This was the most fun I’ve had so far with a blog post!
Thanks to everyone who participated, and congratulations to @smartsncents for winning the “Live Like No One Else” wristband in my giveaway!
I combined the questions that were similar. If you do not see your question listed, it is because I am not versed in what was asked and did not want to provide misleading or incorrect advice.
1. financiallifocused: What has been the hardest part of your debt free journey?
Having patience! I am so excited about our future goals of investing in real estate that I want this out of the way as quick as possible so that we can begin building wealth.
2. oh_karly: Do you think donating plasma is too extreme for trying to become debt free?
No way! As long as you’re not selling your children or pets, do whatever you feel is necessary to become debt free as fast as possible!
3. debtfreeinsunnyca: What’s your real name?
Haha, nice try, my friend!
4. eatpraybudget: What would you tell your 18 year old self?
Trust your gut. Don’t do things just because your friends are doing them. You’ll have plenty of time to figure out what it is you want to do. College is not a ticket for success and you’ll thank yourself later when you’re not laden with student loan debt. Don’t go into debt and don’t be embarrassed by the car you drive or the apartment that does not have bugs but doesn’t have much of anything else for that matter. Live alone or with roommates, but not with a boyfriend. 30 isn’t old. Don’t limit yourself. Be brave. Be nice to yourself.
5. hiltonprich: What are the top budget tools you use that are effective?
The only tool I use is the budget format that I put together on Excel. In my experience, one-size-fits-all budget tools have not worked for me. I’m too much of a control freak.
6. smartsncents: What do you do for a living?
I write procedures and work instructions for a nationwide sheet metal fabrication company. It’s definitely not my dream job or my passion, but I choose to stay, at least for now, for the great salary and free health insurance!
7. mebteach & end_of_debt: What originally motivated you to begin this debt free journey? What was your “I’m fed up!” moment?
I never had the “I’ve had it!” or “I’m fed up!” moment that a lot of people had. It was more of a moment of enlightenment for me. I had been a Dave Ramsey follower for years but had not completely committed to changing my financial life until I heard a solocast by Adam Carroll on the Build a Bigger Life Podcast. It was only 15 minutes long, but it changed my life and made me realize that time freedom was what I truly wanted, and from there, I went into action planning how to achieve it. Listen to it and his other solocasts and interviews here. I strongly believe that debt ties you to a job and that financial freedom and TIME freedom can only be achieved after the foundation of debt freedom is established.
8. mckeller22: I assume your husband was the free spirit, how did you get him to agree to go on this journey? It seems he works a lot of O.T. too, was that his idea or yours?
Even though my husband is more of a spender while I’m definitely a saver, I’m actually much more of a free spirit than he is. My intensity on this financial journey is so that I can be truly free for most of my life, instead of doing what most people think of when we hear “free spirit” – that is, blowing money while tying myself to a job until I either die or become physically unable to work.
He has been completely on board from the start and was completely debt free except for my engagement ring by the time we got married. We both knew that if we did this right and never raised our standard of living now that we would have two incomes, we could be set for life. We live on one income and plan to do so even after our mortgage is paid off. The other income will be used for our large financial goals and building wealth.
Regarding his overtime, he does work a lot of it, and he does so very willingly. It’s not only to keep us moving on this journey but to help out his department. He’s very passionate about his work and has always gone the extra mile as far as overtime opportunities even before we were married.
9. happilyyharrisxo: How do you budget your money every month? Gas, grocery, sinking funds, etc.?
We use a zero-based budget for a family of two adults and one six-year old, and we use a list in the Cozi app to add topics that we would like to add to the upcoming month’s budget as we think of them. Doing this keeps our budget meetings very short and keeps us from forgetting to budget for upcoming expenses.
My budget format is on Excel and is divided into three parts – Monthly Bills, Sinking Funds, and then Cash/Miscellaneous. We fill out the top two parts first, then groceries, gas, daycare, prescriptions and other essentials. After that, our formulas in Excel show how much is left over based on our projected income (I’m on salary so this does not vary month-to-month), and we prioritize our list while adding the topics to the budget until we hit $0. We do not budget at this time for savings or paying off debt since we use all of my husband’s income as mortgage principal payments, so we do not include his income on the budget.
10. debtfreeby35_: I think everyone has asked my financial questions for you, so my question is do you plan to have any more children?
At this point, no. My stepdaughter came into my life when she was three, and I’m pretty happy at this point with the fact that I’ve never changed a single diaper in my life!
11. tobedebtfree: Was it a difficult decision for you to choose paying off the house early instead of pumping up retirement contributions? Why did you make the decision you did?
When we first started discussing pulling the trigger and actually starting this journey, the thought of lowering our retirement contributions from 15% each to 5% and 4% just to receive our employer matches gave me serious anxiety. However, we never really had Baby Step 2 and figured with the time it would take to pay off the house (two years was the estimate at the time but will be shorter), we could meet in the middle and treat this as our version of Baby Step 2.
At this stage in our journey with as much as I’ve learned, I doubt we’ll even go back to contributing 15% to Baby Step 4 or starting Baby Step 5 back up. I don’t feel that I have much control when it comes to investing in mutual funds, and we will probably focus most of our energy and money into investing in real estate. Regarding Baby Step 5, we want our daughter to have a lot of skin in the game if she decides to go to college, and we will decide at that time how we want to contribute. We will be able to cash flow whatever amount we decide to help with.
For more information about the Baby Steps mentioned, I recommend purchasing or checking your local library for The Total Money Makeover by Dave Ramsey. It will completely change your life!
12. manvscash: I’ve got a good one! My husband and I contribute pretty heavily to retirement (14% & 10%). We are debt avalanching our debts (2k CC, 2 cars, and the house all under 3.50% interest indefinitely), but we aren’t struggling to do any of these things. Everything but the house will be paid off in 16 months, and the house by 2023. Things are comfortable! Would you suggest we pull back from our 401k’s to pay off debt faster? Or should we do a little or both (pay off debt while saving for retirement) so we don’t miss out on compound interest gains?
I think it really depends on the way your brain works. In my mind, building wealth while still having debt gives me a mental picture of one person dumping dirt in a hole while another person shovels dirt out. I also think that a lot of the advice we’re given about retirement savings is aimed at MUCH older, LESS ambitious people that you and me. As young, ambitious, disciplined and focused as you are, are you really going to retire the traditional way? I can’t see that being your life. It made me anxious pulling back on retirement contributions, but my mindset is changing to focus more on streams of cash rather than piles of cash. Retirement savings = piles of cash.
My answer may have gone off on a tangent, but as you know, it’s not a one-size-fits-all scenario. As for my situation, which is all I can speak for, we decided to focus all of our energy into paying off the house in as short amount of time as possible so that we can be done, never look back, and start my 30’s with a clean, 100% debt-free slate and a net worth to build on.
13. perfect_cents_living: Besides living off of one income, do you or your husband have a side hustle to help pay off the debt faster? If so, I’d love to know!
We sure don’t! My husband just signs up for all the overtime he can. He is constantly on call, so it would be difficult for him to get a side job, and he’s old-fashioned so he doesn’t like the idea of me having a second job. I provide “Live Like No One Else” wristbands, but it’s more to unite our community and keep up my blog.
14. lucy.lorraine: What type of planner, journal & books besides the usual Dave Ramsey reads do you recommend? Thinking of taking FPU again, because with having to relocate homes on such short notice and recently becoming a mom of two we just have not made time to budget, let alone create a separate Instagram blog page! Need help.
I use an inexpensive Recollections Creative Year Planner and journal combo primarily to keep my blog organized, and I’ve never taken Financial Peace University, but the group setting may help you stay on track.
Four books I usually recommend:
- To spark your fire and open your mind: Think and Grow Rich by Napoleon Hill
- To improve your relationships: How to Win Friends and Influence People by Dale Carnegie
- To broaden your financial mindset past Dave Ramsey: The Millionaire Fastlane by M.J. Demarco
- To stay motivated and set goals: See You at the Top by Zig Ziglar
As far as budgeting, I recommend finding or developing a budget format that works for you and setting up a few minutes somewhere in your daily routine to log on your bank account and balance your budget. I do this every morning, and it only takes 2-3 minutes tops, depending on if there were even any transactions the previous day. Use cash envelopes to keep your budget simple and keep you from having to log and balance transactions!
15. more_briana & getbravemama: What advice would you give to someone who is in midst of their debt journey and losing motivation? Making extra income isn’t the problem, but discipline to use that (hard, sacrificial work) money toward debt is.
My tips for staying motivated:
- Leave behind the common excuse that there is no time to read. Listen to audiobooks while driving/working out/preparing dinner or read while eating breakfast or lunch. Keep a book in the bathroom and read a few pages instead of playing on your phone. Seriously! Do what you have to do to find ways in your daily schedule to squeeze in at least 30 minutes of reading.
- Listen to podcasts. Some that I suggest are Dave Ramsey, Listen Money Matters, The Money Nerds Podcast and The James Altucher Show. I also listen to Real Estate Investing podcasts even though we are a couple years away from our goal of purchasing rental properties, and they keep me motivated to get through this baby step so that we can reach our bigger goals. Thinking big picture is key when pushing yourself through financial marathons of goals.
- Create a social media account dedicated to your goal and/or a lifestyle blog to document your journey. An Instagram account will keep you surrounded on social media by like-minded people in the Debt Free Community, and having a lifestyle blog definitely helps keep you accountable. I started out using a free plan through WordPress.
- Vision boards work wonders, and if you don’t have a place such as a cubicle or desk that you spend most of your day, even changing the background of your phone to reflect your goal will be a constant reminder. Out of sight, out of mind – so get creative and figure out ways to keep your eyes on your prize.
anndot1: What are your plans with the site after the mortgage is dead? I’m excited to find out!
Good question! I will continue to share my financial journey, especially since we plan to start investing in real estate. There’s not much out there from people in Baby Step 7, so I hope that by sharing my life after Dave, I can provide realistic expectations to people who are having a hard time envisioning what life is like when the baby steps are completed. Stay tuned!
Thanks again for the opportunity to answer your questions. If you would like for me to elaborate on any of my answers, just let me know!