Episode: 292 - Financial Freedom Made Simple: Practical Answers to Listener Money Questions
Setting Financial Priorities
For many, the question of whether to save or pay down debt first is a frequent hurdle. A good starting point is building a small emergency fund to prevent reliance on credit cards for unexpected expenses. With this financial cushion in place, you can shift focus toward high-interest debt, like credit cards, which is essential to eliminate as quickly as possible. Once the high-interest debts are handled, you can begin setting aside more substantial savings and moving toward longer-term investments.
Boosting Savings on a Limited Income
Even with a tight budget, small tweaks can lead to meaningful changes. Start by reviewing your last few months of expenses to spot unnecessary or redundant costs. Subscriptions or regular habits—often overlooked—can add up. Taking on a small side gig, even for a few hours a week, is another way to incrementally improve your financial situation without massive changes to your routine.
Finding New Opportunities to Cut Expenses
When it seems like there’s nothing left to cut, digging deeper often uncovers hidden savings opportunities. Downsizing a vehicle or housing, if possible, is a significant step. Smaller adjustments, like negotiating your bills or borrowing books instead of buying them, can add up over time. Sometimes, these decisions might feel uncomfortable, but each one brings you closer to financial independence.
Handling Unexpected Expenses
Unplanned expenses can be one of the biggest obstacles to financial stability. Many costs labeled "unexpected" are, in fact, predictable when planned for. Setting aside funds for recurring annual expenses like car maintenance, insurance renewals, or school supplies helps avoid budget disruptions. And, having an emergency fund in place provides a safety net for true surprises, allowing you to maintain momentum on your debt payoff journey.
Making Budgeting Easier
Budgeting might seem intimidating, but it becomes simpler with practice. The challenge isn’t usually creating the budget—it’s sticking to it. Dividing spending into categories and using methods like envelope systems can help you manage expenses like groceries or gas. Planning trips to maximize errands also helps cut down on unnecessary costs, making the budgeting process more manageable in the long run.
Getting Your Partner on Board
If your partner is reluctant to join your financial journey, approach it with open, honest communication. Rather than focusing on what budgeting restricts, talk about how financial stability can improve your quality of life and bring you closer to shared dreams. This reframing can help both of you view budgeting as a positive step toward a common goal, making buy-in more likely. Patience and compromise are essential in creating a successful financial plan as a team.
Dealing with Social and Peer Pressure
A budget-focused lifestyle sometimes means turning down social invitations, which can feel challenging. One option is suggesting budget-friendly alternatives, like hosting a potluck or having a game night. Friends who understand and respect your financial goals are more likely to support your journey, and over time, you may find your social circle aligns more closely with your values.
Resources Mentioned
Get better results with your finances in 30-60 days - GUARANTEED. Watch this video to learn how! - https://www.debtfreedad.com/payoff-debt-in-60-to-90-days
The Totally Awesome Debt Freedom Planner
For more help, and a step-by-step process to get started, enroll in Brad's FREE online course, LIFE WITHOUT PAYMENTS.
Free Tools and Downloads at www.debtfreedad.com
Connect With Brad
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Transcript:
Brad Nelson:
Hey. So today, guys, we are tackling the real and often pressing questions about managing money on a tight budget. Things like how do you decide which financial goals to focus on first, or what if there's hardly any income left over to actually start saving, and what do you do when it feels like there's nothing left to cut from your budget. We're also going to talk about handling unexpected expenses, making budgeting easier and getting a reluctant spouse on board with paying off debt. So, if you're ready to gain control of your finances, this is going to be a great episode for you to listen to. Stay tuned.
Announcer:
You're listening to the Debt-Free Dad Podcast with Brad Nelson. Brad and his co-hosts experience the anxiety of living paycheck to paycheck before learning the fundamentals of financial success. They are now on a mission to empower regular people to pay off their debt for good and enjoy happier, less stressful lives. Keep listening for inspirational interviews, tips, tricks and practical advice to gain financial freedom.
Brad Nelson:
Hey guys, welcome to today's show. I am Brad Nelson, founder of Debt-Free Dad. I paid off about $45,000 of debt. I've been debt-free now for more than 11 years, outside of my mortgage. I've also been fortunate to help thousands of other people save and pay off tens of millions of dollars with the work that we do here at Debt-Free Dad.
Amber Taylor:
And I'm Amber Taylor and we paid off $54,000 in 20 months and we have been living debt-free outside of our mortgage since 2018.
Chris Hawkins:
And my name is Chris Hawkins, and my wife and I started our journey way back in 2005. And from 2005 to 2008, we paid off right around $90,000 worth of debt and have been debt-free except for our house ever since.
Kati Hatfield:
And I'm Katie Hatfield. I am still on my journey to debt freedom and in the last six years I have paid off over $189,000 on a single income.
Ryan Nelson:
And my name is Ryan Nelson. My wife and I paid off about $160,000 over eight years while raising three kids.
Brad Nelson:
Now, after listening to this episode, you guys, if you want to take this a step further and you'd like to get better results with your finances in as little as 30 to 60 days, we're going to be sharing some details about how you can get started with that later on in today's episode. So, guys, we wanted to take some time and really do an episode. It's been quite a while since we've done an episode where we've taken some of the most frequently asked questions that we get from either you, our listeners, or people who join our workshops, or even our Roots members, or even people who comment on a lot of the social media channels that we have out there, where we are posting a lot of content to help people take control of their finances. And the cool part about this is that all five of us on today's episode all have a different experience with getting out of debt. We all have a different background. We all had different resources and challenges that we face.
Brad Nelson:
So I think, by going through some of these more FAQ questions that we get, it's going to be a great opportunity for you to learn how we kind of overcame some of these things, because I feel like there's probably a few of us that have experienced a lot of these things that we're going to talk about here today. So the first question that I have today is what financial goals should I prioritize first? This individual says I currently have very little savings and I have multiple debts like credit cards, student loans and my car loan. Currently I am investing in my company's 401k plan, but my goal is to at least pay off my credit cards, but I also want to boost my savings account. I'm not sure what I should focus on first.
Kati Hatfield:
Since I was in this position when I first started, I definitely feel like getting that savings built up. So I had something to go to when emergencies and notice. I said when emergencies happen because when emergencies happen before swipe, swipe, swipe there goes my credit card and I was maxing those out and definitely having the savings. I didn't think I could find a thousand dollars anywhere, but I did it and that was like, oh okay, well then, let's try the next step. And then, paying off my smallest credit card and having that payment roll into my next credit card payment, I'm like, wait a minute, I'm actually gaining momentum. This is amazing. So I would definitely focus on the savings just to get yourself out of the habit of swiping your card and getting further into debt.
Chris Hawkins:
Okay Now, the premise of this question was my goal is to at least pay off my credit cards, but also want to boost my savings account. It makes it sound like they want to do both at the same time. Okay, yes, you're going to have to pay off at least the minimums on your debts and you need to get an emergency fund in place. Then, if I were you, I would cut out all savings, including the 401k plan. That's what my wife and I did, so I'm not telling you that you should do this without having done it myself. The idea was we wanted every possible dollar that we could throw at the debt.
Chris Hawkins:
Okay Now, I'm a big believer in compound interest and I understand that the sooner you can start investing and saving, that's more years worth of work that your money has moving forward. But you'll be surprised when you get out of debt and I think we all can probably agree on this, when you get out of debt how much money you have left over now and how much more saving that you can do, and you'll be able to catch up tremendously fast. So, emergency fund savings first, then debt, then come back to savings for a bigger emergency fund purchases, wealth building and those things.
Ryan Nelson:
Yeah, I would just say it, just you know. I would say I agree with everything you said, Chris, and I think this is where it just becomes like everyone's got to kind of have their own approach. And for this person as well a lot of times if you're investing in a company, 401k, you're getting a match. And I would say, if you are looking at all your bills and all your debt and you're making good money and you can make good progress on your debt without having to stop investing, we didn't stop investing because we were able. There were things we did where we saved money in other areas, like we downsized our home. We did different things, we sold a car, I bought an old used car and then we were able to keep investing that way. But if you do all of your bills and you're looking at everything and you're like we have 20 bucks left over there's no way Then I totally agree.
Ryan Nelson:
I think then cut out that investing, cut out pretty much anything that you can to throw at debt and get your emergency fund funded and things like that. That is just for me. I don't think there's any. This is the way to do it. It's just. I think you have to figure out what works for you and what makes you comfortable. If you don't want to stop investing in your 401k, then just make sure that you are maybe potentially going to cut other places to make up that difference.
Chris Hawkins:
I'll agree with that in the context that if you're not really serious and there's a lot of folks out there who don't get serious and I wouldn't cut the 401k plan, particularly if you have a company match all right, so maybe you prove to yourself that you're serious and then cut back to use that money for something else, because the last thing I want you to do is to spend five years and not get out of debt but also not having saved for retirement. So it's that fine line. There is a balance.
Brad Nelson:
Yeah, chris, you took the words right out of my mouth and I think that would have been my first question, just on the 401k part, is how intense do you want to be about getting out of debt? Do you want to do it super fast or as fast as you possibly can? Then maybe that's something you consider cutting. But I also at the same time, like Ryan just said, it hurts to tell people maybe stop doing the match, because number one, that's free money that you're getting and if it's like if your budget can allow you to keep the match, I say keep it for sure. But if it is a situation where you know that extra match is making things tight, then you may have to back off a little bit until you pay off some other things and maybe you can bounce back to that.
Brad Nelson:
The only other thing I would say is in this situation is I felt like this is kind of like me when I first started. You know I wanted to build my emergency fund, I wanted to pay down debt. I also wanted to start investing and you know you have too many things going on. You seen, and you have too many things going on, and when you have all this money going on to these little things, it's hard to make really any sort of momentum or progress. So my suggestion to this person, based off of our answers today, is pick whatever it is that you're comfortable with doing. I suggest savings, like Katie did, and just focus on one thing at a time and then move down that list rather than trying to do it all. And I think that's one of the mistakes a lot of people make is that when they want to improve their finances, they tend to focus on too many areas at once and it just dilutes their efforts.
Ryan Nelson:
And I think at the beginning too, especially with a 401k, and the reason that I'm a little like you got to be serious about paying off debt because you can get it. It's easy to get an influx of cash Like, okay, I'm going to cut out contributing to my retirement, and that influx of cash could be $200, $300, $400, $500, $600 a month that you were contributing. Well, now all of a sudden, you've got $300 or $400 or $500 all of a sudden extra. We all have great intentions. I'm going to totally put this all towards debt. Well, suddenly, if you've got bad behaviors, you're now spending that $300, $400, $500 that you were investing. So, to me, fix your behaviors and then, if it gets to the point where you want to cut it and you're doing well and you're not going to be tempted because I know for me, if we would have stopped investing, I most likely would have bought a new car or something stupid because I wasn't being serious I'm going to pay off. I'm totally going to do this.
Brad Nelson:
And then you get the money and you're like, yeah, I'm not going to do it, all right. Next question is how can I start saving with so little income left over after, obviously, all of their expenses are paid off?
Amber Taylor:
I think this can be a tough one, because it could be that all of your expenses are necessary and you really don't have any extra income to save. Or it could be you have a bunch of subscriptions or stuff that you're spending your money on and you got to go back and you got to look at those expenses that you're spending your money on whether it's eating out and other things and then you realize, oh, maybe I do have some extra money where I could start saving. So I think you really got to go back and look at your last three to six months of spending and really hone in where that money is going and you may be surprised at how much money you actually find that you have extra for saving.
Brad Nelson:
Yeah, I always find this question pretty interesting when I get budgets from individuals where they say I don't have anything else to cut out. And I think each person obviously can make their own decisions about what they're willing to sacrifice, obviously, to reach their goals, and I think, you know, there are some people who are willing to sacrifice more and there are some people who don't want to sacrifice as much, and I think that's what this real answer is going to come down to. But time and time again, I'll get people's budgets who said they have nothing to squeeze out of it, and I can usually find quite a few areas where they can squeeze out of it. It's just they don't want to.
Brad Nelson:
And that's the hard part. And I think even when I was first starting, it was hard for me at first to give up some of those nice little things like going out to eat or, you know, cable TV back in the day. Of course they didn't have subscription services when I was getting out of debt. But you know it was hard for me to give some of those things up. So I took like tiny steps towards it. I cut out a little bit and realized I don't miss that stuff nearly as much as I thought I would and I'd be willing to cut out more and more and eventually, you know, it didn't feel as painful doing it all at one time.
Brad Nelson:
But the other thing too is you have to consider is, if you don't have any money to save, it could be an income thing. You know. Can you look for ways to make extra money? Are there side hustles? Or there's so many different opportunities out there just to make money on your phone. Now, I mean, you could easily take advantage of some of those things. Now are they going to be ideal? No, I mean, when I was getting out of debt I was working 60, 65, sometimes 70 hours a week. I didn't like it. I hated every minute of it, but it was worth the work, because now I don't have to do that anymore.
Chris Hawkins:
So you might have to put in a little bit of time, sacrifice in there too and look at the income situation. So I would say you also need to ask yourself how important is it to save right? Because if it's really important, you'll find some way to save money. Now the other question is you don't have to save money Now. The other question is you don't have to save a whole lot initially. Just prove to yourself that you can do it.
Chris Hawkins:
Anything is better than nothing, and when you gain a little bit of confidence, it'll help you figure out how to do a little bit more. And maybe even I'm going to do a cheap plug, for one of my podcast episodes here recently is if you need to set up a savings account or a checking account at a different bank and automate where your employer sends, say, 50 bucks a paycheck just to pick a number into that account. The rest of it comes into your main checking account, and then learn to live off that. I think sometimes just not having it quickly available and all you have is what you have in your checking account, you'll find a way to live off of that.
Kati Hatfield:
And we've always said go through your stuff, because you have lots of stuff and you can sell it. My first garage sale I made like $1,200. I was like why haven't I done this before? Because that was one day of making money of all this stuff that was just sitting around that I wasn't using. So yeah, if you run out of income, find other ways to get income.
Brad Nelson:
Now the next question very similar, but I'm interested to see if you guys have any different perspective on it. This individual says how can I reduce my expenses when there's nothing left to cut out? And this one again I will say I can usually find areas where people can reduce their expenses Not all the time because there are some people who are able to squeeze out as much as they can and they're kind of at the end of whatever they can do, and then it's an income thing, right, like we just talked about. But what are some things for you guys? Because obviously you probably went through this, but were there some surprise areas where you're like I can't cut anything else out?
Ryan Nelson:
And then all of a sudden, you were like I can actually save money with some of these expenses. Yeah, for me. I mean, this is where I think you have to really get a lot of soul-searching about what. When we say, when I hear that, when there's nothing left to cut, I'm thinking like you're driving a really crappy car you're doing, you're living in a, in a, you know, an okay house, but not a fancy house. You know what I mean.
Ryan Nelson:
So like for us, like being real with myself, when I felt this way like hey, we don't have anything left to cut, we were living in a big house, we had new cars, big car payments, all this stuff it's like, yeah, we, there was truly nothing left to cut, but the things left to cut were the, the luxuries that we were paying for, because I think that's a lot of people. What I see in the mindset is I only have a hundred dollars left over after paying my bills, but you have two cars that are $700 car payments, you have a house payment that you can't afford. And it's like we downsized the house, we sold the house, we moved to something smaller. It's like we downsized the house, we sold the house, we moved to something smaller. We sold a car. I drove like a $3,000 used car for a while and I mean we instantly gave ourselves a huge raise by doing that.
Ryan Nelson:
Now I know housing is different. Now Things are different. So I know that someone's listening to that being like cars are expensive houses. I get it, but the reality is when there's nothing left to cut if there truly isn't then it can become an income thing, like we said. But for me, I just really feel like for most people that are really trying to get out of debt or want to get out of debt or thinking of it, it's having to give up the lifestyle that you've kind of grown accustomed to a little bit for a while. It doesn't mean forever, but for a while you're going to just have to get uncomfortable and that's our part is getting uncomfortable and sometimes it's not just cutting everything out 100 like.
Kati Hatfield:
I used to get my hair and my nails done every month and that was hundreds of dollars. And when I stopped dying my whole hair and just did a few highlights, it was way cheaper. And guess what? You can do your own nails. So, like there are other ways, you don't have to always buy books. There's this thing called the library where they're free and they'll just let you use them and then you just have to remember to give them back, and it doesn't cost you anything. Sometimes you just need that, other ways of thinking. And again, going back to the mindsets and behaviors that might just have to change a little bit, and again, it just has to be until you're in a place where you could add them back in again.
Amber Taylor:
But honestly, I don't miss going to the salon every month or anything like that, and I think, though, even negotiating your bills like if you are looking for ways to reduce your expenses and you really have nothing to cut negotiating your bills can be a big savings.
Brad Nelson:
Yeah, one of the biggest ones we see is insurance. Yeah, all the time. I mean, how often do we see inside routes, you know? Someone said you know saving five, six hundred dollars a year. I mean sometimes we see a few thousand dollars a year. They're saving just by shopping around their insurance and shopping around their services and, like you said, amber, just negotiating those bills.
Amber Taylor:
I just did this this year and we are saving $1,000 between the few of them that we did negotiate, so yeah, yeah.
Brad Nelson:
So I think, yeah, the thing is, you got to, you got to keep at it and I would. I would agree with what Ryan said is it is hard to get uncomfortable. That's probably the hardest part. I remember when I got rid of my brand Well, it wasn't brand new when I got rid of it, but it was a brand new car when I bought. It is a $500 payment and I also cut out satellite TV and I think between the two of those I saved I took nearly $700 off of my budget every single month. And that extra $700 a month Now I could use to build my emergency fund or pay down massive amounts of debt.
Brad Nelson:
And when I first did it it sucked. It sucked so bad, but after time went on I got to tell you it was the best thing that I ever did, because that car didn't provide the stress-free life that I was now living, or I was getting more sleep at night because I actually had wiggle room in my budget and cash flow in my budget to be able to actually improve my finances. So it felt really bad at first, but it was short-lived, because you began to realize the benefit of living below your means. I don't think enough people have ever been there to actually understand the security that that gives you. And you're like that car wasn't worth it, that TV wasn't worth it, this is worth it. All know All right.
Brad Nelson:
Next question is how do I manage unexpected expenses? So, guys, this is a big one because obviously, when people first get started with getting out of debt or taking control of their finances, or budgeting, or wanting to save more money, it's the unexpected expenses and um, you know, just emergencies that pop up that tend to throw off all the whole plan, the motivation, the excitement, and you're like am I ever going to get there, right? So what would be your suggestions? Obviously, we all went through that very early on in our journeys getting out of debt.
Ryan Nelson:
I would say for us, I would venture to guess 75 to 80% of unexpected expenses were just poor planning on our part. It wasn't most things that are going to derail you. I mean, yes, there are big things that can derail you, but most things were like oh my God, we got to buy school clothes this year. I totally didn't know that. It was like really dude. I mean, we've been doing it every year in August for years, but every year we never save for it and it was an unexpected expense. And so I think the reality is for people but every year we never save for it and it was an unexpected expense. And so I think the reality is for people.
Ryan Nelson:
You got to get really good at planning. You got to sit down and you got to really look at the year and what's coming up. Look at your car, Like the last time you put tires on it, what's the maintenance, potentially you know like, get really good at looking at that because, like tires is another example, I remember multiple times oh, we got to get new tires. How are we going to pay for this? It's like when you buy a car, they usually have a 40,000 mile tires on it. So whatever, your car is at 40,000 miles, you're probably going to need new tires. Just plan for that. And we just did it. We were just terrible at that. So for us, for the unexpected expenses, for me, you got to get good at planning and I think you'll find that most expenses will not be unexpected.
Kati Hatfield:
Yeah, I would say when I started it was any little thing was an emergency because the AC went out on my car or I had a medical bill that came up or whatever, and I would just freak out and just swipe a credit card. Also, never put your medical expenses on a credit card. But once I got used to saving, I mean I had to use my savings and then rebuild it over and over and over and over again. But, like last Thursday, a chunk of my teeth fell out one morning and I was just like, oh, this is fabulous. And I went to the dentist and it was going to cost $575 to fix and I'm like, all right, here's the money. And I didn't even sweat it. I was just like okay. And then it's like night and day difference between now and six years ago.
Brad Nelson:
Yeah, Speaking of that, it brings up a funny story Stupid things I used to do with cars. Ryan brought up tires. There's one time I justified buying a brand new car because my current car needed new tires and brakes.
Chris Hawkins:
I was going to say that I know somebody who did the same thing, but I wasn't going to bring that up.
Brad Nelson:
Oh my gosh Stupid who did the same thing, but I wasn't going to bring that up. Oh my gosh stupid. And you'd sit there and justify it. And it's like Mr Nelson, you are upside down in your loan. We're going to roll that over your new loan. Yep, sounds great.
Chris Hawkins:
Oh, yeah, I will say this now, getting back to the topic If it's truly and Ryan, you're right, most of the time it's truly not unexpected, it is poor planning, and I know you hate to hear that, particularly if you're starting off at the beginning. But let me say this If it's truly unexpected, that's what an emergency fund's for, like Katie mentioned, right, and you hate using it all. Right, you hate using it because you know what's going to have to happen is you've got to stop and you've got to replenish it. But the thing that the most important thing is you didn't borrow money, you didn't go backwards, okay, you paused, you stopped for a moment, you paid the bill with emergency fund. Now you're going to replenish the emergency fund and get back on track.
Chris Hawkins:
But I will say this and I think we probably all could agree with this is the more that you do this and particularly when you get out of debt, right, you can have an emergency fund and something truly unexpected can happen and the more experience you have with this, you just sort of deal with it. It's like you don't even really notice it. You're like, okay, I'm going to move money from this part of the budget to here, I'm going to move this here. We were going to eat out twice this month, but we're going to eat out nine or something like that. That's my point is you just sort of move things around and it's like, oh big deal, but that comes with experience and you've got to get yourself to that point. And part of that is, yes, truly unexpected things are going to happen. Have an emergency fund, pay them. The more experience you get, the more savings that you eventually get. You don't even really notice them.
Ryan Nelson:
Reality is is, when you're starting out, you're going to be bad at this. There's going to be unexpected stuff that comes up, probably for the first year, because you're not used to thinking this way. So how you manage that at the beginning, number one, like we said, have an emergency fund and then you're just going to have to give yourself grace and that first year is just educating and reeducating and learning and after you do it a while, you'll. The next year you'll start to be like okay, christmas check, birthdays check, thanksgiving check, like all these things that are going to catch you as unexpected. You're going to be so much better every year you keep doing this.
Brad Nelson:
Yeah, and I want to piggyback on that with the next question, because it goes well with what you just said, ryan Is there a way to make budgeting easier? This person asked. They said I just can't seem to make the numbers work out and I'm always off, especially with categories like groceries and gas. And I think what you just said is the perfect answer to that, because budgeting isn't doing the actual budget isn't so hard at first. Maybe for the first few months it could be right, but what's hard is following it.
Brad Nelson:
It's the behaviors, it's the habits, it's the choices, but it's also like some of those things that you forget about because you just aren't used to planning and looking ahead towards your future expenses, just aren't used to planning and looking ahead towards your future expenses, and so I think the secret to getting better at budgeting is, like Ryan said, it takes time. Just understand that budgeting is a learned habit. It's not something that you're just going to be great at, especially when you first get started, because a lot of it is that behavior side that you've. Okay, now that you have this plan, we got to follow it, and that's sometimes really hard to do, especially when you're getting started.
Amber Taylor:
I think just reviewing your budget too, like just reviewing that budget all the time and checking it at least every few days, Like it's going to make such a difference to really stay in check and follow it when you're not quite used to, you know, managing a budget at all right.
Chris Hawkins:
The other thing is use envelopes. Can't stress that enough. We've talked about that on previous episodes, particularly you mentioned in the question groceries and gas. Use envelopes and when there's nothing left in there, you figure out how to fix food or dinner, breakfast, lunch with whatever's at home until you get to the next paycheck. Right, listen, when we were getting out of debt, I found very creative ways to not use gas. Right, I mean, I would coast going down hills. Right, just, you laugh. Okay, I made my own laundry detergent one time.
Chris Hawkins:
Yeah, there you go yeah, I made my own laundry detergent. My brother laughed at me sort of like your relationship with Ryan, early on, right, he thought I was being stupid and why would you want to do all that? And then, several years later, he called me up and goes hey, I need your help. How do I deal with this credit card company who's suing me? I mean, they were literally he'd been filed paperwork. Okay. So the point I'm trying to say is you get very creative when you look in that envelope and there's not very much left. You get very creative when you look in that envelope and there's not very much left. You don't go make a trip to the grocery store without also going to the post office, without going to the bank, without going to the multiple things all at one time. And that is the number one thing that I tell people Envelopes, envelopes, envelopes. Give it a try. Do it for six months. Your budgeting is going to get easier and managing cash is going to get easier.
Brad Nelson:
Well, and I think this is this is also important to mention that I think having that emergency fund is so important to budgeting too. They're like best friends the budget and your emergency fund because your budgeting can be perfect and especially if a necessity pops up kid gets sick, need medicine, whatever it might be having that emergency fund is amazing, right. I mean, that's there to fall back on when your budget isn't perfect. So they work hand in hand because it keeps you out of debt, because you're using your emergency fund right and you're not creating, you're not continuing that habit.
Amber Taylor:
So, uh, savings is really important too well, and I think chris said it make plan right. You know, go to the grocery store, go to the post office, do all your errands all at once at the same time, so you're not running out five times. The key to a good budget is planning like you really got a plan, whether it's meal planning and you know planning out how you're driving around for certain errands, whatever it is, the planning is what's really going to keep you focused and keep you on track.
Ryan Nelson:
Yeah, when it comes to groceries too, like when we started out, we paid cash, so we would save.
Ryan Nelson:
If our budget was $200 a week for groceries, we would take $200 in cash to the grocery store and that really helped. Like, I don't know how you're, how people are grocery shopping, but like for like, when I go and shop, with the debt I am a hundred percent. I mean, the grocery stores are designed. They've spent millions and millions of dollars to figure out how to get you to buy stuff. You know there's a reason the eggs and the milk are all the way at the back of the store, because they know you're going to walk through and probably buy seven other things on the way back there. So it's like, if you have cash, it was just so much easier to stick to that budget when we started at the beginning. Bring cash, because when you're walking through the aisles it's a lot less tempting to be like oh, that looks good, I want to put that in the cart, because you only have so much money when you get to the front you don't want to be there like, oh, put that away, put that away, I don't have enough money.
Kati Hatfield:
Yeah, and I've been using cash the last month or so. I've been doing it. I really have cut back and I always, always take a list to the grocery store. You always eat before you go to the grocery store, so you're not starving. And I get very grandiose plans of what I'm going to have for dinner, and then none of that happens because I'm so hungry by the time I get home for dinner. And then none of that happens because I'm so hungry by the time I get home. I make sure that I buy a pizza or something I can immediately throw in and be eating in less than 20 minutes, so that I don't go out to eat after I've spent all that money on grocery shopping.
Brad Nelson:
All right guys. Next question, which is a big topic, is how do I get my spouse on board with the idea of getting out of debt? They just want to spend, spend, spend and don't seem to understand how bad our situation is. And, I'm stressed, what do I do?
Chris Hawkins:
I think the big thing is. Communication is actions. You've got to at least do your part. You've got to at least communicate. Hopefully, over time, the work that you're putting in, the sacrifice that you're doing, the communicating that you're doing, hopefully will wear off. That's the only thing that I could suggest. But this was always a tough one for me to answer, for that very reason, because I had a spouse who got on board fairly quickly.
Brad Nelson:
And when she realized I was serious, it was game on. Most couples. The mistake that they make when they first get started is they get excited. They might hear our podcast or they might just say I feel the need that we have to get out of debt, and what happens is we need to cut this out. We need to cut this out, we can't do this anymore, we're not going to do that anymore, and it's finger pointing and it's like my suggestion always is is don't have a conversation about money when you first get started. First have a conversation about like how does your current financial life make you feel? Talk about the emotions, talk about the stress, talk about the worry, talk about you know, I just, I'm just exhausted from this.
Brad Nelson:
And when you go that direction, and if your spouse really cares about how you feel or your partner cares about how you feel, they're much more willing to listen and have an ear to that, as opposed to telling them you're not gonna be able to go get your coffee anymore, you're not gonna be able to play golf anymore, you're not going to be able to go shopping anymore, you're not gonna be able to. All of a sudden, they're like what I ain't doing this right. There's no buy in there when they feel like they're getting everything that's in at least in their mind currently, that's important to them taken away from them. So I think the key is really sitting down and really having those beginning discussions of where your life currently is. How does that make you both feel and where would you like to be. And then you can start having conversations like OK, how do we get from here to where we want to go, and what are you willing to compromise on and sacrifice, and what am I willing to compromise and sacrifice?
Brad Nelson:
And having a decent understanding that you know the other individual, they may not want to cut everything out, but that's part of the whole relationship. Right, be willing to lose a battle rather than the entire war is what I tell them. Right, don't ruin the whole thing over just one little thing that they won't give up. Instead, focus on the stuff that they will give up. And I guarantee you what we see all the time is these partners come around and they're like cutting things out and willing to sacrifice some things that they weren't, because, like you said, chris, they start seeing better results, they start actually seeing less stress, there's money in the checking account, they're not fighting as much. My first suggestion is always to start with the feelings, because I feel like that's really the best start.
Chris Hawkins:
And so the communication side that I mentioned is yeah, what's our shared goals, what's our shared dreams? What do we want our future to look like? And you're right, brad, how do I get from where we are now to there? What do I have to give up? Hopefully, the other person will give up something on their end, and the next thing you know you're holding hands down the yellow brick road towards whatever your goals and dreams are. And when that happens, that's when the real magic happens, because now it's not me working by myself and my spouse working by herself, but it's us together, and we don't get double the results, we get quadruple the results and, if all else fails, play the podcast in front of them.
Amber Taylor:
No, but really, because honestly it it turns it from like me saying yes, I'd like to do this or I'm feeling this way and I want to do this to a third party, kind of putting it in their ear, going like, hey, these are some good ideas, it's not coming from me anymore, right.
Kati Hatfield:
Or you when you're in the car doing the dishes just while they're wandering around like just have it on Yep.
Brad Nelson:
Yeah, because it's a third party. It works so well all the time. All right, guys. Last question, and this is a good one, especially when it comes to relationships too. It says I'm on my debt-free journey and I have cut back on a lot of spending. Because of this, I'm having to say no more often to my friends who wanna go out to eat or for drinks or concerts, and these are things that I used to do without even thinking about it, but now that I have this goal to get my debt under control, I have to say no and they're getting mad or annoyed with me. How do I handle this? This is probably the toughest thing that we have to go through with. This is, at least, at first, is standing up and having a backbone for your finances and being willing to say no. So you guys want to share any insight of what you guys did, having a backbone for your finances and being willing to say no?
Chris Hawkins:
So you guys want to share any insight of what you guys did, I'm going to answer this from the perspective of yeah, I bet to say get lost. Listen, we're sort of serious with that, right, ryan? There will come a moment in your journey where you realize that you're on your journey, not on somebody else's journey. Okay, that you've got things you want to accomplish, things that you want to do in life, and if they're not going to be on board with it and help you, then they're just baggage, and I hate to sound cold and cold-hearted, but that's what I would tell anybody at this point is, if you've got somebody who isn't going to be there to support you, then maybe it's time to find somebody else.
Chris Hawkins:
All right, at least not being cold hearted, though, is explain to them what it is that you're trying to do, and maybe encourage them to do the same thing, because what's going to end up happening one of these days is when you keep saying no, no, no, no. Eventually, you're going to be able to say yes to something that they would never, ever be able to imagine saying yes to, then going to be able to say yes to something that they would never, ever be able to imagine saying yes to. Then they're going to go. Whoa well, how did you do that? Do you remember all those times I said no and you got mad and annoyed at me? Well, now you see why.
Ryan Nelson:
Okay, but the bottom line is I hate to say it, but don't get lost if you need to. And I think the reality is is they're not mad, and I think sometimes we think that they're mad and annoyed at us. And just personally. You know, brad got out of debt years ago and he started talking about a lot of this stuff and I was quote unquote mad and annoyed at my brother. But I wasn't really mad and annoyed at my brother. I was mad and annoyed because what I was doing and what your friends are doing and what you were doing before you started doing this, is just that's the normal way we live. That's normal to us. So when we do something that's just completely abnormal, which is I want to get out of debt, the reaction is like that's stupid, that's dumb. So what I was really mad and annoyed with is watching people do this and take away the excuses of I can do this because that's the way we live our lives. In my opinion, it's the way a lot of people who live in debt live this life of. I live paycheck to paycheck. There's no way I can get out of debt. I'll always have a credit card, I'll always have a car payment. There's nothing I can do. And then people do it, and those people get pissed off at other people because those people are doing it. And then they come up with other excuses well, they must have got a lot of money, they must get have good jobs, all these other reasons. So I think the reality is these friends are not really mad and annoyed at you. They're probably just having a reaction of who do you think you are? You know, because that's that's some of what it is, um, but I do totally agree with what you said, chris, and that's you just got to tune it out.
Ryan Nelson:
We had people who thought we were crazy when we sold our house. We had people who thought we were crazy when we told them we were doing it. I thought my brother was crazy when he was doing it. And when you get done, you get to the other side. You'll be surprised how many people then, like you said, chris, will come and say like how did you do that? You know, and you can then become like we've helped family. We've helped our family. Brad helped me. I've, in turn, helped people in our family do this, because those same people were like how did you do it? Then, you know, and these same friends that are mad at you. You'll be surprised Down the road. They may not be mad. They just be mad because they can't do it or they don't have it in themselves to do it right now.
Amber Taylor:
Or they might just be annoyed or upset because you're not getting together all the time. So maybe offer other suggestions to get together, like a potluck or hang out at your house for games or, you know, find alternatives to going out and spending money at restaurants or bars or whatever it is that you're doing on a regular basis before you started to pay off debt and get your finances in check and look for alternatives. And if they're not willing to do that, then bye.
Chris Hawkins:
And let me clarify I'm not saying be a jerk and tell them to get lost. Okay, mentally, that's sort of what you're thinking. And, amber, you're right, give them a chance, see if there's some other alternatives. But at the end of the day, you can just not hang around them as much, not talk to them as much.
Ryan Nelson:
But there are people and I mean you say that, chris, but I will say you may have to tell them to get lost. And I got to the point where I was comfortable cutting off people that weren't supportive of what we were trying to do, Because if they're not going to be supportive and they're just going to constantly be on me in this and that, like I mean I don't want to paint this picture that getting out of debt is perfect and everyone's just going to say, oh my gosh, how you did it. We irritated people and we probably lost some friendships over it, and I don't want to say that as a mean thing, but it is a reality that you are what you hang around, and if you constantly hang around people that are spending money and living above their means, you're most likely going to follow suit, even if you want to get out of debt. If you constantly have people and you want to hang around that lifestyle, you're most likely not going to succeed if that's what you constantly are hanging around.
Brad Nelson:
Yeah, and I think this is why we started this podcast because getting out of debt is a lonely road. It is. There's not a lot of people who do it, there's people. There's a lot more people doing it now than when we started all doing it, but I think you got to realize that it is going to be a lonely road. This is what you're going to do is going to be weird, it's going to be foreign to most people and they're not going to understand it.
Brad Nelson:
So I think, getting yourself around information like this, getting yourself around podcasts, getting yourself around a community of people join our Life Without Payments Facebook group and start getting into some of these areas where these people are having these different discussions, people who are wanting to achieve some of the things that you want to and you'll be surprised at the new relationships that pop up. I mean, heck me and Chris. I didn't know Chris. Chris and I met at a training about financial coaching back in like 2015, almost 10 years ago now. We're friends.
Brad Nelson:
Now it's like you meet new people that compliment you and will help you and will be able to encourage you along with what you want to do. But the sad reality is, you may lose some friends and you likely will, but that's okay. You'll find new ones that will support you. All right, guys. If you want to pay off debt, save more money and take control of your finances and start seeing some amazing results here in just the next 30 to 60 days, all you have to do is head over to debtfreedadcom, click on the green button at the top of the page and we're going to show you how you can get started.
Chris Hawkins:
Let's talk about death baby, let's talk about your money. Let's talk about all the good things, all the bad things that may be. Let's talk about death. Let's talk about death. Tune into Death, free Death.
Amber Taylor:
Tune into Death, free Death, and that's how we need this time for the celebration of the show. First we have Bonnie, she says I finally saved enough to buy myself a good desk chair.
Brad Nelson:
There you go, bonnie. Congrats. Good for you. Jessica says. Getting through the first two weeks of Roots and setting up my very first zero-based budget, I rewarded myself by buying a wallet with the envelope system in it. Chris, you talked about that today on the episode. Jessica, great win.
Chris Hawkins:
And that will pay off tremendously. So Gina says she went to breakfast with a good friend this weekend and it was good to catch up and enjoy some good food. There you go, Gina.
Kati Hatfield:
Congrats and hope says her emergency fund is almost back to the amount it was before she had to use the account money. Slow and steady, Been there done that over and over.
Ryan Nelson:
You got this and, brandon, I have my emergency fund of $1,500 and I've paid off my first credit card.
Brad Nelson:
Awesome Way to go, brandon. Hey, as always, congratulations to all of you guys who are taking a stand for your financial life and are wanting better. Hey, we get that. Getting out of debt isn't easy, but with our help and with your consistency and discipline, we promise you guys this will be some of the best work that you guys do in your entire life. Thanks for joining us on today's show and we will see you guys on the next episode.
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