My Debt Free Year In Review

Let me start by saying that losing $165,000 in debt FEELS REAL GOOD..like REALLY REALLY GOOD. This may be one of the top reasons that I keep shouting about the debt free community and trying to recruit all of you to join me. Believe me when I say that a debt free head just hits the pillow different at night.

So I’ve now had a whole year to reflect on my decision to get out of debt and wanted to share three things from my reflection with you. So keep reading to learn why I got out of debt, how I got out of debt and how I have and will continue to keep the debt off.

THE WHY-YOLO..so that was my mentality back in my late teens and twenties, but I interpreted it wrong. I thought it meant that I should party it up, buy what I wanted when I wanted it, and just be making minimum payments for a lifetime..the American Dream. Pay for everything on credit and work until my mid sixties and make jokes with everyone else along the way about how “I will never pay these student loans off” or “At this rate I will be working until I die”. Looking back, YOLO now means to me that you in fact only live once. So live the life you want and not the life society tells you to. Figure out your own path and your own way to to make a living.

THE HOW-I contribute 3 things to my how. One being a mindset shift. If you don’t first believe that you can be debt free and that you also deserve the freedom of a debt free life, then no budget or even a large sum of money will be able to help you. The second was zero budgeting during the payoff. This just means that I literally took every additional penny that I had and put it to work for me paying off the debt. I turned down a lot of stuff during this time, including eating out or going on a bunch of trips. I got dramatic with my expenses and cut them down to the bare minimum. (or so I thought) Then I woke up one day and realized that I was making excuses for some expenses that weren’t necessary, such as two newer cars that we didn’t need, and an SUV that sucked down the gas. I was also still budgeting for clothes, hair and makeup. When I cut down to the ACTUAL needs..I found out that none of that stuff was included. Actual needs are just that..basic food, shelter and transportation are it…period. So once I got rid of all the excess through a No Spend Year and getting rid of the cars, things really started to accelerate. The 3rd item that helped was the debt snowball method. Every single extra penny went towards the smallest debt, paid that off, then rolled that into the next smallest, and just kept going. When I got towards the end, I also dabbled with the debt avalanche for a student loan that had a high interest rate.

KEEP IT OFF-I have come across a lot of temptations now being debt free, including getting an itch for a new car occasionally or to upgrade in other ways. I think it’s human nature and it’s hard to deprogram from a lifetime of consumerism and instant gratification. It would be very easy to get led right back down that dirt road to debt. But I’m proud to say we haven’t. I ultimately switched from zero budgeting to value based budgeting. So now, if it’s something I value, such as my family, health, or education, then I will spend the money on it. When you know your values and align your spending with them, then you will notice that most of the items that require consumer debt don’t fit anywhere in the budget. The occasional big items, like upkeep for our family home, just require me to save up until we can pay cash for them, and we keep that emergency fund for the unexpected. The rest, like family and education usually are worth the most yet cost the least to add value in my life.

So as you can see..no get out of debt quick scheme or magical inheritance or lottery winner over here. Just some boring stuff that paid off in our current lives and will continue to do so over the long term as we head down a trail we are blazing on our own that builds wealth.

6 quick tips on budgeting

Man..it’s crazy to me that it’s 2020 and there are still folks running around rogue with their finances, thinking it’s not going to catch up with them. Several recent studies show that only about 40% of people are living that budget life. 😱

I have personally been living with a budget for over a decade, and I can promise you that this is one of, if not the biggest contributing factor to my current debt free and wealth building chapter of my life. I would definitely still be living beyond my means without a budget.

There is no better time then right now to put the money you make to work..and that money isn’t going to get to work without your help. So do me a favor, and if you are in the 60% of people who don’t currently budget, then make a pinky swear to yourself to start ASAP…after reading my quick tips of course. 😉

Tip 1-Live off of a zero budget. That’s a fancy way of saying that every single penny you have incoming should have a home for where it needs to go. The key to this is to assign your money jobs BEFORE you’re eyeballing that delivery menu on an empty stomach or you’re clicking on that BOGO sales ad that just landed in your inbox. So a few days before the month starts, you can sit down and map out your incoming vs outgoing. Mind that gap with some investing and savings. Which brings me to my next point.

Tip 2-Have a goal you are working towards. Whether it’s building your savings up, paying off debt, or investing in index funds to work towards financial freedom..you will be more successful minding the gap if you have short term and long term financial goals in place. Don’t let lack of planning cause you to live with a YOLO mentality..it’s true..you only live once..so get your shit together already. Nobody wants to keep hearing your “I’m broke and just barely getting by because they don’t pay me enough” talk, yet you’re driving a new car, eating out, constantly getting new clothes/AmazonPrime packages and texting your money problems on the latest IPhone. (sorry for being a little harsh..but seriously..someone had to say it)

Tip 3-Speaking of planning..plan for the unexpected. I’m talking about having enough in your savings to cover a bigger item, like a new transmission, your HVAC suddenly breaking down, your car insurance deductible from an accident, or taking your dog to the vet after they ate something crazy again. I don’t have time to get into details here on what’s considered unexpected, but if you have to ask if it’s an emergency..it’s not. Also, stuff that is recurring, like personal property taxes or Christmas gifts are NOT unexpected. You knew all damn year they were coming up..you should have separate money you’re putting back to plan for these annual recurring expenses.

Tip 4-Check for trends and opportunities. For example, if you are noticing a large chunk of your money is going towards gas, then it might be time to explore a more fuel efficient ride. If you are spending over $100 each time you hit up Target, then it might be time to keep your ass out the store. Luckily, there are other ways to shop now, including carryout or delivery, so that could possibly help keep you to the items you need vs want. Also, if you find yourself doing a great job, like going two weeks without eating out..then celebrate. Rewarding yourself (within reason) for good behavior is a great way to train yourself on new spending habits.

Tip 5-Give yourself a cash allowance. Let’s be honest..little things come up and having some cash on hand is a great way to take care of these little things. For example, if you slept like crap and really NEED a Starbucks latte..go get yourself one. Or the neighbor kid hits you up for buying some Girl Scout cookies, and nobody can say no to those Caramel Delights, nor should they say no. Much like crash diets, budgets don’t work if they are so strict that you feel deprived, week after week, month after month. This will make you more likely to fall off the budgeting bandwagon, so plan to allow a little flexibility sometimes.

Tip 6-Make it easy. Budgeting is a long term wealth building strategy..not a get rich quick scheme..remember that as you set things up. Keep it simple and keep evolving as you and your needs change. Setting up autopay on everything is about as easy as it gets for your fixed expenses. Also, for tracking, I used a paper check register up until last year..lol. BUT it was easy and worked for me. Now I have a word doc that lists out all my recurring expenses, along with an app called Spending that tracks all incoming/outgoing expenses. Don’t get so caught up in trying to figure out the details to a point where you don’t ever start. Any way you track is better than not tracking at all..so get to it already.

You know I am happy to share my tracker if interested and answer questions, so ask away.

Value Based Budgeting

I know I’ve shared in the past that I am a big fan of the zero budget, which means that before each month starts, I go count every single penny I will have coming in, compare it to what’s going out, plan for any variable expenses for the month, and then put the rest to work. Since paying off the last of our debt, these remaining funds have grown as high as almost 70% that I am using to fund our real estate portfolio and other savings/ investment goals. When I put that all in writing, I know some of you on the FIRE journey (Financial Independence Retire Early) are probably pretty in line with this strategy and aiming for the same, or maybe already achieving it.

I also realize for someone who is anti-budgeting or brand new to budgeting, then my current path probably seems pretty extreme and even intimidating. Just know that I didn’t start here..I started somewhere though, and sometimes just getting started is the hardest part. So I have a middle ground solution for those that just want to dip the very tips of their toes into figuring out once and for all the following two things without counting every penny 1) where is my money going and 2) is that where I want it to go?

So here is a really quick and easy way, inspired by the book “Your Money or Your Life” By Vicki Robin. If you haven’t read this book, please do yourself a solid and follow the affiliate link below and pick up a copy, and maybe grab a few extra for gifts. It is a very influential book that will CHANGE YOUR LIFE.

https://amzn.to/376Bipl

One way to get started thinking about the two questions posed above is to make two lists. One should include your top 3-5 things that you value, and the next should list your top 3-5 things you spend the majority of your money on each month. That can give you an idea on if your values align with your spending each month. For your first time doing this, you should expect some room for improvement, so don’t be too hard on yourself and just focus on how you can get better. Before any purchase, simply ask yourself “is this aligned with my values?” If the answer is no, put that delivery menu up or put that shirt back on the rack.

Want to really make some value based budgeting and spending become your new normal? Another eye opener activity to help with this is to go back and add up how many hours you have worked for all your life and how much earned income over your lifetime you have made, and then compare it to what you have in savings/investments/assets. Is there a huge deficiency? Great way to see how all those little things quickly add up. Find 3 ways right now that you can start keeping more of your money and write them down.

Does anyone else currently do value based budgeting?

Lifestyle Choices

This is going to be one of the hardest topics yet to cover at a very high level and also my first mention of FIRE in my writings (financial independence retire early). My goal is just to inform you of two choices and get you rethinking, especially if you feel like you don’t have choices and are stuck in your current financial position. I am by no means claiming to be an expert on the topic or to get into the HOW in this post. I have just dabbled with both lifestyles mentioned and I feel like there are not enough people (especially women) who are thinking about or providing information on the topic..so looks like you are stuck with me. 😜

The above picture is the best way I could summarize the concept of lifestyle creep. For now, as mentioned, this is just to introduce you to the topic, so I have a few stats and thought provoking questions to hopefully do so.

First..the stats tell an alarming story. I recently read in this USA Today article https://amp.usatoday.com/amp/34378157 that the average household is bringing in around $75,000 annually, and of that, they are spending 90% of it, which equates to $67,500 outgoing and only around $7,500 extra annually. (which the article states a lot of this is going towards interest payments on consumer debt). This breaks down to $5,625 in expenses each month and $625 extra. That doesn’t leave much wiggle room and helps paint a picture as to why people aren’t putting anything or very little towards saving, investing, emergency funds and retirement. 😳

Essentially pointing out that people are living a paycheck to paycheck lifestyle. I don’t know that this was a surprise to any of us, but it may be a surprise that people are making the choice everyday with their actions and spending habits to live this way. Disclaimer that there are people living in poverty, so for the sake of my post, I am referring to the middle class mentioned above.

Now on to the questions. Feel free to answer in comments if you want to share, or just answer to yourself or as an internal conversation or with your significant other. Keep it real because denial is a great way to protect yourself from the truth right now, but long term in fact it just ends up hurting you more.

1) Are you living paycheck to paycheck like the scenario mentioned above?

2) Have you noticed that no matter what you do, you just can’t get ahead?

3) Do you receive regular raises or have you changed jobs to make additional money over the course of your career, yet you aren’t seeing a difference in your monthly budget after expenses because they always seem to match what’s coming in?

4) Do you ever pay attention to how much you spend on conveniences like pre-made food, someone to mow your lawn, someone to clean that big house, someone to wash that new car, someone to groom your dog, someone to do your hair/nails/makeup, etc because you are too busy working to do these things?

5) Have you ever wondered why things are like this for you and probably a lot of people you know, yet it’s still a taboo topic to discuss money, so everyone just keeps working harder and staying in the vicious cycle mentioned above?

6) What will happen if you change nothing and keep following this path?

Please reference the above picture as you are going through these questions to see if lifestyle creep has found a way to creep into your life. Remember..be honest.

Next, know that there is another option. As mentioned above, lifestyle creep is a choice and I’ve said this so many times on purpose. So many think they have no choice unless they make more money and this is far from the truth.

Lifestyle creep is a path that many in our society have walked and not challenged until recent years. Here are some questions to ask yourself and see if you’re one of those ready to challenge the traditional path and choose a different way.

1) What upsets you the most about always being broke and living paycheck to paycheck?

2) How has constantly feeling stressed from working so much and not having any money to show for it affected you?

3) What are your values and what are you spending your money on? Do they line up?

4) What are your passions and what do you dream about doing?

5) What could change if you have an open mind and put in the work, I mean really put in the work, to change your current financial path and mindset? Think of one quick and easy way you can change today.

6) What will happen if you start to live a lifestyle designed by you instead of others?

As mentioned, a lot of people have started looking at the above stats and questions, and are starting to make the decision to customize their lifestyle based on their own unique values, not what society tells them to value. Spoiler alert..it’s not through making more money as mentioned above..it has never been about that. It’s about a lifestyle of being content with only those things that bring you value. Luckily, it usually don’t cost anything at all, just the basics needed like food, shelter, experiences and none of the extra crap. 😊

Don’t get this lifestyle design twisted with a life of going without, because it’s actually the opposite of that. You have room for so much more when you let go of stupid shit.

Well..shocker..I have lots more to say but I’ve said enough for one day. What are your thoughts or questions on the two different paths mentioned above?

My biggest financial mistake

Y’all might want to grab some popcorn. 🍿 I promise you will experience a wide range of emotions when reading this, including disappointment, anger, humiliation, sadness, confusion, and hope. At minimum, some good laughs as you get a glimpse into one of my biggest financial mistakes EVER.

I still remember 18 year old me getting my first car back at the turn of the century. 👵 I remember it to the day..because it was on September 11, 2001. I became the proud owner of a 1997 Geo Prizm that I signed up to get a loan on, and since I couldn’t get the loan on my own, my boyfriend co-signed for me. 😳 I was a full time college student and was working part time delivering pizza and taking the max in student loans that I could. 🍕 I remember my car payment being $225 and my car insurance being just as much. So I was paying $450 just for my car and insurance. That Geo started me on the road to bad choices..so buckle up and come along for the bumpy ride. 🤣

When that boyfriend and I had a bad breakup two years later (shocker), I wanted him out of my life completely. Now that I had two years of payments, I really showed him by walking into a dealership and buying a brand new 2003 Chevy Cavalier off the showroom floor with..wait for it..ground effects. 🤦‍♀️ Everyone please take a minute and reread that and laugh WITH me. It’s best to get a visual, so imagine me delivering pizza to you. But stay with me..it gets even better. I rolled in a few thousand bucks from that Geo Prizm that I traded in because I was “upside down” on that loan. My payment was now $364 a month and I can’t remember insurance cost, because I likely blacked that out of my memory.

I somehow still had friends for the two years I drove that thing around, so thank you to those who stuck with me through the hard times. 👭 Luckily my brother was driving that thing one day and totaled it. (don’t worry..he was fine) Also lucky me that the dealership saw nothing but dollar signs on my naive ass and sold me GAP coverage, along with everything else they sold. So I was now free and clear of that additional $10,000 that I was “upside down” in with car and old boyfriend baggage. 🧳

This is the part where you started fresh..right..Mindy..right..please tell me..oh geez. One may have taken that clear break as a sign. I took it as a sign to get that SUV with the third row I always wanted..as a single full time college student..still delivering pizza and now also working another job at a video store just to get by. 🙄 The year was 2005 and that 2001 Dodge Durango cost me $293 a month, and I’m still blocking insurance costs out, but we can assume around $125. I eventually got a job that was an hour commute, and this was when gas was $4 a gallon, so I was basically working for free. But that job also introduced me to the coworker who heard my bitching about money on the daily and sponsored me starting the Dave Ramsey Financial Peace classes at her church.

What do you all think I did next? What would Dave had done? 🤔

Stay tuned for Part 2..

This is us

I thought with all the new followers, it’s a good time to re-introduce the magic behind mysemibasiclife (you read that right..I totally referred to myself as the magic). To celebrate, my daughter humored me with a photo shoot, and my favorite was one of the bloopers. 😜

Sometimes life is more about what happens behind the scenes, between the “perfect” pictures, when you’re trying to pose and get the best lighting, hide that lazy eye, those wrinkles and those frizzy grey hairs. She captured all of these things, all of my imperfections, including crows feet I didn’t even know were there. How fitting to show my imperfections to all of you who have been following along on my imperfect journey to financial freedom. This is me..always laughing at my own jokes, never taking things too seriously, currently staring off into space like only a true dreamer can do. 🤷‍♀️

This is the entire family that puts up with my latest crazy schemes, understands the bigger picture behind those crazy schemes, sometimes appreciates my hilariously witty comments and penny pinching ways, and packs in the car with me for that fifth trip to the library in a two day period. 😂

You weren’t there for the early years, the dark debt days 😬 where we were living beyond our means and got ourselves into a financial spot where all of our paychecks were going towards debt. But you have now followed along as we ditched the debt, got rid of car payments and paid our last student loan off, which puts us at a grand total of $165,000 in consumer debt paid off!! You’re following as I am feeling weak, but holding strong and halfway through my #nospendyear. You followed along as we bought our first rental property and are following along now as we now search for the next one. 👀

We are excited to continue sharing our life after debt journey, including our ever changing goals, working on growing our net worth, celebrating the success, overcoming the setbacks, and the blood, sweat and tears along the way as we define what financial independence looks like for our family. 🔥

Enough about us though..I want to hear from you..what’s your story? What topics that I’ve covered have helped or would help you along your journey?

What questions do you have for me?

👇🏼👇🏼👇🏼👇🏼

New Year…New..Furnace?!

I slept in gloves last night.  I wrapped up my kids into blanket burritos and hoped I would find them frostbite free this morning.  Were we camping?  Why else would I do these things you ask?  Well, the time was 8:00 p.m. on January f’ing 1st, 2019 when the alien mothership decided to land on our house.  The sounds, the coldness, the anticipation of finally getting chosen for abduction that filled our house on a blistering hot 20 degree night, the first day of the f’ing New Year.  When I noticed no aliens entering the house to take me back for probing, Matt investigated and determined it was actually the furnace.  The 20 year old furnace that nobody was “planning” to go out.  So, of course the earliest we can get our new “super affordable” furnace is tomorrow (air quotes sometimes equal sarcasm in my writing).  Fast forward to 5:07 p.m. on January f’ing 2nd, 2019 and my car decided to join in on the “fun”.  There is now a super awesome message it keeps telling me that blah blah chassis error and blah blah AWD error, so that’s gotta be good news right?

What do the two totally real life stories above make you wonder?  How is she going to pay for that after just coming off the holidays, property taxes, HOA dues, vet bills, etc. etc.?  Well..”she” is wondering the same damn thing right now (huddled next to her fake fireplace with fuzzy gloves on).  If it happened to you, would you be able to cover it?  Yes I’m getting at an emergency fund and yes I’m slightly lecturing you.  I have heard that anywhere from 40-50% of people don’t even have enough saved to cover a $1,000 emergency.  And let’s just say..that won’t even begin to cover “her” problems listed above. 

If you fall into the 40-50% statistic above (I won’t tell anyone), how would you handle life’s emergencies or unplanned expenses that have to be fixed before your burrito babies freeze?  Don’t worry, you can keep them in the burrito for about 48 hours, so you have a few days to get your funds gathered.  But if you only have a piggy bank to steal from one of your burrito babies, then maybe you should make this a focus of yours this January. 

How can you get $1,000 in an account that is liquid?! 

  1. Make it something you don’t have to do and you don’t miss by having your employer automatically put back $100 out of each paycheck into a separate savings account (If you can swing it then it will take just 5 months to get there.  Do more or less depending on your individual situation). 
  2. Sell your junk on FB or out of your garage or wherevs..the kind of junk people want to buy of course, and you would be surprised.  Go look around right now and tell me you can’t scrape together a few hundred bucks from random stuff you’re no longer using? 
  3. Save your tax return instead of “investing” in that new 60″ plasma flatscreen t.v.
  4. Cut expenses or increase income (these seem like no brainers, but could easily be covered by several posts in the future..spoiler alert)
  5. Don’t stop at $1,000!  Once you get it, make sure you celebrate and keep on going.  Most people will tell you that you should be able to cover 3-9 months of expenses with your emergency fund.  It’s your life though, so you decide what works best for you. 

Lastly, please send gloves and blankets our way 😉