Category: FIRE Journey

When I coach people about their money, I can tell pretty quickly if they are serious about making changes or not. The ones who are serious will listen to me. They will step back and really examine their habits. They are willing to make sacrifices. They say “Hmm… let me think about it. I guess we don’t NEED three cars.”

But the ones who aren’t ready – they have a different tune. They have excuses. They have special circumstances. When I suggest re-thinking the cable package, they say “Well how would we watch Survivor?” And when I say, “Isn’t that on CBS? You can get that channel for free” – they say “But we couldn’t POSSIBLY lose the sports station”. But soon they are justifying their addiction to Starbucks because of a busy schedule. And their required gel manicures for a professional office. And their penchant for Whole Foods, ie “If I don’t buy organic I’m basically poisoning myself”.

Fear likes to creep into our lives, and fear tells us that our problems are worse than other people’s. Fear tells us that no one could possibly understand, and that our struggles are insurmountable.

Everytime I hear “But my situation is a little different”, I have a chuckle. (If I had a dollar for every time I heard it, I’d be much closer to financial independence!) But when you say that, that’s when I know – you aren’t serious. Come back to me when you are desperate to get ahead in life and willing to cut out a few luxuries. Stop making excuses. #sorrynotsorry

I get it. You are a unique snowflake who has struggles that no one else could possibly understand. But here’s the rub – WE ALL DO. Don’t paint yourself into a corner of debt because your parents couldn’t afford to pay for your college education, so you may as well get a fancy car loan on top of those monster student loans. Life pro tip: you do not need an eight passenger SUV to safeguard the lives of your not-yet-born children.

Yes, you are unique, and so is everyone else. You probably have challenges that some other people don’t have. That’s no excuse not to do the best you can.

Fear has a way of convincing us that we’re so unique we’re beyond help.

If you think that your situation is special, and there is nothing you can do to better yourself, you won’t change your behavior. If you think you are unique, and no one else can possibly understand your challenges, you won’t reach out for help.

I don’t believe there is anyone out there whose situation is so dire that there is nothing they can do to better it. Actually, quite the opposite. If you are in an absolute hole, sometimes a very little thing can really make a big difference. If you have really terrible habits, just a little change can impact your life in ways you didn’t foresee.

I believe in you.

Don’t use your history an as excuse not to succeed. Don’t listen to the fear.

Red flags you are terminally unique:

• When someone else is successful, you say “Must be nice.”
• When someone accomplishes something you wish you could do, you say “Yeah but THEY didn’t struggle with” [insert your unique situation here].
• When someone asks if you need help, you say “You couldn’t possibly understand.”
• When someone gives you advice you say “That couldn’t work for ME because” and you justify not even trying.
• And lest you think I am immune from this syndrome – I used many excuses to justify my lavish spending. “I’m a professional Financial Advisor, I HAVE TO drive a BMW and get frequent manicures.”

People who are ready for a change, when their debt and their finances finally become too much to handle, they stop making excuses and start making changes. When you hear someone is successful, instead of thinking of why that couldn’t work for you – ask HOW it could work for you. Instead of comparing how different your lives are, think about how new habits would look in your life. When someone accomplishes something awesome, instead of “Must be nice”, why not ask them how they did it? Chances are you can learn something from them.

Everyone is unique. Everyone’s situation is a little different. How have you used your “special circumstances” to justify your bad habits?

I recently made a money mistake (more on that later). It wasn’t huge, but I allowed myself to wallow in self-pity and flagellation for a hot minute. Then I remembered some advice I had read recently that I hadn’t yet followed, and I decided now is the time. It was a “productivity hack” and entailed focusing on what you had already successfully accomplished rather than what you had left to do or what you had done wrong.

The premise is simple – by always focusing on your To Do’s, you are never feeling fulfilled and happy and proud of all you have already completed. By always focusing on the future, and what is still to be done, you never take the time to reflect on the past, or pat yourself on the back for what you have accomplished.

Focusing on the future list of goals, or regretting past mistakes, is my go-to tendency. I have an automatic habit of highlighting the one negative thing in a sea of positives. I’m really working to change that internal voice into a more gentler, encouraging version.

So without further ado, and simply to make myself feel better, I bring you a list of my money accomplishments over the past ten years (#humblebrag):

• Created a workable monthly budget – together! On paper!
• Read MANY blogs/books on finances
• Cut up / paid off all credit cards
• Paid off $40k in debt – car loans, student loans, etc.
• Paid off $140k mortgage – became completely Debt-Free!
• Saved 6 months cash emergency fund
• Saved $5k to replace current car when needed
• Save and pay cash for every vacation and other variable expenses
• Create Christmas budget and plan in advance to make homemade gifts each year
• Paid cash for amazing wedding/ honeymoon
• Reversed crazy negative net worth to crazy positive net worth!
• Reduced expenses to live on less than half of our income
• Max out IRAs every year
• Max out my 401k too!
• Purchased term life insurance
• Created wills and Power of Attorneys
• Kept good stable job for 5+ years
• Purchased reliable used car on Craigslist for dirt cheap
• Canceled cable! Switched to $15/month internet and $10/month Netflix
• Canceled crazy expensive Verizon and switched to Republic Wireless
• Canceled all magazine subscriptions and gym membership
• Canceled crazy expensive car insurance and switched to Progressive
• Made decision to stay debt-free, never loan money, never co-sign etc.
• Began giving a tenth of our income to church community!

Sometimes by focusing on how far we’ve already come, we can find more motivation to keep going. What’s on your list of “Done” money items? I bet it’s longer than you think!

I stumbled upon a new idea this week and it really resonated with me. I heard a recovering alcoholic say that his mental disease had brought him so low that he was given the “gift of desperation”. He said that only when he reached this bottom was he able to completely let go of his need to drink and to turn his life around.

Tony Robbins once said, “Change happens when the pain of staying the same is greater than the pain of change.” This is the same idea.

I feel like the gift of desperation is sometimes needed in finances, as well. You have to feel a pinch, some kind of pain before you will do the hard work of changing your behavior. If it just feels great to go deeper and deeper into debt, and you are able to buy whatever you desire with no consequences, everyone would always continue to do so. But sometimes, there is a moment where you look around and feel buried by the mountain of debt. You feel chained with no choices, and you decide to change something about the way you spend your money.

I remember the exact moment I received the gift of desperation. I had a student loan, a car loan, and a credit card balance. I had a mortgage on a fixer-upper, and a job I hated. My car needed new tires and my tooth had a cavity that needed filled. We were making ends meet, but barely. I thought we were fine – it’s like not we had creditors hounding us. We were skating by with minimum payments on everything and no savings. We had just replaced all the windows in the house with a 12-months same-as-cash loan.

And then, I received a statement in the mail from the window company. I began reading the statement and it said that no payment was due – YET. But it also said that if we were not able to pay the full balance – over $7,000 – by the time the 12 months was up, that the bank would retroactively charge us an insane amount of interest, backdated all the way to the day we bought the windows. The kicker? Nine months had already passed and we had made zero payments. I freaked out. It was a “come to Jesus” moment – there were a lot of tears.

You see, I didn’t know the rules of the game I was playing. And in my fear, I couldn’t see any way that we would be able to make all our minimum debt payments and also pay the balance of this purchase in full in the next three months. I broke down. I got desperate. I began searching for a better way. I talked to my husband. I got some books at the library. I pulled out a calculator. I began looking at our spending, trying to find the things that we could cut to make this work. We spent about $100 on a money class that we took together. We started writing down a plan for spending. We argued about what was important. We got serious. We had a garage sale. We cut a lot of other things out. It was really hard, and it was worth it.

After a long road on the debt payoff journey, we reached the end. We celebrated – it felt great. And then, we coasted for a bit. We bought a few big ticket items that we had put off – new flooring for the house, a new(er) car, a better computer. We got a bit lazy and didn’t really have any goals besides our regular savings. But then… I began feeling a new type of desperation. I had switched jobs, but this one wasn’t much better. It was still a small cubicle, in which I was held captive all day, and had to report for pointless meetings and fill out meaningless self-assessments. I was feeling hopeless, staring down 30+ more years of working under clueless managers and feeling chained to a life of corporate drudgery. Even the “perks” felt completely arbitrary. A bigger cubicle? A fancier title? A window in my prison? I began searching for a better way.

That’s when I stumbled upon the FIRE movement. I began to see a light at the end of the tunnel, finding a different way forward, outside the regular forty year corporate career path. Giving up the little things that don’t matter for a life of freedom in early retirement became the goal. And that’s the journey we’re on now. We’re totally debt-free and living frugally to squirrel away as much money as possible, to afford an extremely early retirement.

***I do want to include a small caveat that I am not talking about depression. I don’t see any gifts in depression and most times it does not stir you into taking action; in fact it may do just the opposite. Desperation is not depression.

Have you ever been given the gift of desperation?

To get out of debt, you have to really want to.

I know that sounds really simple, but its SO true. No one ever just wakes up one morning and is like “Oops – I’m debt free! How did that happen?” It’s really easy to get into debt but you have to create a plan if you want to get out of it.

You have to be intentional, and focused, and really, really want to. It’s very simple to pay off all your debt, but it’s not EASY. I’ll say that again – its simple – you just take money and you pay it all off and then you don’t get any more. But its difficult – if it were easy, everyone would be debt-free and it wouldn’t require any sacrifice.

Probably one of the most drastic “sacrifices” we made, that actually impacted our quality of life, was to take on roommates in our home. Not impacted negatively – just moderately changed our lives. Over the years we have rented our guest room out to three different people (at different times). These people were all friends or at least acquaintances, and we were relatively sure each of them would not murder us in our sleep. And we ARE alive today to tell about it, so I’d say it worked out well for everyone. But our house is pretty small, so we had to share the one bathroom, kitchen, laundry, and living room.

Friend 1 – A friend I met at work wanted to move out of her parents home. She was also actively seeking employment out of state and so we figured she wouldn’t stay around too long. This was an experiment and it was great. We loved getting rent money in exchange for our guest room and we decided always wearing pants was something we were willing to do. She did move out of state and we parted ways on great terms.

Friend 2 – This was a guy with whom my husband went to high school. Bizarrely, we found him through an ad on Craigslist but when he showed up, it turned out they knew each other, so we felt like it was meant to be. Besides a few late night, rowdy World of Warcraft sessions (lol), he was a great roommate. He got engaged after about 8 months and moved in with his fiancee.

Friend 3 – A good friend, who was living out of state and needed a place to rent to transition back to our neck of the woods. She already had a job and this was perfect for us. She stayed about a year, probably the longest of any of our renters. After she moved out, we wanted to take a roommate break, and go back to wearing no pants around the house.

One thing I will say – having roommates allowed us a huge leap forward in our debt/mortgage payoff goal. $500/month is $6,000 a year that came out of nowhere – for little to no cost on our part. It was the best “side hustle” because it took no time. The only expense was maybe buying a bit more toilet paper and laundry soap. And with the girls, it was nice for me to have a built-in hang out buddy around (extroverts holla!).

I will tell a funny story though – just for you slightly crazy people like me. One day I got home from work and my roommate’s car and my husband’s car were both in the driveway. So I thought – cool, everyone’s home. So I walk in the door and the dog greets me, but no one else is around. I go “Hello, I’m home” and I get no reply. And mind you, this is not a large house. So I look in the living room and bathroom – no one. I go down the hall – my roommate’s door is open and she is not in there. I keep walking down the hall – my bedroom door is closed. That’s weird. And as I’m walking up to the door, my brain tells me – They are in there together. They are having sex in your bed. You’re going to have to commit murder today. How long do people go to jail for homicide? And I hesitate at the door, holding my breath and trying to bask in the time before I knew my husband was sleeping with my best friend.

And I slowly open the door, and the room is dark. My husband is asleep. Alone. He had a migraine. And our roommate? She wasn’t even home, her friend had picked her up to go out.

As I sidle up to my much maligned husband in bed, I whisper “I thought Liz* was in here.” And he mumbles “thoughtless?,” and I let him go back to sleep.

So anyway. If you can swing it, get a roommate. You (probably) won’t regret it.

*Names have been changed to protect the innocent.

Have you ever done anything extreme to save money? Would you consider getting a roommate or taking in a lodger?

I wandered through life for quite a while, with no savings in the bank, no plan for future purchases, and no real goals (besides vague wishes). I put things on credit in the hopes for some magical future with more cash than I had today. I woke up one day with lots (and LOTS) of debt and no way to pay it off. I wasn’t doing anything out of the ordinary, I was just doing what everyone else was – being an American consumer. I had student loans (like everyone else), I had a car loan. I had less credit card debt than the average person. We had gotten a modest mortgage, and I had a little bill at the dentist office I hadn’t been able to pay off right away. We were doing ok. It’s not like creditors were banging down the door.

But we had no plan, no dreams. My car (that was not really mine, but more the bank’s) needed new tires, and I had no way to pay for them. So they went on the credit card. Next month, and that $400 statement came in the mail. Shit, now what? The house really needed new windows… well that’s $7,000. Ooooh they have an interest free loan? For 12 months no payments!

Life just kept happening to me, and without a plan, I drifted through, getting further and further behind. I lacked intentionality. I spent money on things that were not important to me. Little luxuries that I thought I deserved or that helped me to feel like I fit in.

But eventually, it caught up to me. With no savings, every little thing was a disaster. After a mini-breakdown, I started looking for ways out and began talking with my partner about how we could change what we were doing.

So. We made a plan. We wrote out a monthly spending plan and began paying down our debt. And we did it, we’re debt free now. And it was all worth it. Being debt-free feels REALLY good. Owing nothing to anyone is priceless. It’s peace of mind that you can literally buy.

Here’s what we did. Just a warning, this is pretty simple. I did not say it was EASY, but it is simple. It’s difficult, but it’s worth it.

First, we created a spending plan with a little money factored in for debt payments. At first, we were making the minimum payments on everything, with just a little bit extra to throw at the smallest balance.

We followed the “Debt Snowball” method of repayment, which I highly recommend. It’s simple to figure out and remember. You just pull out all your statements, and make a list of your debts (all of them, credit cards, loans, etc.) and you list the balances in order from smallest to largest. You pay all the minimums on all the debts, but any extra money goes toward paying down the smallest debt. After you pay it off, all the extra money goes towards the next smallest. It’s called a snowball because all the minimum payments keep getting rolled together bigger and bigger until when you are paying off the larger debts, you’ve got a huge monthly amount going toward it. It feels amazing.

So for me, I had a $200 bill at the dentist, I had just put $400 on a credit card for car tires that I couldn’t pay cash for, we had a same-as-cash loan for new windows, two car loans, a big whopper of a student loan, and then the mortgage. That was the list, and it seemed insurmountable.

But you know what? It wasn’t. We did a bunch of crazy things to pay off the debt, and it worked. We didn’t have to go to extreme lengths, but I’m glad we did. We had a garage sale, we curbed our out-of-control restaurant habit, and I stopped going to the mall for entertainment (god Sephora can fuck right out of here). Stayed tuned tomorrow for some of our other nontraditional choices.

The bottom line is being debt-free is peace of mind, and the freedom to choose where to put your money.

What could you do with your money if you had no debt?