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, Host
00:00
Hey. So today, guys, we’re 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
00:37
You're listening to the Debt-Free Dad Podcast with Brad Nelson. Brad and his co-hosts experienced 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, Host
01:10
Hey guys, welcome to today’s show. I am Brad Nelson, founder of Debt-Free Dad. I paid off about $45,000 of debt and have been debt-free for over 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 we do here at Debt-Free Dad.
Amber Taylor, Co-host
01:25
And I'm Amber Taylor. We paid off $54,000 in 20 months, and we’ve been living debt-free outside of our mortgage since 2018.
Chris Hawkins, Co-host
01:34
My name is Chris Hawkins. My wife and I started our journey back in 2005, and from 2005 to 2008, we paid off around $90,000 in debt and have been debt-free except for our house ever since.
Kati Hatfield, Co-host
01:48
I’m Katie Hatfield. I am still on my journey to debt freedom. In the last six years, I’ve paid off over $189,000 on a single income.
Ryan Nelson, Co-host
01:59
My name is Ryan Nelson. My wife and I paid off about $160,000 over eight years while raising three kids.
Brad Nelson, Host
02:06
Now, after listening to this episode, if you want to take this a step further and get better results with your finances in as little as 30 to 60 days, we’ll share details on how you can get started later in today’s episode.
We wanted to take some time to address some of the most frequently asked questions we get from our listeners, people joining our workshops, Roots members, and those commenting on our social media channels. Each of us has a unique experience with getting out of debt, with different backgrounds, resources, and challenges. This will give you a well-rounded perspective on overcoming these financial challenges.
The first question we’re tackling is: What financial goals should I prioritize first? This individual has very little savings, multiple debts, and is unsure whether to focus on credit card debt or boosting their savings.
Kati Hatfield, Co-host
03:33
Since I was in this position when I first started, I definitely feel like building a savings buffer is important. Having even a modest amount saved means you don’t have to swipe a credit card for emergencies. When I found a way to save that first $1,000, it was a game-changer. After that, paying down my smallest credit card and rolling that payment into the next one really helped me gain momentum. I’d focus on savings first, just to break the habit of using credit cards and getting further into debt.
Chris Hawkins, Co-host
04:29
This person mentioned wanting to pay off credit cards while also boosting savings, and it sounds like they’re trying to do both at the same time. While you still have to pay the minimums on your debts, I’d recommend focusing on an emergency fund first. After that, if you’re serious about tackling debt fast, you could consider stopping contributions to your 401k temporarily, which is what my wife and I did. It gave us every possible dollar to throw at the debt, and we caught up quickly once we were debt-free.
Ryan Nelson, Co-host
05:37
I’d add that everyone’s situation is different. If you’re getting a company match with your 401k, it may make sense to keep that going, as we did. Downsizing or selling a car can help free up funds for debt without halting investments, but if there’s no wiggle room, cutting back on investing temporarily might be necessary to get that emergency fund in place.
Chris Hawkins, Co-host
06:48
I agree, but if you’re not fully committed, cutting the 401k might not be worth it, especially if there’s a company match. The balance lies in proving to yourself that you’re serious about getting out of debt.
Brad Nelson, Host
07:16
I’d ask how intense you want to be with this. If you’re trying to get out of debt as fast as possible, cutting the 401k is an option, but if it’s only making things tight, maybe keep the match. Start by focusing on one goal, like building your emergency fund first. When you have too many things going on, it can dilute your efforts and make it hard to see real progress.
Ryan Nelson, Co-host
08:32
Exactly. Also, cutting investments can free up a large amount monthly, but make sure you’re using it solely for debt payoff. Otherwise, it could end up going to unnecessary spending if bad habits aren’t addressed.
Brad Nelson, Host
09:30
Next question: How can I start saving with so little income left over after all expenses?
Amber Taylor, Co-host
09:39
This one’s tough, but sometimes you have subscriptions or unnecessary expenses that add up. I recommend reviewing your last 3-6 months of spending to see if there’s room to save. You might be surprised at what you find.
Brad Nelson, Host
10:18
Often, people think they have nothing left to cut, but they do. It’s about what you’re willing to sacrifice to reach your goals. Taking small steps, cutting a little here and there, can build up over time without feeling overwhelming.
Chris Hawkins, Co-host
11:53
Sometimes, it’s about asking yourself how important saving is. You don’t need to save a lot initially—just prove to yourself that you can. Even $50 per paycheck can make a difference if you automate it. Setting up a separate savings account, one you don’t access regularly, can help you adjust to living without that extra cash in your checking account.
Kati Hatfield, Co-host
12:43
Selling stuff you don’t need is also a great way to boost savings. My first garage sale brought in $1,200, and it was all from items just sitting around. If you’re out of income options, try finding other ways to bring in extra cash.
Brad Nelson, Host
13:07
Our next question is similar: How can I reduce expenses when there’s nothing left to cut out? Sometimes it feels like everything’s been trimmed, but what are some things you guys discovered along the way? Were there surprise areas where you realized you could save?
Ryan Nelson, Co-host
13:43
For me, I had to be honest with myself about lifestyle choices. Downsizing our home, selling a car, and using a $3,000 used car instead instantly gave us a financial boost. Often, when we feel there’s nothing left to cut, we have to consider the big expenses like housing and vehicles. It can be uncomfortable but worth it.
Kati Hatfield, Co-host
15:31
I cut back on getting my hair and nails done every month, which saved a lot. Instead of dying my whole hair, I just did highlights, and I started doing my own nails. There are also great resources like libraries for free books, which cut back on buying. Adjusting habits like these can save a surprising amount.
Amber Taylor, Co-host
16:16
Negotiating bills is another way to save. I renegotiated some bills this year and saved about $1,000 by shopping around and asking for better rates.
Brad Nelson, Host
16:31
Insurance is a big one. We often see Roots members save $500 or even a few thousand dollars annually by shopping around. It can make a real impact.
Brad Nelson, Host
17:20
When I started cutting back, I let go of my new car and satellite TV, saving nearly $700 a month. It felt tough at first, but after a while, I realized the security it brought. Living below your means brings a peace of mind that no car or TV can match.
Brad Nelson, Host
18:02
Our next question is about handling unexpected expenses. For many, these unexpected costs can derail financial plans, especially early in the journey. How did you guys handle this?
Ryan Nelson, Co-host
18:34
For us, 75-80% of what we called “unexpected expenses” were really just poor planning. Expenses like school clothes or car maintenance aren’t true emergencies—they’re predictable. Getting good at planning ahead for these can prevent budget surprises.
Kati Hatfield, Co-host
19:50
In the beginning, every little thing felt like an emergency, and I’d reach for my credit card. But once I got into the habit of saving, even unexpected things felt manageable. For example, when I needed a $575 dental repair recently, I had the money saved and didn’t stress about it.
Brad Nelson, Host
20:42
Funny story—I once justified buying a new car because my old one needed tires and brakes. I ended up rolling over a loan and creating more debt, all because I hadn’t planned for basic maintenance.
Chris Hawkins, Co-host
21:01
If it’s a true emergency, that’s what your emergency fund is for. It may hurt to use it, but at least you’re not going backward into debt. You can pause, replenish it, and keep moving forward.
Ryan Nelson, Co-host
22:47
Starting out, there will likely be unexpected expenses in the first year because it takes time to get used to this mindset. But each year you get better at planning, and it becomes easier to anticipate expenses like Christmas, birthdays, and other annual costs.
Brad Nelson, Host
23:26
This ties well into the next question: Is there a way to make budgeting easier? Budgeting can be tough, especially when it feels like you’re always off in categories like groceries and gas.
Amber Taylor, Co-host
24:27
Regularly reviewing your budget helps. Checking it at least every few days makes a big difference, especially if you’re not used to managing a budget.
Chris Hawkins, Co-host
24:40
Using envelopes is huge for groceries and gas. When the money’s gone, you work with what you have at home until the next paycheck. You get creative, and it helps keep spending in check.
Brad Nelson, Host
26:05
Having an emergency fund is crucial to budgeting too. It’s there to help cover those unexpected necessities and gives you room to work within your budget without falling back on debt.
Amber Taylor, Co-host
26:31
Planning your errands and grocery trips together also helps. Reducing unnecessary trips saves time and money, making it easier to stick to a budget.
Ryan Nelson, Co-host
26:58
When we started, we used cash for groceries. Setting aside a set amount and only taking that in cash helped us avoid overspending. Grocery stores are designed to tempt you, so bringing cash makes it easier to stick to your plan.
Kati Hatfield, Co-host
27:52
Using cash helps me, too. Plus, always shop with a list and never go grocery shopping hungry! Having a quick meal planned for after grocery shopping also stops me from getting takeout right after I’ve bought groceries.
Brad Nelson, Host
28:27
Alright, next big question: How do I get my spouse on board with the idea of getting out of debt? They’re a spender, and I’m stressed—what should I do?
Chris Hawkins, Co-host
28:44
Communication is key. Share how the financial stress affects you. The more you communicate and show your commitment, the more likely your partner will eventually get on board.
Brad Nelson, Host
29:19
Most couples make the mistake of starting by listing what the other person has to give up. Instead, talk about the emotions and stress that finances cause you, and where you’d like to be financially. This approach can make them more open to listening.
Chris Hawkins, Co-host
31:18
Talk about your shared goals and dreams, then discuss how to reach them together. Working toward a common vision makes budgeting and sacrifices easier as a team.
Amber Taylor, Co-host
31:58
Sometimes, it helps to listen to podcasts together. Hearing a third-party perspective can make the ideas feel less like they’re coming directly from you.
Kati Hatfield, Co-host
32:12
Or just play the podcast in the background while doing dishes! It makes the information accessible without making it a direct conversation.
Brad Nelson, Host
32:20
Exactly. Sometimes hearing advice from a third party helps a lot. Now, let’s move on to the next question: I’m on my debt-free journey, and I’ve had to say no more often to social activities, which is making my friends annoyed. How do I handle this? This is one of the toughest parts of getting control over your finances—having to say no and stand your ground.
Chris Hawkins, Co-host
33:16
At some point, you realize that you’re on your journey, not someone else’s. If certain people in your life aren’t supportive, it may be time to limit contact with them. That sounds harsh, but it’s reality. Ideally, though, explain what you’re doing and encourage them to do the same. One day, when you’re able to say yes to things they can’t, they might finally understand why you made those sacrifices.
Ryan Nelson, Co-host
34:21
Sometimes, it’s not that they’re mad at you—it’s just that what you’re doing challenges the norm. People can be uncomfortable with others breaking free from the typical cycle of debt, which is why they might react negatively. Often, they’re really frustrated with their own situations but are projecting it onto you. Once you’re debt-free, some of those same people may come to you asking how you did it.
Amber Taylor, Co-host
36:35
Your friends might miss the regular hangouts, so try suggesting low-cost alternatives. Host a potluck, have a game night, or find other inexpensive ways to spend time together. If they aren’t open to these alternatives, then maybe they’re not the right people to have around on this journey.
Chris Hawkins, Co-host
37:04
To clarify, I’m not saying to be rude about it. Offer alternatives first, but also recognize when it’s time to set boundaries. Spending time with people who understand your goals and support your choices makes a big difference.
Ryan Nelson, Co-host
37:20
Absolutely. Sometimes, you have to be comfortable letting go of people who aren’t supportive. If you’re surrounded by people who overspend and live beyond their means, it’s harder to break those habits yourself.
Brad Nelson, Host
38:10
That’s a big part of why we started this podcast. The journey to becoming debt-free can be lonely. Getting connected with like-minded people—whether through podcasts, Facebook groups, or other communities—helps a lot. You’ll form new friendships with people who are supportive of your goals.
Brad Nelson, Host
39:28
Alright, guys, if you want to pay off debt, save more money, and take control of your finances while starting to see results in the next 30 to 60 days, head over to DebtFreeDad.com. Just click on the green button at the top of the page, and we’ll show you how you can get started.
Announcer
39:46
Let’s talk about debt, baby. Let’s talk about your money. Let’s talk about all the good things and the bad things that may be. Let’s talk about debt!
Announcer
39:54
Let’s talk about debt! Tune into Debt-Free Dad.
Amber Taylor, Co-Host
40:00
Alright, now it’s time for the celebration of the show! First up, we have Bonnie, who says, “I finally saved enough to buy myself a good desk chair.” Way to go, Bonnie—congrats!
Brad Nelon, Host
40:16
Jessica says, “I got through the first two weeks of Roots and set up my very first zero-based budget. I rewarded myself by buying a wallet with the envelope system in it.”
Chris Hawkins, Co-host
40:25
Jessica, great job! That’s going to pay off tremendously.
Kati Hatfield, Co-host
40:25
Gina says, “I went to breakfast with a good friend this weekend. It was great to catch up and enjoy some good food.”
Brad Nelson, Host
40:25
Congrats, Gina!
Chris Hawkins, Co-Host
40:41
Hope says, “My emergency fund is almost back to where it was before I had to use it. Slow and steady.”
Brad Nelson, Host
40:41
Way to go, Hope! You’ve got this.
Ryan Nelson, Co-Host
40:44
Brandon says, “I have my emergency fund of $1,500, and I’ve paid off my first credit card.”
Brad Nelson, Host
40:44
Awesome work, Brandon!
As always, congratulations to everyone who’s taking a stand for their financial lives and striving for better. Getting out of debt isn’t easy, but with consistency and discipline, this can be some of the most rewarding work you’ll ever do. Thanks for joining us today, and we’ll see you in the next episode.
Announcer
41:09
Thanks for listening to the Debt-Free Dad podcast. Connect with us on Facebook, TikTok, YouTube, and Instagram by searching “Debt-Free Dad.” If you found value in today’s episode, please leave us a rating and review. For resources, show notes, and links mentioned in today’s show, visit DebtFreeDad.com. See you next week!
