Category Archives: Finance

Taking care of money

There are a lot of things I do wrong with money. I’ve been known to grab a few dollars from my emergency fund and occasionally overspend on my monthly budget. None of these things are horrible offenses but they also aren’t shining examples of my money prowess. However, my biggest money failure isn’t actually spending too much…it’s not spending enough.

I don’t spend money on myself. Honestly, it’s as simple as that. I love buying gifts, going on trips and even splurging on meals out with friends. But in the past few years, even those purchases have come with a side dish of guilt.

And the one thing you’ll never catch me buying is a treat for myself.

I wasn’t always like this though. Before my financial world crashed around me, I was much better at self-care. I would treat myself to a few massages a year, buy the occasional latte (just because) and never sweat a fun outing that I really wanted to do.

I’ve been working since I was 16 and I always had money in my savings account. I never had a problem with blowing my money, but I also didn’t have a problem with spending some of it either. I occupied the elusive ~middle ground~ and it was nice.

When I was unexpectedly cut off at the age of 20, everything changed. I had two choices: drop out of college halfway through or figure it out. I figured it out, but it came at the expense of my mental health.

There were so many different heartaches involved in my final two years of college, but the main one was fear. It was the first time in my life that there was no safety net. If I missed a rent payment or tuition check, then I had to figure it out…alone.

At the time, Alex was living across the world in London, my mom was living across the country in Oklahoma and my best friends were living in various cities across the state. With my support system spread out across the world, I felt as if I was physically alone too.

In order to make it through my first year supporting myself, I had to suppress my emotions. If I had felt all of the pain, loneliness and financial stress that accompanied that year, I would have imploded.

I slashed my budget to the absolute bare minimum and learned to live on peanut butter and pasta. My goal was survival and self-care was a luxury I couldn’t afford.

Today, my financial situation is drastically different. I’m debt free. I have a full-time job with benefits and a healthy emergency fund.

The day I became debt free.

But for some reason, I’m still stingy with myself. Every time I spend money on something fun, I start to sweat (literally) and feel waves of guilt wash over me. I check my accounts every day and even though there is more than enough money, I constantly worry that there isn’t.

It’s an exhausting way to live.

And recently, I’ve realized that it’s rippled out into other areas of my life as well.*

Without even realizing it, my charity donations have gotten smaller, and I’m much less likely to buy Alex a surprise gift or treat my sister to dinner after a long day of work. These things may seem small, but I think they are symptoms of the bigger issue: my attitude of generosity.

By being stingy with myself, I’ve become stingy with everyone else as well.

Driving to work last week, I listened to Farnoosh Torabi’s So Money podcast. The interview was with Dr. Daniel Crosby. As they began to discuss his childhood, it came out that Daniel’s parents were extremely debt averse and had paid off their mortgage by age 40.

I was immediately impressed.

However, that wasn’t the end of the story. The pay-off came at a cost. There were no family trips or delicious dinners. Instead, there was constant scrimping, saving and stress.

Daniel’s parents are now grandparents and their advice for their son is to NOT do what they did.

Daniel explains, “My dad has actually moderated his ideas about debt over time and has encouraged us to not do some of the things he did…Now they have a whole lot of money and they don’t have that time back…He preaches something different to the grandchildren because we did miss out on some things…Now my mom is in poor health and they have all the money they need, but they don’t have the opportunity.”

His story hit me hard because I could easily see myself as Daniel’s parents—scrimping, saving, planning for the future and constantly stressing about money.

But that isn’t what I want. I want to enjoy life, travel without freaking out about every penny and live with a generous heart…and a generous wallet.

I treated myself to frozen yogurt yesterday. There was no reason or occasion. I was alone at the mall and had just finished running some errands. After paying for my yogurt, I sat down in the sunshine with a view of the mountains and took the first bite. It tasted like self-care.

TIPS TO GET OUT OF DEBT

download-20Minimalism isn’t deprivation, but sometimes temporarily depriving yourself creates a path toward financial freedom. That was certainly true for me: I had six figures in debt—nearly half-a-million dollars if you include my mortgage—but today I’m debt-free. Of course, it took diligent budgeting to get there:

Cut cable TV, wrote more.
Drove less, walked more.
Cut credit cards, spent cash.
Stopped eating out, cooked meals at home.
Silenced satellite radio, meditated more.
Canceled gym membership, exercised at parks.
Lived without home Internet, used public Wi-Fi.
Sold large home, rented a smaller apartment.
Canceled magazine subscriptions, borrowed from library.
Ceased upgrading, found a détente with “outdated” tech.
Refrained from purchases, better utilized possessions.
Separated needs from wants, developed a comprehensive plan.

You see, I didn’t simply go without—I replaced expenses with alternatives, which made my momentary forfeiture feel less like a sacrifice. Interestingly, once I becamedebt-free, I was able to bring some of these indulgences back into my life, doing so deliberately, discovering which ones I could afford, which ones would add value to my life, and letting go of the rest.

The Debt Snowball

When it comes to paying off debt, there are two popular strategies that are typically encouraged:

The Debt Avalanche method or the Debt Snowball method

Both of these winter-themed strategies are effective for getting you to debt-free, but each has pros and cons.

The Debt Avalanche method

The Debt Avalanche method consists of paying off your debt with the highest interest rate first. Once it’s paid off in full, you then focus on the next highest interest rate debt, and so on, until you pay off your lowest interest rate debt last. Because you get rid of your highest interest debts first, the Debt Avalanche method saves you the most money overall. For this reason, it is mathematically the best solution to paying off your debts. Using the Debt Avalanche method, you will likely focus on paying off things like credit cards and lines of credit before you tackle traditional low-interest debts like student loans.

The Debt Snowball method

The Debt Snowball method has you paying off your smallest debt balance first, regardless of the interest rate. Once the smallest debt is paid off, you then roll the payment into the next largest debt and so on, until you pay off your largest debt balance last. By tackling your smallest debts first, you rapidly feel a sense of accomplishment whenever you pay off a balance. This gives you momentum to tackle the rest of your debt. For this reason, it is often psychologically or emotionally the best solution to pay off your debts, even if it does end up costing you more money in the long run.

What about the emotional weight of debt?

What many people tend to neglect about debt is the weight behind the balances and interest rates. Some debt simply feels emotionally or psychologically painful to carry around. This could be money we owe a friend or family member, or debt from silly mistakes like unpaid parking tickets. Whether these are small balances or 0% loans doesn’t make them any easier to ignore. Sometimes it makes sense to get rid of your emotionally heavy debts even if they are not your highest balances or highest interest rate loans.

How to Pay Off Your Debt

When it comes to deciding between the Debt Avalanche and the Debt Snowball (or any other debt repayment strategy) the first thing you have to do is make a list of all your debts, their interest rates, balances, and minimum payments.

Boost Your Organic Motivation

My biggest weakness is being unable to generate enoughorganic motivation to keep on hustling. I used to get up by 5am every weekday to work for 2-3 hours before work. Then I’d get home by 8pm and work another 1-2 hours on my side hustles. There was this massive internal drive to go all out to one day break free.

Now that I don’t have a day job, I get up around 6am and then zone out on my phone for 30 minutes before checking the refrigerator several times to see if there’s anything good to eat!

No wonder why my weight continues to creep higher. I’m just not trying hard enough. I admit it. Reaching financial independence has made me less productive by at least two hours a day. What a shame to no longer reach maximum potential.

Then one day I realized I had been sitting on two, $2,100 rent checks from my Pacific Heights tenants for one week. They’ve been great so far in terms of paying promptly. The only reason why I remembered carrying these checks is because I told my tenants to just take the cost of fixing the leaky kitchen faucet off their rent.

They reminded me they had already sent their rent checks, and given rent wouldn’t be due for another 3.5 weeks, they’d rather just get reimbursed directly. Oh yeah, that’s right.

The main reason why I forgot to deposit the $4,200 for a week is because I paid off the mortgage in 2015. After 13 years, the bank is no longer helping me stay financially disciplined. 

Quarter Life Crisis

There’s so much history with this Pacific Heights rental property because I bought it when I just turned 26 in 2003. At the time, I was also losing my organic motivation after saving up around $200,000 and making $150,000 in a fortuitous internet stock four years after college. I knew I was lucky, but I was also tired of working 70+ hours a week.

9/11 was fresh on my mind and I was constantly wondering what was the point of working so long to make more money. I was incredibly tempted to just leave San Francisco and move to this beautiful 6.2-acre property my grandparents owned nestled in the Waianae mountain range in Oahu. Due to their advanced ages, they were no longer actively tending to the dozens of mango trees, pomelo trees, avocado trees, and orange trees they had planted decades ago. What a shame to see their hard work fade.

As I contemplate this quarter life crisis now as a middle-aged person, I realize how dangerous it is to grow up in a household with some wealth. As grade school teachers, my grandparents weren’t rich by any means. But they did buy this amazing property for $50,000 in the 1960s. If there wasn’t this property, I wouldn’t have even considered leaving work in my mid-20s due to a lack of options.

Taking on a $464,000 mortgage at 26 super charged my organic motivation. I changed from wanting to kick back in Hawaii to wanting to get into the office by 6am and outwork everybody every day. The last thing I wanted was to get laid off with such a large amount of debt. Debt saved me from short-circuiting my career by eight years.

If I moved to Hawaii at 26, I might be an incredible surfer by now. But I would have always wondered how far I could have gone in my career had I stayed. Now I have no regrets because I tried my best to get to Managing Director and failed.

Financial Stud Overnight

Years ago, there was a friend of a friend in my social circle who didn’t do too well with the ladies. I forget his name, but he was a good guy. He just didn’t have any animal magnetism. He was an average-looking man with an average-paying job who possessed average social skills. If I had to choose one word to sum him up, it would be boring.

But then something remarkable happened. I merrily walked into my default bar one night and came upon Mr. Boring with a shockingly beautiful girl at his side. And she wasn’t his coworker or his sister, she was his new girlfriend!

I remember thinking two things. First, WTF! Her with him? My second thought, though, was happiness. Like I said, Mr. Boring was a good guy. And it was nice to see that at least one Playmate-quality woman would rather have a mate with character and good sense than a mate with chiseled abs and a hot car. It gave all of us non-studs some hope.

But here’s the really interesting part of this story. Guys started to treat Mr. Boring differently. He wasn’t just there anymore. His thoughts and opinions mattered. Guys suddenly wanted to hang out with him. It was freakin’ amazing. One hot girlfriend had erased years of social mediocrity. Mr. Boring had become an Alpha-male overnight.

What Is a Financial Stud?

Don’t ask me why, but for some reason I’ve been thinking about Mr. Boring in a financial sense. Is it possible for someone, without the benefit of Powerball or a lucrative inheritance, to go from financial dud to financial stud overnight?

I think it is. But before I explain why, I first have to define what I mean by financial stud.

Given that a shockingly small number of Americans can come up with $400 without borrowing, the cynic in me says a financial stud is someone who has four hundred dollars in cash lying around. But that benchmark is ridiculously low. No one who lives with mommy and daddy and has saved half the median weekly earnings of a US worker can be considered a financial stud. Our definition has to be a little more formidable than that. For our purposes here, then, the working definition of a financial stud will be as follows.

  • Someone who is debt free (save his or her house).
  • Someone who has a six-month emergency fund.
  • Someone who is at least half Mustachean; that is, someone who has saved at least twelve and half times his or her annual expenses.

Okay, I got to cover one more thing before I explain how to become a financial stud. What’s my definition of overnight? Well, for starters, it has to be a realistic time frame. It can’t be a month or a year. But it has to be something challenging. After all, studs to do things mere mortals can’t. Hitting the above benchmarks over a sixty-year time frame isn’t that studly. But doing it in ten years or less is.

So there’s my arbitrary definition of overnight in a financial sense. Achieve the above benchmarks in ten years or less and you’re an “overnight” financial stud.

How to become a Overnight Financial Stud in Two Easy Steps

There are basically two steps to becoming an overnight financial stud: Get out of debt and save half your income for ten years. That’s it. I wish I had a more profound secret to share, but I don’t.

The math behind these two steps is pretty straight forward. According to Mr. Money Mustache, if you’re saving 50% of your income, you will have 12.5 times your annual living expenses saved in 8.5 years. If you continued to save 50% of your income for another year and a half, you would have an eighteen-month emergency fund. So overnight financial studism is doable. But you must avoid debt like the plague, and you must be super-good at saving.

Here, then, are some no-nonsense ways of avoiding debt and creating a prodigious gap between your income and your spending.

How to avoid for the debt

What would you rather have? No debt or a better credit score?

If you’re the folks at TD Bank, apparently you take the score.

Their PR department just shot me a pretty lame press release, and after asking if I was going to share it with my audience twice within 24 hours (impatient, much?) , I decided to give them what they want.

Though it probably won’t be what they were hoping for 😉

Here’s what they sent below, along with my gut reactions… Am I alone here??

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Millennials, the largest generation, show a significant aversion to credit, perhaps because they’ve lived through the financial crisis and battled student loan debt. In fact, a recent study from TD Bank found that almost half (44%) of Millennials aren’t using credit at all. Those who don’t use credit are missing out on the opportunity to reap rewards and establish the credit scores they’ll need for big purchases down the road – like a house or a car.

Soo… risk debt for better credit?? So you can – wait for it – take on more debt??

TD Bank’s recent survey set out to find out why Millennials are credit averse, and uncovered the following:

  • Millennials Are Missing Out on Easy Cash:

Only one-fifth (19%) of Millennials say the biggest benefit of using credit is it allows them to earn rewards, meaning the other 81% may not realize how valuable earning cash back rewards for the purchases they make most often can be.

Or meaning they actually hate debt! Which your study clearly shows!

Only 17% of respondents make big ticket purchases with a credit card, missing out on the opportunity to earn even more cash back rewards when making large purchases like airline tickets, hotel reservations and electronics or large appliances, to name a few.

You know what else this shows?? That millennials are paying *cash* for big ticket purchases instead of credit. And what would you rather have – a few dollars cash back or 0% chance of going into debt? Good for them for having the funds to pick up this stuff!

  • Millennials Aren’t Establishing the Credit They Need for the Future:

Only 28% of Millennials say building credit is important so they appear trustworthy to mortgage lenders, meaning almost three-quarters aren’t considering the importance of establishing credit now.

This part I’ll agree on. While credit isn’t the end-all be-all, it’s definitely an important factor. And something that took me way too many years to catch onto, sadly.

Fewer (just 18%) say building credit is important so they can make large purchases in the future.

Awesome if they’re still planning on using cash (imagine buying a house or car in full??), but yeah – not so much if they are eventually looking to finance something.

  • Millennials Are Worried About Incurring Debt:

When asked what is the biggest benefit of using cash, most Millennials said using cash ensures they spend within their means and one-fifth say they worry using a credit card will make them incur debt. However, strategically using credit for regular purchases can help Millennials keep track of their overall budget.

COME ON!!!! If people are worried about going into debt AND spending within their means, then leave them alone already! They’re being smarter than most other adults out there! Who cares about the rewards if you’re just going to dig yourself into a hole in the end and pay more for the privilege of it.

The “better for budgeting” play only works for those who already trust themselves around plastic too, btw – not those who don’t. This is pretty much the worst pitch I’ve seen trying to get someone to sign up to their products, ugh…

Only 8% of Millennials say a high initial credit limit is important to them when applying for a credit card, indicating they are cautious about spending within their means.

YES! And this is bad, because?? We should all be cautious about our spending as financial security trumps credit all day, every day. And none of this, btw, means that you can’t have decent credit just because you don’t use credit cards. There are plenty of other ways to build up credit history, even if they take a little more effort.

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Maybe I’m reading too much into this, but damn… This fires me up! And I’m a lover of credit cards too! I use them for all the great reasons most of you do too – convenience, cash-back, miles, and yes – even budgeting. No one’s going to deny the benefits they bring.

But you can’t discount the enormity of what debt can do to a person either – especially those who have clearly stated how nervous they make ’em (and rightfully so!). Pitch your cards to those of us already comfortable and looking for better cards, and not to those doing their best to stay out of trouble.

Good for every last one of you who have rejected the idea that you “need” a card to make it in this world. If anything good came out of all this, it was to see just how many of you are bucking the trend and doing  your own thing! 44% is freakin’ fantastic – stay strong!

Financial Wake Up Call Moment

As I look around the world today, still convinced that America is in for a huge financial wake-up call, I see many, many people still wandering around in status-quo spending,telling themselves that they’re just fine. And I get it. Hubby and I did this for many, many years. We leveraged whatever credit we could gain to get the stuff we wanted to have. We thought that the amount of credit banks gave us was an indicator of our success in the world, and we wore those badges proudly with new cars, nice clothes, fancy homes, etc.

We told ourselves the old lie: “We can make the payments just fine, so it’s all good.”

That is, until the job layoff. But funny enough, that wasn’t our financial wake-up call moment. We still continued to tell ourselves we’d be just fine, and made the smart SO not smart move of using our plethora of available credit to make up for the difference in income between hubby’s salary and the unemployment check.

It was nice. We could continue to live as we’d always lived: financially cozy without much consciousness of our spending.

You would’ve thought that living on substantially less income and not knowing when hubby would work again would’ve been our rock-bottom wake-up call. But it wasn’t. Not yet.

Our Wake-Up Call Moment

Then we moved out of suburbia into the country, and something happened.

I think it could best be described as “taking the blinders off.”

In the country, we didn’t have nearby neighbors known as the Joneses to keep up with. And being further away from the neighbors we did have, we couldn’t see what they were spending their money on.

Suddenly, we didn’t have so many people around us to compare ourselves with. We’d spent years comforting ourselves with the “everyone’s doing it, mom” theology. Now“everyone” was far away, and we were left alone with our pile of debt and no one to compliment our cars, our home, our clothes or our status.

It was just us, staring face to face with tens of thousands in credit card debt. 

And that, my friends, was our rock bottom wake-up call. We started to wonder how we’d make these payments if hubby got laid off again. Yep, that would suck. We’d be in big, big trouble was the answer.

And since there was no one nearby to comfort us with the “it’ll be just fine” message, we had to face the fact that if a job layoff happened it really wouldn’t be just fine. Not in the least.

It was that stark realization – the one that foreclosure, bankruptcy and all those other not-so-fun things could become a reality – that induced our financial wake-up call.

Don’t Wait for a “Forced” Wake-Up Call Moment

My prayer for the millions dealing with loads of consumer debt and bloated mortgages today is that they don’t wait for that “forced” wake-up call of a job layoff or other disaster before they start making a plan to dump the debt and build a more secure financial situation for themselves.

Take a few moments today to honestly analyze your finances and see if your financial situation really lines up with your dreams and goals. Then make a plan to reduce debt and increase savings if needed.

No one is immune to a job layoff or decrease in business income. Or major league medical or other expense. Begin the work of preparing yourselves today so that your potential rock-bottom, wake-up call moment will end with a real-life “we’ll be just fine.”

How to Build a Financial Fortress

Here’s how you can begin those preparations.

1. Assess Your Situation

Sit down today and make a spreadsheet listing each of your debts (liabilities) in order from smallest to biggest. Then list your assets (savings, retirement, homes, cars, etc.) and their values in order. Subtract the liabilities from your assets in order to get your net worth.

2. Make or Assess Your Budget

If you have a budget, look it over to figure out if you can or should trim costs somewhere in order to improve your money situation.  If you don’t have a budget, make one. Make the first budget based on what you spend, and another one based on what you could be spending in order to make your money situation more secure.

3. Cut Costs That Aren’t Value-Based

Go through your budget line-by-line and analyze each non-necessity cost. If the expense is in line with your financial goals and dreams, keep it, but if it’s not, consider reducing or eliminating it. Example: If meeting your financial freedom goals is more important to you than watching cable TV, get rid of the cable, even if just for a time.

Ask yourself before making any expenditure: Is this expense worth me delaying my financial freedom date?

4. Put All Extra Cash Toward Consumer Debt Reduction

If you’re carrying consumer debt, commit to putting all extra monies toward paying it off. Use the Debt Snowball or Debt Avalanche to help accelerate the process.

5. Decide Which Fork You’ll Take Once Consumer Debt is Gone

Once the consumer debt is gone you’ll have a choice to make. You can either keep putting all extra monies toward paying off the mortgage, split extra monies between mortgage and savings, or put all extra monies toward building up an emergency savings account and maximizing retirement contributions.

The right answer is different for everyone, so you’ll want to sit down (with your spouse if married) and have a long discussion about what financial milestones really matter most before you can make your decision.

6. Stick With the Plan

As Ruth shared here, perseverance really does pay off. After only 4.5 years of working her plan, she and her DH are well on their way to retirement, and Ruth is only 53! That is huge, my friends. In another few years, Ruth will be able to leave work and pursue her dream of a career in writing, and just over 4 years ago she was deep in debt with no plan or way out. It’s never too late to begin a journey out of debt.

MONEY SENSE FOR US

Why the need for the new vocabulary? Our generation is looking at money differently. Sometimes we’re confronting new issues. Other times, we’re confronting age-old issues in new ways. And when an entire generation is faced with unprecedented money obstacles, it’s going to take some new words to sort through the numbers and the emotions behind them. Because when it comes to millennial money, some of it is good, some of it’s bad, and some even gets a little ugly.

The Research

First things first. Let’s talk research. How do I know all this? Besides being really smartspending all my time on Twitter, Filene Research Institute sent me their Millennial Money Chatter findings, a summary of an online ethnography that looked at semiotics, syntax, and other things that I haven’t thought about since I was an English undergrad. See? Smart. But seriously. The report analyzes the way millennials talk about money online* with words, hashtags, and emojis. And it turns out, we’re talking about everything from being good grown-ups to drowning in debt.

*They’re reading our tweets, guys! We’re basically famous! Now when do we get to be rich?

The Good

Adulting – We’re adulting! We made it. And we’re totally owning it. We have jobs, we pay bills, we rent, we buy. We are officially grown-ups. Merriam-Webster says the use of adult as a verb showed a six-time increase in 2016 compared to 2015. Why shouldn’t we make a little noise? We’re figuring life out and doing awesome things.

Degifting – An example of our awesomeness? We’re not just big on DIY. We’re not just stretching our dollars with staycations. We do both of those things, and we also degift. Instead of just regifting, many millennials are pausing or stopping the gift exchange. Some of us are trying to stretch our dollars further. Some of us are looking to minimalism and meaningful experiences. And most millennials are taking a long, hard look at the consumerism that literally crushed my closet.

The Bad

Frugle – I love me some frugality. I crushed our grocery budget goal. I spend $7 on breakfast all month. Aldi is my BFF. That’s frugality by choice and for a purpose. Being purposeful with my money takes the latte factor out of my closet and helps me tackle goals like slaying the mortgage monster. So what’s with the weird spelling? It turns out that frugle is similar to frugality, but it is due to financial hardship. Forced frugality, if you will. When I stumbled across this word, it was another great reminder to check my privilege.

The Ugly

#debth – What do you get when your debt feels like a death sentence? Debth. Before anyone accuses our generation of being hyperbolic, let’s look at the numbers. This study quoted other research (like Inception but with data, not Leonardo DiCaprios) that shows 43% of millennials have delayed starting a family over debt, 55% worry that they won’t actually pay off their debt, and 75% have delayed saving for retirement because of debt.

Pause. No, full stop.

Almost half of the people surveyed aren’t having families on their own time because of money. Over half don’t feel like debt will ever end. And three-quarters of the people surveyed are going to be sad old people because of their currently-overwhelmed-selves.

While the numbers aren’t all pretty when it comes to millennial money, the fact that an entire generation is talking so loudly about a topic that was once considered incredibly taboo speaks volumes about what we can do. We can have smart conversations. We can share real stories. We can climb out of debt and make sense of our money in ways that should leave other generations inspired.

Frugal Habits That Were Right On Money

Many of our grandparents were born between 1910 and 1925. This is what Tom Brokaw dubbed “The Greatest Generation” when America was developed and defended on the backbones of its hard-working citizens. Anyone with silver hair, no matter their birth date, has spent an entire lifetime making choices and reaping consequences. It is our choice whether or not we will learn from our grandparents’ experiences and advice. That is why I’ve comprised a list of frugal habits I’ve learned from watching my own grandparents as a child.

It only just dawned on me that I’ve been learning from their example all of my life even though they’ve all passed on.

Even my grandpa “Big John,” who passed away from a heart attack when I was four, left a legacy in his community as a reliable and trustworthy man others looked to for business advice. Things like that, 25 years later, stay with me.

Grandma’s Top 10 Frugal Habits That Were Right on the Money

I titled this piece “Grandma’s Top 10 Frugal Habits” because many of us had “that grandma” who wore the same three outfits and that one pair of shoes.

But this list will also include other grandparents who had a powerful influence in my life.

1. Driving a used car.

My grandma Dorris drove the same used car through my entire childhood. It wasn’t new or flashy, but it was nice, reliable, and paid for.

2. Gardening.

My grandpa Lloyd plowed Michigan soil every season of his adult life. In retirement, his favorite pastime was taking care of his beautiful garden.

Grandma Dorris and I spent time picking and snapping green beans straight from her garden into the dinner pot.

When I graduated from high school, grandma sent me a letter with two packets of seeds to start my own garden. That was my grandparents’ legacy.

3. Scratch and dent.

Grandma helped me shift my mindset and think about things like manager’s specials and clearance racks. She went a bit too far some days, coming home with food that looked like it was ready to crawl out and burrow itself into the ground, but the lesson was still valuable.

I probably won’t hunt for nearly spoiled food and cereal boxes that look like they’ve been flattened by a forklift. Still, finding food on sale because of a simple blemish or dent is a win in my book.

4. Saturday garage sales.

If I visited grandma Dorris over a weekend, we’d either end up at the “scratch and dent” store or we’d go to garage sales. If I didn’t bring my own spending money, grandma didn’t buy me anything.

I remember only one time when she got something for me. It was a knock-off Barbie doll with chopped hair and a missing foot. It couldn’t have cost more than a quarter. Still, I cherished her gift and played with it for many years.

5. No TV.

I have so many childhood memories of showing up at grandma’s house, diving under her couch for a pack of Uno cards and sitting across from her as we played for hours. Not once did my grandma own a TV.

We’d occasionally listen to Peter Rabbit on her record player or catch the latest Detroit Tigers game while we cooked dinner together.

These types of memories stay with me as I raise my own children. I love the idea of our TV being a side product to our house, not the central focus. We don’t have cable and we try to spend as much time in the play room, kitchen or outdoors as we can.

I want my kids to have as much fresh air and the color green in their memory banks as I had.

Top Tips for Debt Free

Last week we celebrated our second anniversary of becoming consumer debt free.  It was an intentional plan that started back in the summer of 2010 and fifty months later we had accomplished paying off $109,000 worth of debt.

The journey started years earlier when my wife and I got married and started a family. We never really had a plan for our money, overspending over the years to get to that point. We didn’t communicate often about money, other than to say what credit card to use to pay for something we didn’t have the money for. We had five credit cards at one point, juggling minimum payments until they became too much to handle even with a six figure income.

It was at that point we knew we had to make a change. We began to educate ourselves about all things personal finance, built a plan and dug in. We involved our three children and kept our eye on the end goal of being debt free.

With two years under our belts, being debt free is even sweeter than I ever imagined. Stress has been reduced in our lives, the money fights don’t occur often, and we are better prepared to handle what life throws at us. I say “we” because it has truly been a family effort. I think the thing I’m most excited about is the head start our three teenage children will have with personal finance knowledge. I can’t wait to see what they will do with it.

Credit Cards

Credit cards were the tools we used to sink into six figures worth of debt, but what we’ve learned over the last few years is that it wasn’t the plastic card in our pockets that was the problem, the real problem was our behavior.

Once we learned to change our behavior and break our bad habits with money we can use credit cards responsible. They are just tools like a debit card, checks, cash, etc. For a period of time we cut up our credit cards because we didn’t trust ourselves to use them responsible.

We now, believe it or not have four credit cards. We pay off all credit card balance in full each month. We only use credit cards to purchase items with have cash for. We do this to take advantage of rewards and save money on travel. An item that has a lot of priority in our lives. We saved over $2000 on airfare this summer following this method.

Even two years post our debt payoff we still need to be diligent about our spending. It can be very easy to slip back into old habits and overspend using plastic. We never want to go back to that place ever again, so we continue to track spending and communicate often.

Cost of Holding On / Letting Go

I recent read two great articles by Carl Richards, one about the cost of holding on to something and another a follow-up about letting go. I even dropped him an e-mail. The really helped me put some closure on my year two experience of living debt free. It has been great from one stand point, less stress, better communication, but a job loss hung around for several months. It happened right at the point that we were really feeling confident about our new debt free status. I’m grateful that we were debt free and had savings when the event occurred, but still it was lingered.

Reading and listening to Carl was just what I need to stop wasting energy on those things in the past. My former company, my co-workers, being downsized, etc.

You might be asking how is this related to money. Well I was spending so much time thinking about these things, wasting time and energy it was costing me focus. It was clouding my ability to focus on things like moving forward, make more money, saving money, pursuing things, etc. I know that may sound a bit vague, but try it yourself, read and listen to Carl’s articles than let something go. Once you’ve put it to bed, take that extra time and invest it somewhere else more productive.