2018 Goals: Saying Goodbye to the Mortgage


2018 Goals: Saying Goodbye to the Mortgage

If we are able to achieve our 2018 goals it will be a very exciting year for the Financial Pilgrimage household. Our goals range from personal to professional, with an emphasis on getting the remaining balance on our mortgage paid down ($31,000 remaining as of December 31, 2017).

I’ll save the lecture on the importance of goal setting for another day. If you’re interested in my thoughts, you can read the recap of our 2017 goals. Now let’s jump right into our list of goals.

Goal 1: Pay off the Mortgage on our Personal Residence

This is the big one. We’ve been paying down debt since 2011 and it’s surreal to think that we should be able to pay off our mortgage in the next few months. All of our extra money is going towards the mortgage at this point. By minimizing lifestyle inflation and paying down all other debt, we have been able to make a huge dent in our mortgage that started out at $123,000.

Goal 2: Fix up Our Personal Residence

We moved into our personal residence back in 2008. Since moving in we have replaced the roof, HVAC, gutted and refinished two bathrooms, updated three bedrooms, replaced the hot water heater, partially updated the basement, and more. What we haven’t done is update the kitchen. I’m not going to lie, our kitchen is ugly and still has cabinets and counter-tops from the 70s. Our first large purchase after paying off the mortgage will including making much needed improvements to our kitchen.

Goal 3: Increase Charitable Contributions to 10 Percent

Each of the past three years we have slowly increased our charitable contributions. Our goal for this year is to give 10 percent of take home pay away once the mortgage is paid. I am excited about being able to give more and hope that our contributions continue to increase each year going forward.

Goal 4: Max 401(k) Contributions

This is another “after we pay off the mortgage” goal. I currently contribute to my 401(k) up to my company match (6 percent). Once the mortgage payment is gone the goal will be to max 401(k) contributions.

Goal 5: Read 20 Books

Through mid-February I am on book number four. Something I need to get better at this year is moving on from books that I’m not really in to. Some months I’ll read four or five books, and then others I don’t read any. I will occasionally get started on a book and lose interest and will be too stubborn to move onto something else. I mostly read non-fiction books on personal finance, business, and real estate. However, I will drop everything if George RR Martin finally gets around to releasing Winds of Winter!

Goal 6: Write 30 Blog Posts

Blogging about personal finance has been really enjoyable. My commitment from the onset was to blog for one year, then re-evaluate if I still would like to continue. Life is too busy to write several blog posts per week, and I have found that producing one post every 10 days is about the right pace for me. I would rather publish posts that I believe are quality instead of pushing out sub-optimal content.

Goal 7: Achieve Positive Performance Review at Work

This one will be challenging. I started a new job this year that came with a promotion. The new role is challenging, which is a good thing. However, I wonder if I’ll be at work enough to be able to get really good at it. I work for a rare organization that provides six weeks of parental leave, so I will be out of office for a good portion of the year. Not that this should factor into my review, though if I’m not around to really learn the new job it may not be easy to get strong marks at year end.

Goal 8: Seek Volunteer Opportunities in Personal Finance Space

The reason for starting this blog was to share my story and influence others to think differently about money. I would like to have a similar impact in my community. My wife and I are currently taking Dave Ramsey’s Financial Peace University. In the future I hope to either lead a class myself or get involved in related opportunities such as financial counseling.

Goal 9: Win Championship for Men’s Baseball Team

For the past 15 years I have played on an amateur men’s baseball team. The team primarily consists of current and ex-college baseball players. I started managing the team last year and still play occasionally even though I’m the old guy on the team.  I find that sports are a great counterbalance to having an office job. Having a competitive outlet is important. Anyone who has ever run a sports team knows the amount of time and effort that goes into it. If I’m going to put the time into it, I want to win!

Goal 10: Purchase Rental Property or Live-in Flip

This is by far the biggest stretch goal on the list. The reality is after paying off the mortgage, maxing out the 401(k), increasing charitable donations, and fixing up the house, there probably won’t be enough money to go around for this goal. However, I like setting lofty goals and wanted to add it to the list. This will probably be at the top of the list of goals again in 2019.

Honorable Mention: Learn to Play the Guitar

A couple years ago I was at my parent’s house and stumbled upon an electric guitar in their basement that belonged to my little brother. I grabbed the guitar and ended up picking up a copy of Rocksmith for PlayStation 4. Rocksmith is like Guitar Hero, except you play with a real guitar. Apparently many people have learned to play guitar this way. While I would like to learn to play the guitar, I’m just not sure the time will be there to put in the hours of practice to get good. Maybe this will make the list once I retire from managing the baseball team!


Many of these goals hinge on getting our mortgage paid off this year. If we are able to get the mortgage paid off by the summer, I’m really hoping we can jump right into getting our house fixed up. Then, who knows, maybe we’ll get lucky and find a real estate deal either as a live-in flip or rental property. On top of this all, 2018 should be life changing as we expect to welcome baby number two into our family mid-March. Cheers to a great 2018!

Who Are You to Give Personal Finance Advice?


Who Are You to Give Personal Finance Advice?

After three months of blogging, I have been asking myself the following question. Who are you to give personal finance adviceMy negative inner voice likes to whisper these sweet nothings into my ear. The more I think about it, my inner voice is asking a good question. Besides living below my means and saving some money in retirement funds, I haven’t done anything special.

On the flip side, my inner voice occasionally asks rational questions such as the following. Who is the primary audience for this personal finance blog?

Well, I’m glad my inner voice asked this one. For years my inner voice has been encouraging me to find an outlet to discuss personal finance topics. Let’s face it, talking about money is taboo in our culture right along side politics and religion. Opportunities to discuss money in the real world are limited, so why not take it to the digital world? When you’ve found the secret to financial prosperity that so many others are blind to, how can I not want to share it? Live below your means, pay off debt, and invest. Simple, right?

Losing Focus

Just because it’s simple doesn’t mean it’s easy. As recently as 2015 we spent more than $30,000 in vehicles in one year. We even took out loans to finance the vehicles. After the feeling of guilt washed over us, we then started paying the cars off aggressively.

One year later we nearly used all of the equity in our personal residence to finance a rental property.

See related blog post: Backing Out of a $70,000 Profit House Flip 

That property ended up making someone a lot of money. However, if one or two things would have went wrong it could have brought down the whole house of cards for my family.

I Do Have a Story to Tell

People need to hear more often that paying off debt is REALLY hard. At least for me it is. Too often we see articles where some millennial paid off $80,000 in debt in two years. For most people doing the same is unrealistic so they don’t even try. These headlines make it seem so easy, when it’s not.

So here is what I have to say to my negative inner voice when it asks if I should be giving personal finance advice. I do have a story to tell. That’s why I’ve chosen to blog about personal finance and financial freedom. People need to hear real stories of the struggles related to paying off debt, saving, and investing. We’ve been paying down debt for almost seven years now. The path has not been straight and many unexpected expenses have come up along the way.

Our Crossroads

We were at a crossroads back in 2011. Already nearly $200,000 in debt we had just agreed to go in on a lake house (condo) purchase with my family. My mom had always dreamed of owning a condo on a lake. We still have the condo today and I don’t necessarily regret going in on the purchase. However, shortly thereafter the pressure of debt continued to mount.

Our personal residence then started to have issues. We had to go to the bank to take out a home equity loan since both of our bathrooms were leaking.

The speed on the financial treadmill continued to go up. If it was dialed up much higher we’d be in an all out sprint. Who knows if we’d be able to turn back.

We could have continued to follow the path of typical above average income American families. This would include buying nicer cars and a bigger house as our salaries increased.

Thankfully, when we hit the crossroad we had an awakening and started taking steps in the opposite direction. Since 2011 we have paid off all of our consumer and student loan debt, built an emergency fund, continued saving for retirement, and are now close to paying off our mortgage. 

Is it Happening Again?

When I look around it feels like 2007/2008 all over again. The economy is hot and savings rates are back to all-time lows. People are starting to take out the big mortgages and are becoming more careless with consumer debt.

People need to know there is another way. Through discipline and delayed gratification you can find great freedom. I want to help people think differently about money through my story. Families who make above average incomes have no reason to live a life of debt. Some debt is fine, but too much can be catastrophic.

The best part of our story is hopefully yet to come. I’m excited to share it and hope that many of you continue to join me along the way.


Back on topic. After blogging for three months I’ve found myself asking, who is my audience for this blog? Even though I may not be fully qualified to give personal finance advice, I feel this deep desire to get my story out there. So to answer this question, I’m writing for many different people or groups, and even myself.

Who is My Audience for this Blog?

Myself and My Family

At this point I’m wouldn’t suggest taking personal finance advice from me. I am a believer that you should take advice from people who have achieved the goals you want to achieve. How can I tell people how to achieve financial freedom when I’m not there yet? I’m not going to take real estate advice from someone who has never bought a property, no matter how smart they are. However, what I can do is share my story on the journey to get there.

The good news is we have done a few things right so far. By paying down all non-mortgage debt and minimizing lifestyle inflation we’ve been able to make quadruple mortgage payments every month for the past year and a half.

You see, when we started this journey back in 2011, we were hardly able to save any money. My wife had gone back to school for her teaching certificate and wasn’t making hardly any income. Additionally, we were financing her education through more student loans. Nevertheless, we made sacrifices and still found a way to save a few hundred dollars a month.

When my wife was hired on as a public school teacher, instead of stepping up our lifestyle we instead put most of her modest teaching salary towards pay down student loans. The student loans totaled $48,000 when she graduated.

We’ve been doing this debt pay down thing for a long time now. You have to understand, I AM TIRED OF PAYING OFF DEBT. 

This is why we have had moments of weakness such as going back into debt to buy cars. Even as recently as last year we had a brief period where we were looking at new, expensive homes.

So who am I writing this blog for? Right now mostly for me and my family. It helps us stay accountable. If we screw up again I will put it out there for all to see or stop writing. Our story is still in the early chapters, and I know the best is yet to come!

Upper Middle Class 

I started working at my current organization back in 2007 fresh out of graduate school. Bright-eyed and bushy tailed, I was so grateful for being able to work for a great organization. It was (and still is) challenging, rewarding, and interesting. A lot of my colleagues are equally as grateful and passionate about their work.

I was however surprised when I learned that some individuals didn’t share the same excitement and passion. I then started looking around at friends and family outside of work. Mind you, these were people who made good money and appeared to have great jobs. Why were so many of them miserable?

Then you start paying closer attention to the stories of couples divorcing over money issues. People who maybe lost their homes during the financial crisis since they weren’t prepared for the storm.

I came across several individuals who lost a job late career. Without sufficient savings or retirement funds, they couldn’t find a new job paying anywhere close to what they made before. What a hopeless feeling after working so hard for so many years with little to show for it. These were people in the upper middle class who made good money throughout most of their career.

So much brokenness, stress, and despair. Much of it because of DEBT.

Becoming debt free and hopefully financially independent isn’t about quitting a job for me. I love my job. Becoming financially independent is about being able to weather the storm, because it’s coming at some point. I have experienced a tremendous amount of freedom when getting hit with a $5,000 bill for a new roof and not batting an eye because we had savings to cover the expense. I would hope to feel the same level of freedom if a time ever came where I lost my job. Yes, I’d miss the work. Though I hopefully will not lose the roof over my head or even worse my marriage.

So who am I writing for? Today I’m writing for myself and my family. Tomorrow I hope to write for the upper middle class to help show them the path out of debt to financial freedom.


The Personal Finance Community

The personal finance and blogging communities that I follow are nothing short of amazing. Sites such as BiggerPockets, DebtFreeFanatics, and Rockstar Finance are all filled with incredible, supportive individuals.

What I’m finding after blogging for a few months is it can be tempting to focus my writing too much on the individuals in these communities. The Twitter likes and forum kudos can be addicting. No matter how supportive these communities are, I have to remind myself these communities are not my primary audience. The people in these communities are already financially savvy for the most part. In fact, most of these individuals know way more than I do about personal finance topics.

Even if the personal finance community isn’t my primary audience, I hope to continue propping up other personal finance blogs, and they do the same for me. By propping each other up we can get our voice out there together. Collectively our community can increase awareness of the dangers of debt and benefits of financial freedom.


Bloggers generally make money by selling ads, making referrals, or selling a product. It takes a lot of time and effort to produce a blog, and bloggers should be compensated for their hard work, time, and effort. While I have not started trying to monetize my blog, and some point I likely will.

At this point what’s most important to me is helping others through my story. Even if I never make a dime from this blog, if I can help a few people change the way they think about money this will be a success.

I hope to always stay true to my values without making compromises to make money. I’ll give one example in what may be an unpopular opinion. I hope to never use my blog to intentionally promote credit cards. Promoting credit cards can be a great way to make extra money on a blog. Even though credit cards are a tool and not inherently bad, they are the number one tool for accumulating bad debt. And for me, knowing something I’ve promoted could influence someone to go into debt is completely against the purpose of this blog.

I’m sure there are plenty of ways to monetize this blog without compromising my values. That time may come at some point, though for now I’m just happy to get my story out there for others to see.

Low to Moderate Income Population

I’m not going to spend too much time on this one. The low to moderate income population is desperately in need of financial literacy. Schools are getting better at promoting financial literacy, though there is still a long way to go. I would love nothing more than to inspire low to moderate income families get out of debt and pursue financial freedom. However, the reality is these things are really hard to do when making a below average income.

I have a personal goal outside of this blog to volunteer to help spread financial literacy, especially in low to moderate income communities. However, the purpose of this blog will be more focused on above average income earners who struggle with debt.

Who Am I to Give Personal Finance Advice?

At this point I’m mostly giving personal finance advice to myself as a way to stay focused and motivated. Writing this blog has been a tremendous help in our debt payoff journey. Once I’m out of debt and begin investing aggressively, hopefully my story can be inspirational to others. My mission is to get people to think differently about money through my story. People need to realize that money can buy peace of mind and freedom, not just stuff.

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If I Received a $1 Million Dollar Windfall I would…


A $1 Million Dollar Windfall

How many of us have thought to ourselves, “if I only had a $1 million dollar windfall all of my financial problems would go away”?

I know I have.

A million dollars is a tricky amount of money to think about. While it can be life changing money, it’s probably not life changing enough to live off the rest of our lives without some work. The reality is that if most people received $1 million dollars, half of the money would be gone to taxes, a few hundred thousand dollars to pay off debt, and the rest spent on expensive cars, vacations, etc.

When I was five years old $5 seemed like a million dollars. As little as $1,000 seemed like a million dollars when I was a teenager. Now that I’m older, a million dollars doesn’t quite seem like a million dollars (if that makes sense).

For the sake of simplicity, we’re going to assume this $1 million dollar windfall is tax-free. Now the question.  What would I do with the money? The easy and boring answer is put the money in a brokerage account, invest it in something safe, and apply the four percent rule. The four percent rule is a rule of thumb used to determine the amount of funds to withdraw from a retirement account each year, while limiting the chances of running out of money (thanks, investopedia). This would provide you with $40,000 of income per year without lifting a finger.

For the purpose of this article, let’s think through the options a little more. Instead of dropping the money in a low risk index fund, let’s invest in something more interesting such as buy and hold real estate. 

Our $1 Million Dollar Windfall

$1,000,000 remaining… 

First, ten percent of the windfall would go to charitable causes, so there goes $100,000 right off the top. It’s easy to give away six figures of virtual money, and I hope we’d have the discipline to do the same if it were real. The majority of this money would go to causes and organizations where we already contribute. However, we’d use a good chunk of it to give freely when the occasion calls for it. We could pay for the meal of the table next to us at dinner, buy groceries for mother in front of us at the store, or make a donation to the gofundme page of someone who is dying of cancer. I personally get a lot of satisfaction from helping others and we would have fun with giving away this money.

$900,000 remaining… 

Next, $200,000 would go into trust accounts my now three year old and new baby on the way. Giving each of them $100,000 will be good starter money to buy a home, start a business, or pay for college. However, not so much money that it will make them feel entitled or lazy.

$700,000 remaining… 

I would give my parents $100,000 to use on whatever they want. My parents are pretty awesome people, though not the best with money. They started investing in retirement later in life. They are in better shape than most approaching retirement age through a combination of retirement funds and money left by my grandparents. An extra $100,000 would help them pay off some remaining debt, add money to their retirement portfolio, and maybe go on a nice vacation.

$600,000 remaining…

An additional $100,000 would go into emergency savings. Since we are planning to be debt free soon in real life (woohoo!) we won’t have to pay down any significant debts. Having an emergency cushion of $100,000 would cover two-to-three years of living expenses in a worst case scenario situation.

$500,000 remaining… 

Okay, so here is the fun part. We’ll take the remaining $500,000 to start a buy and hold real estate business.

We will set aside $100,000 to pay for initial set up of the business and emergency reserves. That will leave $400,000 to purchase buy and hold rental property.

For simplicity, we’ll be purchasing these properties all cash in my home city of St. Louis, MO. After extensive research, networking, and negotiating we were able to obtain the following properties:

  • A 4-plex with a purchase price of $120,000 in South St. Louis City (C+ class neighborhood). The property costs an additional $40,000 to upgrade and get rent ready. Gross rents for the 4-plex (all one bedroom) are $500 per door, or $2,000 total.
  • A turn-key duplex with a purchase price of $140,000 in an up-and-coming neighborhood in South St. Louis County (B class neighborhood). The property is rent ready upon purchase and each side (two bedrooms) rents for $750 per door, or $1,500 total.
  • A single family three bedroom property in North St. Louis County (C- class neighborhood) for $55,000. The property costs an additional $15,000 to upgrade and get rent ready. Gross rent for the single family property is $850 per month.

In total we have spent $370,000 of our $400,000. We’ll put the rest back into our emergency fund which can be used for a future purchase.

Our gross rent for all properties will be an estimated $4,350 per month. We will assume that 50 percent of the gross rent will be put aside for expenses such as maintenance, vacancies, capital expenditures, property taxes, and property management. This will leave us with $2,175 in cash flow per month to start out.

Like most investments, real estate is playing the slow game. The first few properties may not lead to substantial cash flow. Though over time there will be compounded gains by putting the cash flow back into the business to invest in more properties. Leveraging rental properties by taking out a mortgage can further accelerate these gains in you are comfortable with the additional risk involved.

Real Estate Investment Analysis

Let’s take a quick look at a breakdown of the 4-plex. For the sake of simplicity let’s assume that expenses, income, and property values increase around three percent, which is close to the rate of inflation. Using the BiggerPockets Rental Property Calculator we can see the estimated increases in property value and cash flow during several periods within the next 30 years.

Figure 1: Analysis of 4-plex Rental Property over 30 Years

Real-Estate-Analysis-Million-Dollar-Windfall (10)

This one property alone has the potential to profit nearly one million dollars over 30 years. The purchasing power of one million dollars will be far less in 30 years than it is today. However, this is just one property. Imagine if the cash flow from our three properties purchased with our imaginary $1 million dollar windfall was used to purchase additional properties every year? It may take two or three years to save up enough money to purchase property number 4. Though by year 10 we may have enough cash flow to purchase three properties a year or more. Imagine the cash flow and equity that would develop over time!

Many of you may have heard of the debt snowball (credit: Dave Ramsey). Well, the snowball approach works for investments as well. Starting small with a few rental properties can lead to big gains down the road.

Closing Thoughts: $1 Million Dollar Windfall

Spending pretend money is easy. We just purchased three pretend cash flowing real estate properties in this blog post without doing any work. We also gave away a few hundred thousand dollars to my parents, children, and causes greater than us. The reality is these things are hard work. It’s hard to find great or even good real estate deals in a hot market. It can be challenging to give money away when the temptation of buying a bigger house or Tesla is present. If I ever were fortunate enough to come across a $1 million dollar windfall, I hope to have the discipline to follow through with this approach. After all, personal financial is mostly about discipline anyway. 

To summarize, about half of the windfall would go to giving and saving. The other half to investing in buy-and-hold cash flow producing real estate. The investing will hopefully produce many more millions of dollars over and over again. That in turn will allow us to give even more to my parents, children, and causes greater than us.

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What if You Started Investing in Retirement as a Baby? The Power of Compound Interest

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The Power of Compound Interest

Typical advice in the personal finance space is to start investing as early as possible. Let the power of compound interest, also known as the 8th wonder of the world, go to work. This advice usually applies to recent college graduates to encourage them to get money into retirement accounts as soon as possible. However, what if this was taken to an extreme? Let’s see what happens when little Johnny starts investing as a baby.

The Story of Bill, Susan, and Chris

For simplicity, let’s say this window opens at the age of 25 and closes at the retirement age of 65. This would allow 40 years for your money to grow. Using the visual below as an example, you can see the power of compound interest on display. The main takeaway from the chart is Susan ends up with more money than Bill even though she only invests for a period of 10 years while he invests for 30 years. They invest the same amount of money every year and the only difference is Susan starts investing at the age of 25 (and then stops after 10 years) and Bill starts at the age of 35 and invests until retirement.

Compound Interest (Blog Post 9)

Chart assumes 7% growth rate. Souce: business insider via jpmorgan.com

Think about that for a minute. This really is a huge difference. Bill has to invest for TWENTY more years than Susan with his late start, and he will still end up with less money at retirement.

I have seen dozens of articles similar to this one associated with the above graph. However, I’ve seen very few that recommend starting to save for retirement even earlier. After additional research, the Google machine returned a few articles discussing starting investing as a baby, though similar content is rare.

Here’s Johnny

Back to the graph above, let’s add someone else into the mix along with Susan, Bill, and Chris. Let’s say Johnny was born in the year 2018.

Upon Johnny’s birth, someone in his family made ONE $5,000 lump sum payment into a retirement account. For consistency. assume a growth rate of 7% and a retirement age of 65.

By making ONE payment of $5,000 when Johnny is just a tiny baby, he would have nearly $500,000 at the age of 65. Little Johnny’s money would be worth a multiple of 100 times just by placing it in an account and letting it sit there making an annual return of 7 percent.

Compound Interest 2 (Blog Post 9)

To reiterate, Bill would have to make 30 payments of $5,000 starting at age 35 to have roughly the same amount as Johnny after making only ONE payment.

I get it that this is an oversimplified example since it doesn’t factor in inflation. For example, the purchasing power of $5,000 in the year 1982 (35 years earlier) would have been $1,946. With that being said, this still demonstrates the amazing power of compound interest. Even an investment of $1,946 would be worth nearly $200,000 at the age of 65.

I <3 Compound Interest

Why isn’t this topic discussed more broadly? Well, I’m not sure though I can speculate.

  • Babies don’t read Business Insider articles (or personal finance articles in general). Therefore, the audience for personal finance articles is usually adults anywhere from recent college graduates to retirees.
  • It’s weird to think about your newborn baby getting to retirement age. It just is.
  • Similarly, 65 years is a really long time away and most parents only have financial responsibility for their children through college.
  • Most parent won’t live to see their children turn 65. Nobody wants to think about that.

To summarize, if you have a few thousand dollars laying around and a child on the way consider throwing that money into a brokerage account and let it grow until your little bundle of joy reaches retirement age. I know that most people don’t have that kind of money available, and that really wasn’t the point of this blog post. The purpose was to show how important it is to start investing in retirement early, weather that is at age 1 or age 25. If a person takes only one thing away from the personal finance world, it should be an understanding of the power of compound interest.

Thanks for reading!

The Importance of Setting Goals: 2017 Year in Review

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2017 Year in Review

Paying off debt is hard. Not because it requires any type of special skill, but because paying off debt requires a tremendous amount of discipline. Setting realistic goals is important because it allows you to keep focus even when things get tough. Paying off debt is kind of like watching grass grow. If someone were ask you to sit outside and watch the grass grow it would be incredibly easy and boring. However, it would require a lot of discipline to stay focused. Okay, so maybe that wasn’t the best example but you get what I’m saying. Now, if you could trade grass clippings for financial freedom, it might be worth the effort.

From a debt pay down standpoint, 2017 has been our most successful year yet. It has also been the least exciting when it comes to spending money. In the past we’ve almost always spent money on a big ticket item or two that prevented us from aggressively paying down debt. Sometimes the purchases were necessary such as when our HVAC system went out, other times not so much such as buying a wave runner (yes, really), taking a nice vacation, or purchasing a newer used car.

I mentioned in my blog post last week that my wife and I sat down last year and actually wrote down our goals. I believe that goal setting is one of the most important things you can do to achieve success. While we kind of had goals in the past, the process of sitting down and actually writing out our goals made a big difference.

The goals have been in my wallet all year, and have been pulled out several times to review throughout the year. Many successful people will even go a step further and place their goals in a place visible every day. I may do that in 2018. The focus on this blog post will be reviewing our 2017 goals to see how we did.

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The goal sheet took a beating from being in my wallet all year

Goal 1: Close gap of $42,851 by year-end 2017

This goal needs a little more explanation. For the past several years our debt pay down goal was to have enough money in savings to pay off the mortgage. It wasn’t until mid-2016 when we decided to commit to paying off the mortgage as opposed to just having the money in savings to cover it. Before then our goals weren’t as focused which often resulted in spending large chunks of money from savings to make purchases that didn’t contribute to our debt pay down goal.

At the beginning of 2017, the balance on our mortgage was $93,041. We also had about $50,000 in savings that had taken years to accumulate. Therefore, the spread between these two numbers was $42,851.

So how did we do this year?

Well, we came really close to hitting this goal but fell a little short. We knew going into the year this would be a really aggressive goal to achieve. The end result is an overall reduction of $36,861 (86 percent of the goal). Even though we fell a bit short, I’m still proud of our progress this year.

In March 2017 we took a huge step in our commitment to pay off the mortgage and moved more than $30,000 from savings to the mortgage.  Therefore, with the money from savings combined with debt pay down, our mortgage was reduced by $62,041! The remaining balance on our mortgage heading into 2018 is $31,000. You can probably guess what one of our 2018 goals will be.

Goal 2: Achieve Positive 2017 Performance Review at Work

This goal is related to my career which I don’t write about too much here on the blog. My organization has a typical performance review process where we receive a rating at year end on our overall performance. Doing well in my career is important to me.

I’m happy to report this goal was met this year. I have been off work all this week and have had the chance to reflect on the year. While it was stressful at times, the work is rewarding and I feel like I grew a lot professionally.

I am fortunate to have a job that is challenging, rewarding, pays well, and offers decent work/life balance. The goal of achieving financial independence is not to quit my job. I would love to work at my organization for a long time even if I’m able to achieve financial independence. However, I also know that factors outside of my control could impact my future job security. I never want to be the person whose life is ruined by a layoff. I want to be the person who leaves knowing I’m not going to lose the roof over my head because someone else made a decision that my position wasn’t needed anymore.

Goal 3: Find Opportunity to Volunteer for Personal Finance Consulting 

This goal was surprisingly harder to achieve than expected. With an educational background in finance and more than 10 years in the financial services industry, I thought finding a volunteer opportunity of interest would be easy. I will admit that I didn’t put as much effort in to this goal as possible, though at the same time did pursue several opportunities. My end goal with volunteering is to help families who need financial advice, either through my church or other organization.

I have had the opportunity to volunteer this year through organizations such as Junior Achievement and INROADS. Therefore, I would still consider this goal mostly complete. I will continue to look for volunteer opportunities that more closely align with my goals next year. 

The volunteer opportunities I’m most interested in become available through relationships. Providing personal finance counseling isn’t something that an organization will let just anyone do. I’m working on building better relationships through my church and other organizations to get more involved.

Goal 4: Double the Amount of Charitable Donations

The goal this year was to increase charitable contributions from about 3 percent of take-home pay to five or six percent.  We completed this goal and now give away between 5 and 6 percent of our take-home pay every month. Giving is important to us and at some point it would be great to be successful enough to give away more money than we take home in a year. 

Our goal in 2018 will be to increase charitable donations to 10 percent of take home pay. I think everyone should have a goal to give away 10 percent of their income to causes you believe in. This doesn’t have to be related to tithing or any other religious affiliation. I have come across content recently discussing the magic of giving at least 10 percent, and I want to experience that as well. I regret not giving away 10 percent early in my career when it wouldn’t have been much money. Now that we make more money, it would have been a big leap to go from 3 percent to 10 percent this year, which is the reason for the more gradual increase.

Goal 5: Complete 12 weeks of P90x3 

Remember several years back when P90x was all the rage? More recently Beachbody came out with the trilogy, P90x3. Without going into details, P90x3 is similar to the original P90x program but shorter. My wife and I successfully completed the 12 week P90x3 program this year. Exercising and eating well, which I’m not always great at, can help to achieve personal and professional goals. I’m a believer that diet and exercise are the best medicine for developing a strong immune system, having more energy, and reducing stress and anxiety.

Goal 6: Find a Preschool for DS3

First of all, DS3 stands for Darling Son, Age 3. It took me a while to figure out this lingo commonly used in internet forums. When we were setting goals, DS was 2 years old and finding the right preschool was a high priority. We ended up enrolling him in the public school system where we live and are happy with the outcome. For those that may be curious, even though its a public school preschool program we are still paying $600 per month. This was much cheaper than some of the private preschools that charged $1,000+ for full day programs. The program he’s enrolled in is as good if not better than other places we researched. Regardless, kids are expensive!


Overall we did really well this year. Even for the goals we didn’t meet, we came really close. Sitting down and writing out our goals made a huge difference. We ensured our goals were a mix of personal and professional which is important to keep balance in our lives. I’m excited about sitting down to set our 2018 goals and am already thinking to add to the list. Regardless, our goals will be simple enough to fit on a small sheet of paper, yet aggressive and challenging. We have baby number two expected in March 2018 and that alone will make next year fun and exciting.

Thanks to all who have taken time to follow this blog on social media, through WordPress Reader, or by subscribing via email.

How did you do on your 2017 goals? Comment below to share!








Backing Out of a $70,000 Profit House Flip

House (Blog Post 7)

The $70,000 House Flip

Around this time last year my wife and I sat down at a restaurant and discussed our goals for 2017. It was the first time we actually sat down and talked about our goals together. While we had discussions in past years about saving money and paying down debt, we didn’t have much focus or direction.

Paying down debt remained a priority in the beginning of 2016. However, I was easily distracted in the pursuit of other interests. For example, even though we started the year focused on paying down the mortgage the focus changed a few times and eventually we found ourselves with a rental property under contract. The plan was to use a combination of savings and home equity to make a “cash” purchase. We’d then refinance after six-to-twelve months.

The asking price of the property was $89,000 and we eventually got it under contract for $65,000. We knew the property needed some work and then the inspection report raised additional concerns. The front porch was separating from the house, there was termite damage in the basement, and siding on the outside of the house needed to be replaced. This didn’t include all of the cosmetic work needed as the house hadn’t been updated in decades. It would have been a huge undertaking for someone like me with little experience fixing up homes.

To Partner or Not to Partner

Due to my lack of experience, I was planning to partner with a contractor I had invested with in the past. A couple years prior I invested $10,000 into a flip project with this contractor. This was a significant amount of money as I still had more than $100,000 in debt and only $20,000 in total savings not including retirement. He purchased two homes using mostly his own money and a smaller percentage of money from a few small investors such as myself.

The first house was flipped and sold within 6 months for a decent profit and I was paid nearly $1,000. Not a bad return on my money for being a silent investor. The second house took almost another year to sell. We didn’t receive any additional profit though the initial investment was returned. In the end it wasn’t the best investment, but we got our money back with a small return so I was willing to give the partnership another shot, especially since he was a really good contractor.

Back to the original story, I’m not sure what the rehab cost would have been on the property I had under contract in 2016. Our best estimate was about $30,000 to flip and $10,000 to $20,000 to rent.

The Decision

I ended up backing out of the deal for a few reasons including not being comfortable with using equity from my personal residence, concerns that had surfaced with my potential partner, and the results of the inspection report. I knew this was probably still a good deal and I hated backing out so late, but going through the process made me realize how unfocused I was in pursuit of financial independence. I’ll admit, once I had the house under contract I started to think of all the things that could go wrong and fear set in as well.

The house was eventually purchased by a flipper who fixed up the property and resold it. According to Zillow the selling price of the home was $134,750. The pictures of the listing confirmed that a lot of work went into the house (see below). I doubt the rehab cost anywhere near $70,000, so there was likely a large profit made from the flip. Therefore, the title of this blog post is a bit misleading as the overall profit was much less than $70,000, though if I had to guess the profit was still well into five figures.


Before and After Photos of the House

No Regrets

This was huge missed opportunity on the surface. Though I don’t regret it (for the most part).

My wife and I have been at this debt payoff game for more than five years now. One of the reasons why it has taken so long is the lack of focus. We have always been pretty good at saving money. The problem is I have shiny object syndrome and have changed direction several times. Unexpected costs have come up for our own home such as a new roof or HVAC system. Other times we have overspent on cars, a bathroom remodel, or vacation. Once you get good at saving money, it’s really hard to stay disciplined to not make a big purchase. It takes years to build up a decent amount of savings, and only a small moment of weakness to spend it. 

After backing out of the contract we made a firm decision to go all-in to pay off our mortgage. We have made great progress ever since. As of mid-2016 our mortgage was just above $100,000. At the end of 2017 we approaching the $30,000 mark. Most of the pay down was due to applying $30,000 from savings to the mortgage. It was surreal to take $30,000 that had taken years to save up and have it be gone to the mortgage in the blink of an eye.

Returning Focus to the Mortgage

Our focus remains on paying down our mortgage and once we accomplish this goal, we will move onto something different. Maybe we will take another swing at rental properties, maybe we save up money to fix up our current house, maybe we will save money and start looking for a new home in a similar price range, or maybe we will start dumping a bunch of money into retirement or index funds. Regardless, we will pick one goal and have complete focus on achieving it, whether that goal is directly related to our pursuit of financial independence or doing what is best for our family (e.g, looking for a home in a better school district).

The fear factor is a real thing as well. When we try real estate again I’m sure we’ll be scared. However, not using home equity will allow us to be more accepting of the risk. We plan to take advantage of loans next time to make a  20 percent down payment. Good deals may be tougher to come by without using cash. Taking a loan will allow us to get into the real estate game quicker without risking our current home.

Our goal going into 2018 is to become completely debt free before my 37th birthday in October, and hopefully sooner. Financial independence is still a ways away. However, I am looking forward to not owing money to anyone (at least for a while).

Side Hustle Tips: Finding Great Deals at Garage Sales

Finding Great Deals at Garage Sales

It has been a while since I was in college. I’m in that weird age range where I’m sometimes considered an old millennial and other times a young member of generation X. I grew up in the dial-up generation where America Online (AOL) was king. My eBay account was created pre-2000 and I played online poker on sites such as Full Tilt and Party Poker. I was the in last graduating college class year before Facebook became mainstream around 2005 and my MySpace profile was all kinds of awesome (not really).

I played baseball in college, which was like a full time job. We had 6:30 am weight lifting sessions three times per week, a full day of classes, baseball practices or games, and then homework. It was a great experience that I wouldn’t trade for anything, but finding a normal college job was challenging. My parents helped pay my rent, but I was on my own for spending money. To my parent’s credit, they would have helped me more financially but I wanted to take care of myself as much as possible.

Therefore, I had to come up with a creative way to make extra spending money. The term side hustle wasn’t a common phrase back then, but that’s what I was looking to do instead of a typical job.

My College Side Hustles

One way I made a extra money was by playing online poker. I wasn’t the best poker player, though was decent enough to where I made a single $30 deposit and was able to pull out a few hundred dollars every couple months without ever having to make another deposit. My winnings were consistent at small- and mid-sized $5 and $10 tournaments. Play at higher stakes never ended up being profitable. Thankfully, I ended up making my final withdrawal the week before Full Tilt poker accounts were frozen. I narrowly missed having several hundred dollars inaccessible for months or years.

My other side hustle was reselling items on eBay. This is where I made most of my side hustle money in college. I hear a lot of people talking about retail arbitrage these days. Retail arbitrage is where an individual purchases an item at a low cost, usually from a retail store, and immediately checks a site like Amazon or eBay to determine if it can be resold at a higher price. This is basically what I did on eBay, except I did this before smartphones.

My niche was garage sales and dollar stores. Since I couldn’t immediately look up an item on my smartphone, I ended up wasting a lot of money on junk from garage sales that had no resale value. These losses became less frequent as I gained experience in my specialty areas.

Side Hustle Wins

Successes at the dollar store involved VHS tapes and computer games (I told you this was a long time ago). My best run ever was when I stumbled upon an old computer game called Total Annihilation. The game was selling for $1 at a dollar store called DEALS and was reselling for as much as $40 on eBay. I drove to every DEALS location in Southwest Missouri and ended up purchasing about 50 copies of the game. For someone who was used to being a broke college student, I lived well the next few months. I was able to take a break from Ramen noodles and ketchup spaghetti.

Most of my dollar store and garage sale purchases were smaller wins. VHS videos purchased for $1 would often resell for $8 to $10 on eBay. At garage sales, I usually did well with items such as video games, board games, VHS/DVDs, athletic equipment, and sports memorabilia. I once came across a copy of a rare Super Nintendo game called Mega Man X3. The game was purchased for $5 and resold on eBay for $200.

I will still occasionally get the family up early on a Saturday morning and go to garage sales. My wife buys books for her classroom, my three year old buys a few toys, and I keep an eye out for items that I can resell on eBay.

The eBay market is much more competitive these days. eBay fees are higher, the market is more saturated with large companies, and free shipping has almost become the standard. The margins for retail arbitrage will continue to shrink as companies wise up or more re-sellers enter the market. However, people will always have garage sales to quickly get rid of their junk. With a little experience and patience you will come across the right items to make money. Below are a few tips to make decent money by reselling items found at garage sales on eBay.

Garage Sale Tips

Pick a few specialty areas and get to know them well

There is an advantage to picking a few specialty areas and knowing those areas really well. For example, my main specialty area was video games. I got to the point where I knew the rough price range for most any game. Sports games typically didn’t sell very well, while role playing games would usually turn a profit. Even with smartphones, having specialty areas will allow you to move quickly through garage sales and identify the items that are more valuable.

The one exception is I always pay closer attention to new or sealed items even if they are not in my specialty area. I have stumbled upon a few garage sales where unopened wedding or baby shower gifts are available for cheap. Electronics, cooking accessories, and toys in the original packaging can do really well in the resale market.

Seek out Neighborhood Garage Sales

Finding great deals at garage sales is all about volume. You need to be able to move quickly from house to house. Once you have experience, as soon as you walk up to a garage sale you’ll know if it is a dud or potential gold mine.

Going to a site like Craigslist and searching for key words such as “subdivision”, “annual”, or “neighborhood” can quickly point you in the direction of the larger sales in the area. I have found that upper middle class neighborhoods are the most profitable. Low income areas have more junk while high income areas have fewer sales as I’m assuming they donate more to charity to avoid the hassle of a garage sale.

Show up Early!

Most anything decent at a garage sale will be gone before 10 am, if not earlier. There will be others out there looking to resell items so it will be important to beat them to it. You may also be able to catch sellers the night before setting up their garage sale. Getting there the night before or too early in the morning can be disrespectful, so I tend to wait until the official starting time to show up. More aggressive garage sale veterans may disagree with my thoughts on not showing up before the official starting time.

Focus on Smaller Items for Simpler Shipping

Shipping can be a huge pain if you run a smaller operation. Now days I tend to focus on purchasing items that can fit into an large yellow envelope. For example, DVDs and  Video Games are easy to prepare and ship. Don’t get me wrong, if I come across a larger item where the potential profit margin is significant, I will buy it. However, the margin has to be worth it to go through the extra hassle of shipping a larger item. Many eBay vendors are moving to free shipping, so it will be important to keep shipping and packaging costs to a minimum. Items such as DVDs and video games are usually light enough to be shipped first class and you can package them in a basic bubble wrap envelope that can be bought in bulk.

Utilize Your Smartphone at Garage Sales

This goes without saying, but take advantage of your smartphone when looking for items to resell. I usually have the eBay app up with the proper filters (e.g., completed items) as I browse garage sales. For new or used items with a bar code, you may be able to scan using Amazon or other apps for a quick price check. Most people don’t seem to care if you are looking up items on your phone, though I’ve found it does make the negotiation process more challenging.

I also think it’s rude if you are spending too much time hovering over items searching for every little thing on your smartphone. This goes back to the point of having a specialty area that allows you to quickly identify items that you can quickly search on your smartphone. Don’t be too obvious, but also use it as a tool to keep you from making poor purchase decisions.

Make an Offer

The majority of the time garage sale hosts are willing to take less than the original price. Don’t waste your time negotiating 50 cent items down to 25 cents. However, negotiating a $20 item down to $10 can make a big difference. People also seem to be more willing to lower the price if you are purchasing multiple items. Negotiation is a great skill to have in many aspects of life. Going to garage sales is a great way to practice this skill. Also, I’m not going to lie, my three year old seems to help with negotiating better deals.


There are opportunities to make decent side hustle money reselling items on eBay. This is especially true if you are in a decent sized metropolitan area. The market is more competitive today than 15 years ago. However, individuals still get rid of valuable items at garage sales all the time. If I could be successful before smartphones, you certainly can with the assistance of your iPhone. Get out there and find your Mega Man X3 or Total Anihilations.

If you have questions please leave a comment and I’ll respond as soon as possible.

Thanks for reading!


Finding a Passion for Financial Independence

Passion (blig post 5)

Back when I was in graduate school I had someone ask me what I wanted to do with my degree upon graduation. The person who asked me this question was someone who seemed to have everything figured out. His question caught me off guard. I didn’t want to say “I don’t know”. I, too, wanted to appear that I had everything figured out. So I totally made up an answer.

I can’t remember exactly what I said, though it went something like this:

“I want to use my education to help people; to help people get out of debt.”

He looked at me and said, “Wow, I’m glad you have it all figured out, I have no idea what I want to do.” His honesty was refreshing and I felt guilty for not saying something similar instead of making something up.

Back then I hadn’t ever heard of the term financial independence. My mindset was still in the mode of ‘make money to buy more stuff’. After that discussion I started to question how it would even be possible to make money helping families get out of debt. I could get into debt consolidation or other related field, though the more I thought about it the less interesting jobs in that area sounded. I didn’t give this conversation much thought for many years, though it remained in the back of my mind.

It took my wife and I about five more years before we had an awakening of sorts to get off the financial treadmill. Even though I didn’t have any clue what I was talking about during that conversation several years back, it makes me wonder if there was something deep down that came out when I answered that question completely off guard.

I believe that we are all put on this earth with a purpose. I have come to realize in my older age that my purpose is to help people think differently about money. I want to help people see that there is a true freedom in being debt free and financially independent. I’m not exactly sure how I will end up fulfilling this purpose though something tells me in time it will become more apparent.

One of the reasons why I’m on this pilgrimage is to ‘walk the walk’ before I can ‘talk the talk’. Before being able to teach people about financial independence, I first need to experience it myself. I mean, who am I to give advice on financial independence when I’m not even financially independent myself?

In a few days I’ll be making another mortgage payment which will get my remaining debt down to about $36,500. By the end of the year I’m hoping to get the balance below $30,000 with a full payoff sometime in 2018. I’ll then be shifting my focus from aggressive saver to an aggressive investor.

Until then, I’m planning to share my random thoughts on personal finance topics on this blog. I’ve already covered such as paying off your mortgage, the Dave Ramsey program, and student loans.

I’m not sure exactly how I’ll fulfill my purpose, though something tells me it starts with this blog. Even if nothing big comes from this, it will be fun to look back on it one day and relive the journey.

When we started this journey we were on a single income, still accruing student loans, and nearly $200,000 in debt. We’ve come a long way and I can’t wait to begin the next chapter soon.


Is College Worth the Investment With Student Loans?

Even though it may not be the sexiest topic, student loans are a hot topic in the personal finance world today. There is a lot of discussion around the impact student loans have on millennials, the housing market, and the overall economy.

College tuition continues to rise faster than wages and inflation which can’t be sustainable long-term. Total student loan debt is more than 1.4 trillion and the average graduate leaves school with debt of $38,000, on average. Most individuals who graduate with a degree will likely be okay in the end. However, there are a lot of former students who go to school for a few years, rack up tens of thousands of dollars in debt, and end up with nothing to show for it. These are the individuals who will likely be hit the hardest when it comes time to pay back their student loan debt.

Regardless, I believe that college is absolutely still worth it as long as you are reasonably smart about it. The pay gap between college graduates and non-college graduates is significant and continues to grow.

I’ve mentioned in previous posts that my wife and I have paid off nearly $50,000 in student loans since 2011. What I haven’t mentioned is our student loan debt was all from my wife’s college experience. I know what you’re thinking, she must be one special person if I still married her with all of that debt (and she is!) 🙂

I graduated with my Bachelor’s and Master’s degree with zero college debt and had very little help from my parents along the way. I did it by working hard to find or follow scholarship opportunities while also getting a little lucky. With that being said, what I’ve learned is hard work and luck seem to go hand-in-hand. My college career took a non-conventional path that included stops at two different community colleges, transferring to a small state school for my undergrad, and then enrolling in a different state school for graduate school.

Even with some luck, I also did what many do not. Instead of having my mind set on an out of state private or big name university, I followed the opportunities that were presented. I didn’t end up at my dream school(s), but in the end I don’t think that mattered much. College is what you make of it, and you can have a great college experience at most any school with the right attitude.

What I’m also finding is the further you get away from college the less the name of the school on the diploma matters anyway. I will share my college story in more detail at some point, including how I went to school for six and a half years and barely paid a dime of tuition from academic/athletic scholarships and internships.

My wife took a more traditional route to her undergraduate degree. She briefly went to a small private university that charged a ridiculous tuition. Fortunately she transferred after her first semester to a more reasonable state school. She still ended up graduating with about $25,000 in student debt and then went back to school after deciding to get her teaching certificate which cost another $25,000. It was all still worth it as she’s been a teacher going on six years and loves it.

To reiterate, even with $50,000 in student loan debt it was still worth it because she has a job that she loves. So keep this in mind as my thoughts below are not for shaming anyone but are suggestions that should be taken into consideration when determining the cost/benefit of college.

From personal experience and years in the workforce, below are a few general thoughts I have on college and student loans.

Consider Going to Community College 

Here’s a little secret, nobody cares if you went to a community college after you graduate from a four year university. I know community college isn’t the full college experience. I know the statistics show the dropout rate is higher at two years schools compared to four year schools. And if you can afford to pay or have scholarships for a four year university as a freshman, then by all means go there. However, I’m not sure if it’s worth going into debt at the tune of 5 to 10 times the amount when in the end the name on your undergraduate diploma will be the same. Community college allows a much cheaper option to get through your first two years of college. I know that community colleges are not available in every state, though there are some states where community colleges are completely free!

The Name of Your College Doesn’t Matter as Much as you Think

Let’s get this out of the way, there definitely are schools where the name on the diploma is important depending on your field of study. Ivy League schools are incredibly expensive, though if you are smart and ambitious enough to make the cut then it may be worth taking on six figure debt. Additionally, if you are in a niche field it may also pay off to go to one of the top schools in your field. I would argue the main benefit of going to a top school isn’t education but the network you build as an alumni. It’s up to you to decide if that’s worth tens or hundreds of thousands of dollars in debt.

For the vast majority of us, the name of the school you go to doesn’t matter all that much in the long run. I wouldn’t go so far as to go to an online or non-accredited school. However, if your school is accredited then more than likely its not going to make much of a difference between a private university where tuition is $50,000 per year. The name of the school you go to may help you to get that first job, but the further you get away from college the less the school you went to matters. After five years or more hiring managers want to see experience and a history of results.  What gets people promoted mid-career is a history of achieving results and the ability to build effective relationships.

Scholarship Money is Everywhere

You may not be able to get the scholarship or grant you want at your top school. Though I’m willing to bet about anyone who works for it can get a decent scholarship or grant at a college somewhere. There are billions of dollars in federal grants left on the table every year. My brother went to college on a bowling scholarship. My wife got thousands of dollars off her tuition after her aunt wrote one short letter telling her story. You may not get those scholarships at your dream school, but you also need to consider if it’s worth passing up free money to go into tens or hundreds of thousands of dollars in debt at your favorite school.

It may take some hard work to get that scholarship or grant, but the payoff can be huge. I ended up getting a 5th year scholarship as I needed to go an extra semester to complete my undergraduate degree. I was one of the only student athletes to apply for the scholarship and ended up getting it mostly due to lack of competition. There were dozens of other students who could have benefited from the scholarship but they either didn’t proactively seek it out or didn’t put the work in to complete the application.

The Bottom Line

College is still a good investment, the name of the school usually doesn’t matter much for most of us, and if you work hard you can find scholarship or grant money.

When I look around I see way too many kids who are getting buried in student loan debt. Going the community college route, not getting stuck on expensive schools, and working hard to find scholarships can make a huge difference.

In the end, the root of the issue is the overall lack of financial literacy taught in K-12 schools, which results in kids and parents making poor financial choices when it comes to college. We need to do a better job of setting expectations with high school kids and their parents when it comes to financial literacy and student loan debt. A better understanding needs to be developed on just how much money fifty or a hundred thousand dollars really is.

The data show a college degree is usually well worth the investment over the long run even for those of us who ended up having to pay for student loans. However, if there was a way to leave college with less debt wouldn’t that lift a huge burden as you’re looking for a job, buying a house, or starting a family? Hopefully this blog post gave you a few things to think about if you or your child needs to make a decision about college soon.









Following the Dave Ramsey Plan (not really) to Financial Freedom


Following the Dave Ramsey Plan (not really)

As mentioned in my initial post, when we started our journey in 2011 to pay down the nearly $200,000 in debt we had accumulated it started by reading several different personal finance books. One book that had a lot of influence was Dave Ramsey’s “Total Money Makeover”. This book, along with others, helped change the way we looked at money. Money was no longer for purchasing stuff, but for buying experiences and freedom.

The Dave Ramsey plan is a simplistic, and in some ways extreme, way to pay down debt. Dave caters to the masses, many of whom have little financial literacy. He is an outstanding communicator and does an excellent job getting his message across to a large audience. Overall, I love Dave Ramsey and his message. I am grateful that he helped change our approach with money.

A few of Dave’s general teaching and principles are below. Some we follow closely and others not so much.

Follow the “Baby Steps” to Financial Freedom

If you are not familiar with Dave’s “baby steps”, you can click here for a quick overview. The baby steps have basically been our goals for the past several years. When we had seven different student loans totaling nearly $50,000 we paid them off one-by-one using the debt snowball method. Once we paid off the loans and cars, we immediately started saving for the emergency fund. Now, here we are several years later on baby step 6. We are so close yet so far away from getting the mortgage paid down.

              Dave’s Baby Steps

Use a Zero-based Budget to Take Control of your Finances

Budgeting is at the core of the Dave Ramsey plan. It’s such an important part that he has developed an app (Every Dollar) to make budgeting easy. Honestly, if we were better at budgeting we’d probably be out of debt right now. We’ve tried budgeting and hate it. It doesn’t work for us.

Instead, we tried to come up with a simplistic alternative to budgeting. Several years back my wife and I sat down and wrote down all of our general expenses minus entertainment and other discretionary expenses such as going out to eat. From there we agreed to a savings rate that we wanted to hit every month (this is now the money we’re using to pay down the mortgage). Therefore, the mortgage gets paid as soon as we do.

Every once in a while we have to make a lower mortgage payment or pull some money out of our fully funded emergency fund, but for the most part we pay ourselves first every month (well, technically, we pay the mortgage first every month). We then pay all of our other bills as soon as possible and spend the rest on whatever we want. We had been doing this for years, and then came across the term “anti-budget” that I believe the blogger/podcaster Paula Pant came up with at affordanything.com.  Most of us don’t want to budget, so why not take a much simpler approach?

There is No Good Reason to have a Credit Card

Owning a credit card requires a certain amount of discipline. You probably shouldn’t have one (or many) if you are someone that absolutely cannot control your spending and will be tempted to run up credit card debt. However, I can think of a few very good reasons to have a credit card.

  • A strong credit rating is important. Even the most passionate followers of Dave may at some point need to take out a loan (15 year mortgage, of course) to purchase a home. Your credit rating can make a huge difference in your monthly payments. Credit ratings may also be used in hiring decisions when you apply for a job. In my opinion, the complete disregard for credit ratings is the most dangerous omission from Dave’s teachings.
  • Have you ever tried to travel without a credit card? It is doable though can be a huge pain. Traveling for work with a debit card can be challenging and you’ll need to be prepared to have a large hold put on your account upon checking into a hotel. Also, reimbursements through your employer can sometimes take weeks to receive.
  • The points and rewards can be a nice perk. Dave often says that nobody gets rich on hotel or airline points, though if you are responsible you can get complimentary airfare and hotel rooms. I know there are studies about the psychological aspect of spending more when you have access to credit cards, but if used responsibly I have a hard time passing up free airfare and hotel rooms.

Married Couples Should have Combined Checking Accounts

I get the logic behind this one, but also come from the approach of “if it ain’t broke, don’t fix it”. My wife and I are both pretty independent individuals. I don’t want to be worrying about every $5 cup of coffee or the occasional expensive clothing purchase. As long as she’s not using credit to buy those things, then I think a certain amount of financial independence is perfectly fine within a marriage. My wife and I have yet to have had a serious fight over finances during our more than seven years or marriage. It’s a non issue for us, so why change things up?

We are aligned on our goals and discuss our finances (me much more than her). Ground rules are in place such as not accumulating credit card debt that can’t be paid off at the end of the month. Also, we discuss any purchases of roughly $250 or more. Additionally, the anti-budget approach gives us both some money to can spend without being tied to a budget or asking permission from each other.

Giving is One of the Most Important and Rewarding Aspects

I could not agree more with this statement. As pay down debt we make a point to give a certain amount of our income to charitable causes. The amount we give now isn’t as high as we’d like. We plan to at least double our contributions as soon as we reach baby step 7. There are so many worthwhile causes to give to in the world and I can’t wait to be able to give more. There is little in life that is more fulfilling than helping a person or cause genuinely in need. One of the reasons I am passionate about pursing financial freedom is not to be able to quit a job but to be able to give more. Baby Step 7 is all about turning from aggressively paying down debt to investing and giving. I am very excited about both.

Summary of Our Dave Ramsey Plan 

I love the overall concepts that Dave teaches. It just so happens I’ve highlighted a few things we have done differently in the pursuit of financial freedom. Personal finance is a little like dieting or working out. There is so much conflicting and restrictive information out there that it can be paralyzing. If you have some level of financial literacy and discipline you should be able to take the Dave Ramsey plan and make it your own.

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