This post may contain affiliate links. Please read my DISCLOSURE for more info.
This guest post comes from two of my new friends Alyssa and Ryan at Just Another Dollar. JustAnotherDollar.com is a resource for millennial readers working their way down the path of post-school life. Alyssa and Ryan have paid off over $27,000 in debt in just 6 months and strengthened their relationship in the process.
I plan to interview them on my new podcast in August. Leave me a comment on any questions you would want them to answer!
How working together has allowed us to change our future.
There are many studies out there claiming that arguments about money are one of the top causes of divorce today. Dr. Sonya Britt, assistant professor of family studies and human services and program director of personal financial planning at Kansas State University says ‘arguments about money is by far the top predictor of divorce’” (PyschCentral News). In this post, we will share some of the tips that have helped us get on the same page with our finances and get ahead on our debt free journey. Whether you’re single or in a relationship, the process is largely the same. Anyone can do it!
1. Discover your “Why?”
Every debt-free journey has a why but not every why is the same. Our journey started with finding our why and planning out the steps to take to reach our goals. We opened a beer sat on our patio and each wrote down a few of our long-term goals. Then we compared, discussed, and identified how they would fit together.
Alyssa’s reasons for becoming debt free:
- Open an animal rescue sanctuary.
- Create my own work schedule.
- Pursue the work I am truly passionate about.
Ryan’s reasons for becoming debt free:
- Freedom to choose any job I want.
- Funds to pursue my hobbies.
- Begin to create wealth.
Our mutual why for becoming debt free is to quit full-time work while we are still young enough to able to pursue our dreams and live the life we want. Retirement advice is usually fairly standard “Put x% away in your 401K starting at the age of 25 so that when you are 65 you can retire with a million dollars”. By that math, I would need to work at least 40 years before I can start living the life I want. Our question to everyone else is, why wait until you are 65 to retire a millionaire?
The standard retirement model puts many people in a situation where they don’t know what they want. By talking about the future and beginning with the end goal in mind, we will avoid the all-too-common conflict as we get closer to retirement. We know we’re on the same page, and having set re-evaluation check-ins will ensure neither of us will have to give up their dream later in life.
2. Make a roadmap to achieve your goals
Our roadmap to retiring in our 30’s is not some trade secret, and it’s definitely not the only way to achieve success. Many have become financially independent in a similar way, and even more will do so in the future. We believe that anyone can be successful if they develop their own plan and stick to it. Our goals do not come without sacrifice and hard work. But we are willing to be disciplined for the next 6-10 years in order to live freely for the following 50. Our current position within our roadmap is sticking to the budget; we are fast approaching the $30,000 of debt destroyed milestone!
We plan to achieve financial independence through a diversified income approach. Our income sources over the next 6-10 years will include our W-2 earnings, rental real estate, and side-hustles/freelancing. The next step in our plan is to save a down payment and purchase a duplex sometime in 2018. After that, we will take one year to pay off our remaining student loans, and another year after that to save the down payment for a 2nd rental property (duplex or 4-plex). We will then save enough to purchase a homestead for ourselves in cash! Our income sources at that point will include rental real estate and freelancing/part-time work. We will also continue investing in retirement accounts throughout the process to ensure a stable nest egg as we get older.
Our roadmap will not work if we do not work together as a team. We lean on each other for strength when the spending urges seem impossible to shake. If we did not have mutual goals and agree about how to achieve them, our roadmap would look a lot different and the dream to retire in 10 years would not be attainable. We are dreamers but we are realistic. We set achievable goals with our strengths and weaknesses in mind. You may be wondering, how exactly do we work together like a well-oiled machine?
3. Communication is key
Finances in a relationship can be a very contentious topic if the discussions are not approached in the right way. It is very important to start off on the right foot if you are to be successful in the long run. Below are some of our keys to success in communicating about money. You need to be able to talk about your income and spending habits long before you’ll be able to create and stick to a budget! Make a plan to sit down with your family and talk about your own money situation.
4. Use your resources to overcome challenges
It is important to remember that every situation is different. While it can be tempting to try and compare yourself to people around you, or blogs you read, it’s rarely an apple to apple comparison. Identify the particular advantages and challenges you face in your situation; a few of ours are below:
Dual incomes & no kids (DINKS)
Specialized skills & training (college degrees)
Prior life experiences and lessons learned
Alyssa – Creative, Driven, Networking Professional
Ryan – Financial Knowledge, CPA, Good Communicator
5. Execute the plan
Once you have your plan laid out and your family on board, it’s time to execute! Don’t put off starting for fear of not being an expert right away, that’ll come with time. In our first month of paying off debt, we were excited to pay over $500. In our sixth month alone, we eliminated over $11,000! Every journey requires patience, a LOT of it.
Make a point to check your progress monthly, if not more often. Evaluate things that are going well, things that are challenging and anything that is truly not working. Set intervals to discuss your goals in order to avoid “ditch-to-ditch” priority shifts. Most importantly, create defined milestones and celebrate reaching them! Ryan will be celebrating paying off $15k in credit card debt by buying a new cell phone WITH CASH (6-months in the making)!
Learning to delay gratification has been a challenge for us in this process, and is a major reason we were $107,000 in debt, to begin with. We’ve learned to embrace the sacrifices, live on a budget, and hold each other accountable. Try to become better at telling yourself “no” so that your significant other doesn’t have to; you’ll both appreciate it!
6. Live in the moment
We believe that the most meaningful lesson we’ve learned in this process is to live ‘in the now’. We had both spent years of our lives looking forward to what comes next; life after high school, after college, etc. By focusing on the present and mindfully living each day, we have become much more contented with our lives. We are giving up quite a bit to live on 35% of our take-home pay, but our lives have never been more fulfilling. Learn to enjoy the simple things in life.
What’s the biggest goal you want to achieve this year? How are you planning to do it?
FREE 7 Day Budget Course
Subscribe to get our Free 7 day budget course! Were we learn to conquer debt by being smart about our budgets!
Latest posts by Barnabas Brown (see all)
- How To Change Your Financial Future Together - July 14, 2017
- Buying A House Is Always The Correct Answer….Right? Maybe Not! - June 30, 2017
- How to Eliminate Expenses by Living Frugally - June 23, 2017