Feature: How to Manage and Pay Off Multiple Credit Cards with Andrew Rombach

I LOVE credit cards. I think that credit cards are really useful when their perks are used efficiently, in things such as travel hacking for example. We use them frequently to fly to places around the world for free. However, my relationship with credit cards wasn’t always good. In fact, I used to hate them. My money egg story here explains how my perception of money was greatly shaped by my parents’ influence. At sixteen years old, they had me open a few credit cards under my name, and then maxed out those credit cards. By the time I was a freshman in college, I was getting letters in the mail saying that the credit card minimums are not being met and that my credit score was being affected. When I confronted my parents, their answers were “Don’t worry about it. We have it under control.” Since 2007, they had maxed out my cards at $20,000. Eventually, when I was 21 years old, I became brave enough to say “No more” and shut down all credit cards that they had access to so that they couldn’t keep using them. To this day, they still owe $8,000 towards that debt. This relationship with money is what made me fear my student loans, and it is eventually what propelled me to knock ’em down! Because this means that all this time, my parents were paying massive amounts of interest on credit card debt, and they still have not been able to pay it back. Credit cards have some of the highest interest rates and unless they are paid back in full at the end of every month, they only work to hurt your financial journey. Therefore, while I advocate the use of credit cards in order to propel you forward in reaching your finance goals, I also warn that you must have the wherewithal to be able to handle credit cards well. If you are starting from a place with existing credit card debt, my advice would be to work with all you’ve got to pay it down … OR COMMIT FINANCIAL SUICIDE! We don’t take credit card debt very lightly around here. So when Andrew Rombach from LENDEDU asked if he could share some tips with my readers, I was all on board. If you are struggling with paying off your credit cards, I hope you find some useful info in this post. 

Do you find yourself in the vicious cycle of trying to pay off your credit card debt? Do you have multiple cards and aren’t sure where to start? You’re not alone in that struggle. Credit card debt is a common problem for consumers. It’s all too easy to fall into. Just take a look at a few nationwide statistics.

According to the Federal Reserve, households in the United States owed a collective $999 billion in credit card or revolving debt by mid-2018. Some sources put average credit card debt at over $6,000 per consumer, and cardholders typically have 4 credit cards. That’s quite a hefty sum to deal with for any household, and if you find yourself in this situation, then you may find yourself stuck paying the minimum endlessly on several cards.

While getting out of excessive credit card debt is hard, it’s certainly not impossible. There are a few ways to manage your credit cards or transfer the debt that can save money, make your life simpler, or both. Check out a few of these tips if you want to find a different approach to your credit card debt.

Try Debt Consolidation Loans

A debt consolidation loan is basically a personal loan used to pay off various forms of debt, or credit cards in this case. To put it simply, you apply for and take out a loan from a bank or lender, which is usually unsecured. That loan pays off your credit card balances. Now you must make monthly installment payments on just one loan instead of various credit cards.

Consolidation loans provide the benefit of simplifying monthly payments to just one payment; plus, it adds certainty to repayment because you can stick to one repayment schedule with an end goal in sight. Furthermore, clearing your credit cards may lower your credit utilization ratio. Finally, a possible interest rate reduction on your debt could save money. This new debt consolidation loan comes with a new rate, so it could be lower than your credit cards depending on your credit.

A drawback is the eligibility requirements for a new personal loan. Lenders prefer applicants with a great credit profile and high income; in fact, those applicants are more likely to get lower interest rates. Also, remember to use newly-cleared credit cards wisely moving forward. You don’t want to be left with a loan balance and mounting credit card debt again.

Time Your Payments Accordingly

Some credit card debtors consider timing multiple monthly payments to save on interest. Interest cuts into your principle payments and extends the repayment process, but timing additional payments can help reduce your principal balance before interest accrues.

After making your monthly interest and principal payment, your interest balance should be lower moving forward. Before it accrues again, it may be worth making an extra payment on your cards. This will cut into the principal balance more significantly, and it also reduces the amount of interest paid on the next scheduled monthly payment.

On the negative side, not everyone has the extra cash to make a second payment each month. If you don’t have the money, then you may need to settle for another way to save money and expedite repayment. 

Try Either the Debt Avalanche or Snowball Method

The debt avalanche and snowball methods are two different ways to handle multiple credit cards over time, and neither requires taking out a loan or new credit card.

The avalanche method requires you to make large credit card payments on the account with the highest interest rate, while paying the minimum on all other accounts. After you pay off the high-interest credit card, you repeat the process with the next high-interest card.

It’s counterpart, the debt snowball method, works in a similar way, except you must prioritize low-balance credit cards. You would make larger payments on the credit card with the least debt and maintain the rest. When paid off, start paying more on the next low-balance card.

A major benefit of these methods is simply organization. They help you get on track with a plan of action. By prioritizing high-interest debt with debt avalanche, you’re paying off multiple debts more efficiently which should save money (eliminating high-interest debt reduce interest costs). With the snowball method, you can simplify repayment by cutting out low-balance cards from the equation. It’s generally accepted that avalanche saves more money than snowball, but that is still up for debate.

These methods are ideal because they require budgeting with your own cash (no loans involved), but this may also be a drawback because it’s very hard to pull off without the extra money for larger payments.

Balance Transfer Credit Card

If you opt for this method, you will take out a new credit card that comes with a lower interest rate, preferably a super-low or 0% rate during an introductory period. You then must transfer your credit card balance to this new card and begin repayment. It’s similar to debt consolidation, but the debt is transferred to another revolving account instead.

The point here is to get a lower interest rate on your credit card debt in order to save money. Ideally, you can get a zero-rate offer for up to a year or more which would save the most money. The goal is to pay your debt before that intro period is over.

Like with debt consolidation, you may be tempted to rack up more charges on a freed-up credit card. Remember that the debt doesn’t go away; you still need to pay it off. Also, balance transfer cards may be less suited for transferring multiple balances depending on your new credit limit.

Find the Method That Works Best for You

Each method offers its own set of benefits and drawbacks. One method could suit your budget perfectly, but another may not be the best fit. If you have the cash and organization skills, then maybe debt avalanche/snowball would work best. If your credit is stellar and you’re used to loans, a debt consolidation loan could be the solution.

Finding the method that works best for you is what matters most. Be honest with yourself and look at which style will best suit you – and then starting acting on it.

Andrew is a Content Associate for LendEDU – a website that helps consumers with their finances. He got his start in content and finance by writing all about credit cards. When he’s not working, you can find Andrew hiking or hanging with his cats Colby and Tobi.

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?

Finance: Taking It Slow

Yesterday, I was asked by a colleague for some financial advice. The conversation began with a request for a referral to our financial advisor, whom we actually no longer have. While the perks of having a CFP are many, our particular one had decided to pursue other professional endeavors earlier this year and Mike and I had decided to go without. For my colleague, I listed off a number of references that I have found most helpful to our financial journey, including Travis Hornsby (affiliate link) who saved us thousands of dollars in student loan debt, but my colleague wasn’t interested in student loan advice at this time. He was interested in honing in on his budget. In which case, I thought I would help.

His concern is one I often hear: “My fixed expenses are way too high. There is no way I can make ends meet with my income and my expense.” We then did a deep dive into some of his monthly expenses, and it appears that the most expensive recurring payments entail a car payment for a brand new Tesla, an apartment in a complex that offers all the amenities situated in a very popular city in Orange County, CA, and insurance payments. “Surely, none of those we can change.”

Somewhere in the distance, a buzzer goes off.

Maybe not right away. You can’t up and move apartments tomorrow, sure, but these are actually things we can change, if we wished. I suggested he sell their brand new Tesla, get rid of the monthly payment, and buy an old, used vehicle for a couple grand. I suggested he move away from large complexes where they charge up the wazoo for the gym and pool access, and instead opt for a co-housing situation, or at least a cheaper apartment. I also inquired about the possibility of geo-arbitrage. I suggested researching insurances further, to see if there are any options that will save them some money.

And then I saw it. The slight shake of the head, the glazing of the eyes as his focus started to turn somewhere internal. I knew I was losing him.


Talking about finances can be difficult. Hearing the steps you need to take in order to get from point A to point B can be quite daunting. It can make any person shy away, make them believe that frugality is for superheroes, that financial freedom is not in the cards.

I guess I should start with the following: It’s going to be slow. It requires a mindset shift, after all. A lifestyle needs to be upturned, and that is never an easy thing to do. To bridge the gap between the impossible and something more attainable, start with a conversation.

For example, right now, it may seem impossible to just get up in the middle of the night and move to a cheaper place. Plus, the decision to unroof an entire family isn’t up to you. Everyone gets a say, too. But speak up about the possibility. Look ahead to when the lease ends, what options lie ahead. Brainstorm, to get your brain on the same wavelength.

Then, start with one change. Maybe it will take a few months to find a used car to replace the current one. Focus on what you can do now. If you aren’t ready to trade your car back in, then call insurances. That let’s you tackle one thing. You probably won’t switch to a new one this week, but you’ll get a few quotes to pocket for next.

For some, even this may be a bit too much. Big things can be intimidating. Calling insurances requires a lot of research, and right now, there isn’t the time. If this is the case, then let’s drop the big things all together, for now. Refocus, and start small.


So we backtracked. He initiated a new tactic, and I followed suit, not pushing the bigger budget cuts. For now, that leap may have been too great.

He asked about grocery budgets. He shared a number around $800 for a family of four, which isn’t the worst. I’ve heard of more. I shared our goal of $300 for two adults, which also not the most frugal. Then he asked me about dining out. I shared that we have a target of $100 for the both of us per month. His eyes grew wide.

“Where do you eat, In N Out?!?!”

Yeah, sometimes.

He said $100 could not even cover a night of sushi.

And he would be right.

His family spends closer to $800-900 a month in dining out. There. A place where we can work. Further discussion reveals that they dine out 3-4 times a week, versus Mike and I’s once a week. Changing dining out habits, even by simply limiting them, is a much more doable thing than relocating an entire family to a cheaper state. Here, we can begin. And slowly we work our way up.


How about shopping?”, he asked.

I don’t shop.

“You need to talk to my wife.”

I think she would hate me.

Because here’s another thing. Going up to a significant other who enjoys shopping and telling them that they have to not shop the entire year can be perceived as quite near impossible, let alone unsustainable. If any success is to lie ahead in your future, we need a tactic that helps others slowly transition. Perhaps, we cut back on spending this month. Then, we cut back on the number of items next month. Afterwards, we may narrow it down to one. Lastly, we tackle the time. No shopping for “x” number of months. The turtle wins the race.


I think what people need to hear most is how slow the process actually is. There’s no way around it. It won’t be tomorrow that you suddenly quit every pull you feel towards spending. You can’t drop all the bad habits in one go. You’ll make mistakes and buy that dress. You’ll start looking at cars you wish you had. We both did. You’ll want to kick yourself for the slip ups. You’ll feel hopeless when you take a step backwards. You’ll be embarrassed when people hear. But don’t give up then, because that’s the point where your mindset shifts. Even if you can’t see it.

Frugal Challenge: Living On One Income

In this space, I try to address ways in which we can rethink a lifestyle in hopes of saving a couple of bucks. Sometimes, the advice borders insensitive, especially when it doesn’t apply to a particular person or group. Today’s post definitely pushes the bar, since it is glaringly obvious to me that not every household has the luxury of having more than one income. But speaking about finance itself makes us all very privileged. To have the ability to access a computer, to have the time to sit down and read, to have control of where our money goes, to have money worth talking about, these are all very stark privileges as compared to people whose conversations surround how to get food on the table, how to keep their kids safe. May I be the first to say that privilege seeps from my life since the moment I was born, and I am hyper aware of it. That being said, I think it’s important to point the privileged towards a direction, so that we may use money (specifically) to push the needle towards a better tomorrow, rather than spend our excesses flippantly over trivial things for today. Conclusively, it’s important to limit the spending of our earnings on only the things that bring joys that have permanence, and one such way to do that is to dedicate only one income to lifestyle spending in the cases where there are two (or more).

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When I think back to my grandparent’s time or farther, I see a period when the traditional family dynamic of a stay-at-home mom and a working dad existed. Raising 8 children in a third world country off of one income could not have been easy. But they made ends meet. Even Mike’s grandparents grew up on a farm, with his great-grandpa owning a diner that sold burgers for $0.10 each. His grandma talks of wearing the same few shirts a week, and keeping her old furniture because it still functions. My grandma takes paper towels at family gatherings, washes them, and hangs them to dry over the sink for re-use later. These little indications serve as reminders that they don’t do it to be frugal, but rather, because that’s how they’ve always done it. It’s a lifestyle born out of a necessity.

I’m not saying that this way of living no longer exists, because it still largely does. But it is becoming less and less common. Today, it is becoming more frequent that households are dual-income, so before we get too carried away rejoicing at the larger sums of money we are taking home, may I suggest we act as if none of it has ever changed? By assuming that we still need to live as if we make only one income, we too can live this lifestyle. I’m not talking about washing your paper towels and hanging them to dry (since nixing paper towels all-together is really the lifestyle I’m trying to advocate). I’m only saying, be less wasteful, of money and other things. But especially, of money.


My biggest gripe with people telling me that I could not tackle my $575,000 of student debt was their assumption that with a bigger paycheck comes a richer lifestyle. “Let the loans grow, and just wait 25 years to pay it all off! I mean, surely you’ll need to worry about buying a grand house, a new car, a dental practice. Forget that the student loans will be over a million dollars of debt by the time your 50 years old, you can worry about all that later.” I see this all the time. People who have double the income are more comfortable with going out to dinner every night, buying new cars, purchasing homes, shopping every few weeks, racking up consumer debt. The people who have to worry about money, somehow, are more capable of getting by without having any debt. Better equipped, I would say.

Mr. Debtist and I both grew up in families with a single income. We had everything we needed to live happy lives and become decent people, even though our families were not exactly the richest family on the block. With this realization, we decided, well, how bad would it be if we lived off of one income? Dentistry comes with great pay, but we will need 100% of that pay for the next 10 years in order to pay down the loans. What if I worked for free for ten years, served my time, and we act as if it was a single income household like it was during our up-bringing? It would hardly be restrained living. We don’t have any kids to worry about if the cat doesn’t count, and Mr. Debtist makes enough money to support two people comfortably despite living in Orange County, California. Plus, we are very simple people.

It was this realization that allowed us to tackle the debt. As you may already know, the naysayers had me on the 25 year loan forgiveness plan for the first 8 months after graduation. It was in this time span that we tested out our theory: Living off of one income will allow us to pay back a debt that no one else believed we could. It only took a few months to prove to ourselves that this will work. The intentionality with money is really what propelled us down this path, and we started to accomplish something people didn’t believe we could. Switching loan forgiveness plans can save you thousands of dollars, but by switching from a 25 year loan repayment to tackling student debt aggressively, it will save us more than $150,000 dollars, and 15 years of our life. Which is why I am willing to risk the flack that I might receive for the insensitivity of this post.

Because nobody told us we could.
There wasn’t ever the suggestion to work for free.
People didn’t think to tell us to act as if we were a single-income household.
It almost felt like we didn’t have a choice.

And that’s a problem.

It’s important to speak about these things, because it’s the only way to empower people. For some, it may be obvious. For others, it may be offensive. But for others, still, it may be the only thing that will free them.

If you’d like to try and see if switching to a single-income household is a good life hack for you, try to start with 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 Create a Budgeting Tool, and get started today!

Freedom: Be A Baker, If Your Heart Tells You

It’s been a while since I’ve talked about freedom, but in essence, this is really what this blog comes back to. Freedom from clutter, freedom from societal norms and expectations, freedom from social obligations, freedom from the monkey mind, freedom from debt, and freedom from financial chains all-together. Even though I talk largely about finance, as my site moniker implies, the wealth will never amount to anything without the freedom. I’ve seen time and again people hung up in the numbers game, that they miss out on the life. They become money making machines (and great ones, too) but at the expense of the things that make one most free. My advice? Sure, you can play the numbers game. Use your knowledge about finances to free you more. But the end goal isn’t to become a millionaire. At least for me, it’s not. It’s to become a baker, if my heart tells me to.

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By now, you all know about my staggering debt, which I took out to pursue a profession that I have wanted since I was 8 years old. You also likely know about my resolve to get rid of the debt. I mean, even Travis Hornsby of Student Loan Planner couldn’t convince me to get off this crazy, wild train of paying down debt aggressively! And surely, if I was concerned solely about the numbers, I could accelerate this repayment by working as a dentist as many days as I can. Or even more so, by buying a practice and putting in some serious hustle, dedicating most ALL of my days to building a business that would yield a large enough profit to accelerate my timeline even more. Yet, I chose to stay part-time.

Am I a crazy nutcase? A dummy who doesn’t realize how much more efficient I can be?

Choosing to stay part-time gave me the space to be able to fill my time on this Earth with other things that bring meaning into my life. Choosing to tackle my debt aggressively relieves some of the dependency I have on my job. Little by little, both options have led me down a path to pursue things such as writing on this blog, dog sitting on Rover, and now, baking bread in earnest.

It is with great pride and an overwhelmingly amount of joy and excitement that I would like to share a recently accepted position as a baker for the company Rye Goods, one that pays little in green paper stacks compared to dentistry, but pays enormously in terms of joy. And while people would gawk at my audacity to add three midnight shifts to my four dentistry days while trying to juggle this blog, I cannot explain to you how much energy all of this brings me. And wasn’t this the whole point?!

All the hours I spent de-cluttering, all the heartaches I delivered de-friending, all the sleepless nights filled with budget cutting, all the effort spent trying to erase the mental clutter and slow the heartbeat’s pace … It wasn’t to live with all that empty space. It wasn’t to deprive. It was to be free. All of this, to allow me to be a baker, if my heart tells me to.

And if you want to follow this crazy train, you are more than welcome.
First stop: financial independence. Then onwards, to the rest of your life.
May I suggest starting here.

Freedom: From the Grind

Previously, I had written about why I chose to stay part-time on the blog, wherein I delved into the benefits of working less than forty hours a week. Sometime in between the writing of that post and today, I got carried away by a desire to reach a goal of ours, at a FASTER pace. It was an all-consuming drive, not too far from the push resulting from a desire to own more. Needless to say, I was swallowed whole by this need, and for a while, it did control a part of my life. Yesterday was the day I said ‘Goodbye’ to that lifestyle on the fast track to disaster. I regained my freedom from the grind! I share my story today, because I believe that we can learn from each other’s mistakes. While Instagram, Facebook, and other social media outlets are there to highlight the best moments of our lives in tiny square boxes and endless scrolling pages, there is a sort of disservice that we do to each other by ignoring the realities of every day living. There, you will see the freedom from the grind, but here, you will read the story about how I got there, lost my footing, and then returned, once again.

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The Desire for More

Embedded in our culture is this desire for more. We want more things in order to satisfy our “needs”. We want more friends, in order to feel loved and complete. We want more achievements in order to be seen as “successful”. Having more, culturally, is a positive thing.

Two months ago, I became obsessed with an idea. It’s an idea that has been brooding inside my mind since I was a young child. Socially ingrained, it was a desire for both a physical object and a psychological concept: which was a desire for a home. Additionally, I was very adamant on achieving another dream, which was, to open a coffee shop. Both required adding more. More work, more responsibility, & more loans (ick!). Additionally, it required more means to fund these dreams. So what did I do?

I voluntarily decided to add an extra day at work. Actually, I insisted on an extra day of work, and my boss warned me that I would get burned out, but he was kind enough to let me figure it out on my own. It didn’t take long for the stresses of a five-day and six-day alternating work weeks took a toll on my life.

The funny thing about adding more, is that in reality, you end up with LESS. I had less time for myself, and if you don’t help yourself first, you will have difficulty helping others. I was able to spend less time with people I cared about, which then put stresses on some relationships. I had less to offer to my patients, since my tired brain and body couldn’t perform to the best of their abilities. I found myself being pretty conservative about treatment, which is fine and good, but failing to give them the alternative of doing more for themselves also has its drawbacks. I had less patience, and poor Mikey got the brunt of all of that. I had less inspiration, since I was so brain dead after work. I had less motivation, since my body just craved crawling into bed every night. Most importantly, I felt less like myself. There was a rigidness to my body, a robotic beat to my motives, and a hollowness to my being.

What you see on Instagram are pictures of our adventures, accomplishments, and hobbies. What you don’t see (what we NEVER see) are the difficult moments. The nights of crying on the floor. The burning desire and the anger for anything that falls short. The zombie-like walk through the house. The frustration of having to do chores. The  mindless decisions we have made. The resentment one starts to feel for their work. These are things we never say. And why would we? People will start to think less of us.

After two weeks, I knew it was bad news bears. But I also knew that I had asked for this. So Mike suggested I try it for four weeks more. At three and a half weeks, I talked to my boss. Earlier that week, I had finished a day of work, only to realize at the end of the day that I had not diagnosed anything. “Observe, observe, observe.” It was a sign that I may have subconsciously been telling myself that I can’t add anything more to my plate. The next day at work, I had difficulty doing simple things. Extractions that should have taken ten minutes took thirty. Kids that I usually am able to do well with were crying. Inside, so was I. By Wednesday, I realized that it was really a mess. It dawned on me that I had not paid rent, which was due the day before. I have never missed rent in the entirety of my adult life. On Thursday, I asked for a day less. My boss, all knowingly, said he thought that was better for my health.

Having more is sold to us as something AMAZING! But is it really so?

The Benefits of Less

On the flip side, having less is seen as not so desirable. When I wrote about Intentional Living: Create Empty Space, I touched on our discomfort with emptiness, and our desire to constantly fill that emptiness. We are raised to “not settle for less”. But having less is arguably much more important than having more.

Having less gives you the freedom to pursue things that you want, or need. Having less gives you the space to create the lifestyle you want. Freedom from the grind restored a healthy balance to my life. I gained back so much of myself that I lost to the rigorous hours. I had a weight, that had just as much a physical impact as a mental and emotional one, lifted from my bony shoulders. I restored a healthy relationship with my husband, who I had been turning to every single day to pick up the slack that I had brought into the relationship due to my extra day of work. Most importantly, I feel as if I can breathe again. It’s important to take a step back and ask the question, “Am I working to live, or living to work?”

I asked for the extra day to work in order to live the life I want. Namely, in order to get a home and have a coffee shop. Ironically, the result was me giving up the life I want (namely, a slow, mindful and intentional life style) in order to work.

Restoring Balance

By taking away the extra day of work, I pretty much am re-instating my previous lifestyle. I am also setting aside that dream of opening a coffee shop. I was obsessed with opening a coffee shop by the following year, but I now realize that slow and steady wins the race. The dream of a coffee shop will have to wait for a few years. However, there are also exciting news ahead! We are currently working on securing a live-work loft in our community!! Our ideal place has always been a loft. Even before we got married, while we were still dreaming up our future life on an Ikea bed with bed bugs in a house infested with termites, we both said that a loft was our ideal space. We have been living in our current one for over two years now, and we love this community and this space. We found a neighboring one that is being offered for sale. So we are putting an offer, like, today! It has a business space on the first floor, which you know, is fantastic for any future business endeavors we choose to do. Meanwhile, our beautiful roomie has decided to stay (we want to keep her as long as we possibly can!), and that’ll still continue to be a win-win co-housing relationship. We are so excited for the future ahead. If everything goes through, we will have a loft, a home, a business front, and a beautiful roomie. All of this on top of paying down the massive student debt in ten years! So please, keep your fingers, toes, legs, arms, eyes crossed for us!

Lastly, we couldn’t have achieved any of this without: