The Real Reason Doctors Can’t Pay Down Their Student Debt

I was sitting at work once (and many times after), talking to colleagues of mine who were all in their early thirties – fairly young by doctor standards. We were talking about student loans (what else?) and how steep the price has become to get an education (in this case dental, but it applies to education in general). We were going through our numbers and they were going through their excuses as to why it was impossible in their situation to pay down debt. Of course, me being me, I gently stated the obvious which was that the real reason doctors “can’t” pay down their student debt was because they thought they deserve more than everyone else.

This statement may hurt many doctors’ feelings, but actually, it’s true.

For example. I had one person complaining about drowning in student debt. He blamed it on the kids and the fact that he is a single income household. Fine. But he also just bought a brand new Tesla SUV. He gets a nanny to watch his kids so that it’s easier on his stay-at-home wife. He gets help (did he say $100k a year??) from his in-laws that is budgeted for the kids. His dining out bill is $800 a month. But he can’t afford his student debt.

Another person also bought a brand new car after graduation, enrolled his 6-month old in Montessori private school, took wild vacations (without travel hacking!), and bought a grand house for their family of three.

Yet another person owns two medical-grade massage chairs in his home, bought his girlfriend a Tesla, and drops $10k on trips around the world.

What if I told you that this story is repeated many times over? I have spoken with my fair share of indebted graduates, especially after releasing my own personal story with ChooseFI.

They all wish to banish their student debt. They also don’t wish to do the work.

Here’s the thing I see most often with doctors. They work very diligently to get through school. They do anything to get to their dream career, including taking out a huge sum of moolah (hell, I did too). They sacrifice the best of their young years. They put off buying a home, earning money, and settling down. Then graduation hits and they think, “I’ve made it.” For a brief second, they breathe a sigh of relief thinking it’s all going to be worth it.

So they buy a new car to celebrate. Then they buy a home or a practice. They go out every weekend for food. Sometimes they dine out a few times a week! They want to live in affluent communities. They want to go on vacation. They throw themselves a dream wedding. They buy nice clothes and expensive Figs scrubs. But more than all this are the little purchases. They want the daily coffee, the trinkets from the $5 section in Target, the happy hour events, the spin class – you know, the harmless stuff.

They become obsessed with the high-life and quite quickly, they refuse to give it up.

And if you think I’m being extreme, I’m not.

Because when I graduated, I wanted all these things, too!

The most excruciating part about facing my student debt, the part that nearly killed me, was realizing that after every sacrifice and sleepless night, after giving up the best of my youth, after working three jobs during school, after wracking my brain on ways to extend $40 for another week, after being a model student, the good daughter, the most loyal employee, the most valuable I could be to the community – the work was still not done.

And when I tell new grads coming to me for advice on making loans disappear that they have to use their beat-up high-school ride, possibly move-in with their parents or take on a roommate, cook dinner every night, manage a budget every week, wear their same scrubs from dental school for five more years, and try their darndest to travel for FREE – well, their faces fall and I can see the disappointment plain as day scrawled on their furrowed brows.

Only thing is, I can’t tell if the disappointment lies in the fact that they have to continue living like a college kid for ten more years or if the disappointment lies in me – because I wasn’t the magic genie they wanted that would grant them their wish.

I can tell you how to repay your loans. You just might not like it.

99% of graduates with more than $350k of debt choose to stay with loan forgiveness. Probably because it hurts the human psyche too much to know that everything you’ve done thus far is not enough.

Becoming a doctor does not end the day you graduate. Not for me. It ends the day everything you need to become a doctor is behind you. Loans included.

Not everyone thinks this way, though. Many people truly believe that the hardship stops the day you get the degree. Ahhh, time to sit back and enjoy the benefits of all our hard work. But how can that be when you don’t even know what a hard-earned dollar looks like?! What makes you better than the rest of ’em?

I know I’m making enemies here but I must pose the question. If not I, who will?

I don’t blame the docs. They were merely children when they signed their lives away for a chance at the American Dream. I blame our upbringing for creating the expectation that a doctor’s life is a rich and easy one. I blame the institutions that are set in place that allow universities to charge this much money to get educated. I also blame lending companies who are handing out loans this large. Child robbery, that’s what I call it.

I implore to all the existing doctors that make it seem like being a doctor is easy. How will we ever change the trajectory if we keep implying to young ‘uns that pursuing this career path will mean they won’t have to work hard for the rest of their life. How will they realize and make an informed decision when the time comes?

I know the real truth.

That behind the facade of wealth is an increasingly long list of medical professionals patiently waiting 25 years for loan forgiveness to hit. Behind every confident thrust of the credit card is an avoidance technique that makes life a bit easier to live. Behind all our heroics and saving lives lies a coward afraid to face our social responsibility to pay back debt that we chose to take out. And behind every accomplishment lies a lifestyle creep that is avalanching too fast out of our reach, propelling doctors further forward towards an unsustainable way of living.

The real reason doctors “can’t” pay back student debt is because they won’t.

They choose not to work hard anymore. It isn’t burn-out, although that stuff is real too. It’s the social expectation that a doctor’s life is breezy. The mindset to pay back debt just isn’t there. Many cannot accept that graduation is not the end-game. They think they already won.

There will be excuses. I don’t buy any of it.

There will come a day when I will finish my loan repayment journey, and people will think it’s a miracle. They’ll think I was one of the lucky ones, rather than a penny-pinching maniac. Perhaps the stars aligned and the pandemic gave me this “unique” ability to pay back loans faster because I was not being charged interest for six months. My parents must have helped me out. An investment strategy probably worked out for me but not them. I can’t wait to see the excuses they make. But none of that will be true.

My current car is a high-school ride that I’ve had for 13 years. The passenger’s rear-view mirror doesn’t match, because when someone broke it (probably to re-sell it), I didn’t want to pay an extra $60 to get one that was white when the stock color was black. Mike even helped me put it on the car myself because I didn’t want to pay a service fee at the auto shop. My neighbor came out of his garage this past week and looked at me funny when he saw me physically hand-washing my car. He said, “That’s … nice…” and walked away slowly.

I sometimes have to wipe graffiti off my windows, because I chose to live in a lower income neighborhood so that I could buy a business storefront AND a dwelling at a very low price. Last Friday night, it was getting ratchet at the club next door since they moved the party outdoors due to COVID restrictions. I’ve had to run away from my own home before when the riots first started and they fired fireworks at the cops.

I spent a third of last year working midnight shifts. I still wear my USC scrubs that I was forced to buy upon entering dental school in 2012. I run with the Nike’s that my husband bought me as a gift when I was attending dental school so that I could “be cool”. They used to be orange but now they’re mostly black. I sell my de-cluttered stuff on Poshmark. I research heavily in order to travel the world for FREE. I come home from work to work. I still actively budget every week. I aim to spend only $200 a month in groceries for the two of us and $150 a month in dining out. I created a lifestyle where my job is three blocks away, to reduce the gas I have to buy. TO REDUCE THE GAS I HAVE TO BUY. I spent my last birthday repainting our bathroom. We spent Mike’s birthday picking up birthday freebies. Heck, even our cat was free.

Do you know the real reason THIS doctor can pay off student debt?

Hard work and a willingness to.

It’s not rocket science.

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Freedom: In Taking A Month Off When Owning Your Business

About a year ago, I heard of a man who worked for himself as a photographer. During Christmas time, his calendar for booking a photo shoot was entirely grayed out, indicating that there were no days available for last-minute holiday cards of procrastinators. At first, one would think, “Entirely booked for the holidays – he must be doing well!” Until one looked at the bottom right corner and saw an asterisked note.

“*We are accepting no bookings in the month of December in order to dedicate our time to our loved ones.”

To some, they may still come to the same conclusion. “He must be doing well to take THAT much time off.” But to others, myself included, a lightbulb flickers. An “Aha” forms quietly on the lips. And I think the inverse instead: “He’s got it all figured out, that which makes him well.”

R E : M Y T A K I N G A M O N T H O F F

In the month of June, I turn thirty years old, with my date of birth landing directly on Father’s Day, as it sometimes does. Life has been one crazy ride these last few months, and I thought to myself, why not take the month of June off?

Okay, not entirely, persay.

But my time has been disproportionately skewed towards my recent baking venture, and I have been looking for an opportunity to swing things back to a more balanced state. I’ve missed writing, and feel the loss of the introspection that only a year ago predominated my life. Plus, I also miss that slow lifestyle that has so rambunctiously sped up. I’ve quite made up my mind. I want to be like the photographer. I have my own bakery, and no one is requiring me to bake. In an effort to exit my twenties full of opportunity for moments of self-reflection and enter my thirties with half my wits about me, I have decided not to take any orders for Aero Bakery during my birthday month.

Off course, I will still be working as a dentist during part of my birthday month (we leave for a two-week trip to Alaska towards the end – how we get our flights for free here), and I will still continue helping Rye Goods bake off their bread and pastries. But with regards to my own business, I will close in observation of this life event, and in an effort to respect my mind and body which have both been craving time and space.

In addition, I have decided to quit the midnight shifts at Rye Goods after June and focus solely on Aero when I return in July. It was a difficult choice since both gave me so much happiness, but I had to choose between the two, or continue to deprive myself of the lifestyle which I have worked so hard to build. So, you see, I couldn’t keep both. I wished not to keep both. The choice ultimately came down to which one I had more control over, and Aero happened to be the winner.

R E : B U S I N E S S O W N E R S T A K I N G A M O N T H O F F

I think it’s important to address the freedom in taking time off when owning your business. While it may seem straight-forward, unfortunately, the majority of business owners do not realize this freedom. As with most American dreams, less is not considered more. Closing a business (for a month or more, no less!) is considered business suicide. Taboo, almost. Many suffer from the feeling of, “No choice”. One simply doesn’t do it. Or at least, that’s how they want you to think.

Business owners experience a lot of pressure in competing with other business owners. Held prey to a scarcity mindset (you know, that sinking feeling that if someone else is getting a customer, you are, in turn, losing one), many owners fear taking the time off. In fact, they are less likely to take the time off than a person working for someone else.

I hope to remind you that it isn’t really the case.

It takes a whole lot of courage (and even more trust) in your abilities, or self-worth, or what-have-ye.

But it’s worth it.

R E : F R E E D O M I N T A K I N G A M O N T H O F F

We talk a lot here about financial independence, and it is this freedom that this life affords.
The ability to say, “No, not today.”
The ability to walk away.
The confidence that it will be there for you when you return,
and if not, then you can build another.
Eventually, I want an entire life built around this freedom.
A simple one, free of debt, so that all I have to earn is the food I am going to eat.
I wish for a life’s work that is in my hands.
A job that we don’t depend on, because we don’t need to make money.
The ability to choose a different path, in an instant, without hesitation.
Eventually, I hope to work mostly for myself.
In fact, I hope to l i v e only for myself.
There. That’s better.

R E : O W N I N G A (D E N T A L) B U S I N E S S

People in this space ask why I don’t own a dental practice, so that I may be free from my student debt sooner. But just as I refuse to work full-time as a dentist, I find that owning a practice gives up freedom now for freedom later, and the cost is too great.
I want to do work that is not dictated by money … nor insurances, nor patient wishes.
Currently, I counter-balance the need to fit into a box dictated by what is just, and good, and scientifically-proven, and paid for by insurance, and perceived by the patient, et cetera, with baking for myself, and myself alone. This is kind of where my life is headed. I wanted to be a dentist to be of use to people. I likely will not give up dentistry entirely any time soon, because I find that there is truth in my initial intention. But in dentistry, I cannot say with certainty that the end-product is truly my work. It’s manipulated by other people, factors, institutions, and the politics doesn’t allow for something more pure. It is because of this I do not own a dental business. And there is some pride in that.

R E : C A P

Regardless, looking forward to having a month sort-of-off. Looking forward to a lot of memory hashing and story-telling. Looking forward to, well, looking forward. My twenties were chalk full with life-affirming moments. I wish for my thirties to be filled with much the same. And much less ranting. As, I am sure, do you.

Finance: The Second Year of Paying Down $550,000 in Student Loans, An Update

I can’t believe how fast time flies! The second year of paying down my student debt has passed, and I didn’t even notice. After the first year, I posted an update that outlined a review of our journey. It seemed to help some, so I decided to do the same for the second year. This year there were some ups and downs (a lot more downs than we thought would happen), but I am so pleased to announce that we are on track to finish paying off our debt in under 10 years. In fact, if we continue on this same trajectory that we’ve been on, we are actually estimated to finish 6.9 years from now, for a total of 8.9 years!! And I have high hopes to bring that number even lower. Read on to find out how we got here, and where we plan to go.

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To recap, we started off our journey with $574,034.50 of student debt (including the interest that had accrued)! All of which was mine. To date, we have paid a total of $145,128.48 towards my student debt over the last two years, bringing the principal amount down to $481,368.06.

To understand the progress, do recall that after year one, only $28,000 went towards paying down the principle. The rest of the $84,000 that we had paid towards the loan went towards the interest only. This means that only 33% went towards paying down the principle amount of the loan.

In year two, you start to see improvement. Of the $61,000 we paid to the loans, $29,000 went towards paying down the principle. That’s 47.5% of our payments going towards actually making the loan smaller!

Off course, you will see right away that we paid way less towards the loans in year two ($61,000) versus year one ($84,000). If we had paid the same amount or higher, we would have had an even higher percentage going towards the principle balance. So I guess this is a great time to recap what slowed us down this year.

THE SET-BACKS

In September of 2018, we decided to buy property. Property ownership was something we felt was right for us to do. We bought a live/work space that we hope to utilize in the future for some sort of business. Meanwhile, we are co-housing, or as financial independents might say, house-hacking, our way towards paying down the mortgage. Buying the property did entail two things to happen: We used some of our emergency fund to place a down payment on the home. Because of that, we are now re-building the emergency fund back up to what it was, which decreased our ability to pay back loans. Currently, we are setting aside $1k a month to rebuild the emergency fund and are on track to being back to normal in March of 2020. Also, it raised our total payments towards our housing a teeny bit, since now we pay for things like HOA fees and home insurance.
In October of 2018, we were delivered some shocking news. Mr. Debtist’s company experienced a laying off of 80% of the people working there, and even though Mike was one of the “lucky” few to stay, his pay got decreased by more than 50%! It was something we were not really prepared for, so on top of wanting to re-build the emergency fund, we also had to deal with a huge blow to our income. Since we were living off of one income, the change in salary really affected our ability to pay down the loans. But we made it work! That’s part of the joys of being on Loan Forgiveness Program even though we were paying it back aggressively. They still only required the minimum payments. Off course, we continued to pay more than the minimum. We were able to keep up with the interest that accrued and to slowly bring the loans down.

THE POSITIVES

Now that those two negatives are laid out, here are some positive things that happened!

A conversation with Travis from Student Loan Planner (affiliate link) is saving us THOUSANDS of dollars. He brought to our attention that we could optimize the loan repayment by switching from IBR to REPAYE. How does this help? Under REPAYE, the government subsidizes the interest at 100% for the first three years for an subsidized loan, and at 50% for unsubsidized loans and subsidized loans that have been present for longer than three years. Which means every month, we are given a free $850 to go towards our loans and help us out! This is fantastic because now that Mr. Debtist has a new job and we are back to our previous income, we also are getting help to pay back the debt. Whereas last year we were paying $6,500 per month towards the loans, we are now sending $7,300 towards the debt with the help of REPAYE’s stipend. And while we were dealing with the smaller income stream for four months, we were still getting that helpful $850 to add to the few thousands that we were contributing to the loan. If you want some loan advice, I really think Travis is your guy, and you can schedule a call with him to discuss your particular situation.
Additionally, the side hustle game has been ramping up since 2019 started! Now that we have our budgeting in order, it was time to start increasing our income. I was already writing on this blog and doing some dog-sitting on Rover, but I just recently started as a bread baker, and soon thereafter opened my own bakery called Aero Bakery. In January, I made only $14 in side-hustles, which made sense since we were off traveling in Australia and New Zealand for the first half of January. In February, I made $450, and in March, I made $750. For April, I am on track to make an extra $1,500 in side hustles! Read more about why I am an advocate of side hustles, here.

Why the Future Is Bright

So now, we are not only back on track with making $6,500 payments, but we are actually on track to be finished one year early! How did we do that? By being AGGRESSIVE. The minimum payment for a 10 year repayment plan was $6,063 a month. We set our sights on $6,500 a month. Even with the lapse during those few difficult months while Mr. Debtist struggled with his work situation, we were still able to be at a point where we have only 6.9 years to go! How exciting is that?! And what’s even more exciting is that I predict this will all snowball even more! I turn 30 years old this year, and wouldn’t it be great if this would all be cleared by the time I turn 35? That’s right! I have my sights set on getting rid of this in 5 more years. Here’s what we have planned.

Since we are now switched to REPAYE, we are making $7,300 contributions towards the loans, instead of the $6,500 that we were previously doing under IBR. That will vastly improve the trajectory of our path.
In March of 2020, we predict to have saved enough for our emergency fund, leaving an extra $1k to be funneled into the loans. That would increase our contributions next year to $8,300/month.
Also in Spring of 2020, Mr. Debtist is scheduled to finish his car loan payments. While I was in dental school, Mr. Debtist got a car loan and we currently pay $585 towards it every month. Freeing up $585 will increase our loan contribution to $8,885/month.
The side-hustling is just getting started. I hope to continue with many of these hobby-turned-hustles, and we will see how that impacts our payments.
Lastly, we decided not to refinance our loan at this time because of the risk of not being able to meet the minimum payments in case we have another fiasco like the job situation. However, when the loan is small enough (say under $300,000), we may still consider refinancing the loan. It’ll be less of a risk at that point, since the monthly payments will be way more doable. If we DO refinance as we get closer towards paying the loans off, then we will be able to attack the loans at an exponentially improving clip.

Please note that we are paying back student loans aggressively, but we are also doing it responsibly. We are living within our means, investing in our 401ks respectively, and are diversifying by entering real estate last year. I make myself less susceptible to fluctuating job conditions by having my own dental S corporation, opening my own bakery, working as a dog-sitter, working as a baker for another company, and doing some writing on the side. We are also a dual-income household, which greatly affects the possibility of this success.

If you are feeling lost in your student loan repayment journey, or you simply want to know your options, I would start with talking to a consultant at Student Loan Planner. This path is not for everyone, but it also may be more doable than they want us to believe. For those who just want to get budgeting down, why not start with my free course on creating a budgeting tool?

Personal Finance First Step: Mastering the Budget

If you are embarking on a personal finance journey, then let’s get you started on the right footing. Step one begins with mastering a budget. Some may scoff at me and say that I know nothing about becoming rich and getting to financial freedom. They laugh and say that I must not realize that reaching financial freedom lies in increasing income, rather than decreasing spending. But I know something that they don’t know.

You can increase your income, and never be financially free. It’s just a quick fix attempt, and usually, quick fixes do not work. In order to really tackle your personal finance, you need to start with the basics. You can’t just jump ahead to making a ton of money, because without mastering a budget, you’ll likely never see that extra money you make. If you’re like most Americans, you’ll spend it before it even gets to your bank account.

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Now I’m not naive enough to believe that mastering your budget is all it takes. I agree that there are limitations to mastering a budget. One can only cut their spending so much. On the flip side, one can increase their income exponentially…indefinitely, perhaps.

I, myself, am well aware of the need to increase income. I worked three jobs while going to undergrad to increase my income, but I also graduated in three years in order to cut spending. I was one of the few students who worked during dental school, just to make a little extra money. And even now, am a side-hustler of sorts. I work in dentistry, write on my own blog, write for other blogs, walk dogs via Rover, work the midnight shifts as a bread baker with Rye Goods, and bake my own bread to sell (currently I am applying for a license to open my own “bakery”). But before all of this, I mastered my budget.

Here’s the thing. I know many people who are high income earners. I define high income earners as people who make six digit incomes or more. Most of them are also swimming in debt. This debt includes car loans, mortgage loans, student loans, and even consumer debt. Unfortunately, lifestyle creep is real, and unless you’re well-versed in staving off advertisements who are convincing you to spend more as you earn more, you will likely be one of the top targets (and victims) of lifestyle inflation.

There’s a statistic swimming around that 80% of Americans do not have $2,000 set aside in an emergency fund. Eighty percent! The part that gets me is the fact that $2,000 won’t even cover most true emergencies. Medical bills are way more than $2,000. If something happens to your home, or someone loses a job, $2,000 won’t last most people one month in Southern California. While it’s hard to confirm the statistic, for they do have a tendency to appear out of nowhere and start floating around, I can confirm that many patients that I meet don’t have the income to jump into an emergency dental procedure right away. Yet many of them are working their tails off (I can’t tell you how many nightguards I’ve diagnosed to help with stressful grinding habits), and earning decent pay, and still, they have to “save up” to treat a tooth in pain. And trust me, you wouldn’t put off treating a tooth that really hurts, unless you absolutely have to. It’s a feeling one never forgets.

People are working longer hours and making more money, but are saving less and less. We’ve been raised to be consumers. It’s not an anti-consumerist society, I can tell you that. But we haven’t been taught how to be SMART consumers. I was never taught how to ration out my earnings. I was never taught to pay myself first. I was told that good credit is GOOD. Wrong. Good credit is bad, and bad credit is worse. People without credit history probably are the best with handling their money. (This does not mean they are the richest. Just that they are really good at handling money).

All of this to say, you can try to get rich by working your butt off. You can spend all the hours of your day for forty years of your life trying to make enough money, and then some. But you can’t be successful if you don’t know how to manage it. You can try to take the short cut, the quick way to success. But that’s what most Americans are doing, and eighty percent of them don’t have $2,000 set aside for emergencies.

If you were to take my advice, I’d say start mastering your budget. If that’s something you’ve wanted to do in 2019 but haven’t had the chance, check out my free course How to Master a Budget, and get started today!

One Income Stream is Risky Business

There’s a recent happening at the Debtists’ residence that we have not yet spoken of. It’s one that I hope you consider heavily, and it emphasizes the risky business of relying on a single income stream. After revealing the going-on’s at our home, I sure hope it convinces you to re-think the way you look at yourself and your job, and to possibly start on this path towards adding side hustles to your resume in 2019.

Real talk: A year and a half ago, Mr. Debtist pursued his dream job at a start up company working on electric vehicles. As with any start-up, there is risk involved, and one never quite knows if anything will come of it. Last year, we went through some difficult times with the company, and for a month or so, we didn’t know if there was any more growing left to be done. Luckily, they pulled through and at the beginning of this year, there was hope of moving forward.

Unfortunately, mid-October, we (and the rest of Mr. Debtist’s company) were blind-sighted by a turn of events that resulted in a laying off of 20% of the company, followed by a mandatory furloughing until further notice of anyone who joined in the last six months. A 50% cut on everyone’s salary was implemented, which is hardly the worst part. Last week, another wave of mandatory furloughs was issued, getting rid of all of Mr. Debtist’s friends at work, but one. All that’s left of Mr. Debtist’s team is him and two other mates. Now I am not ungrateful for the fact that he was kept on and still has a job, despite the 50% cut that he’s been working under the past two months. But it is a depressing thing, to see your company degrade, your co-workers leave, and your paycheck smaller than when you first graduated from college 8 years ago. I share this with you all to prove one thing: Having one income stream is risky business.

Sometimes, “what you do in your 9-5 is not as important as what you do in your 5-9”, my favorite quote from Side Hustle Nation’s Nick Loper. We need to stop thinking of ourselves as someone employed by a company who works in the 9-5. Rather, we need to start thinking of ourselves as entrepreneurs, who may be doing particular work from 9-5, but who are our own employers from the 5-9. Because we are our own employers, we are responsible for creating other income streams for ourselves outside of our 9-5. By doing so, we no longer remain dependent on a single job, or on an employer for that matter. Even if you own your own company and you work for yourself, you cannot assume that your single source of income will be there a year from now. You cannot assume that you’ll still be satisfied with the same work after a year. And who likes sticking to a job that they hate? We only have a limited number of days, and our lives have to reflect that. With other sources of income comes more freedom from any potentially unfavorable turn of events, and more power to call the shots as to what takes up your precious time. The minute you become an entrepreneur, you become your own person.

Even as a child, I knew deep down that I did not want to depend on anyone. In fact, I hated it when people told me what I could and couldn’t do. That’s just who I was. No one else but me gets to say how my life is going to be. I mean, should anyone else be given that right?! Here in this space, I write about ways in which we can live intentionally. Part of that requires ensuring that we are living for us. That our actions are shaped by neither our histories, nor our relationships. That we leave our own legacy behind, and not an empty shell of a life made busy with what other people thought defined our success, or worse, defined us.

For Mr. Debtist and I, we are absolutely lucky in the fact that we do not rely on one income stream. And I am not referring to the fact that we are a dual-income household. I would say that we are a hexi-income household, because we employ a number of different side-hustles to increase our income. And while we cannot necessarily replace our 9-5 jobs with the other income streams, we can stay afloat. We prove to ourselves that we can come up with something to replace it. We (hope to) inspire others to have the courage to make it work. If all of this jives with you, here are five income streams for myself that have helped offset the dramatic pay-cut.

Work for 2 dental offices (and stay open-minded to help out fellow dentists in need at their offices). I work for two different dental offices in two cities about twenty five miles apart. One is three blocks from my home, the other is a five minute drive from my parents. Working for two offices gives me flexibility, but also, safety. Imagine one city suffering from a fire, or an office suffering from a sudden loss of staff. Dispersing my dependency between two offices that serves two different communities gives me a stronger sense of stability. Additionally, I have colleague dentists who occasionally message me and ask me to help out with their own private offices once in a while. If I have a day off, I am more than happy to work for them for that day, to help alleviate the work load or to give them time to take a vacation.
Act as landlord and rent out a room. We started this idea of co-housing in January of 2018. After having an emotional break-down over the stagnancy of our finances given the large student debt that we had to overcome (referring to myself, not the Mr. Debtist, regarding the debt AND the breakdown), we decided to co-house to alleviate some of the financial load, and more importantly, allllll of the stress. Another way of thinking of co-housing is as an additional income stream. Renting out a room in our home gives us an additional $700 a month! It’s actually the biggest thing that got us out of our stagnant stages (along with YNAB which helped us get our budget in order), and it was the best decision we ever made!
Dog sit via Rover: This is a recent side hustle that I started to do and I think it has great potential. We do not have kids of our own, and while we love our toothless cat, we also enjoy the additional company of other pets, too (even though Theo may not). Dog sitting is a great side hustle because it does not add much to your plate. It is flexible in that you can create the timeline that works for your already existing schedule to feed and walk the dogs. For us, it is a great opportunity to play and love dogs who would otherwise be sitting in a kennel overnight. The dogs are welcome to sidle up by us on the couch during the day or on the bed at night. It gets us to go out on a walk three times a day, forcing us to exercise, but also giving us the opportunity to connect. With this side-hustle, I charge $30/night to dog sit, giving us the earning potential of an additional $900 per month. Via Rover, you can also choose to day sit, take dogs on a walk, check-in on someone’s pet, and more! You control your own calendar, making it easy to do without sacrificing your current obligations. For example, if you have a vacation planned, then you may block that day off from your availability. If you love pets as much as I do, then this is a great hustle to look into.
Use affiliate linking to generate income from the blog. This is fairly easy to do when you have an existing blog or social media platform. You can become an affiliate for a number of companies and help others by linking them to that company’s programs or services. Off course, I do not link to every company out there willy-nilly. I only choose companies that are in line with my lifestyle and my values. Most of the time, I have tried the product myself to verify that they make a good fit. For example, in an effort to help others who are attempting to wrangle their student debt, I have partnered with the following refinance companies (Laurel Road, ELFI, Common Bond, Sofi, Splash Financial, Earnest, Lendkey) to help people get lower interest rates on their loans. It’s a win-win situation, because I make financial independence, zero waste-living, and sustainable products easily accessible to my followers, and at the same time, I receive a small percentage commission from the companies I work with.
Take bread orders and sell bread loaves and croissants. Baking bread is like a science. If I am being honest, it took me quite a few experimental bakes before I even got to what I would consider edible bread. Eventually, I got to bread that was soft enough to digest, let alone bite into, but I still wasn’t satisfied. When I got into a bread baking habit, I wanted to improve my skills without wasting so much bread. A gal can only eat so many loaves in one sitting! So what I started to do was sell my bread to friends, family, and co-workers, which gave me the ability to practice honing in my skills without wasting resources. In return, they received fresh loaves of organic bread, without any preservatives of any kind, at a hugely discounted price. Even though I have stopped baking bread loaves every week once I developed a recipe that I was happy with, I occasionally still do get orders and requests. This isn’t to say that bread baking will replace our real 9-5 income. Rather, it’s to show you that you have hobbies and talents that people are willing to pay for. At absolutely no expense to you. Let’s say you love to read. Offer your services as an editor. Let’s say you like to cook. Sell your most popular meals to friends and family. Or better yet, start a blog and share your recipes with the world. If you like calligraphy, use the holidays or weddings as opportunities to make some income. If you own a camera, become a free-lance photographer on the side, starting with close friends and families to build a portfolio. Trust that you hold value , and share your interests and skills with others in a way only you know how.

We took over a $55,000 pay cut two months ago. But we aren’t going to quit. We will keep up the student loan payments and dig our way out of hyperdebt. We will flex those frugal muscles (a year of working out those frugal muscles has prepped us for this!). And we will not jump desperately to the next corporate job offer. We will stay afloat this crazy ocean ride. Why?? Because it is important (to us) to build a lifestyle by design. Part of that means that it is important to do meaningful work, however that’s defined by you. We knew the risk of a start-up company, but electric vehicles is what he wanted to do. He loves cars, and he believes strongly in a future of autonomous driving. Despite the unexpected turn of events, you don’t ever regret a decision like that. If you find yourself in a similar situation, I implore you to seriously think before you jump into the next job life throws your way. If it doesn’t align with your lifestyle or your values, why chain yourself up?

We only have a limited number of days, and our lives have to reflect that (see paragraph 4).

Frugal Challenge: Don’t Buy Snacks

I am going to be the first to say that I am the least opposed to having a mid-afternoon treat. A firm believer that chocolate fixes all things, you won’t see me denying a cupcake when it’s sitting on the kitchen counter for the taking. My family knows that once you set out the dessert at a holiday gathering, I’m going to be first in line holding an empty plate.

That’s just the problem. It’s difficult to say no to something when it’s taunting you from right underneath your nose. However, it is very easy to pass up on something that you never knew was there. So here is my next, and long-awaited, frugal challenge for the month of October. Stop buying snacks!

Related Posts:

This challenge is not a practice that just recently came about in our household. In fact, it is a habit that we are quite accustomed to. The origin story goes way back to the moment I was diagnosed at age 22 as pre-diabetic, despite the fact that I weighed 100 pounds. You’ve oft heard the saying, “Never judge a book by its cover”? Well, it’s true. A skinny, young girl can be diabetic. At 22, my body was doing a great job at metabolizing all the sugars that I was consuming, but it was also already starting to fail. Without getting too extremely technical, having a normal blood sugar level does not mean that your body is not suffering. Your body can be fighting to keep itself healthy by pumping out a TON of insulin to get rid of those sugars, but eventually, your handy dandy pancreas will not be able to keep up with the work load, and it will start to fail. By the time you notice a high blood sugar level, it is already too late. Your body has had enough.

So when I was diagnosed with pre-diabetes, I knew something had to change. Having been trained to eat ice cream for breakfast, lunch, and dinner (yes, I have done that all in the same day… quite frequently), and growing up in a household where snacks can be found in the pantry every single day, I knew that it was my diet that was causing my body to suffer. I was taught that soda was exchangeable with water, and that juice was “healthy”. Every day after school, my mom would require us to eat merienda, which translates to a snack in Tagalog. Unfortunately, the snack list included chips, cookies, cereal, ramen, mac-and-cheese, and more thoroughly processed goods.

I was in my first year of dental school when I cut out sugar from the grocery bill. In doing so, I nixed mostly every snack possible. I not only said goodbye to my beloved cartons of ice cream, but also the chocolate bars and the cookies and the juice. I even cut out most cereals, with the exception of Cheerios (and not the Honey Nut kind). It was here that I first learned that the most efficient way to cut down the grocery bill is to get rid of junk food. I was grocery shopping for Mike and I, swimming in student debt, and I proposed that we limit our combined grocery bill to $50 a week, a rule which we still stick to to this day. $50 covered at least six days worth of breakfast, lunch, AND dinner for two. That’s how I got through dental school. But that means our limitations couldn’t stop at sugar. We also cut out chips, frozen fries, pizza pockets … even cheese and crackers.

Once we did that, we realized that $50 a week was completely doable. And I am not talking about eating spam or peanut butter sandwiches every day. I am referring to decent, home-cooked meals that taste better than going out to eat! Off course, there are many more perks to cutting out snacks than simply hitting a grocery budget. Here are the top 5 reasons why you should cut out snacks, in general.

TOP 5 REASONS TO CUT OUT SNACKS

Decrease spending. Have you noticed that snacks cost so much for what you get? A protein bar for a few dollars?! A box of fruit roll ups for $5?! You’re practically paying top dollar for useless carbs that will shorten your life span or increase the chances of you needing to pay for medical bills to treat underlying conditions because of unhealthy food choices during your hay day. When you put it that way, all of this pointless eating costs more than the food itself. You may want to cut out snacks to decrease overall spending, for now and for the future.
Cut down on sugar. In case you haven’t heard, all processed foods contain tons of added sugar. It doesn’t matter if they sell it in the form of “agave sugar“, it is still processed sugar that is unnecessary. Cutting down sugar was my number one reason to cut down on snacks. But there may be other reasons as well..
Cut down on cholesterol. My extended family has a history of high cholesterol. When I think about how much salt lies in my once most favorite snacks (ie: Cheetos, Ruffles, French Fries, Ramen, etc), I can feel my arteries clogging up. Decreasing snacks can really do a body good.
Become more productive. Let’s face it. A majority of us use snacks as a means to distract us from work. I remember the days when I needed to study for a test, and suddenly, my mind focuses on food when it should be focusing on the textbooks in front of me. How often do people at work take “snack-breaks”? Work-at-home-bloggers, you know what I am talking about. When I cut out snacks, I find that I eat more regularly. Three meals a day at approximately the same time. I stop “craving” a lot of things, which allow me to focus on my work, whether that’s dentistry or blogging.
Help planet Earth. A majority of snacks are packaged in plastic. When we cut out plastic from our grocery list, we were already primed for success, because we have been cutting out snacks for a few years. Think about it. Individually packaged candies, bags of chips and cookies, even popcorn is in a paper bag wrapped in a plastic bag! We cut out frozen foods completely, as well as jugs of orange juice and bottles of soda. We aren’t only helping our bodies, but we are also helping the planet too.

Off course, there are many more reasons not to eat snacks. But these, for me, are my top five. So try it out for the month of October! Extend it past your grocery list and avoid buying snacks at all times. Do you need that mid-day coffee from Starbucks, or that extra bag of chips from the gas station to satisfy you during the commute home? If you do go out for dinner, is it necessary to get the appetizer and the dessert? Or a cup of soda, even though it’s unlimited re-fill? I know that at first, habits like these are hard to ditch. But try it for a month, and see how much you actually save. You may be extremely surprised, in a good way.

How to Decide if Property Ownership is a Good Financial Decision for You

This post may contain affiliate links. Please see my disclosure to learn more.

Well, we are doing it! We are in the throes of purchasing our first property! Currently, we just started the escrow process, so it’s all new enough to accurately relay our experience on zee blog. I have been MIA on the finances front for a while, but I’ve decided to start a new series on Property Ownership (I say property ownership because, as you will see, we did not go with a traditional home, therefore I think home ownership is too selective of a title), in which I hope to cover a collection of thoughts and well-meaning advice.

The first of which is this: You’ve got to know what you are doing when buying a home. Unless you want to get your money swept from underneath you or risk ending up with a home that you absolutely hate, I highly suggest getting informed before even considering any of this. May I suggest starting with the Home Buying Kit for Dummies? Not saying you’re a dummy, just saying I read this from front to back and felt confident in the home buying process, which went quite smoothly for us. In fact, today’s topic of deciding whether to buy is outlined in their first chapter. Sans my own personal stories and interjections. You’re welcome!

Deciding Whether to Buy

We all make consumption choices in our lives. Whether that’s a cup of coffee, a sustainable product, or an eco-friendly gadget. Sometimes, purchases can lead to buyer’s remorse, especially when they fall short of our expectations. When it doesn’t cost much, you can get over it quickly by either choosing to return the product or deciding you will not make the same mistake twice.

As a very mindful consumer, you likely already know that I weigh the pros and cons of every purchase I make. This is especially important with large purchases, such as a car or home. Sloppy shopping can lead to financial and emotional disaster. And I love the analogy that consumer debt is the equivalent of financial cancer. So, buying a home should not be taken lightly. It should not be an entirely emotional decision. And it is not right for everybody. If that is something you did not want to hear, then I am very sorry.

The goal of this series is to go through the process that Mike and I went through in order to help ensure that we have a home we are happy with, we get a good deal on the property, and most importantly, that owning a home helps us accomplish our financial and life goals.

But before we could have even decided whether owning or renting was best for us, we had to learn the advantages and disadvantages of both!

The Pros of Ownership

Not everyone should buy homes, and not at every point in their lives. That’s a statement I believe in. That being said, there are many pros to owning your own property.

Owning should be less expensive than renting!

This is the first guideline that Mike and I wanted to follow. We have thrown away so much money in rent. How much, you ask? Our first 18 months, we paid $2,800 a month for our beautiful 1,599 sq. ft., 2bed, 2ba live/work loft in Orange County, California. For those of you thinking we are financially crazy, I just want to point out that an 800 sq. ft. 1bed, 1ba apartment in an apartment complex runs around $2000-$2200 in our area. I agree, it is crazy expensive to live here. I also agree that we weren’t exactly financially savvy when we started out. The next 8 months, we received a huge rent reduction to our space. We made a bargain with our landlord which stated that we ourselves will fix any problems (that totaled to no more than $200 per month) that came up, and she reduced our monthly rent from $2,800 per month to $2,600 per month. Additionally, we took on co-housing and we further reduced our rent to $1,900 per month, while giving our roomie her own bedroom, bathroom, and access to the entire house for $700 a month. She was happy because she avoided having to hemorrhage $1,500 for an old, run-down studio space, and we were happy because our rent went down almost $1,000 with those two simple changes. The savings of $900 over the course of 8 months was $7,200! YAY US!

All of this to say, that over the course of the last 26 months, we have spent $65,600 in rent. If we didn’t have our roomie, then we would have spent $71,200 towards rent, with nothing to show for it. Now if it seems like your monthly rent looks way smaller than the price of a home, which is likely to be hundreds of thousands of dollars, think again.

A very simple calculation of the home you can buy that would have approximately the same monthly cost as your rent can be completed using the following equation.

$______________ per month x 200 = $ _____________________

Example: $2, 800 per month x 200 = $ 560,000. The property we decided to put an offer on? $499,900.

Another consideration between the cost of buying and renting is the cost of doing so today versus the cost in the future. As a renter, you are fully exposed to inflation rates. A reasonable annual increase in rent is 4% per year. Remember that if you pay $1,000 in rent per month, that is the equivalent of buying a $200,000 home. Well, in 40 years, with 4% inflation per year, your rent will balloon to $4,800 per month, which is like buying a $960,000 home! On the flip side, after buying a home, your housing costs are not exposed to inflation if you use a fixed-rate mortgage to finance the purchase. So only the comparatively smaller property taxes, insurance, and maintenance expenses will increase over time with inflation.

This isn’t to say that you must buy because of inflation. But, if you are going to continue renting, you must definitely plan your finances accordingly.

You can make your house your own

This is a great pro to all the creatives out there. However, a word of caution:

Don’t make the place too unique. I understand that you may have a distinct taste or style. And while that may lead you to a happy life in your home, it could make it very difficult to sell in the future. If you do make improvements, focus on those that add value, such as adding skylights, energy-efficient upgrades, and updated kitchens and bathrooms.

Avoid completely running yourself into financial ruin. It’s easy to get carried away in the emotions associated with owning a new home. There is this urge or pressure to make it look picture perfect straight away! There is nothing wrong with making your home a dream one the slow way. When you feel the urge to throw all your money straight into renovations, think of the things you already have. Say, a roof over your head?

Avoiding Landlords You Can’t Get Along With. Mike and I have never personally had an issue. However, we have heard stories of landlords who neglect their tenants needs or continually refuse to fix rental units that are falling apart.

The Pros of Renting

Simplicity. Signing up for a place to rent is definitely easier than going through the process of securing a home. You don’t have to deal with financing, inspections, and other possible issues like you would if you were buying a home.
No upkeep. When you have a rental property, your landlord will be responsible for property maintenance and upkeep!
You have flexibility! This was actually one of our initial reasons to continue renting. Renting allowed us to not feel tied down. In the last few years since we got this place, we were going through so many changes. We got married, Mike got a new job, we started tackling our student debt, and we wanted to travel the world. I just started work and Mike and I did not know if we would like our new jobs and if this is the area we wanted to stay. Luckily, since then, we have fallen in love with our city and our jobs. We have proven to ourselves that tackling the student debt is doable, and we are comfortable enough to now tackle on housing. But if you are at a stage in your life where you need any sort of flexibility at all, then maybe renting is better for you right now. If you plan on not keeping your property for more than five years or plan to move soon, buying and then selling a property is not the way to go.
Increased liquidity. Many people buy their first home and wipe their finances clean with the down payment and the closing costs. Plus they have to make their monthly payments. Renting will help prevent you from being financially stretched.
Better diversification. Buying a property could mean that your wealth is tied up in the house. As a renter, you can invest money in a variety of investments, not just one.

Do NOT Fall for the Following Pitfalls

Renting because it seems cheaper than buying. You must consider the monthly cost as well as the future cost. See discussion above.
Buying when you expect to move soon. Additional costs that come with buying and selling a home are pretty large. Unless you plan on keeping the home for a while after you’ve moved, it may be better to wait until you are more sure of where you will be one year from now.
Allowing salespeople to sell you something you don’t want. Many people in the biz have a vested interest in getting you to buy, because they work off of commissions. But remember that when you buy a property, you will be the one coming home to it every day. You will be the one paying for it. So make sure that you do you!
Ignoring logistics. You should probably think through how every aspect of your life is affected by your home purchase. Imagine buying a home that has everything you are looking for and is within your price range, but which adds an hour commute to work. How much would you resent that home? Or imagine having a home that happens to be located in a loud neighborhood, and you are a light sleeper. These are important things to consider!
Don’t become house poor! Either you own a home, or it owns you. Nuff said.
Being peer pressured. This is a toughie. Typical me, I had to really dig deep and figure out why I wanted to buy a home. Was it entirely socially ingrained? Was it purely from a financial perspective? Was it part fantasy? I had to rationalize and confirm (and re-confirm) that I was not being peer pressured into this. That this is something Mike and I decide to do, for reasons of our own. Just because siblings, friends, and co-workers are buying homes, it does not mean you should too. Maybe they own a home, but have no finances left over to travel. Maybe their house is keeping them from quitting their work and pursuing a passion. Don’t assume their life is better than yours. And as always, never compare your beginning to someone’s middle.
Misunderstanding what you can afford. To be honest, if you haven’t gotten a feel for your financial situation and life goals, you are just guessing how much you should be spending on a home. So having a good grasp on your financial stance is the place to start. Also, unless you are a high-income earner, if you do not have a back up plan for unexpected life occurrences, you may find yourself in a tight situation. A job loss, family emergency, or natural disaster can make you house broke in an instant. Understanding all of this and having a back-up plan is very wise!

Given all of these pointers, only you can ultimately decide if buying a home is right for you. Not me, not your peers, not your real estate agent, and, no offense, but not even your parents. More importantly, you must analyze whether NOW is the right time for you. It may be that waiting until you have a bigger down payment, a more stable job, or a better financial back up plan is the best option. Something we as humans tend to avoid thinking about is the worst case scenario. But think about it you must.

Also, learning about the property buying process is quite necessary. If you are feeling a bit overwhelmed after reading this post and need a place to start, start with this book! I highly recommend it. Do you have other recommended reading for first-time home buyers? Feel free to share with the community in the comments below!

Frugal Challenge: Co-housing

There seems to be this taboo in the United States about having roommates after you are married. The general concensus is that once you are married, you two should symbolize your ability to provide for yourselves by living in your own home. When you continue to live with your parents or family, people almost look down on you and judge you, saying things like, “They aren’t capable of living on their own. Why did they get married then?” Couples who live with family members or friends are almost embarrassed to reveal this to others. People who are serious about each other or who are married feel this pressure to hunker down and find their own home. An even greater pressure exists for people to BUY their own home right after they get married, because that’s the next thing to do before having kids, right?

This is not common in other parts of the world. Couples live with families to create communities that act as support for their growing families. Some would argue that most families do this out of need, maybe in third world countries, because they do not have the resources to care for themselves. But this isn’t true. In Denmark, which is known as the happiest country on Earth, there are co-housing communities where there are 20 or so homes in the same area for non-related families. These housing communities were featured on the documentary “Happy”. They work together to cook, and clean, and care for the children. Each family member has a day of the month where they have to cook for everyone, say 40 people in the case of the documentary below. Even though it takes 3-4 hours to cook that one day, the rest of the month, they don’t have to worry about coming home to cook. We deal with stresses all the time about buying groceries, figuring out what to make, cooking every day, doing the dishes every day, etc. Imagine doing that only once a month, and then the rest of the month, you come home, shower, and you have 3-4 hours to relax and be with your kids. There is also a sense of community and support that your family receives. The kids have friends at home that they can grow with, and they have plenty of adults who they know will care for them. This is one of the things that sets Denmark apart, but it is being embraced more and more by other countries such as Canada. What people have started to realize is that the community is really enriching and plays a huge role in one’s happiness. Compare that to the United States, where most families with young children experience a lot of stress and feelings of isolation, countries with communal living tend to report higher satisfaction with life among their citizens.

Mike has spent his whole life with roommates, and for the most part, so have I. Rather than “live together” the way most couples do, we spent my last two years of dental school “living together” in a house with 2 of his college friends, and we both had separate rooms. We enjoyed this version of communal living. Each of the four roommates had their own bedroom and we came out and hung out with each other in the common living areas. I lived at home throughout my whole undergrad and I was used to always having people over, eating dinner together as a group, and sharing chores. When I started dental school, I lived by myself for the first year, but I was honestly hardly ever home. Talk about your biggest financial mistake. My second year I lived with one roommate and I realized that I thoroughly enjoyed living with other people. When I lived with Mike and the boys, I realized even more that there was a lot of value with communal living. Whenever I was stressed, there was always some way to relieve it, whether it be hanging out with our friends or talking with them and asking them for advice.

When we decided to get married, we did what any other couple would do, which was find our dream home and move into it, just he and I. We’ve loved every minute of it, but there is just too much space for the two of us. There has been a lot of talk about potentially moving the last few weeks. We have been considering downsizing, looking for smaller apartments to rent in order to save money but also simply for the sake of downsizing. And then I did what I usually do and started re-assessing.

Two of our closest friends just got married last month to each other. They have been renting a house with a third roommate for the past year or so. When asked if they were going to move into their own space, my friend said, “Why would I do that?! My dream is to buy a house and have all my friends live in it in the separate rooms and help me with the mortgage.” Absolute genius, I tell you. They liked living with their friend, and it was a smart financial move to keep living with each other. The three of them wouldn’t have to hassle with finding a new place and physically moving all of their stuff. Nothing changed after they got married, and why did people make it feel like it had to? And just like that the stars aligned.

The day after Mike and I decided not to commit to a potential rental and to continue living at our loft, we learned that my brother’s recently graduated girlfriend found a job in Irvine and is looking for studios in Fullerton or Orange. She was looking at rentals at the price of $1300. We offered her the entire first floor of our three story loft, with her own bedroom and full bathroom for half the price. We are very excited to say that we now have a new roommate joining us around me and Mike’s one year anniversary. We cannot be more excited to welcome someone else into our home! Frankly, I’ve been missing my roommates dearly. I’ve spent hours and hours trying to find a cheaper rental without sacrificing the coolness of our space. And I highly enjoy spending time with our new found roommate. This couldn’t have been a better opportunity. She will have a significantly decreased rent, without the need to buy the usual household items new-grads have to buy when they start living on their own. Mike and I save on rent and can put the extra money towards my student loans. And we will all have additional company and people to hang out with and help around the house. Rather than moving to a new place, we took a step back and moved towards the right direction.

Yet another way we are challenging social norms with the intent of getting closer to living the life that’s right for us. And hey, who knows! Maybe over time, the United States could start to embrace the co-housing community concept too.

This post is dedicated to our friend Chad, who made us see an alternative to the housing strategy. Thank you.