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Debt Help

How to use a no-spend challenge to pay off debt and save (with Frugal Friends)

October 31, 2022 By Bob Lotich, CEPF®

(The following is an abbreviated transcription from a podcast Linda and I recorded with Frugal Friends Jen Smith and Jill Siriani. Please excuse any typos or errors.)

Start a No-Spend Challenge

Today we are chatting with Jen Smith and Jill Siriani (hosts of The Frugal Friends podcast).

Jen is the author of a best-selling book on Amazon called The No-spend Challenge Guide and she ended up using no-spend challenges to not only help her pay off over $70k of debt, but also to learn a lot of deep lessons about herself.

As the book states “you’ll learn how to use No-Spend Challenges to reach your financial goals faster and transform your spending habits to finally be able to stick to a budget.”

This is very interesting to me, because 30 day challenges have been very significant in my life. They have been very powerful in my life, with great impact. So I am intrigued by this idea of a no-spend challenge because I’ve never done a no-spend challenge before. There’s a lot of value in this and we’ll get into that.

Now before we get into the details of the book, I recorded our discussion that you can listen to on our Podcast. But, if you would rather read the full transcription, you can do so here in this article!

The No-Spend Challenge

Bob: So you guys have this book The No-Spend Challenge Guide on Amazon’s best seller list. You have a ton of reviews and it seems like it’s going really well. I want know how this started for you. I’m assuming you both went through no-spend challenges and it must have impacted you to some level that inspired you to write a book about this. I would like for Jen to share her story. And then Jill, I want to hear about your story.

Jen: So I actually wrote and published the book shortly after I met Jill. But I used no-spend challenges to essentially teach myself frugality. So my husband and I had $78,000 of debt between us and we wanted to pay it off. I really thought that I could just side hustle my way out. Like I was already buying the generic brands at the grocery store and I thought that meant I was responsible with my spending.

Bob: Yeah. 

Jen: It didn’t help that on the way home from the grocery store, I was buying Chipotle for dinner. There was a disconnect there. 

Linda: Yeah. 

Bob: Yeah. 

It’s about spending less, not making more

Jen: So I thought I could just side hustle my way out of debt. And two months into that plan, I was working so so many hours that I gave myself shingles from the stress.

Linda: Wow. 

Bob: That’s no fun. 

Jen: It was not. And I still kind of have the nerve damage from that. So when I get stressed, my body kind of reminds me to slow down. 

Linda: Wow. 

Jen: So a blessing and a curse, I guess. 

Linda: Yeah. 

Jen: I realized I had to figure out how to spend less. But I really didn’t want to give up the things that I loved. But honestly, I couldn’t tell you what I loved and what I didn’t love. I wanted to spend money on anything I wanted whenever I wanted. I’m an adult.

So I decided if I’m going to go in on something, I go all in. So I was like, okay, I will spend a month just not spending money, besides like on bills and debt payments and all that stuff. I will cut out everything and just put all the money towards debt from what I save.

I didn’t go into it thinking that I would find what I value and what I want to spend money on guilt free. And what I am spending money on that I didn’t realize, like the Chipotle trips on the way home from the grocery store. 

Bob: Yeah. 

Jen: I didn’t go into it thinking I’d discover those, but those were the long term benefits of the challenge. And frankly, much more beneficial than maybe the couple hundred dollars I saved by doing the actual no-spend challenge. And so I did several of those during the two years we were paying off our debt. And I was like, this has been eye opening for me in the long term benefits of these things. And then figuring out how I can still have what I value while not spending money, like forcing myself to get creative.

Bob: Yeah. 

Jen: And so, that’s why I wrote the book. And that challenge was an inspiration for the early episodes of the podcast, when we started it just maybe six months after.

Permission to spend

Bob: Yeah, that’s cool. All right. So Jill, tell me, have you done any no-spend challenges? Like have they impacted you at all?

Jill: Oh, my whole life is a no-spend challenge. There’s something to explain here. I think that certainly when people think about the word frugality, it can oftentimes get associated with cheap and deprivation. And I definitely don’t want to spread a message of something that’s not attainable. But, I also want to recognize all of my my hoarders, my money hoarders and savers out there.

And the people who are like, I’m not going to spend if I don’t have to. That has been developed and cultivated in me sometimes. Well, out of necessity from previous experiences, but then just adopted as a lifestyle in many ways. And so I think for me, my journey of frugality and an understanding that has come out of not spending is a permission to spend. Which is similar to what Jen is describing. We just got there by different modes of transportation.

Jen is the brains behind The No-Spend Challenge Guide. She solely authored that. The only thing we’ve co-authored together is is a workbook. But yes, I have done no-spend challenges. Although that’s not necessarily my issue. My issue is permission to spend. And permission for my partner to spend.

Bob: Yeah. 

Jill: But of course, paying attention to where the spending is, or the lack of spending is, has definitely informed me about myself and my values. Like Jen is saying with the no-spend challenge. And then creating that permission of, but now how do I want to utilize this resource of money. And where do I want to save? And if I’m saving, what’s the best place to be putting that money. And if I want to spend, where’s the best place to spend that money. So my journey has been more of the where can I spend with guilt free? 

Linda: Yeah. 

Bob: Yeah. 

Spending money and your spouse

Linda: We should talk a little bit more about that because that is something that I think a lot of people listening to a podcast about money are probably leaning a little bit more on the side of needing to give themselves and their spouse, specifically, permission to spend. I would love for you to talk a little bit more about that. I mean, this is not my problem. I’m like, yeah we can spend money all day long. I have no problem there. 

Bob: She’s right. 

Linda: Like, I think it’s interesting because there can be that tension of, I feel like you just don’t want me to ever spend money and I have always have to ask permission. Right? So, yeah, expand on that. 

Jill: Oh, I can talk to this. Jen has had firsthand observation of this very conversation. My husband is amazing. I really hit the jackpot in all of the layers and levels. 

Linda: Congratulations. 

The spending habits

Jill: Yeah. He’s so great. I have such great things to say about him. In my opinion, he spends a lot of money on shoes. Like I think he’s shoe obsessed. He denies this. He does not agree and digs his heels in. Not only does he not agree that he’s not shoe obsessed, but he claims that I have more shoes than him. 

Linda: Have we counted? 

Bob: This should be easy to figure out, guys. 

Jill: But the thing is… 

Jen: They need a third party.

Jill: His shoes are also everywhere. I feel like I have to whisper cause he is in the house. I can’t get an accurate count because I’m still discovering them. There’s some in the trunk and then there’s some in the garage and then there’s some out on the patio… 

Bob: All right. Fair enough. Fair enough. 

Jill: Yeah, okay. However, it came to this conversation recently where I was kind of poking at it. I don’t really care, we’ve got money for the shoes that he wants to buy. But for me, I don’t get it. If I’m going to buy a pair of shoes, it’s going to be functional. It’s got to be that a pair of my shoes just broke. Or, suddenly I decided to become a runner and I need good running shoes. Like there’s got to be a reason it’s going to be form and function. 

Bob: Yeah. 

Jill: And we’re not just buying things to just buy them. 

Linda: So funny. 

Realizing that your spouse “just likes it…”

Jill: But it occurred to me, as we were having this conversation, the connection that really helped me to create space and permission was he just likes it. He just likes shoes. There’s not many other things that he’s going to spend frivolously on…

Bob: Yeah. 

Jill: …other than on shoes. I think that’s why it strikes me like, yeah, you buy construction stuff. That makes sense because we’re building a house. And, we’re doing renovations. Or, you buy music equipment because you’re writing an album. That makes sense to me. 

Linda: Mm-hmm. 

Jill: But why do you just need another pair of shoes? Like, what shoes is this going to replace? Or, what problem do you have now with your shoes that this is going to solve that problem? And he’s just like “… nothing. I just like them. I think they’re really cool.” And something clicked with me.

Value based spending

Jill: We talk all the time, but of course I can be a little bit dense of values based spending. And understanding where our values are and how our spending and decisions and actions can align with that. And for me, it clicked when I realized he just likes it. This is fun for him. He finds it beautiful in his own way.

It’s something that he would enjoy spending money on, enjoy wearing. He just likes it. It might not form a function. It might just be form. And permission, I kid you not, it’s like a flip switch to my mind. And I thought he values that and I value him. So I’d love for him to be able to purchase those shoes.

Now it’s not like sky’s the limit. He can’t like buy all five of the shoes. He’s got his eyes on right now. 

Bob: Yeah. 

Jill: But I think when it comes to these money conversations and getting our partners to, or not to, when we can bring it to that deeper level of values.

Linda: Mm-hmm. 

Jill: And when we can honor the other person and the needs that they represent and the uniquenesses that they represent, it becomes a much different conversation than just how do we want to spend this $50? Can you click that buy button? It becomes, well, what does this say about you and how does this connect with maybe some of your needs wants and desires and values? And how can I honor that in you before we even get to the buying conversation? 

Linda: Yeah.

Bob: I love that. That’s good. Yeah, that sounds very familiar.

Questioning your spouse’s decisions

Linda: Yeah, I’m the one that just wants another pair of shoes. And he’s like why? Bob basically just went through his wardrobe the other day. And got rid of half of his clothes. 

Bob: It was really half. 

Linda: And doesn’t want to replace them. He’s like, I just have too many. 

Bob: No, I want fewer things. I went from like 10 pants down to three pair of pants.

Linda: I’m like, dude. 

Bob: And I’m happier. 

Jill: But I also realize that we want freedom. And we talk about this all the time on our podcast. That our financial journeys, there’s so much freedom in it (here’s my checklist to financial freedom). It’s not a one size fits all.

And something that I also realized is my goodness, if he questioned every decision I make and some of the ways that I question him, that would feel so stifling. And so also checking my own self of… he never questions me if I want to buy something. Usually it’s because like, I’m not hardly buying anything, but in other areas… 

Bob: He’s like applauding you. 

Jill: Oh, he put a pause on our credit card account one time, because they thought it was an odd charge that something was bought off of Walmart.com, and they called him. And he is like, no, no one. I didn’t and my wife never buys anything, so no. He canceled the card.

I’m like, what happened to our credit card? He’s said there was a weird Walmart charge. And I told him, that was me. He’s like what?! You’ve never purchased from Walmart.com. Like that one time I did…

Linda: You need to give him a heads up when you buy something.

Jill: Exactly. So he doesn’t cancel all of our cards (here are my credit card recommendations). 

Bob: That’s great. 

Jill: But again, back to that freedom. Where can I create freedom for him? How would I want to be treated, right? Just back to that golden rule of …

Linda: Yeah. 

Bob: Yeah. 

Jill: I don’t want to stifle him and I don’t want to be stifled. There is freedom here and where we can value each other.

Linda: Yeah. 

Bob: Yeah. That’s good. All right. Linda, do you have something to add here? 

Frugal vs. cheap

Linda: Yeah. So you mentioned this here, but you also in something that I read about you guys. About how frugality isn’t cheap. And they are two different things. I would love to hear more about that and your views on that and how that filters, maybe your buying decisions.

Bob: Well, yeah, because so many people, they are synonym. 

Linda: Right. 

Jen: Yeah. 

Jill: Mm-hmm. 

Bob: I want to hear your take on it. You have frugality in your name. So, I’d just love to hear how you guys define those two terms. 

Linda: Mm-hmm. 

Jen: Yeah, that is one of our core missions. To remove that synonymous… synanonymity, if that’s a word, between frugal and cheap.

Bob: Yeah. 

Jen: Before I was paying off debt, I thought I was spending soundly by buying generic products at the grocery store. Or buying the $3 clearance clearanced shirt at Target and doing stuff like that.

Being frugal

Jen: That’s what I interpreted as being frugal, or being like conscious with my money. But what we’ve really discovered through this journey, and actually just having lived life, is that when you buy quality, that you buy less. And so that kind of led us to not only does quality stuff lasts longer, but it’s often also made more sustainably. And the human interaction from the source to our house is less and better.

Being cheap

Jen: And so for us, we’ve discovered that cheap is really poor quality and it’s inconvenient. So maybe frugality isn’t always the most convenient option, but it’s definitely not inconvenient. It’s not like spending hours clipping coupons to save $3. So cheap is inconvenient, it’s lesser quality. It’s at the expense of other people sometimes.

Stewardship

Frugal people can be looked at as moochers. And we’re definitely not that. So it’s taking all that away and putting that on cheap and viewing frugality as just being wise stewards of our resources. 

Bob: That’s good. 

Jen: And stewarding these resources as well as possible.

Linda: Mm-hmm. 

Shortsightedness vs. longer term thinking

Bob: Would you say that being shortsighted is in alignment with being cheap? Specifically in terms of the value idea of buying this cheap thing . That if you would’ve spent $15 more, it would’ve lasted five years longer type of thing. So would you say that shortsightedness is part of cheap? And then longer term thinking falls a bit more in line with frugality? 

Jen: Yeah. Well, some of our resources aren’t just money. It’s also time. And so if you are having to buy new things more frequently, that’s a waste of time. Or you’re having to repair things more frequently, that’s waste of time.

And so looking into the future and thinking about your future, giving up that short sidedness that craves instant gratification is definitely part of the definition of frugality. 

Linda: Yeah. 

Bob: Great. 

Linda: Our last house, when we moved to that house, we had pretty much gotten rid of all of our furniture and we were refurnishing this house. And so there was this tension of, okay, we need to budget this money so that we don’t spend half of it on a couch or whatever, which you could very easily do. You know, you walk into Restoration Hardware, you want it all. You know? And you can buy one thing there, or you could furnish the rest of your house.

But I remember we were going to put up these curtains. I had this specific vision in mind of what I wanted. And I found them at Anthropology. I was like, oh Anthropology, you guys know it’s not cheap there. But I was like, this is exactly what I want. And I remember trying to find them several different places, trying to find something similar.

I found some at Target that would work. And I thought, but I’m going to hate these in about a year because I’m going to be mad that I didn’t get the ones I wanted. And it was one of those moments. We still have those curtains, they’re still beautiful. They look amazing. Don’t you think? 

Bob: Yeah.

Linda: It’s like we would’ve probably replaced them two or three times by now, had we not just gotten this one. So yeah, it was one of those times where it made a little bit more sense to buy the nice more expensive item instead of buying the cheap one. 

Bob: Yeah, I think that’s the tricky thing is identifying those things because sometimes it’s not super clear on the front end.

Linda: Yeah. 

Bob: And I think, especially with you with clothes. Because like you’ll find something that you’ll wear the heck out of for 5-10 years. And then other times where you think you will, but you just won’t. 

Linda: Then I don’t. 

Bob: And, I think that applies to a lot of different things.

Linda: Right. 

What a no-spend challenge looks like

Bob: Yeah. So I want to come back to the no-spend challenge. I want to talk about this a little bit, because I think this is just a really interesting idea. I’ve used 30 day challenges to really implement some significant changes in my own life.

And I know the power of that, you know? I think Jen might have been talking about this. But there have been times where I have actually found it easier, maybe in regards to sugar. Like something that I like a little bit too much. I’m like, I’m just going to cut back for a month. And I actually really struggle with that. But if I just completely cut it out and have none, it’s actually easier. Which is so counterintuitive and doesn’t make any sense, but at least that’s the way my personality is wired. I’ve found that to be true.

So for somebody listening who’s like, all right this idea is intriguing. Give me some visuals. What does this look like practically? What did you do Jen, as you’re going through this? Of these 30 day challenges, are they one week? Are you having a cheat day? Like how is it laid out? How is it structured? Will you just go through some details for me?

The radical middle

Jen: Yeah. Well, first off I think it’s much easier to be extreme in wherever you are. And that’s why on our show, we’ve coined the term “the radical middle.” Because in any space, like to get popular, you kind of have to have this extreme view. To debate or to write on, or to get interviewed on. Being in the middle and figuring out what’s right for you and your unique situation is not sexy. And you know, nobody really cares.

So, to an extent it’s easier when you’re getting started to have these seasons of extreme living. And that’s kind of what the no-spend challenge was for me. It was a season to not have to think. Like at the end of the day, after I’ve made decisions all day, decision fatigue definitely sets in. I could have been good all day and at night, I just have no more energy and I’m ordering takeout.

Setting up the challenge

But if I set myself up for a month long challenge, and you could do it at whatever time fits you. Sometimes people are like, “oh, but I have a wedding in three weeks. So I can’t do a month long challenge.” Well, that’s fine. Then like skip that one day. You know you’re going to have to spend money on a wedding gift or whatever, like don’t cheap out and not get the wedding gift for your friends.

Like it’s not an excuse. But you can make certain exceptions and plans in your no-spend challenge. You could do it for a week, a weekend, a month, whatever suits your need in your season.

Getting creative and learning to say “no, but…”

And then just say no to everything. I think my favorite term is “no, but…” Because it’s like, no I can’t spend money, but let’s get creative and figure out how we can accomplish the same thing without spending. So do you want to go out to dinner? No. But do you want to come over and we can see if I have a frozen pizza? Or do you want to go shopping or get our nails done? No, but do you want to come over? We can paint our nails at home. We can watch Netflix or whatever.

So it gives you the opportunity to get creative to try and recreate all the things that you love while you’re spending money, but not spend money on them. 

Bob: Yeah. 

Jen: For me, community is one of my core values. So I made it a point to find as many free activities during my no-spend challenge so that I could just fill my time either with side hustling or doing free events.

That was my goal. Anytime that I might be tempted to spend money, I would just fill it with free activities that really spoke to my values. We live in a city that thankfully has a lot going on, so that was easier for me. But it could also just be like finding people that maybe you’ve wanted to get to know, but haven’t had the opportunity to. And now’s your chance to start forming some new relationships. So strategically, I just like to fill my time as much as possible intentionally without spending money. That way I don’t give myself the opportunity to accidentally spend. 

Linda: Yeah. 

Expenses allowed in a no-spend challenge

Bob: Okay. I’m trying to paint the picture. Just to be clear for myself, and also for anybody else. So what this looks like for you, as defined by you, this no-spend challenge. You’re not buying stuff on Amazon. You’re not going out. You’re not ordering food out. But you are buying groceries, right? You’re still paying the bills. 

Jen: Yeah. 

Linda: Or toilet paper. 

Jen: Some people like to do a pantry challenge on their no-spend challenge. So they have enough stockpiled where they’re like, I’m actually not going to buy groceries for a month. I’m just going to eat out of my fridge, freezer and pantry. I’ve never kept that much on hand. I’ve always lived with smaller kitchens. So I would always buy fresh produce. But I would really try and dig into things that I had, like spices and stuff I’d have for a long time. And I try to dig into all those things and the freezer that might be in there a little too long. 

Linda: Yeah. 

Jen: But no, I’d always buy fresh produce. 

Should you celebrate at the end of the challenge?

Bob: Okay. So if you do this for a month, like after that month, do you take a vacation of some sort where it’s like, all right, it’s time to celebrate. We just kicked butt for a month!

Jen: Mm-hmm.

Bob: Now we’re going to go out to dinner. How do you handle that? 

Jen: So… 

Jill: That’s where a lot of people can get definitely… 

Linda: A little too crazy? 

Jill: …derailed. Because I think a big point of the no-spend challenge is to jump start some savings.

All of it is a learning process

Jill: Of course, there is always a lot of learning and discovery that happens, even if we don’t do it perfectly. And we won’t. Especially if this is your first, second, third time trying.

There will be days where you make a mistake and you buy something. But all of it is learning. All of it is useful and beneficial to helping us understand ourselves. So at the end, it’s just as important to have preparations for the back end as it is for the front end. Right?

Deciding what to spend money on

So before you go into a no-spend challenge, you’re going to consider what are the things that are okay to spend on. Hopefully your mortgage (if you have one), your bills, the things that are necessary for survival. And what are you not going to spend on. People come up with all sorts of rules. There’s freedom and flexibility in it. But certainly if it’s your first time, consider your discretionary spending. Cut your subscriptions. Feel free to slice and dice as much as possible.

What is your “why?”

Jill: But then also consider what’s going to happen at the end. If you have a why for the no-spend challenge from the beginning of jump. Do you want to start saving or learn about your spending habits? Or maybe putting “X” amount of dollars away for your “why,” that is going to really help on the back end to not derail all of the progress and learning.

End of challenge action and reflection

Jill: And so the next step is going to be, do the thing that you had hoped you could do at the onset of this. Was it a savings goal? Was it to learn about your spending habits? Is it to put a certain amount of money away for the holidays? Then do that and utilize all the things that you just learned in your no-spend challenge to celebrate. Challenge yourself, to celebrate for free. Or already have set aside a little bit of cash to be able to go out for dinner, decide ahead of time what that’s going to be.

Don’t let yourself be surprised by an impulse decision where now everything that you just worked so hard for is completely down the tubes. So at the tail end be sure you’re reflecting. And we often forget that with anything that we do. To pause, reflect, look back, consider what we learned. It is hard work, but that is part of the challenge.

What did you learn?

Jill: Once you’ve done it. What did you learn? What did you learn about yourself? Even in the areas where you might have considered it to be a failure. None of it is a failure when we’re looking at this, as far as personal growth, even if you failed the entire thing. What does that show you about yourself? 

What do you now know? What would you want to do different in the future? So that reflection piece is huge. Definitely celebrating, but not in a way that’s going to sabotage you or not be beneficial for you overall. 

Rewarding yourself

Jen: Personally, I would get a nice latte after I completed a challenge. That’s just my thing though. I love like getting coffee, like lattes out. 

Linda: Me too. 

Jen: And so that would be my reward after a month of being really good. I would get my latte. And it would be more special than just the mindless lattes I would get, because I drove past the coffee drive thru. 

Linda: Mm-hmm. 

Jen: Then it was like really special after not spending money on one for a month. And I was like, I want to feel like this all the time when I get a latte that I really like. And I don’t want to waste my time getting lattes I don’t like. I want to get the ones that, even if they’re a little more expensive, are from the really good coffee shops. So that’s how I came out of my challenge and what I learned from it.

First time tips for doing a challenge

Bob: I love that. So I’m just, I’m processing. I’m thinking through all these pieces on this. This is really good. Okay. Let’s answer this. What tips do you have for someone doing this the first time? Who’s like, I don’t know what this is going to be. Like. I don’t know how hard this is going to be. I don’t know what to expect. Like what would you tell to somebody in that situation? 

Jen: Yeah. So planning is essential. Like you don’t just listen to this episode and be like, oh, I’m going to start a no been challenge today. Because it will not go well. So plan, it will not go the way you think it will go.

Linda: Right? 

Jen: Yeah. So planning is definitely essential. If you’re the kind of person that doesn’t want to buy groceries on the challenge, make sure that you have enough food. Or if you want to buy some groceries, make a meal plan for the whole month. You can do that because you know, you’re not going to be getting takeout. Give yourself a lot of grace too, in your planning.

Approaching the end of a challenge

Jen: Know that near the end of the challenge, you are not going to be wanting to make recipes from the feed. You’re going to be doing quesadillas, grilled cheese spaghetti with cheese on top, like many cheese. 

Jill: Lots of cheese. 

Jen: Lot of cheeses. 

Jill: So much cheeses.

Jen: Yeah. So like near the end, you’re going to need that comfort, real easy comfort food. So give yourself grace, don’t expect more from yourself than you can give. And if you go in with your low expectations, you will be pleasantly surprised. It will still be super difficult. But the meal plan is essential. Making sure that you’re stocked on household stuff.

So make sure you’re not at the end of your toothpaste. And you’re like, oh no now I have to buy toothpaste on my no-spend challenge. So just pay attention to the things around your house. And then while you’re on the no-spend challenge, give yourself grace when things pop up that there’s no way you could have planned for. Like, when your kid comes up with a permission slip and be like, I need $20 for this field trip today. And I’ve had the permission slip for three weeks, but I’m just giving it to you the day before. 

Linda: Right. 

Jen: Give yourself grace for that. That is not a failure. That’s just life. Life just happens. And it’s going to happen while you’re on your no-spend challenge. So when you go… 

Linda: Or you tell that kid, forget it. You’re not going. 

Jen: Right? Then they will love your no-spend challenge. They will be totally on board with all your other financial endeavors. It will be flawless. 

Bob: Yeah. 

Jen: So yeah, the planning and the mindset. The realistic and grace mindset, I think are the two most important things that I would take into it.

Make the rules

Jill: And then making rules. I think what can be really helpful for first timers is to look at what are the things you do typically spend money on. And again, you’re going to want to keep the things that keep the lights on. You’re going to still be paying your electric bill your water, bill, your housing, some sort of food. Again, if you’re not buying food, then have a plan for food or have an amount of money that you’re okay with spending for those 30 days on food. And from there cut everything else. So we’re thinking non-essentials versus essentials. Some of the way that you can get a handle on that is by looking back at your spending and your bills.

Out of all of that, decide what am I going to cut? And start to think, what am I going to replace that with that’s free? Doing a no-spend challenge there’s not longevity in this. We are not saying, oh, then this will become the way that you live your life. Again, it’s to jumpstart savings. It’s for learning it’s for identifying habits . And so engaging in it for that time, for the purpose that you’ve set out to accomplish.

Bob: Yeah. 

Discipline is important

Linda: I posted this on our Instagram feed, it says, “nobody wants to tell you why discipline is so important. It’s the strongest form of self love. It is ignoring current pleasures for bigger rewards to come. It’s loving yourself enough to give yourself everything you’ve ever wanted.” And I just thought that was so interesting. 

Jen: Yeah. 

Linda: You brought in this element of learning things about yourself. If you couldn’t make it the whole time. Or what did you miss the most? I mean, there’s something there about learning things that you didn’t ever realize before, because you’d never been put in that position. That I think brings you to, all right what’s really important to me? And how can I do more of that and cut out some of the other things. 

Jen: Yeah. 

Linda: And where do I need to just tell myself “no” more often, you know?

Rice and beans

Bob: It reminds me of, I remember Tim Ferris talking about this stoic idea of, and I think Tim still does this, where he like takes three days out of a month and just eats rice and beans, just to remind himself that he can do that. And it’s actually empowering to be reminded that I can survive on that. And so like all the extra is just extra. I think that’s a healthy thing to just kinda be aware of that. 

Linda: Yeah. 

Results of Jen’s no-spend challenge

Bob: But anyway, all right. So I want to talk numbers a little bit. So Jen, what did this look like for you?

I’d love to hear some numbers in terms of when you first started doing this. How much were you saving that first month? Was it more or less than you thought? Because you paid off like what, 70 something thousand dollars? And this was the big part of it, right? 

Jen: Yeah. So we paid off $78,000 in two years. Which was less than half the time we thought it was going to take. We thought it would take five years. And I really do think this mindset shift and this lifestyle shift did help in speeding that up. And it also gave me more time to pursue things that would earn me more money.

Bob: Mm-hmm. 

Jen: Whereas I would’ve been out spending money, instead I spent my time making money. 

Bob: Yeah. 

Jen: So that it just had this dual impact. I can’t remember the numbers, like specific numbers off the bat. But because of this, we were able to transition to living off just one income. And that’s pretty much how we’ve lived our life. Ever since then we’ve always lived on one income. And it was because we, just like said no to lifestyle inflation and tried to be intentional with the spending.

Savings results of a no-spend challenge

Bob: Yeah. So, for somebody listening and they’re thinking, all right, I’m wondering if I do this, am I going to save like a hundred dollars this month? Or am I going to save closer to a thousand dollars this month? In your experience, average middle class American family, like what are they closer to?

Jen: Well, gosh, I know different studies have said different things about the average American, like what they spend in non-essentials every month. And sometimes it’s over like a thousand dollars. So it could be, I mean, if that’s what you’re spending, then that’s how much you can save. But I know a lot of our listeners are living on smaller incomes and they’re looking towards frugality to be something to kind of help them over the hump. 

Bob: Yes. 

Jen: So then in that case it could be a couple hundred dollars. But I think as a percentage of your income and spending it could be massive if you’re talking percentage wise. Because I think, most of the time, we kind of try to live at 50%. Or at least that’s what the 50, 20, 30 budget kind of recommends (check out our Real Money Method budgeting course!). I mean, you could kind of predict it to be something around there if you want to kind of get a ballpark prediction. 

Bob: Yeah. 

Linda: Mm. 

Buying the book

Bob: Yeah. That’s crazy to think about. All right. Well, that’s really powerful. So yeah, this is really great. And people can find out a whole lot more about this whole idea by grabbing your book, right? 

Jen: Yes. 

Bob: The No-Spend Challenge Guide over at Amazon and probably other places, right? 

Jen: Yeah. Over on Amazon. And. it’s the only one named that long name. So it’s not hard to find. 

Bob: Great. Oh, go ahead. 

50/20/30 budget

Linda: Wait, let me just ask the question that everybody else might be asking. 

Bob: Okay. 

Linda: What is 50, 20, 30?

Jen: Oh, sorry. The 50, 20, 30 budget is a method for budgeting where you spend 50% on essentials, 30% on non-essentials and then I think 20% on savings. I might be mixing the 30, 20, but I’m pretty sure that’s it. And it’s not my favorite budgeting method, because I think incomes vary so widely that… 

Linda: Mm-hmm. 

Jen: It’s maybe if you’re at the average or median American income it might be feasible. But if you’re in a high cost of living area, that may not be right for you. Your essentials may be closer to 60 or 70%. So it’s just kinda like a standard guideline that’s given. 

Bob: Yeah. 

Linda: Gotcha. Okay. 

Bob: That’s great. 

Linda: All right. So sorry about that. 

The Frugal Friends

Bob: Well, yeah, I was just saying, yeah, so people can find you at your podcast, Frugal Friends Podcast, right? 

Jill: That’s correct anywhere you listen to podcasts and Frugal Friends Podcast on Instagram and Facebook, we’re all over the place. 

Linda: Everywhere.

Bob: Awesome. Love it. All right. Well, I appreciate you guys coming on. This was a great conversation. Enjoyed this. I think we need to figure out… we need to put No-Spend Challenge. That’s what we’re going to do. Sound good? 

Jill: We love it when our spouses recommend what we need. 

Bob: Exactly. 

Linda: Oh my gosh. 

Bob: She’s got plenty of challenges for me. Don’t worry. 

Jill: I don’t know if we left you with the right takeaway, but I’m glad to be here. Thanks for having us. 

Jen: Yes. Thanks for having us. 

Bob: Yeah. All right. Take care. 

My Checklist To Financial Freedom (PDF)

September 15, 2021 By Bob Lotich, CEPF®

I am one of those people who loves checklists.

Especially when I want to make progress in a particular area but don’t exactly know what steps to take.

my personal financial checklist that you can download - PDF!

They tend to help me see the big picture a little bit clearer.

Below is my personal financial checklist that I have been following.  

It covers many of the steps I have taken over the last decade that have helped me move from being a financial mess to having at least a little bit of an idea of what’s going on with my money.

Some of the listed items are bigger and will take a long time, and some of them are simple tasks that you can accomplish in a day.

Some will be relevant to your situation and some will not – that is why it is called “personal” finance – everyone’s situation is unique.

But, if you are just starting out and are trying to get yourself into a better position financially, I would suggest spending the next couple months checking off as many things on this list as possible.

If you do that you will be on your way to financial freedom!

Get my checklist to financial freedom (printable PDF) - its my 24-point personal financial checklist that has taken me to financial freedom!

Want to print this financial checklist?

You can download this checklist as a PDF and print it for your own use if you’d like.

NOTE: This is not a chronological step-by-step process, but like the title suggests it is just a checklist.

Some of the items can be done simultaneously, while others will require another item to be checked off first.

Hope it helps!

My Personal Checklist to Financial Freedom

✅ Begin tracking your AUM

This is commonly referred to as your Net Worth, but we stopped using that term and prefer the term AUM because we believe it is all His and we are just stewards managing what we have been trusted with. And that it is pretty insulting to define your total worth by a number.

But, all that said, tracking this number is the best way to measure your financial progress. So do it now if you haven’t yet. It might only take 10 minutes. Here is a quick video showing how.

✅ Start giving a percentage

Something. Anything. If you don’t have a dollar to your name, give your time. Just get the sowing and reaping process started.

Genesis 8:22 says as long as the earth remains there will always be seedtime and harvest and you can’t reap what you don’t sow. So just like a farmer wouldn’t expect crops without planting seed, we too must start sowing in the area that we want to reap.

Though it seems counter-intuitive (like many Biblical principles), giving is one of the best things you can do for your finances.

✅ Make a lifelong promise to yourself to spend less money than you earn

We could end this checklist right here and it would suffice.

Just about everything listed below falls into this category. Spending less than you earn is the key to wealth-building, and is the most important lesson when it comes to personal finance. You can do everything else right, but if you spend more money than you earn you will not be in a good financial position.

This is the simple rule that allows families living on a $40,000/year salary to retire with millions and that causes millionaires to go bankrupt. You have to commit and decide that you will not spend more money than you earn.

✅ Begin learning what the Bible has to say about money

The Bible really has a lot to say about our money. I wrote an article called 5 Bible Verses about Money that Every Christian Should Know and if that isn’t enough, here are 250 Bible Verses about Money to get a deeper dive.

✅ Find a budget you can stick with

Creating a budget can be as simple or as difficult as you make it. I love having a budget in place – contrary to what I thought before I tried it, it doesn’t feel like we are in handcuffs, but rather that we are more free to spend money in the areas we want to.

We have a bunch of free free budgeting spreadsheets for excel you can download, but if you really want the best budgeting solution I have found, take our quick course to learn the Real Money Method. It is by far the quickest and easiest to stick with approach I have ever seen.

Once we found this method that we could actually stick with, it instantly improved our marriage, has saved us thousands of dollars, and given us so much more peace with our money.

✅ Negotiate a better rate with credit card companies

While I was working to pay down my debt, I spent some time on the phone negotiating with my credit card companies to get a better interest rate.

It isn’t a guarantee, but I consistently would get off the phone with a better interest rate than when I called.

✅ Pay off all credit cards

Proverbs 22:7 says that the borrower is slave to the lender.

Having been both a slave and a free man in this area, I much prefer being free. A wonderful second benefit is that you can build wealth faster when you are out of debt.

Here is a 23-page guide I wrote on how to pay off credit card debt.

For paying off debts, I recommend the Debt Snowball Method. Te speed the process up I also transferred all my CC balances to get 0% on all my cards.

✅ Get the employer match on your 401(k) or 403(b)

If your employer has a matching program in your 401(k) or 403(b) (many of them do), you should try to take advantage of that if at all possible.

My former employer had a 100% matching program. So if I put in $500, they put in $500. That is a 100% return on my investment. It is free money and you don’t want to pass this up if at all possible.

✅ Build an emergency fund of $1,000 – $3,000

This was another thing that we did to give us a lot more peace with our finances.

It can be expected that unexpected things will happen. Creating an emergency fund is just proof that you are expecting them.

We have since used our emergency fund to save us even more money.

✅ Sell your junk and make it a habit

Way too many of us have way too much stuff.  I recently read that the average U.S. household has over $7,000 worth of stuff that could be sold on Ebay or Facebook Marketplace.  Not sure if it is true or not, but I have found from personal experience that we have a lot more than we realized.

In this article I show exactly how we made $2,145 in one month selling a bunch of our stuff from around the house.

A lot of it would never be missed if we got rid of it. Here is step-by-step instruction on how to sell on eBay if you have never done it before.

✅ Pay off car loans

I am convinced that the one of the biggest things that keeps the middle class Americans in the middle class is their insistence on spending way too much of their income on cars. And it doesn’t have to be that way.

You don’t always have a car payment. You can still drive fairly nice (and extremely reliable) cars without having a car payment.

Once we paid off the first one, we just kept “making the payment” to our savings account and watched the savings grow. Once we had enough saved we bought the next car with cash, and we have been doing it that way ever since.

For more inspiration read How Cars Affect Your Financial Freedom.

✅ Create a FLOP for your loved ones

Since I handle the finances in our family, I know a little more about what’s going on than Linda does.

I created this file, which I call our Financial Life on One Page (FLOP), as something that she could go to if I died prematurely. I combined it with our balance sheet (or AUM tracker) to make it one file that covers all the financial details that she would need if I were gone.

✅ Start giving 10% (if you aren’t already)

Giving 10% of your income (or tithing) is an important milestone. God was the original giver and we were created by Him to be givers as well.

We have witnessed so many miracles in our life in the area of giving and it also happens to be the only place in the Bible where God says it is okay to test him – see Malachi 3:10.

✅ Better organize your bank accounts

I discovered that having more than one checking account allowed us to manage our money much cleaner and with more efficiency.

Here is a little on how we used to organize our bank accounts. To see how we do it today, check out the Real Money Method course.

✅ Spend more on what you love by cutting spending on things you don’t

One of the things that most people fail to realize is that by cutting out the things you don’t really care about, you can free up more money to spend on what you love.

This requires you to question expenses, re-evaluate current mindsets, and possibly break bad habits, but it is worth it. I wrote about 25 ways to save money by not being “normal” which will get you started.

✅ Simplify your bill-paying process

I tend to be obsessed with efficiency. And I hate wasting time. So I created a simple system for paying my bills each month to make it fast as possible all while virtually guaranteeing that I never accidentally miss a payment. It made my life a lot easier and eliminated a lot of stress.

✅ Pay off student loans

Paying off our credit cards felt good, but man, getting those student loans off our back after all those years was such a relief.

For many of us it is a long hard road, but invite God in on our journey, and I believe you will see things move a lot quicker. Once you do read this article about how to get your student loans paid off faster and how you might be able to get your loans forgiven!

✅ Start investing in low-cost index funds in a Roth IRA

A financial mentor of mine told me that the “Roth IRA is a legal loophole that is too good to last.” He is convinced the government is going to shut it down at some point, but in the meantime, we have the ability to take advantage of it.

Here are some ideas of how you can get started investing today or if you want a step-by-step instruction (down to the buttons to press) we created our 10x Investing course just for you.

✅ Calculate your true hourly wage

This is a fantastic exercise to help you more accurately know what your time is worth and whether or not that job you have is worth it. Most people are blown away at home much they actually earn after factoring all the expenses that come with a normal job.

Try it here: How much are you really getting paid?

✅ Prayerfully set career goals

Following up on the previous task, is the current job worth it? It is going to help you reach your career goals?

If you continue doing what you are doing, where will you be in 5 years – or 20 years? Are you doing what you love?

If not, find someone doing what you want to do, take them out to lunch, and ask them how they did it.

✅ Create (or update) your will

Save your loved ones a headache and just do it. We have an article about how you can create a will in about 10 minutes and for free.

Just mark it on your calendar for this weekend and be done with it.

✅ Get life insurance

For most people I recommend buying term life insurance over whole life.

There are some cases where whole life can make sense, but generally term life insurance seems to be a better purchase for most people.

When I recently got another term policy I used Zander to get a term life insurance quote and was happy with the process. You can read more in my Zander Term Life Insurance Review.

✅ Pay off your house early

As part of getting out of debt, I want to live without a mortgage as well. Here are some ways to pay off your house early.

Just imagine your electric bill being the most expensive bill each month!

✅ Give beyond 10% (if you aren’t already)

The more I understand stewardship, the more I realize that every dollar that is in my bank account isn’t mine – it is all God’s.

A big part of being a good steward is understanding this and never letting money get a hold on us. I am convinced that the most fulfilled people in the world are those who are always looking for ways to give more of themselves.

Time, energy, or money – it is in our DNA to be givers and like the parable of the talents teaches us, if we are faithful with small amounts we will be entrusted with more.

God has led us on a journey of giving our age as a percentage of our income (currently 40%) which has stretched us, but the amazing blessings, miracles, and provision that we have seen since we began has been mindblowing.

We have found that R.G. LeTourneau’s words are true: “I shovel it out and God shovels it back. But God has a bigger shovel.”

The financial checklist

So this has been the checklist that we have followed to this point. Hopefully it serves as inspiration or a guide for you on your financial journey.

Please leave a comment below to say hi!

In Him,

bob

Getting out of debt success story: How they paid off over $229K in debt

August 22, 2021 By Bob Lotich, CEPF®

(The following is an abbreviated transcription from a video Linda & I recorded with Mel & Murph Stewart. Please excuse any typos or errors.)

Mel and Murph Stewart (of FitNFunds) have an amazing debt payoff success story.

Linda and I were so blown away by their accomplishment that we had to share their feat as an encouragement to all of our SeedTime community.

Ready for it?

They have paid off over $229,000 in debt!!!

We are simply amazed. No matter the amount of debt you have to tackle, this accomplishment shows that even a huge amount of debt CAN be paid off!

Linda and I recorded our discussion we had with Mel & Murph that you can listen to on our Podcast, or you read the full transcription below:

Mel & Murph’s Mountain Of Debt

Bob: Today we’re chatting with Mel and Murph Stewart and they have an amazing story that we want to share. I’ve been hearing about it all over Instagram in which you should go follow them, it’s @FitNFunds. But the gist of it is they paid off over $229,000 in debt. 

Linda: I mean that is amazing. 

Bob : And yeah, and we paid off, I mean, in terms of non-mortgage debt, it was about $46,000. And I felt like that was a lot. So when I hear stories like this, it’s this is crazy.

But anyway, Mel and Murph, thank you for taking the time to come chat about this and share this whole crazy thing that you’ve gone through. 

Murph: Absolutely. We’re excited, thank you for having us. 

How Did They Get $229,000+ Of Debt?

Bob: All right, so I want to talk first about yeah, so $229,000 in debt, like what was that made up of? What were the actual pieces of debt there? 

Mel: Yeah. So it was a little bit of everything. We like to say, you name it  we had it. Except for a mortgage. It wasn’t mortgage debt, but I mean, IRS debt, it was medical debt, credit card debt, lines of credits, car loans, student loans, a little bit of everything. The big, the biggest step that we had though is the student loan debt.

Bob: Yeah. 

Mel: And that was as well over six figures. 

Bob: Yeah. Student loan debt in our society, I mean, I think most people tend to think that’s reasonable debt or good debt. I have some mixed opinions about that. Having a good amount of myself. So was the credit card debt bad spending habits or was it all justified? Or how did you guys land into so much debt?

Acknowledging The Lack Of Financial Education

Mel: Yeah, I think it was the lack of education. Growing up, we really didn’t learn how to manage money, nor did our parents come from wealth. We didn’t really come from wealth, so we pretty much, well, I know when I went to college, I had no choice. I just didn’t really have the education to learn how to apply for scholarships or apply for grants. So it was just, let’s go get a student loan. And so I think that’s a lot of how it started for me. And then the college credit card came along and that was like copping money. And from there on it just kinda started accumulating for me.

Growing Up In Poverty

Murph: Yeah, I think the thing about me was I grew up on welfare. My mom was a single mom doing her thing, trying to raise two boys. And we eat a lot, especially me. But it was one of those things that you, you, you grew up in a household and not knowing that you’re at that poverty status. You’re, you’re just a happy go lucky little kid.

And, but as I grew older, I figured, I started noticing things that we weren’t able to do. And this is where I realized that my mom, she just wasn’t educated financially to help us along the way. I think she was so excited for me to go to college because I got a full scholarship for basketball and she was excited for that, but still I still took out student loans.

So why’d I do that when I had a full scholarship. It’s a lack of education financially that on the, I discovered. But yeah, so it was one of those things. Learned behavior patterns are the patterns that compound and compounded, and it just. Blew up the, the whole Mel and Murph household. 

Keeping Up With The Joneses

Mel: The first four years of our marriage, we accumulated a lot more debt. We would try to as I say, keep up with the Joneses. And go out every weekend and spend a lot of money using like a line of credit. Or just money that we didn’t have. So I know that we probably racked up.

Thousands of dollars more in those first four years of, because we just, we didn’t know better. We had a lot of denial around the debt. 

Needing To Change Financial Habits

Bob: So what was your turning point moment? Cause I think most of us who we all have some moment or moments where we decide, all right, we got to make a change here. And, what was that for you guys? 

Murph: Such a good question. I think it was we were at I think 2014, I believe, so we got to a point of marriage that we were at almost a brinks to divorce. We were arguing a lot more. Really just at each other’s neck, she just wasn’t having it.

Getting Counseling And Introduction To Dave Ramsey

She started going to counseling and I joined a party. I started one counseling. And then I remember I was in the lounge waiting to speak to my therapist, and I had an epiphany. It was one of those things that I felt like now was speaking to me, giving me a refresher of someone’s name that I heard in the past and it was Dave Ramsey. No idea what I heard it from. I thought I heard it from her father-in-law back. I might notice that that’s no way to happen. And then was trying to figure out who I heard it from. But anyway, I heard Dave Ramsey’s name. I started instantly Googling and researching who this man was.

I found out that he was in a million dollars a debt. And he started helping a lot of people. I’m like wait, who is this guy? It really encouraged me because I started listening to his podcast and everything.

You’re Not Alone

And that pivotal moment for us to understand that we were first of all, not alone. And the amount of money that we had in debts, it could be diminished from our lives indefinitely.

I brought that back to Melissa and she was not having it at all. So it was one of those moments that I was so hyped and excited and really that mood of enthusiasm, but she wasn’t having it. Because, I guess, I was so aggressively trying to get as going.

I’ll let her speak on that behalf. 

Being Apprehensive About Starting To Tackle Debt

Linda: Yeah, I was going to ask you about that because I was reading your story and I read that you were apprehensive about it. And I would love to know why. What was going through your head? And then I have a follow-up question after that, but I’ll let you answer that first.

Mel : Yeah. That’s a good question. I think when Murph brought it to me, I’ve always liked spending money. Spending every penny and like I said, I didn’t know better. 

Bob: You know nothing about that, right? 

Linda: Yeah. I know nothing about that. 

Mel: Yeah. So basically when I would get those loan checks. If I had money left over for student loans, I would just spend it on clothes or different things.

Crunching The Numbers And Budgeting

And so when Murph brought this to me… I’m like wait what? And he always would calculate out, because he’s a numbers guy, he’d calculate out the numbers. Like how many years it’s going to take us. And I was just like, I don’t want to hear it. Have so much debt, and I had just gotten a new job.

I was like, I want to go shopping and get a whole new wardrobe for work. And no, we didn’t really need to start this budget thing. And I was just not having it. But I think that over the course of that year or so we, we played the podcast in the car and then we started having our budget meetings together.

It really helped me feel more comfortable with the process. And then I learned to like budgeting because it was a place for me to voice what I wanted or needed. 

Linda: Yes. 

Mel: Over the course of that year-ish the first year, I think it was kind of tough for us because we were not on the same page. But gradually I think that I came to, even in year three and four of our journey.We were finally done with the consumer debt and I knew we had my big student loan left and Murph’s we have to finish this we’re not debt free yet. And I was like, are you what I thought we would be done? So…

Linda: Yeah.

Mel: I think that we finally agreed. 

Murph: We gotta put a pinpoint there and circle back on that one, but yeah. I’ll let you do the follow up question because I want to add to it. 

Getting On Board To Paying Off Debt

Linda: Yeah. Okay. So my follow-up question is. Okay. What changed? Like it can be from what changed in that first year of you, like starting to listen to that stuff, but also what has changed over the course of this period of time between not wanting to pay off debt and then being like I am sold out and onboard.

What was that mindset shift like for you? Cause we had a little bit of a similar situation, not maybe not as intense as yours. Cause I was more like, can you just take this problem off my hands? So I kind of just did whatever he told me to do. Cause I didn’t want to deal with it, but I was also like, I really like spending money.

So I’m with you on that for sure. But yeah, I just would love to know like the journey that God took you on from: I want to spend all the money I have and more to being sold out for this. 

Having A Common Vision: What Is Your Why?

Mel: Yeah, I think it was partly like my own work and healing that I needed to do and encounter, but also, like I learned that once we had like a common vision and a why, that was my motivation and it became bigger than me. It was like before it was all about me, me, me, me, me.

And now, or over the course of time, and even now it’s well, what about our future generations. And what about their kids? And like really seeing those generational curses and there was a lot of other things too, that was our why.

Giving more and traveling more and all of that. But I think what I finally grasped, like the why behind it, the purpose, the vision that I was, I started to change inside and learn a lot more about myself. And when you’re paying off debt and you’re working and you’re and grinding there’s a sense of accomplishment and confidence that you gain in yourself and God and each other and your marriage. So it was just like a whole transformation, like who I was back in 2013/14, I’m a completely different person today.

Does Paying Off Debt Bring You Closer To God?

Linda: So do you guys think that paying off debt has brought you closer to God? 

Murph: Well, let me think about that. Yes! And I know that was not a rhetorical question. It was actually a real question. But seriously it has. My belief level has increased substantially to the utmost because I could, God was a per the the spirit that gave me Dave Ramsey like, there’s no way. I didn’t know who this man was. I had no idea what his man was when I was sitting in that lounge, but he intentionally knew that at that time I was at my rock bottom, emotionally and I had to get some kind of hope. And he seriously gave me a lifeline.

And I think my belief in God, even though I was still a believer before that, it just increasingly got better over time. My relationship with him individually, you know. And of course our interdependency, with God too. 

Walking In An Abundant Life

Mel: Yeah. And we started getting free from the debt and that was bondage for us. And we started walking in an abundant life. We’re like, wow, this is a real thing. Like what it says in the Bible, when you walk this out and you walk in obedience, it’s these blessings start chasing you down. And then it’s like real life miracles that would happen to us. So we’re just like, this is so cool. 

Murph: She’s not saying something that’s really important to her was that we actually kept a miracle book of everything that occurred from day one, what God had did to us. And that really wasn’t pivotal, or more so instrumental element, of our belief in God. I wish we can go down and read them, but it’s this amazing things that happen throughout the course of over the five years. 

Extra Provision Blessings

Mel: Checks in the mail, refunds and rebates… 

Murph: Promotions, and everything was insane. 

Mel: Anything we would increase, anything we got, we just wrote it down. It was just like, thank you, God. No a hundred thousand dollars check in the mail, but you know, it was…

Bob: But extra provision, one of the things we’re always talking about, cause I’ve heard this. I’ve been talking to people about this stuff for 14 years now. And this happened on our journey and I’ve seen this over and over and over and over and over again. And I say it non-stop is when you start doing the natural things, doing, taking those natural steps in your own ability, in faith doing the natural, and then believe God for the supernatural, he comes in like wind to behind your back and pushes you forward.

Murph: Yeah.

Results of Taking Action When Trusting And Obeying God

Bob: To reach this goal, in the case of paying off debt or whatever it is, and we saw that. It sounds like you guys are saying that. Because you were doing the steps and then God starts showing up with all these little miracles pushing it forward. I mean, is that correct? Am I saying that right? 

Murph: A hundred percent. 

Mel: We still write down our miracles, now that we’re on a wealth building journey. So yeah. It’s amazing.

Bob: Okay. So let’s talk a little bit about some of the practical things, because yes, we see God at work. We see some of those miracles happening.

Making Practical Decisions

Bob: What were the practical decisions that you guys were making to do things differently? So you talked a little bit about setting up a budget, so that was one part of it. What other things were you guys doing to just move down this path? 

Murph: I think I can instantly say, we looked at what we were having taken out of our checking account, subscriptions and what have you. We’re fitness enthusiasts. We love working out. So we lowered our gym membership fee. They were almost paying 100, some dollars, got down to $20 a month. So I was one practical thing that we did. We stopped eating out. That was very, very hard. You know we’re foodies too. So she started cooking a lot of meals. And lastly, we do not go on any vacations at all. We did not and the FOMO was real to say the least. 

Bob: Yeah. 

Murph: For sure. 

Mel: I mean, we would do like little weekend trips once in a while, but you know, the, the Mexico vacations or Hawaii vacations, we just, we were working and side hustling too. I think that’s another part of it in addition to, our nine to five. Murph was driving Uber till midnight.

So we did what we could, but I think definitely practical steps. Number one is the budget, it’s the foundation. Just having that consistent, weekly, biweekly, monthly budget. You have to have a budget to do this.

Bob: Yeah. It’s so funny because so many people, and I felt this way, think that, well, I, man, a budget, it’s just, it’s going to be pain in the butt and we’re going to save like $30 a month. It’s just not worth it. And as well as I do, if you have even an average income and you aren’t budgeting, like you’re going to save hundreds, if not many hundreds or even thousands of dollars a month by doing this, like we see this over and over again. And I’m sure you guys have as well, right? 

Being On The Same Page

Murph: Oh yeah, definitely. I think when we really started agreeing upon the mutual agreement of a budgeting. And we literally saw more money in our account, which was so weird. It was just like, what, how did, how did we have extra money in our account where we had the same income, not doing a budget, but now here you are doing a budget. And now we see more surplus in our account. It was just. It was, it was almost like a breath of fresh air believe it or not. 

Mel: There was literally times where we had no money for groceries. And we would just go off our line of credit. 

Murph: Yeah. Revolving door.

Mel: Then start to see like money, extra leftover. Oh, what are we going to do with this money? Oh, well we get to pay the debt or put it in savings or whatever. It’s just like a whole new concept for us.

Bob: Wow. 

Linda: That’s amazing.

Bob: Murph, I remember you had something you wanted to tie back to. Do you want to jump back to that point or do you remember that? 

Murph: Yeah, well, I definitely remember it because it’s made an impression on me.

Conquering The Shackles Of Debt

Murph: So she was saying that, there was a point where we got all done with the consumer debt and we paid it off. And we’re now about to attack her student on the sixth figure student loan. And she, I remember her saying to me, Hey babe, let’s just say we’re we’re debt free now. And when she sat down, I’m like, what?

No, we have so much momentum we are not stopping. I didn’t say like that. I was more loving of course. Right. I wanted to make sure my pay my money. Baby we can actually do it. Look how far we’ve come. And she was point that she, because I think what it was, it was a sole tie that I was attached to that student loan.

And we can maybe go on that if she wants later on, it’s up to her. But it made her so angry at what that student loan meant to her. That she wanted to ignore it and I’m like, I want it to accomplish paying it off because I knew that we had the momentum building and we wanted to release her from those shackles stronghold to be free.

And that was the whole, concept and I was trying to help her comprehend. 

Linda: Wow. So there was more tied to it than just the dollar amount. There was something in your heart that you needed to get cleared up. So, I mean, that’s amazing too, cause it’s God takes us on this journey and it’s not just for one thing. It’s not just to be out of debt it’s for multiple different things, which I think is just so wonderful. 

Mel: Yeah, absolutely. And I think that, that once I finally, got that out of my life for good. It was like, I could really get past that. Whatever, whatever that, that hurt and that pain that, that was attached to and forgive and be an acceptance and be like, you know what, it’s okay.

We took care of this and with God’s help, of course, and we can move past this. And, so yeah, like you said, it’s a lot more than just paying off debt. I mean, it completely changes. 

Linda: Yeah. 

Giving Is Instrumental

Bob: All right. One other thing I wanted to ask about, cause when I was doing some research on you guys, I think I saw some of this. So I’m curious, what role did giving or do you feel like giving played in this debt payoff? 

Murph: That’s a good question. 

Mel: I think it was, it was instrumental. Tithing was always at the top of our budget, that was one thing that we said, we’re not going to let go of, and I think there was another, portion of sponsoring a child that we said we’re not going to let go of. So those two things we kept, regardless of our income. We were like, okay, we’re going to honor God with the first portion of this. And it was a non negotiation. to this day, it’s that’s the first thing. 

Murph: Yeah, I’m laughing because she says sponsor a child. And it just brought back a memory, because I did not want to do it. I’m like babe, we’re not doing this. And here I am at church, listening to Israel Houghton and the New Breed praising God, they’re wanting people to sponsor a child. I’m like, we’re not doing that. But here we are, fast forward still sponsoring that same child.

Should You Tithe While Paying Off Debt?

Bob: It’s funny. Cause sometimes people ask me and I probably asked you to should I stop tithing and stop giving to pay off debt? Because I want to pay off my debt a lot faster. It’s not a math problem. Like it’s just not how God works. And I’m not going to tell anyone, what they should do. But for us, it’s the same way. We’re not going to stop giving to pay off our debt. And we’re convinced as well that by giving that was how we ended up getting it paid off faster. Cause that’s just the way it works in the kingdom.

Murph: Love it.

What Does Being Debt-Free Feel Like?

Bob: Yeah. Well, that’s good. All right. And so I want to know just for people who are watching and listening, What has it done for you? Like having that burden to $229,000 of debt, now it’s gone. What was that transition? What did it feel like? How did it affect your spiritual life, your marriage, your personal life, like everything emotionally? What did it feel like? 

The First Year Sucked

Murph: So that first year sucked. 

Bob: After you paid the debt off?  

Murph: Yes. The year after. 

Bob: This is fascinating. Go ahead. 

Murph: You know what it was because we were so ingrained with the same pattern, the new pattern behavior that enabled us to pay off the debt. So we were still grinding down. So driving Uber and Lyft. She was still working over time.

We weren’t really doing any of that at home in regards to in kind of celebrating. We were still in that ingrained in that mindset. That’s why I think it was so hard. It was so hard to break that, that new, element of thinking that we were in. So that’s why, in my opinion and why it was so hard at first year though.

Mel: Yeah. And not having, we didn’t really have the next goal.

Murph:  Exactly, very true. 

Having A New Goal

Mel: So when we finished. It was just like, already to the finish line and then, okay, well what’s next? 

Bob: So did you not enjoy paying off debt? Did you not enjoy having it paid off? 

Murph: Oh we did. 

Mel: And that’s what I was going to say at the same time. We finished probably about a year before COVID. And we did get to do traveling. We got to take a celebration trip to Cabo San Lucas. And, that was like a whole new world. It was just so exciting. We did a lot of upgrades.

We got to move cashflow and move and and then fast forward, a few years later, it’s like our lives are… like money is not an issue anymore. There’s no financial stress or weight anymore. It’s like we get to budget for things like taking this trip, and just… 

Murph: Give more.

Mel: Give more and live our lives and build wealth. And it’s just amazing.

Like it just, the opportunities that have opened up for us. And…

Bob: Yeah.

Mel:  We drove through one of the old towns that we live in today and we were just like, How did we get here? Like where we are now?

We’re just so grateful but God almost had to take us back there today to show us like, look how far you guys have come.

Cause we used to walk around that town all the time, when we were paying off debt. And it was, it was a hard season for us, but we still have issues and problems and this and that. It’s just, yeah, it’s just, wow. When that financial burden isn’t in your life anymore.

And it’s just not there. It’s just such a better life and marriage. 

Murph: I love it. 

Figuring Out Where God Wants Next For Your Journey

Linda: Do you feel you had to, like you said that first year was really hard, cause it was a transition of well, what do we do now? Do you feel like you just had to figure out like where God wanted to take you next?

Murph : Yeah, I believe so. Because I think after we actually, we prayed more got kind of like a community around us more at that time. And I think that’s when we started FitNFunds, or am I tripping? 

Mel: Once we establish the community, like Murph said, and we started to, figure out what the next goal was. I think that we started the enjoy our debt-free life a little bit more.

Bob:  Yeah. 

Mel: Yeah, it was an adjustment. A good adjustment, but like Murph said, it was hard. It was, it was hard at first. 

Bob: Well, that’s great. All right, well, appreciate you guys taking the time and sharing your awesome, amazing story. It’s so cool. Seeing what God’s doing in people’s lives. So people, @FitNFunds on Instagram, they can see you because you’re sharing so much great stuff there. Website, they can find you at?

Murph: FitNFunds.com, and that’s F-I-T-N, as in Nancy, F-U-N-D-S. 

Bob : FitNFunds. Yeah that’s great. All right, guys. Well, thanks for taking the time. Appreciate getting to chat, love having you on. 

Murph: Thank you. God bless you guys. 

Mel: Thank you so much for all of this. 

Bob: All right. Appreciate it guys. Bye-bye. 

How This Couple Paid Off $52k In 7 Months

December 8, 2020 By Bob Lotich, CEPF®

(The following is a transcription from a video Linda and I recorded. Please excuse any typos or errors.)

How This Couple Paid Off 52k In 7 Months

Today Linda and I are talking with some friends of ours (Chris and Andrea Petrie), whom we met last October, and they have a really cool story that we want to share with you.

They paid off $52,000 in not seven years, but in seven months!!

And so we’re going to talk to them about that and how they did it. We’re going pick their brain and see what we can learn from them.

Chris actually runs an awesome podcast called The Money Peach podcast, which he also has a blog named Money Peach. We encourage you to definitely check both of those out. He’s super sharp and we’ll get in more than a second,

Before we get started, below is the transcript of our conversation. But, if you would like to watch our discussion instead, you can do so here:

Bob: Chris and Andrea, thank you so much for hanging out with us, looking forward to chatting about all this.

Andrea: Well, yes. Thank you for having us. We’re excited to be here.

Chris: I’m excited to be here. I will say this, just so everybody understands here. Happy wife, happy life. So I do a very good job of making sure I don’t step on her toes when she’s talking. And we’ll talk a little bit about our story. She used to talk for a living. And so-

Andrea: Is that why you pause so long? So I could start talking first?

Chris: If it’s my podcast and I’m host of the show then I’m in charge.

Andrea: He plows forward.

Chris: Right now, I’m going to just look for little areas where I could just jab in there, so-

Andrea: Well, you’re too close to me. And so I couldn’t catch your eyes. Like, are you going to talk?

Bob: That is awesome.

Chris: You’re going to get one of these, like “Hey, my turn.” So-

Bob: That’s great. I love that. So you both had great incomes in your early twenties, you racked up a bunch of debt, so yeah and I remember reading your story and so I want you to share your, I don’t know, that turning point moment for you guys.

The “A-ha” Moment

Chris: We call it out a-ha moment, I would say. So it was February 2011 and now fast forward, we got married in 2008. 2011, we’ve been married three years, we have a 10 month old at home, and so she’s been on television now probably seven years. Right? So you about seven years. So everywhere she goes in the Valley, she’s recognized as the girl on TV. And so I was at the fire station and she was at the grocery store. And leading up to this point, we were basically just spending out of control. I think we realized it and we just felt like, “Oh, we’ll just get a raise. We’ll make more money,” or, “We’ll figure it out later”.

Andrea: Or every two weeks we get paid and it’s all going to be okay.

Chris: We just always had to step back, remind that if we don’t look at it, it will get better. And so we did this over and over and over again, and it was February 2011 at the grocery store. I’ll let you take this part here because you were there.

Andrea: We had a baby, our first baby and he wasn’t even a year old and I’m there at the grocery store and I can’t have a bad day at the grocery store because I had to always be nice to people. I don’t need… The one day I decided to have a bad day and take it out on somebody, someone say back lady on TV, she’s just awful. And so of course people are so kind and nice and they would talk and ask all about the show and, “Oh, I watch you and at the time my co-anchor Rick,” and so I’m paying, the groceries are all loaded up into the bags and they’re in the cart with Carter, my baby, our baby.

And she asks, “Swipe her card.” I put it in, I swipe it and it’s declined. And I’m like, “Well, that’s weird.” And so of course, immediately too, I think, Oh, it’s in my wallet, the magnetic strip is worn away and that’s probably it. So let me do it again and declined again. So, now I’m starting to get a little bit frantic inside and a little embarrassed and it didn’t work a third time. So I was like, “Oh, I’ll just try a credit card.” And I use that and that didn’t work. So we’re now on four times and now I’m just dying inside, but I’m trying to be super positive and “Oh,” and of course they’re not thinking the girl has no money. They’re thinking it’s some sort of tech problem.

Chris: No, I think they realized-

Andrea: Well, I’m hoping they don’t think that about me because I-

Chris: I think they realized the girl on TV was broke, is what happened there.

Andrea: Well, I was embarrassed. And so I said, “You know what? I have cash at home. I’ll just, can I just leave the groceries right here and I’ll run home and get the cash and come back?”

And they’re like, “Oh, of course.” So I grabbed Carter out of the cart and I bolt to the car and I am so mad. I’m livid.

Linda: Oh man.

Andrea: I’m mad, and I don’t have cash at home. I just am going to leave all those groceries and I hope there’s a shift change. And Susie that was helping me out is not going to share that with Heather that comes on shift and we are not going to be embarrassed up here in Arizona. So he’s on shift and he gets a hot and bothered call from me, and not the hot and bothered that he wishes he was getting.

Chris: She was one upset Andrea.

Andrea: I was mad. I was like, “How would you… Why would you let this happen?” Of course you, you, you, that’s all I said. I was so mad at him. I was.

We’re Going To Be Fine

Chris: Yeah. And I was like, “Don’t worry about it. We’re going to be fine. I’ll figure this out.” Because that’s what you know, “We’ll be fine.”

Andrea: That was all that word, “We’ll be fine.”

Chris: I remember, the next day I came home and it was a Wednesday and I knew we got paid on Friday. And so we look at everything, we print out our bank statements. And that’s when we finally looked at it and we realized that we had been living paycheck to paycheck for so long that we had no savings. We had nothing put away for anything. We had $52,000 in consumer debt. We had overdrafted our bank accounts. We were maxed out on her credit card. And I remember sitting there and that’s when I personally felt this overwhelming shame, because for me, I’m supposed to be the leader or the man of the house. And I’m sitting there and I’m looking at my 10 month old in the high chair, realizing if he needs food, I have to go call my mom and dad.

And then we started thinking, what our mom and dad’s going to think of us? What are our friends going to think of us? Our neighbors? They’ve seen us live this lifestyle with the new cars, new house, vacations, fancy clothes. We’ve done all these different things since day one. We put on this fake and now it was all going to come crashing down and everybody’s going to see what was really going on, right? That whole saying is “No one knows you’re skinny dipping until the tide comes out”, like, here we go, everybody’s going to see this. And I just remember, for her she was angry. But for me it was just total shame and embarrassment because as the man of the house, Bob, you don’t want to call your parents for money, right? You don’t want to have to ever go through that humiliation.

And that’s what we were facing. I was like, “Thank God we get paid on Friday.” What if this was another week and a half? We can’t get gas. We can’t get groceries. We can’t do anything. And I remember, we sat there and I just… It didn’t happen right away but I remember thinking to myself, this will never happen again. Never again are we going to make this much money and sit here and feel this broke. Well, not feel this broke. We were that broke.

Andrea: Not feel these feelings ever again.

Never Again

Chris: Never again, and I remember hearing, I started tuning into everything I could finance. And I remember hearing this quote that the number two cause of divorce in North America was money problems and money fights. Number one is infidelity, if you’re wondering. And number two is money problems and money fights, and I remember thinking we’re going to be a statistic if we don’t get this figured out, because I know this. It was bad, it was bad.

Andrea: And the thing was is we didn’t necessarily fight leading up to that about money. We just never talked about it. And when I look back I’m like almost fighting would have actually been better because it was some sort of communication, maybe not the healthiest communication. But no communication about something as important as that was really to the detriment of that portion of our life, which money is everything. I mean, it touches every aspect of your life, whether you want to believe that or not. And it was affecting every part of our life and now our marriage. Yeah.

Bob: All right. So I’m curious, where was God in all this, in this whole equation for you guys?

Chris: God wasn’t there yet.

Andrea: God was not.

Chris: God was coming a few years later.

Letting God Guide Our Life

Andrea: I mean, God was there. We were believers, but we did not turn to God and we did not let Him guide our life. We tried to control it all.

Chris: I would say it was a couple of years later when we basically just opened our hands and we were like, “All right, your turn. We’re tired of trying.”

Andrea: Your way has got to be better.

Chris: When we do it our way we have some success, but it’s never going to be at the level that God can create. And we’re not very smart over here. We got to go deep into debt and then we had to make a bunch of mistakes. Finally we were like, “All right God, we’ll just do what you want to do. I promise you your plans going to be better than mine.”

Bob: It’s always the best course of action, right?

Andrea: Yes.

It Was All God – Hands Down

Bob: All right, so I want to dig into the paying off the 52,000 in seven months. Like that’s-

Linda: Yeah, that’s crazy.

Bob: Unbelievable. Talk through a little bit of what that looks like.

Chris: During that time, and now looking back, I mean, I’ve thought about this too.

Andrea: Yeah, when you go back and retrace His faithfulness, even though we didn’t give all the glory to Him at the time, because He wasn’t front and center. Now we look back and it’s like, it was all Him, hands down.

We Need To Live On A Budget

Chris: So what it looked like was February, we go broke. Right? Well, we didn’t start doing anything until April because we didn’t know what the heck to do. So for two months you basically just pointed fingers at each other and said, “No, it’s your fault”-

Andrea: Or just not talk about it.

Chris: And not talk about it for two months. We are just in this idle state because we didn’t know what to do. And I remember I came home and I said, “I think that we need to live on a budget.” You looked at me and you’re like, “You can.”

“It’s going to be fun.” And so the first step we basically came to the decision that if we don’t have changes, we’re never going to find success.

Andrea: But you just have to give just a tiny little background is when you said that and I wasn’t willing, it’s because I wasn’t listening. I heard budget, and what that felt like, and what I heard from that was, “You are going to live well below your means, the means that I’m going to say you have to live within. You can’t go to Target anymore.”

Chris: Yeah, I did say that.

Andrea: Yeah. And I’m like, “Take me now. My whole life’s over if I can’t go to Target. No!” And so it took me about a week for me to come back to you and say, “All right, what will this budget look like? How stricter are we going to have to get?”

Chris: So in April we decided to get on a plan, and we didn’t know what a budget was. And I have screenshots that I’ve shared with the students in our class of our first budget and it was terrible. It was on a white piece of paper and it looked ugly. It was $900 over that month and we were trying. But once we got on a budget we realized that the pain of remaining in debt any longer was more than the pain of living on a budget and sacrificing. And so like that teeter-totter effect, it finally became, “Okay, the pain of being broke sucks and it’s now more painful than anything else.” So now was time. So I remember we got on the budget and it was once we got on a budget, we started seeing how much money we were spending frivolously.

What If?

Chris: And it became this game where it was like, “Okay, we can always go back and get that stuff. Well, what if we just turned everything off? What if we turned off cable? What if we turned off-

Andrea: What if we sold that car and got a cash car that was much cheaper, not as nice, not as new, but reliable.

Chris: And of course, we’re normal. We’re upside down in our cars. So it was weird to sell a car and still make payments on it. But I remember telling her that we owe 36,000 on this car, or 34,000 it was, so we can get 30 for it. So I think it would be a lot easier to pay off six than it would be to pay off 30, or 36. And so we just made these decisions, and so we got crazy. So she wasn’t allowed to work overtime because she was salaried employee, so she started selling everything. You sold pictures off the wall, he sold sunglasses, purses, shoes. And the thing is since she spent so much freaking money on clothes, these clothes still sold for pretty good money. I mean, it was actually a pretty little side hustle.

Andrea: I’d meet people too, because that was when Facebook-

Chris: There was no Facebook Marketplace.

Andrea: There was no Facebook marketplace, but there were those swift swap groups on Facebook. I don’t know if they’re still a thing here. So basically online garage sales and I would meet people at the grocery store parking lot, and I was like, “I’m exchanging shoes. This feels wrong, but it’s not drugs. It’s not illegal. I’m just selling shoes. Like, it’s fine.”

Unexpected Blessings

Chris: Well, then for me, the blessing came in three ways for me personally, how I could contribute. So number one, the fire department hadn’t hired in a while because the economy was just… The government is always a couple of years behind the economy shift. So we didn’t hire and we had retired people. So there was this shortage in workforce. So there was non-stop overtime. If I wanted to work every day, I could. So I was working as much as I possibly could over time.

And so then when I was in college, one of my jobs was I had a pool route. I would go clean pools. So I finally remember I told you, it was like, I think June, May or June, and I was like, “You know what? I’m going to go to Google Earth, because remember this is 2011. So I went to Google Earth and I printed off a map of our neighborhood and I highlighted all the houses that have pools. And so we put our 10 month old in the car, she drove me door to door and I’m like, “Stop!” and I’ll get out and I had a one minute-

Andrea: An elevator speech.

Chris: Yeah, a one minute sales pitch. And I would say, “Hey, my name’s Chris. I live in the neighborhood. I noticed you have a pool. I don’t know if you have a pool technician, but I’m a qualified pool technician. And I would like to clean your pool. If you’re wondering why I’m actually a firefighter here in Arizona and I’m trying to earn extra money to pay off my debt. And I’d love to be in your neighborhood. If you need me day or night, you can call me.”

And I don’t know, one out of five would be like, “Yeah, let’s get started.” So that brought it in, there was one month I brought, I think it was $2,000 a month in there and overtime, we sold everything. And then I was also playing football all the time and I played at a tackle football league for public safety. And so-

Andrea: Because he still felt like he was 18.

God’s Involvement

Chris: This is another God thing. God gave me a pool route. God gave me the ability to work nonstop over time. And then God put me on the field at a certain moment where I broke my leg. So the pool route day was over, but here was the icing on the cake. I was so dumb with money that I had forgotten that I had signed up for an Aflac injury insurance policy. And so I think they paid us like 10 grand. And we just went through all that debt. So-

Andrea: But he got a broken leg out of it, then God humbled him and was like, “Those days are over. Go pay your debt off and start stewarding it a little bit better.”

Chris: Imagine having a, at the time a one-year-old, a two-story house, a broken leg-

Andrea: A full-time working wife that left at 3:30 in the morning.

Chris: Yeah, I would say if we can get through that, we can get through anything.

Andrea: Yes.

Linda: Well, you’re a firefighter too. It’s like, you need to be rescuing people. You’re sitting there.

Chris: The fire department wasn’t too thrilled with me breaking my leg playing football either.

Linda: I guess not.

Chris: Look, it was better than working overtime. No it wasn’t, actually. I’d rather work overtime. But I remember, we worked the plan and every month it seemed like how much more can we squeeze? What else can we do?

Momentum Gained

Andrea: It was momentum we gained.

Chris: It started getting more crazy, more crazy.

Andrea: And we were getting excited because we were seeing a small win after another. And when you get that wheel going, it won’t stop.

Chris: We had a great income, we just reallocated our income to debt. We still were making the same amount of money. And then I remember it was November 17th, 2011. And we were sitting, I think, in this office right here, and I said, “Andrea come here.” And I look online and we had more money in our checking account than our last debt. So I knew on paper, we were debt free. We still have that debt. So I was getting ready to pay it and she was like, “We need to…” I don’t want to say the bank. We went to Bank of America. And so we drove it to Bank of America. And I’ll never forget, it’s just a couple miles down the road, we drove up to Bank of America, we walk in, and I’m like… I mean, you got to remember, if you go this radical, just imagine what your friends think of you when you’re selling your cars, you’re buying beater cars, you’re not going out to eat, you stop drinking coffee out with friends, you don’t go to bars. You don’t do anything.

You Say No

Andrea: You say no to a lot of things.

Chris: To everything. No gifts, nothing. We were just, no, no, no, no, no. People that we were crazy. And I remember we were walking into the bank of America and I remember thinking to myself, we’re going to show them. They thought we were crazy. And maybe we were crazy, but we did it. We did what everybody thought we couldn’t do.

Andrea: And that fuels the fire.

Chris: It felt so good.

Andrea: And it fuels a little bit.

Lives Changed

Chris: We walk into Bank of America and I’ll never forget. I wrote the check out, handed it to the teller. And then she tears off that slip and it tells you your account balance. And it said $0, zero cents, paid in full. And that moment was… I always say in life, getting married to her was the best decision I made. The two kids, depending on the month which kid we like the most, but that was right behind it. And I remember thinking to myself, “Andrea, we have to tell every single person we know how to do this because this just saved us. This changed our lives. This is forever. This is going to allow us peace. When we go to bed at night, our head hits the pillow, we go to sleep, we don’t stress.

One Hundred Pounds

All of these things, it felt like… People, someone had asked me, what does it feel like? I said, imagine you’re walking around with a backpack full of a hundred pounds, and you’ve been doing this for 10 years, and that’s all you know. And all of a sudden, somebody just reaches over and grabs it off your back and you’re like, “Oh my gosh, that’s what that feels like.” And so since that moment, that’s why we’re here right now. We have non-stop made it our mission that we are going to tell everybody we know.

Changes And Commitments

Andrea: And I think as you make commitments and you stay consistent with habits and that’s living this way is a lifestyle now. It’s a habit that’s so deeply ingrained in us. And it’s one of those things that is a non-negotiable. So we never, ever miss a month of doing a budget, of sitting down and yeah, they don’t take nearly as long now. We’ve been doing them over and over and over and not a lot changes every month. But the consistency of that, plus it’s the connection too, of where are we on our mindset, our goal set. Are we still steadfast to this? Is this the next thing? And it keeps that communication line really, really open and money just is a topic of conversation that’s really easy and it’s not taboo for us.

It doesn’t need to be. In our opinion, it just does not need to be. And so there’s a lot of things I think when you get… You just get going so hardcore on a goal. And I always say, it’s like you start out on a diet, right? And eventually you have to find that middle gear because for it to become a lifestyle, it’s got to be something sustainable or something that can be consistently done over and over. As far as our budget and this lifestyle, that is one thing just can’t let go of. And so we sometimes go into that sort of middle gear because as you start, when you’re out of debt and you’re just investing and things like that, you don’t have those rapid wins all the time. It feels long, but we know we can’t let off the gas because this is one of those things that we can’t stay too far in middle gear, or we will just let off the gas too much and then I don’t think it will stay consistent.

Bob: Yeah.

Linda: Yeah.

Bob: That’s good. Yeah. I think we very much felt exactly the same way as we paid off our debts.

Linda: Yeah.

Bob: Right? Don’t you think? Like what you’re talking about that a hundred pound backpack, yeah, that’s exactly how it feels. That’s a great descriptor.

Linda: I felt like it was something on my chest. It was like somebody sitting on my chest and just, it’s hard to breathe.

Back In Debt Regret

Bob: Yeah. And so an interesting thing, so we paid off our mortgage and then we moved to Tennessee and real estate is a lot more expensive here. And so we were having a really good year with the business and I was like, “Well, let’s get a little mortgage, everything will be going great and we’ll get it paid off within a year or something. No big deal.” So we got that mortgage, business did not continue going as well. It started trickling down, ended up having that mortgage for another, I don’t know, two or three years or something. And man, it was so much worse, so much worse than the first time.

Linda: Bob was like, “I’m so mad at myself. Why did we get back into debt? This is the stupidest thing I’ve ever done.”

Replacing A Hobby

Bob: So having tasted the freedom and been completely out of debt and then going back in, it was even worse. So anyway, I want to touch on something that you guys were talking about, or I think Chris, you’re mostly talking about this, but I think you both were doing this. One thing that I’ve observed is for a lot of people, I don’t know, I feel like most people who accomplish really great financial goals like this, like paying off this much debt in this short a period of time, it is a hobby for them. So it replaces X hobby over here. And this becomes not just the thing that you have to do, but the thing that you get excited about, the thing that you nerd out on the thing that really is an obsession of your time, in a good way. And that’s what it seemed like for you guys. Is that accurate to describe it that way?

Chris: I think that’s what happened is after we paid off our debt, the non-stop… we didn’t know how to slow down at first. I remember we were like, we just did something great. We need to take a break. We didn’t know how. And I think what happened is we just transferred this energy, and this was 2011. Money Peach started in 2015. So there was a three and a half year period in there where we weren’t thinking, “we got to start a business.” We were just thinking, how can we tell people about this?

Andrea: We would have 6:00 PM dinners at our kitchen table and a couple would come over and we would share a meal and we would simply show them how to set up a budget.

Chris: And then it turned into, “Well, can you show my friend. He’s struggling. He’s going through a divorce. Can you show my brother?” And then it became, I was showing more and more people.

And then we go to CrossFit and the owners of our CrossFit gym at the time, we helped them with their budget and they go, “We want to offer this to our members. Will you teach classes out of our gym on Sunday night?” Yes. And it just became this addiction hobby that all we wanted to do was talk about money. And we chose to do it in a better setting because it turned into “Oh, here comes Chris and Andrea again. They’re going to talk to us about fricking a budget. No one wanted to hang out with us. We were the budget couple. But then when you are hosting a class and you’re inviting people, “Come to the class, we’re going to talk about getting out of debt and saving money,” then it was like the freedom to do that.

Starting A Blog

And that’s when I realized, we’ve got to do this in a different way. And so we did that for three years. And then long story short, but somebody in our class said, “Hey, you should start a blog.” And I was like, “Oh-

Andrea: What’s a blog?”

Chris: Isn’t that where women share their recipes? I didn’t know. I didn’t know what a blog was. I remember people talking about recipes and they’re like, “no, no.” And then, so somebody knew a mutual friend of ours, this guy named Deacon Hayes, and he had a blog for, at the time, about five years. And so I remember I went to coffee and I told Andrea, I’m like, “I’m going to go to coffee with this guy named Deacon. We’re going to talk about blogging.”

She goes like, “What are you doing?”

And I go there and I came back and I’m all excited. I’m like, “I can talk about debt and budgets and saving as much as I want. And I can just put it out on the internet and it doesn’t really cost any money. I can do this nonstop.”

Andrea: Yeah. That was the start of it.

Chris: Yeah. That was the start..

Bob: Yeah. That’s funny how it’s addicting. It’s funny, also I had that same conversation, but in 2007, but yeah. And most people didn’t know what a blog was then, but that’s crazy.

Talking About Money To Our Kids

Linda: I have a question for you guys. So you talked about just the shame aspect, Chris, you touched on this about just feeling really ashamed. And then you talked about how you talk about money now, which is without any shame. I wonder, is this conversation going on with your kids? Do they hear you talking about this stuff and how are you talking to them about it? Because I feel like people feel so ashamed about money and it’s all because there’s a lack of education and how should we be talking about it so that we don’t feel that? Because that is not from God. That shame is not from God. And so I feel like, yeah, I would love to hear your thoughts on that.

Chris: I’m extremely passionate about this. And I would say that societal standards are that children are kept in the dark about mom and dad’s finances sometimes forever. There’s adults out there that have no idea what’s going on with their parents, and more is caught than taught, right? We could sit there and we could teach things all day long, but I look back to moments and I would challenge any parent to do this.

Turn Off The Lights

Look back to a moment that was impactful with a conversation with your mom and dad or something like that. And I’ll never forget, I looked back to, I was probably, I don’t know, a teenager in high school, I remember my dad came home, and everybody can relate to this. “Chris, turn off the lights. You leave the lights on all the time and it costs money.”

Well, if you would’ve left it there, I probably would’ve kept the lights on. And I’ll never forget I was working my first job, I think at Jamba Juice. Do you guys have that in Tennessee?

Linda: Yeah.

Chris: I was making smoothies, people, I was doing it. I was making smoothies, all right? And so I remember my dad was paying bills cause this is in the mid nineties, you sent checks in the mail and he’s like, “Chris, can here and take a look at this.” And he showed me the electric bill, and it was $240 in 1995. And I remember thinking 200? I don’t even make that a month slinging smoothies at Jamba Juice. That right there caused me to go turn lights off. He didn’t have to tell me any more. That impacted me. So I think, okay, I look back at that and I go, okay, how can I now impact the kids the same way?

Being Transparent

We have a 10 year old and a seven year old. So the ten-year-old is working really well, but I show him everything.

Andrea: We’re very transparent.

Chris: He knows how much mom and dad make each month. He knows how much our bills are. He knows what the mortgage is. He knows what our utilities are. He knows everything.

And the fear that people have is, Oh, this is private. Well, I just tell him, “Son, don’t go out and advertise this to the world.” And if he does, that’s a small price to pay, to have a little open book, if he learns about money.

Keeping Up With The Joneses

Andrea: Well, what I am already seeing happening with a ten-year-old and a seven-year-old is this idea of keeping up with the Joneses and this comparison trap that is already so prevalent in a young child’s life.

And so for us, we have these conversations all the time. And one time, this was just last year, and when you talked about how you took the mortgage out, the business was doing great. You were like, “Oh, it’ll be fine. We’ll have it paid off.” Well, that was us.

And that was about a year and a half ago. And we had made some investments that we had plans to do really well with, plus his business. And then there was a shift in all of that. And so we had these plans for these two big vacations to take the kids on.

Well that now doesn’t align with the priority of how we live. We will never go into debt to take our kids on a vacation. We will never shelter them from the word “no, we can’t do that” just to keep them comfortable and keep them sheltered from the reality of how life truly is.

And of course we want them to have experiences, but I never want them to think that those experiences just happen no matter what is going on financially. And so we had to have this conversation last year with them and I think we were more worried too, because we’re like, they’re just going to be in tears. And we said, “Guys, that cruise that mommy and daddy planned to take you guys off for spring break? Well, you know how we are with money and we have to make sure that God gets His money and we have to make sure we do it right, and they have to save for you guys, and all of these things, we have to pay the bills, the lights that are on to the house?”

And I said, “Some of the things with mommy and daddy’s work didn’t go as planned. And so we have to take from something that is a want, and we really want to go on vacation, but this year we’re probably going to have to do something small. Maybe we’ll just go up North here in town instead.

And they were like, “Okay, that’s fine.”

Chris: “Sounds good.”

Andrea: “We can go stay in a little cabin up North?”

And we’re like, “Yeah.” I mean, they were totally, and I think it’s because over the last several years they’re being groomed to understand that this is how we will always steward this money. We will never say yes to things just because your friends have it. I mean, we had the conversation not that long ago, he had a friend over and he is Carter, my son, our son, his friend waw like, “Why do you guys not have brand new cars?” And we’re both looking at each other.

Chris: And we didn’t say anything. Carter goes, “Well, my mom and dad are real serious about their money and they just want to make sure that all the important things were paid. And if we have money left over for a new car, maybe they buy one. But my dad, he likes to make sure he gets a good deal.”

Here, I’m like, “We’re doing it right.”

Andrea: It’s not always like that. So I don’t want to paint the picture like our kids are-

Chris: Just the other day. So we live in an area where we have some friends that are very, very high income earners. And so one of our friends got an amazing, amazing truck. And so, he was over and I was like, “Dude, I want to go see your truck.” We were looking at it. And I mean, it’s nice. It is talk-

Andrea: All the bells and whistles.

Chris: Everything, right. And Carter’s getting out of the truck. And looks at, at the time we just sold it. We had a 2011 Kia. Oh yeah. And he looked at the truck and he goes, “Dad, our car kind of sucks, huh?”

And I go, “Yeah, it does kind of suck compared to this truck. But if we compare it to something else, it’s awesome.” I said, “Compared to your bike, it is awesome.”

He’s like, “No, that’s true, Dad. It’s really good compared to my bike.” No comparison here. Yeah.

Is Being Debt Free Worth The Struggle?

Bob: That’s so smart. I love that. All right. Yeah. This is so good. All right. Here’s how I want you to end this. I want to hear, for people watching, people listening, who are like, “Man, that’s awesome. That’s good for them. Bob and Linda got out of debt, Chris and Andrea got out of debt. I don’t know if it’s worth it. I don’t know if it’s worth the fight. I don’t know if it’s worth the struggle.” What would you say to that?

Chris: Oh, I get asked this all the time. Is it worth it? So here’s what I will say is if you continually, every single month, live in debt, that means your debt is going to go up over time and there’s going to be a time whether you like it or not, you’re going to hit the wall. We hit ours in February, 2011. So maybe your wall is next year. Maybe it’s in five years. Maybe it’s in 10 years. But the point is it’s coming. It’s definitely coming. There’s no way to continue to live in debt and not hit destruction.

God Doesn’t Want Us In Debt

And biblically speaking, we all know that God doesn’t want us in debt. God doesn’t want… the borrower truly is slave to the lender. And so if you believe that, if you believe debt is bad, if you are in debt and you don’t like it, which I’ve never met anybody that’s like, “Yeah, I’m in debt. It’s pretty cool.” I’ve never heard anybody say that. I promise you, if you don’t make a change, it only gets intensified. It only gets worse.

The Decision

And so you get to make the decision. The decision is not is it worth it or not? Is, do you want to live the life that you plan on living? The dream that you have for your life in the future? If you want to do that, no one dreams about, “I can’t wait to retire, be completely broke and cash it all in”, right? No one dreams that.

If you have a dream one day to be able to take your grand kids out or be able to give or to be able to start a foundation or do whatever you want, everything in life that we do is attached to money. Sorry, I didn’t make the rules, but that’s the way it is.

Stress And Money

There is nothing out there that’s not attached to money. I challenge anybody on that. I’ve been doing this long enough where I’ve tried to come up with something, it’s all touching money. So then just take that and say, “Okay, if everything in my life touches money and money as stressful and everything in my life touches money, then there’s going to be stress in my life.”

There’s going to be fear. There’s going to be that ongoing worry of, are we going to have enough? But if you can relieve that stress and get out of debt and stay out of debt, then wouldn’t it make sense that everything in your life that touches money, if money is the good part of life, then it just elevates your life? I promise you it’s one plus one equals two. It’s not rocket science. So just keep that in mind. Is it worth it? I think the question isn’t, is it worth it, is where do you want to be in life?

Bob: Yeah, that’s so good.

Consistency And Habits

Andrea: Yeah. It’s completely worth it. And we say this all the time. It’s not easy in the fact of it being having to stay consistent and continuing to build that habit upon habit upon habit of really sticking to what that original goal and that dream of your life was. Is it easy, math aside? Yes, like you said, it’s a numbers thing. Once you get that all figured out, I would say that the numbers part is the easy part-

Chris: It’s fifth grade math.

Andrea: It is staying consistent and persistent. And we want to be so persistent with this because we know how radically it’s changed our life, living this way and honoring God in our finances. And it changed every scope of our life, from the way we parent to the way we show up for friends and family and the way we show up for our community. And I feel super called to continue to always walk forward with that sort of mission.

More On Chris And Andrea

Bob: That’s great. That’s great. All right, guys. Well, I appreciate you taking the time and chatting about all this. Yeah. Oh, one last thing. One last thing. So moneypeach.com, Money Peach podcast, anywhere else people can find you?

Chris: So you can find me at Money Peach, like you just said. And then Andrea has her site. She was, I would say if you’re a female watching or listening, you’re definitely getting more tailored to her, but she has a weekly encouragement, funny faith-based newsletter that goes out every Friday, right? And it’s pretty amazing how fast this thing’s grown.

Bob: That’s awesome.

Chris: I would say, you know out there there’s so many people like, “Another newsletter?” But her newsletters actually get shared. People share her newsletter with their friends and I’m like, “Wow, you’re doing something crazy because no one shares money-related newsletters.”

Linda: I didn’t realize that you had a newsletter-

Bob: I didn’t either. That’s awesome.

Linda: But I follow you on Instagram which, what is your handle there? Because-

Andrea: Just AndreaRobinsonTV.

Linda: Because she’s, first of all, hilarious. And second of all, so encouraging and not… What did you do? The other day you were talking about, “Let’s just go on vacation for a few minutes and not decide, not have to think about our kids going back to school.”

Andrea: I was like, “I don’t want to think about that. Let’s just pretend like we have a drink in our hand and our toes in the sand.” I was playing [crosstalk 00:34:43] for a minute.

Linda: Yes. So definitely check her out.

Bob: All right. Well, appreciate you guys. We’ll see you soon.

Chris: All right. Take care.

Andrea: Bye, guys.

How to earn $175/month with credit cards (Tax-Free!)

February 11, 2020 By Bob Lotich, CEPF®

(The following is a transcription from a video Linda and I recorded. Please excuse any typos or errors.)

earn cashback with credit cards

We had a reader, one of our readers, one of our really smart readers reached out and sent me an email of how she generates $175 a month using her credit cards. She earns less than $500 a month at her job and she earns a third of that from just credit cards, how she uses her credit cards. We’ve talked about basically how we use one or two different Chase credit cards because I like to keep things super simple, but when I hear stuff like this it’s just fascinating to me because if you do want to spend some more energy on this and have multiple cards and be a bit more strategic, there’s a lot of potential there. Yeah, we’re going to kind of dissect her strategy here for you and show what’s going on.

Amex Blue Cash Preferred Card

Okay. Groceries, using the Amex Blue Cash Preferred Card, you get 6% back at grocery stores and up to $6,000 in purchases per year.6% is a lot. I wish there was no limit here, but 6% back is really good.

There’s one thing you should be aware of with the Amex card. There is an annual fee on this one. But, the reader says the rewards at 6% more than covers the annual fee. A good bit beyond I would think.

Capital One Savor Card

The next one is the Capital One Savor Card. When they dine out she uses this credit card. They get back 4% at restaurants. So if you eat out a lot, this would be a good card for you to earn cash back with

Chase Amazon Rewards Card

Amazon. When shopping on Amazon, she gets 5% back on all her purchases at Amazon. Can you imagine how much money you would have if you got 5% back on Amazon purchases? That is using the Chase Amazon Rewards Card.

And if you shop through Amazon’s Subscribe and Save program, with this card you get an additional 5% savings. Even if you don’t get this credit card you can save a good amount of money with the Subscribe and Save program.

Citibank Costco Card

The next one is the Citibank Costco Card. She saves extra at Costco and on Costco gasoline. She earns 4% on gas. Our reader says that cashed earned back pays for her membership per year.

Costco is another thing that we don’t use because of convenience. But, I think there’s a lot of money to save at Costco if you can buy in bulk, smart. That is if you can not buy extra stuff, but buy the things that you’re actually going to use. I think there’s a big win there for a lot of people.

Citibank Double Cash Card

Citibank Double Cash Card earns 2% back on all purchases. Okay, which is great. This is one of the … I think it’s the highest cashback rate that I’m aware of. If you are specifically looking for cash back, that’s what I like about this card.

Chase Credit Cards

We use this Chase Freedom Unlimited as kind of our primary card right now. We’ve used the Sapphire Preferred a lot. The Chase cards give you Ultimate Rewards points. What I like about Chase is if you’re using Hyatt hotels, and we talked about this in this other video, I’ll have it linked here, how we travel for free, but it uses Ultimate Rewards points. If you’re using Ultimate Rewards points, they go so much further at Southwest and at Hyatt hotels, and you can get a whole lot more value than just 2% cash back. If you’re willing to do that on travel, you can still get cash back with them, but it’s only like 1.5%, but that’s just not the best way to spend them.

Huntington Voice Card

She gets 3% back on her utility payments by using the Huntington Voice Card. That’s amazing being able to do that on utilities.

She can earn this 3% back because you get to pick a category. It’s one of those rotating category cards where you can pick which category you can earn cash back on. I’m also seeing here that certain credit cards you can pick whatever category you want to get a discount on.

Many cards will say on dining you can get 5% back, or on gas you can get 5%. So you can choose whatever one you want. It’s a rotating one or you pick. They give you that option, which is kind of cool.

Melaleuca Visa

The last credit card that she uses is the Melaleuca Visa. To be honest, I don’t know what Melaleuca is. It looks like it might be like Young Living or something like that where they have health products. There’s a whole bunch of products and stuff like that.

What’s good about this card is that our reader gets 6% back there. And then also 4% back on product purchases when dining out. When she eats out, 4% of that goes towards her next purchase.

I think the good point of this maybe is just that someplace where you can become a member and kind of work that system a little bit. Costco falls under the same category. She is a numbers nerd like me and added all this up and concluded that ultimately she’s earning $175 in tax-free income doing this, which is really, really cool!

Now, obviously you do have to spend money to get these cashback rewards. But, the point is, is that if you’re not spending extra money you have to pay your utility bill every month.

You also have to buy food every month. If you’re doing this, it’s like we’re not spending extra money on our credit cards to get the rewards, but we’re going to spend the money anyway so we might as well get the rewards.

Carrying Credit Card Balances

Now, the caveat here that I always want to give any time I’m talking about credit cards, every single time you hear me talking about credit cards I’ll say this, is that there’s no benefit to this if you’re carrying a balance. You have to be a person who is paying off your balance every single month, otherwise, this is just a complete waste of your time, because those interest charges are going to quickly offset any benefit that you’re going to get.

If you aren’t a person who pays off your balance every single month, then just skip using credit cards to earn cashback rewards. It will not be worth it. Get focused on your budget instead.

Focus On Your Budget

Focus on getting your budget really solid and just getting out of debt to a point where you can pay your credit cards off every single month. Then once you’re solid, then you can explore earning cashback with credit cards.

Anyway, I just thought this cashback earning strategy was a really cool idea and wanted to share with you, because I know some of you money nerds out there are like us who might get a kick out of this.

That’s it for now. If you have any cashback credit cards that we haven’t discussed, let us know in the comments below!

Be blessed. Be a blessing!

10 Money Tips For Graduates

January 20, 2020 By Craig Ford

10 money tips for graduatesI keep checking my mailbox to get an invitation to speak at a school graduation, but alas, the invitation never came.  Therefore, I’m going to share some financial advice I wish I had when I graduated (high school and college).

1. When given the choice to learn from your own mistakes or the mistakes of others always choose the mistakes of others.

You are a generation that has access to more information than any previous generation.  On the right is the internet, on the left the libraries and straight ahead there is quality education.  Not only is there more information, but technology is opening the door for faster and more efficient ways to access that information.

But, history is useless unless we learn the lessons history so desperately wants to teach us.

Look.  You could make your own mistakes, but that doesn’t make any sense does it?

Read a top personal finance book.  Subscribe to some personal finance blogs (like SeedTime).  Talk to your grandpa.  Learn from those who have already made the mistakes.

2. Remember that the mirror is your greatest investment indicator and financial advisor.

There are more investment indicators than I care to know about.  They gauge when the market is overpriced and when the market is a value.  They predict when you should buy and when you should sell.

There is a season for everything. Just because the market is down does not mean it is a good time for you to buy stock.

Just because house prices are at a national low does not mean it is a good time for you to buy a house.

Follow a plan to develop a lifestyle of generous giving, then get out of debt, fully fund an emergency fund, and then invest or buy a house.  Purchase things based on when you are ready, not the market.

3. Choose life over money.

Money is not king of the financial jungle.  To make every decision simply because it is the best mathematical decision is a mistake.  You will feel caged in and you will lack the passion for life.  God wants us to live life to the fullest.  Life is his gift and how we live our lives is an act of stewardship.

I’ve never made much money in my life – though God is continually blessing me with more income. But as much as possible, my wife and I have chosen to do what we were passionate about, not what paid the bills.  Interestingly, we’ve always been able to pay the bills.

4. If you think only about today, your future self is going to have a fit.

No one knows the sum of their days.  However, if God grants you another 10-15 years and if you act the financial fool, then your future self is going to have some nasty things to say.

Every day you overspend is two days you’ll make your future self miserable.  That is the unfortunate reality of paying someone else interest.  You will slide further and further in debt.

However, there is another side to the coin.  For every day that you spend less than you earn is two days in the future you don’t need to work.  You will gain more and more financial freedom.

The best way to be responsible today is by making a budget and controlling your spending. Don’t go ignoring your future self.

5. Generous giving is one of the most satisfying things you can do with money.

I’ve done a lot of things with money. I’ve spent it on debt repayment.  That is a horrible feeling.  Knowing that someone else is profiting just because they lent you money.

I’ve spent money on the daily ‘necessities’ of life.  However, that satisfaction of stuff never lasts.  The MP3 player I was so excited about buying broke.  My first laptop required a crane to carry, but now there is the iPad.  What is new will become old.

I’ve spent money on experiences and memories.  Now we’re moving in the right direction.  When I think back over my life those memories grow stronger and more fond.  They still add something of value to my life.

I’ve spent money on helping other people.  One of the first decisions my wife and I made after we go married was to send some money to some missionaries in Japan.  Still today I think about that decision and it warms my heart.  Is there a Christian in Japan today because I sent that money?  That feeling is amazing.  Being part of God’s plan is extremely satisfying.

I once gave money to a family so their son could have surgery to fix a cleft pallet.  I wonder who smiles more today – me or the boy? That must be why the Bible talks so much about giving.

6. Your net worth is not the total of your worth.

Life is going to tell you some lies – many of them.  Here’s one.  Your net worth is the sum of everything you own.  This is the total value of your life.

Here’s how to calculate your true net worth.

Take all your money and your possessions and subtract everything you owe money for.  Then divide that number by 1,000.

Add up the number of people you have helped, encouraged, taught, ministered to, and impacted then multiply that number by 50,000.

You worth is determined by your obedience to God and your service to man.  People won’t gauck over your bank statement when you die, but they will shed tears if you touched their lives and honored God.

7. Don’t listen to just one source – verify.

Everyone has an opinion, but not everyone is right.  Hey, I even disagree with things I’ve said in the past.

People will freely want to offer you advice.  That’s fine.  But, you cannot freely accept it.  Treat every piece of financial advice as wrong until proven right.

When you turn off your brain and start blindly following, you’re going to make your future self mad.

8. Never underestimate the risk factor.

I continually struggle with this.  I tend to ignore risk.  I tend to think I am the exception to the rule.  Yet, day by day, I must continue to factor risk into my decisions.

Would you rather have $40,000 per year and little risk or $75,000 with the potential of losing everything on one single transaction?  Sometimes our natural selves can be deceptive and ambition is simply a fancy title for greed.

Just remember the tortoise still beats the hare.

9. Debt brings devastating destruction.

Getting things by getting debt is a terrible plan.  Avoid debt as if it was a two-headed monster.  In your life you will likely take on some debt – most people do, but always proceed in prayer and with caution.

Here is some debt you should always avoid – credit card debt and borrowing to invest. Here is some debt you should try to avoid – car debt (see how much you can save by paying cash for a car).

Here are a couple of pieces debt that are manageable in moderation– student loan and house. If you do take on debt make an effort to repay it as soon as possible.

10. Pray for your financial purpose because God has something he wants you to do with His money.

You probably won’t wake up tomorrow and know exactly what God wants you to do with his money, but eventually, your financial purpose will be clear.  Talk to trusted advisors and pray constantly and God will show you how he wants you to use his money.

To have money without purpose is a dangerous thing.

What money tips do you have for graduates?





















Free Debt Snowball Spreadsheet

September 5, 2022 By Bob Lotich, CEPF®

free debt snowball worksheet and calculator

Creating a debt snowball is my preferred method of getting out of debt. 

When Linda and I were paying off $46k of debt, we actually didn’t use a debt snowball spreadsheet or worksheet, but looking back I think it really could have helped us. 

If you are wanting to pay off debt on your own, this works!

And while Dave Ramsey popularized the Debt Snowball method, he didn’t actually create it.

The strength of using this method is that it focuses on the behavioral side of personal finance rather than the mathematical.

Since we are not robots that always do exactly what we know we should, I recommend this method for most people trying to pay off debt.

Debt snowball definition:

So, if you are new to this method of paying down your debt you might have thought “what is a debt snowball anyway”?

Well, simply put it can be defined as a simple approach where you pay off the smallest debts first.

You just start with the smallest one and get it paid off ASAP.

As soon as you do, you now have more to put towards the next smallest debt.  And as you keep paying each off, you have more and more going to the next one and the momentum builds like a snowball rolling down a hill – hence the name.

The Debt Snowball steps

Depending on who you hear discussing this method it may be more or less steps, but this how I define the steps:

  1. Create a list of all of your debts: credit cards, car loans, student loans, mortgages, etc…
  2. Next to each one write down the total balance owed.
  3. Re-order these from smallest to largest debts (use Excel or Google Docs to make this simpler.)
  4. Pay the minimum payment on all of the debts – except the smallest one.
  5. Put every extra dollar you can find towards paying off that smallest debt.
  6. Celebrate like crazy when you get that first debt paid off.
  7. Take the amount you were paying towards the first debt and put towards the next smallest debt. Do this until this one is paid off.
  8. Celebrate again!
  9. Continue this process until all debts are paid off.

What you will find is that each time you pay off a debt, the “snowball” gets larger.

Since you are taking the amount you used to pay off the first debt and putting it all + the minimum payment that you were already paying to the second together, you are making more of an impact towards that debt.

Each time you pay off a debt, the snowball gets larger and more powerful – which is great, because it just increases the speed that each debt gets paid off.

Watch this for an example of how the debt snowball works:

Debt Snowball vs. Debt Avalanche

If you are like most logical people out there (like me 🙂 ) you are probably saying, “you could save more money by paying the highest interest rate cards off first.” You are right – calculators do not lie and they will give you the correct logical answer. Paying your credits cards off starting with the highest interest rate to the lowest is “mathematically” the best idea.

That my friend, is the Debt Avalanche approach.  Investopedia defines it here:

“A method of repaying debts in which a debtor allots enough money to make the minimum payment on each debt, then devotes any remaining  debt-repayment funds to repaying the debt with the highest interest rate. Using the debt avalanche method, once the debt with the highest interest rate is completely paid off, the extra repayment funds go toward the next highest interest-bearing debt. This process continues until all the debts are paid off.”

But, let’s look it at from another angle:

If we DID what we knew we SHOULD do 100% of the time, using the mathematical approach would be best. But, we are emotional beings and even the most disciplined among us still have emotions and are affected by them.

Computers use logic 100% of the time. Humans do not. We were not created to. We make decisions based on our emotions. We get let down, we get encouraged, we feel motivated, we get scared, we feel hopeful, we feel like quitting. These are all emotional states that each one of us could feel on any given day!!

Knowing that we are emotional beings, the key is to use our emotions to our advantage. Just like jogging with the wind at your back, it is a nice little boost to use our emotions to give us a little edge. So, rather than tackling the debt like a math problem, we can tackle it in a way that will give us emotional boosts!

After all, isn’t it better to get out of debt and spend an extra $100 in interest than to give up halfway to our goal because we were discouraged?

The scientific evidence for why the Debt Snowball is more effective

There have been a couple studies I have found that prove the effectiveness of the debt snowball vs the debt avalanche approach.

Northwestern University examined a study that confirmed that “The number of accounts closed better predicted successfully completing the program than the dollar amount an individual had paid off.”

Texas A&M concluded in their study here (see page 19) that “The experiment indicates subject performance is best when tasks are grouped from smallest to largest.”

The bottom line is that even science is proving that paying of debt isn’t about the math, it is about doing whatever is going to keep us motivated to the end.

Status Bars and Debt

Learn how to use the Debt snowball (Free Download of a Worksheet)

Ever wonder why there are status bars showing you the progress of the item you are loading on your computer?

It is to keep us from going crazy while waiting 10 minutes for the computer to do what we told it to do!!

Even though that little bar moves slowly sometimes, it is encouraging because we know how much longer we have to endure the torture of waiting.

It is extremely DE-motivating when there is no end in sight. Without that “light at the end of the tunnel”, it can be hard to keep going.

That little bar that shows us the progress that we have made gives us hope. What if there were no status bars?

Or what if you saw no progress on the bar until you got to the 70% loaded point? Would you keep waiting or would you reboot, assuming there was a problem?

When on the phone, have you ever been waiting on hold for 15 minutes wondering, “Did they forget about me? Should I wait it out? What if they never remember that I am on hold?” Do you cut your losses or wait it out, having no idea when they will pick up, or if they ever will?

This is the advantage of using the snowball approach to paying down debt. If you focus on the highest interest rate, it could be months or even years before you reach that first milestone. Would you have the endurance to keep going that long without reaching that first milestone?

It is a wonderful feeling to be able to celebrate your first milestone – paying off the first credit card is a blast! Speaking from experience, I was fueled with motivation after reaching that first milestone. The fact is that most people are strengthened by seeing even a small goal accomplished.

I love the debt snowball approach to paying down debt because it focuses on reaching these small goals first and using them as motivation to keep going. Let me know how it works for you!

Debt Snowball Spreadsheet & Calculator [Free Download]

Well Kept Wallet has a great debt snowball calculator that can help figure out your debts so I encourage you to give that one a try.

I just was making some updates to our budgeting templates page where we have a bunch of free Excel and Google Doc spreadsheets available.

While I was working on it and getting a few new ones added to the page I stumbled upon this Debt snowball calculator for Excel and it is really cool tool to help you track your debt snowball.

As you can see below it has a lot of pretty helpful features and I wish I had a spreadsheet this cool when we were using the Snowball method to pay off our debt.

debt snowball spreadsheet - free download

You can download the Debt Snowball Excel (XLS) file or find more out at the creators website.

Click here to get the spreadsheet for Google Docs (or Google Sheets)

Printable Debt Snowball Worksheet / Template / Form

The Ramsey team created this helpful downloadable debt snowball worksheet PDF template that you can print off as you work your way through the process…

FREE debt snowball worksheet

Have you used the Snowball method yourself?  Did it help you get out of debt?

How to Calculate Your Net Worth & Why You Should

January 20, 2020 By Bob Lotich, CEPF®

Did you know that we have a Biblical responsibility to keep track our finances?

Proverbs 27:23 says that we should “Know well the condition of your flocks, and give attention to your herds,”

how to calculate your net worth

You see, thousands of years ago, wealth was measured differently than it is today. They obviously didn’t have paper money, but it wasn’t just silver and gold that functioned as the indicators of wealth.

In fact, if you look at Genesis 13:2, it says,”Abram had become very wealthy in livestock and in silver and gold.”

Isn’t it interesting that in this verse livestock is mentioned BEFORE silver and gold in defining his wealth?

My point is that a modern take on Proverbs 27:23 might read like this, “Pay attention to your money and know what’s going on with it.”

Just in case you want more evidence, check out the Parable of the Talents as it is a fantastic illustration on Biblical stewardship and our role as stewards of the money that has been entrusted to us.

So what does this mean practically?

This could be a good argument for budgeting, but just in case that is too far of a leap for me to convince you of right now, at the very least start tracking your net worth once a year.

Don’t worry, it is extremely easy to do and won’t take you much time.

Step-by-step instruction to calculate and track your Net worth

I made this video to show you how to track it and how to automate it so you can do it one time and have it tracked automatically in the future.

Oh, and if you use the tool I use they have a $20 signup bonus offer as well! (see their site for more details)

Why track Net Worth?

Your net worth gives you a true and accurate picture of your current financial situation in a way that nothing else does.

It is easy to assume that having a nice salary means that you are going to do well financially, but often that just is NOT true.

On the other hand, some people assume that their low salary means that they are doomed financially. That is NOT true either.

Your net worth shows you what is ACTUALLY going on with your money, instead of what you think or hope is going on.

Why Net Worth rather than just debt?

The primary reason I love using Net Worth as a gauge of your financial progress rather than the amount of debt you have is because it is more encouraging.

When you look at your amount of debt to track progress, you are only seeing the fruit of paying down those debts. On the other hand, your Net Worth increases for every good financial decision you make.

For example, you can increase your Net Worth with the following actions:

  • Paying off credit cards or car loans
  • Paying more towards your mortgage
  • Buying property
  • Funding a Roth IRA
  • Contributing to your 401(k)
  • Building an emergency fund
  • Buying index funds, mutual funds, or dividend paying stocks
  • Or even just not spending as much money

There are many more things you can do to increase your Net Worth, but these are some of the bigger and more common ones.

It changes how you think about buying decisions

The second reason I prefer to use my Net Worth to track my progress is because I have found it helps change how I think about my buying decisions.

One of the most valuable financial lessons I have learned can be summed up in this video.

The gist is that we should spend more of our money on things that will keep cash in your pocket. So they should at the very least:

  • maintain their value,
  • but better yet increase in value
  • and the best would be increase in value and provide you income as well.

On the other hand, you should avoid buying things that are going to take cash from your pocket. Coincidentally, these are most of the things most of us spend our money on.

When you buy clothes, food, electronics, decorations, cars, entertainment, you are (generally) using cash for something that is going down in value and therefore decreasing your Net Worth.

Examples of this would be:

  • Spending $200 on new clothes
  • A $50 steak dinner
  • Going to the Yankees game
  • A brand new BMW

Think about how much you could sell each of these for 2 years from now. Each one of them is a depreciating asset, so 2 years later they would not be worth what you paid for it, if anything at all.

Obviously there is more to life than Net Worth, and you can never avoid spending money on depreciating assets, but you can avoid spending ALL of your money on depreciating assets. This is the key to why many people never get ahead financially. They spend all of their money on stuff that goes down in value. Once you start buying things that increase in value, you begin building a snowball that just grows larger and larger, faster and faster.

I don’t want to get the cart ahead of the horse, so lets get back to our Net Worth. The reason I mentioned this is because I want you to be thinking about the end result of each buying decision.

None of the things listed above are necessarily wrong, but they should be thought about and decided upon rather than just reacting to what you “feel like doing”.

Your Net Worth will reflect each buying decision that you make – good or bad – and as such it is the most encouraging view of our financial progress.

Don’t bury your head in the sand

There was a time in my life where it felt easier to just ignore my financial situation, rather than face the realities of it.

I was burying my head in the sand thinking that if I just ignored it, it would get better or maybe just go away.

Unfortunately it doesn’t work like that.

I believe God wants us to know exactly where we are financially, so He can get the glory when He does the miraculous in our finances.

Moses had to get up close to the Red Sea BEFORE God parted it. God didn’t part it when they were miles away. I suspect that He wanted the Israelites to get an up close and personal view of the insurmountable obstacle in their path.

By doing so, they would much better understand the scope of the miracle that God was doing in their lives – and that it would be a story that they could tell of God’s faithfulness for generations to come.

Regardless of how much of a mess you are in financially, find out where you really are – your starting point if you will – so you can start building your testimony.

The first time I calculated mine

When I did this for the first time in 2005 I found mine to be NEGATIVE 13k.

Initially I was discouraged by this number, but I quickly noticed that it was increasing every month as I began doing slightly less dumb things with my money. 😉

And now as I look back at all the miraculous things that God has done in our financial life I am so glad that I have that as part of my testimony.

I am honestly glad that it was negative, because it makes the story that much better.

If you haven’t done this, let’s do it today and start building your testimony.

Take action in the next 3 days

Do yourself a favor and carve out some time this weekend to do this.

Depending on your situation you might be able to do this in 15 minutes or less.

In the step-by-step video I created showing you how to calculate it, I also show a tool that I am using to track it that I love and is free to use.

And for a limited time they are offering a $20 signup bonus for new customers (check their website for details on this).

Just watch the video below to find out more.

How to calculate your Net Worth

There are 2 ways that I’ve used to calculate my net worth.  The new way that I have been using is by using Personal Capital. Basically it is an extremely secure website that allows them to monitor (not make changes) all your financial accounts in one place.  It is completely free to use, and provides a great snapshot of your overall financial picture.

It is the quickest and easiest way to calculate your net worth and continually monitor it over time.

All you need to do is:

1Create your free account with Personal Capital

To see more about what they do check out this video:

2Add all your financial accounts: banking, investments, credit cards, mortgages, etc.

Just click the “+Link” button in the left corner.

adding personal capital accts

Then you will see a popup box that looks like this and from here you can search for each of your accounts.

add to personal capital

Unless you have a ton of accounts, you can probably do this in under 10 minutes and then you will have your net worth nicely displayed to you as you can see in this screenshot below.

personal-capital-net-worth

And unfortunately, this isn’t a screenshot of my personal account (but rather a healthy demo account).

Figuring out net worth with personal capital iphone app

They even have an iPhone app, so you can calculate your Net Worth while you are sitting in the doctor’s office.

My Old Method of Net Worth Tracking

Before Personal Capital came along to automate this process, I used to just do it manually every 6 months or so in a spreadsheet, just like how I track my household budget.  I  have created a template from my own balance sheet that you can use if you would like. You can download it here.

1. Get a spreadsheet

First off, you can do this on paper if you really want to, but I suggest Excel, Google docs, Open Office, or really any kind of spreadsheet will do.

2. Total your assets

List every asset you can think of. Anything that you could realistically sell. For the purposes of sanity and simplicity, I don’t bother with items under about $500. Yea, I am sure I could find someone on Ebay to buy my socks, but I am just looking for a general picture. So I just lump together all these smaller items as one line called “Misc items” and take a conservative guess of what they could be sold for.

So your house, cars, retirement accounts, stocks, savings accounts, checking accounts, emergency fund, jewelry, and anything else similar would fall in this assets category.

To get real estate values you can use Zillow to get a decent estimate of what your home may be worth. For automobiles you can check out Kelley Blue Book to see what they could be sold for. For all your checking, savings and investment accounts you can either check the balances online, or just use your last statement.

Once you have them all listed with the estimated selling/liquidation value you can total them up.

3. Total your liabilities

A few lines below the Assets total, we are going to now list every debt you have. Mortgages, credit cards, student loans – they all apply. Do the same as above, checking balances on each one and then total your debts to get your liability total.

4. Subtract them

Now you can subtract your liability total from your asset total and viola! You have your Net Worth. Date it and save it.

Now what?

When I first calculated my Net Worth, it was -$13,843.84. This was eye-opening to me. I knew I had a bunch of debt, but didn’t realize how below par I was. Regardless of what your number is, just look at it as the starting point. It is from this point that it will become larger.

After we had been working at it for one year, it was up nearly $15K to +$746! We were so excited to have a positive Net Worth! Even if it was only $746. As we kept on working on it, it has just continued to grow.

I normally check on my Net Worth two times a year. But if you are working really hard at it and need to see the encouragement of it increasing, do it more! As in just about anything, you are either moving forward or you are going backwards. If you are increasing your assets by making good buying decisions or minimizing debts, your net worth will be growing.

Homework:

Your homework tonight is to calculate your Net Worth, using either Personal Capital, a spreadsheet, or a pencil and paper.

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