whatever. It's like when I have a million dollars in the bank, then I will do X or Y. Then it will be at peace. Then I will be comfortable. Then I will give more whatever the thing is.
Those goalposts it's just always move and so this was one of those things.
Giving has always been a really important part of our journey and just something that has always been done in our heart and how it's been the big motivator for us to actually try to earn more. It's been that. And within that, even though we had that kind of desire, We still have the desire to spend too much money on ourselves and to whatever. Like, so both of those desires are there. They kind of fight against each other.
One of the things that we began doing that has helped this a lot, was we at age 31, we began giving basically giving our age. So we've been given a 31% at age 30, one of an increase in that a 1% every year when we turn we're the same age, you know?
That has been so great for us because it's forced us to grow in the direction that we want to grow. Our giving is automatically growing. Presumably our income will hopefully continue going up as well. And and it just puts us in a position where we're doing the thing kind of automatically, that is most important to us.
We found that to be really, really helpful to kind of handle tension of not getting too hung up on whatever the financial goal is at the moment and keeping first things first, you know what I mean?
Support the Podcast!
Thank you so much for listening to the podcast! If you enjoyed this episode and found it helpful, here are some ways to support it.
- Spread the word! If you enjoyed this episode and think it can help a buddy get on the path to dumping debt and becoming financially free, please share.
- Leave a review. Honest feedback and reviews make a big difference and gets the word out about the podcast. Leave your review on Apple, Spotify, or Audible.
- Buy me a cup of coffee!
Sign up for weekly newsletter full of tips, stories, and more to help your family become financially free
Get the best of Simplify & Enjoy in your inbox!