So, why is being debt-free important? For me, it is important because I don’t want to be anyone’s slave–anymore. Owing people makes you, effectually, their slave. Debt-freedom offers an ease of mobility through life that positions you to seize more opportunities. Opportunities that produce more income as well as joy, peace, and charity in your life and in the lives (or causes) of others you care about. And it’s just wise. Spiritually, the Bible advises us to pay our debts, quickly, and owe no man anything except a debt of love.
Disclaimer: Whenever I reference my upbringing or the parenting I experienced in my writing, it is NOT from a self-serving place to shift blame away from me on to others. And, it is NOT me seeking to negate full responsibility for my adult choices. It is simply the result of me quietly and consistently doing the hard work of self-examination so as to fully understand myself. That is, why and how I react to certain life stimuli. It is simply the problem solver in me. Note that I adore my parents. They did the best they could with the awareness they had. I just happen to be a product of a moment of passion in their youth and immaturity. And, being the product of such leaves certain deficits in an offspring. So any narration about my family is simply a sober reflection on the REALITY of my upbringing and the role it played in my adult mindset. But, more importantly, it is referenced to feature how I’m processing the deficits of my past/present so as to make a better present and future. That is better for me and others appointed to my destiny. So, the message I’m conveying in any writing that references my family is, you DO NOT have to live defined by what you lacked in childhood. You don’t have to be a slave to your past, upbringing, or environment. For, what you lacked can actually empower you to have and be more than you ever imagined. But, you must take action and it starts with you in a mirror–thoroughly examining yourself.
In Part 2…
- Valentine picks up the story of how he met his smart wife
- At minute 10:00 discusses his upbringing in Cameroon. Valentine was raised by parents who were financially conscious and responsible. He tells you why he abandoned those principles, briefly, when he moved to America.
- At minute 10:20 Gives a very wise insight into the difference between being broke and poor.
- At minute 12:42 Gives advice to someone who got out of debt but life’s circumstances caused them to backslide back into debt.
- At minute 19:00 for the techies, he shares some of the tools he uses to produce his blog, video, and podcast.
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In this episode, you will discover…
- Who Valentine Nde (Mr. V) is, how he got into debt, and how long it took him to get out of it.
- 10:21 Mr. V discusses the emotions he felt selling his fancy Audi A8 in order to buy a Hyundai Sonata. You learn about Mr. V’s wife and her huge impact on him selling his car and returning to the sound money management principles his Cameronian parents taught him before he moved to the states to become a student and software engineer.
- You get some insight on how it’s true that men who marry smart women, like Valentine’s wife, live longer and become more financially secure.
- 16:15 You learn about what Mr. V is calling “debt-free shaming.”
In Part 2, Valentine shares how he met his smart wife and other interesting events that color his debt free story.
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On December 21, 2016, I was honored to be a guest on The Money Champ Podcast with Nick Blair.
Nick created “The Money Champ” to help millennials win with money. He had me on to offer a sage perspective.
Nick also wrote a cool book called The Money Champ’s Guide to Getting a College Degree Debt Free. Nick says his goal in writing the book was to educate every parent and student on the potential dangers of irresponsibly taking out student loans. He feels insights from his book can help minimize or, even, eliminate the need for student loans.
My interview with Nick (as well as my recent relaunch series of videos) serves as a cautionary tale for young adults (ages 18-21) on what NOT to do when entering college.
It’s a cautionary tale on what going into the “real world,” (fresh out of high school into college) looks like when you’ve had no guidance on personal finance or the dangers of excessive student loan borrowing.
It’s a cautionary tale of how important it is to find mentors or positive role models, early, to help you identify the career path best suited to your unique strengths and personality.
It’s a candid and vulnerable conservation. If you feel the interview helpful or inspirational, then please hit me back here in the comments or on social media @goodbyebrokegirl with your thoughts. Also, please share it with your social network or those with whom you know it would resonate.
In this episode, you will discover…
- Who Shawn Q is and the many hats he wears
- His backstory on how he got into $20K worth of debt and the challenges it created
- How Shawn and his wife got out of that debt and the uncomfortable sacrifices they made to get out quickly
- Shawn’s entrepreneurial story–currently a six figure business servicing elite high-growth clients
- Shawn’s advice and encouragement to those currently in the process of paying off debt or are too overwhelmed
- Shawn’s spiritual inspiration and passion for making an impact for Christ’s Glory in the marketplace
- Wealthier U, The Christian Entrepreneur Manifesto, and His New Book
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I learned of Shawn Q when I came across his Facebook Group back in December 2016. Impressed with the group, I took advantage of his generous coaching discovery call. The discovery call revealed I was not a good fit for his coaching program, so when a more affordable opportunity present I invested into his private accountability program called Growth Buddies. Growth Buddies has enriched my life by expanding my network of high-quality people I can call on for insights and collaboration. Shawn’s example has motivated me in many ways. He entrepreneurial walk and the quality of his products and services have become a blueprint for me. I’m inspired and motivated to “level-up” to my fullest potential and stop half-stepping entertaining fears and the fallout of setbacks. I didn’t want to keep all the treasures I’ve found in Shawn and Growth Buddies to myself. I had to get him on the show to share some of his insights and his story.
- Grab your copy of Online Wealth For The Christian Entrepreneur & Learn the Manifesto
- Shawn’s Website
- Join Wealthier U
- Shawn’s Instagram, Twitter, Facebook
- Goodbye Broke Instagram, Twitter, Facebook
- Subscribe to the Goodbye Broke Chronicles to receive more inspirational and exclusive interviews like this one directly to your inbox (Disclaimer: I despise spam and bait-n-switch marketing. I promise, NO SPAM ever. Only inspiration and information you can take action on.)
- BONUS: Grab the Goodbye Broke Debt Payoff Calculator and challenge yourself to start your emergency fund today!
- Wealthier U
- Online Wealth Book
- Psalm 112
- Proverbs 8
- Proverbs 22:7
- The Truth About Debt
- Rich Dad Poor Dad
- Think & Grow Rich
- Dave Ramsey’s Total Money Makeover
If you found this interview inspirational and helpful, please leave a comment below and/or shout me and Shawn out on our social media platforms listed in the links section above. Tell us your take away. Also, share it with your social network–especially anyone you know would resonate with Phil’s story.
Can You Relate?
Is it just me? Or, can anyone relate to the terror and sinking feeling of logging into your bank account and being surprised there is an overdraft charge? How many have had to make all kinds of frantic calls to the bank to plead your case or down right swallow your pride and beg for mercy? How about borrowing money and rushing to the bank to put it in before the transaction moves from pending to posted? Or, how about calling that merchant or creditor and having that uncomfortable conversation?
Is it just me? Or, who else has had to just eat it the charge, undisputed, because the hard truth was we deserved it. We mismanaged our money. We tried to play the timeline game and lost.
The Timeline Game
You know it. It looks something like this. I have a quarter tank of gas. My commute is 20 miles one way. I need gas to make it to work the next couple days. I only have $3.00 in my account till payday. I get paid on the 15th. It’s after 5 pm on the 13th. Gas costs $2.89 per gallon.
My direct deposit hits, at midnight, like clockwork on the 15th. So I go to the BP because the nearest QT is too far. So, I buy gas using credit instead of debit (since you only need $1.00 available to be authorized at QT, I assume it’s the same at BP). I get $25.00 worth of gas.
I look at my account on the 15th and it’s overdrawn. What happened? Oh. BP is not the same as QT. They only take 24 hours to clear credit transactions whereas it takes QT a reliable 48 to 72 hours to clear credit transactions. What happened? I lost the timeline game. And, I lost a bit of peace. Sound familiar? And let’s not even talk about the brief moments of co-mingling business and personal funds because you are so broke. We will save those cautions for another post. Have a Plan for Your Spending
Some habits are hard to break. And for many of us, especially in rural and urban poverty centers, our money habits are formed quietly watching our parents and elders manage (or mismanage) their money.
What I’ve noticed, as I was forced to deeply examine my upbringing and my family’s financial history and habits, was being reactive and impulsive in spending was the quiet model (i.e., how many things I can buy before my balance is zero). Proactively having a plan for spending (e.g. a budget telling my money what it will be doing each month) was not the trend.
Also, chronically making payments was modeled as the means to acquire what’s needed instead of exercising patience to save up in order to pay cash. Although, the catch 22 for many in these poverty centers is we didn’t have time to be patient. The refrigerator goes out, the hot water heater breaks, the car dies–we need an immediate solution.
Paying cash for things like cars, appliances, furniture didn’t register as possible for my family. It was the exception not the rule in my rural neighborhood. Either the need (lack of ample cash flow) demanded we take the financing option or being patient to save was not appealing.
The only quasi-plan for spending was for utilities and housing. But, often because there was over-spending in other non-essential areas (satellite TV, car payments, furniture, appliances or Murphy’s Law came to visit) we robbed Peter to pay Paul, every month.
The going thought process was always, “Do I have enough to make the payment?” And, we would keep racking up payments for things–until payments ate all of our income. Any extra income was seen as a blessing and green light to go create a new payment (i.e. debt).
More Month Left at End of Your Money
For example, say we have an income of $1000 per month. Say we insist upon living alone instead of with roommates, so our monthly rent is $500.00 instead of $175.00. Say we insist upon having a car instead of using transit. Or, if in a rural area, we insist upon having a car “right now” instead of saving up a couple thousand dollars to buy one cash. So, we add a car payment of, say, $250.00 per month.
Now, we need car insurance–a payment of $100.00 per month. Then we tell ourselves we must furnish the apartment so we go to a rent-a-center and furnish the entire apartment for a payment of $75.00 per month. These expenses leave us with only $75.00 for the rest of the month.
While making our “payment” commitments, we forgot we still have to eat, pay utilities, wash clothes, put gas in the car, and if we are lucky, experience pleasure (like a movie, or a weekend get-away). Now, we go through each month frantic and stressed-out because we keep having more month left at the end of our money.
The typical solution is to borrow and play the timeline game. Some resort to shady or criminal solutions to make it month to month. That is until we–make the decision to shift our mindset and learn how to properly handle money. This scenario may sound very extreme, exaggerated, or frankly, pitiful, to some readers.
But, unfortunately, it is an all too common scenario playing out, almost verbatim, in many American households–especially those living in rural and urban poverty centers. And to my chagrin, it’s been a scenario I lived. It takes one to know one–right? I mean how can I be so descriptive?
The result of managing money like this is chronically overdrawn bank accounts and frustration. And if we are not careful, we will develop a victim self-pitying mindset that can make this scenario our permanent reality.
But don’t you dare feel hopeless and despair if this is where you are.
Again, I’ve been there not too long ago–and much to my chagrin. There a is a better way. If you can be gentle and patient with yourself, you can turn things around and get this area of life under control.
A Better Way
Here is an example of a better way to live in the same scenario above with a $1000 monthly income. First, you learn that your housing, transportation, food, etc. expenses should be a certain percentage of your income. Financial experts suggest 25-35% of your income be set aside for housing. That’s $250.00 per month. So renting a room, or getting a roommate or two would be the best choice over living alone.
Having that valuable information would have alerted me that I should NEVER commit to renting an apartment that is 50% of income (net or gross as $500 is half of $1000.00). You would follow the same guidelines to figure out the rest of your expenses.
The Credit Counseling Society publishes a guideline of suggestions on how much you should spend on each living expense as a percentage of your take home (or gross pay). Below is a graphic of their recommendation.
Upon adopting these (or similar guidelines from a plethora of authority sources online) guidelines, you can then go out into the world and make sound purchase decisions instead of on preferences you can’t afford.
Living Within Your Means
For example, if I followed expert guidelines, got roommates, paid $250.00 for housing and decided to take transit instead of buying a car, then that strategic choice would leave me $750.00 in the black each month instead of only $75 fast approaching the red.
And even if I decided to treat myself and splurge on financing some cute furniture for my new place, then that would still leave me, comfortably, in the black with $675.00.
This is a very simple example of what sacrificing to live within your means looks like practically and the difference it makes to your monthly bottom line. For, it’s really all about personal financial literacy and the choices we, courageously and sacrificially, make to apply the education we receive.
About The Discipline of Budgeting
Don’t let the idea of “tracking your money” intimidate or stress you. Keep in mind, budgeting is NOT an exact science. It does change from month to month sometimes–especially if you are a freelancer or independent contractor. Your income may go up or down each month.
The point of a budget is to have a plan for your money BEFORE you get it in your hand. You may run over an assigned percentage until you get yourself disciplined. That’s okay. Just start. You just need to be as close as possible to the designated percentage until you develop the discipline and routine to start hitting it precisely.
Fellow debt elimination crusaders, Leave Debt Behind, share another useful list of expense guidelines, sourced from the U.S. Bureau of Labor. This is their national average of expense category percentages based on net income. Note these guidelines give you a range of the housing expense category as opposed to the recommendation in the pie chart above.
Budget Tip #1: The Envelope System
Another simple tried and true solution is something called envelope budgeting system. It is an almost fail-safe way to prevent overspending and stick to your budget (or money plan if you don’t like the word budget). Dave Ramsey’s Total Money Maker Over has popularized the envelope system as it’s the main feature of his program and consulting.
But really, the envelope system is an old school money management technique. The video above, courtesy of Goodbudget, illustrates what it looks like in practice. So check it out and learn how to implement this method into your budget. For, this system compliments the Goodbye Broke Emergency Fund Challenge. For example, you can designate an envelope for your emergency fund to ensure you don’t forget to save (i.e., pay yourself). So, give it a try and let me know what you think of it.
If you found this post helpful or know someone who could use this information, then please share it with your tribe. And don’t forget to shout me out on social. You can find me across all social channels like Twitter, Instagram, Facebook @goodbyebrokegirl and on Snapchat by searching my name Latisha Grady | Goodbye Broke or @latishapreneur. And, don’t forget to challenge yourself and build your emergency fund; sign up below.
Until next time….