How Andy Is Teaching His Kids About Money After Paying Off $50,000 in 12 Months!

Episode 23 · February 10th, 2020 · 25 mins 39 secs

About this Episode

Andy and his wife paid off $50,000 in debt THEN paid off their mortgage of $200,000 in 4 years! Andy shares his debt paying off tips as well tips on teaching your kids about money.

Andy Hill is the award-winning blogger and podcaster behind Marriage, Kids and Money which is dedicated to helping young families build wealth and thrive.

Andy's advice and personal finance experience have been featured in major media outlets like Business Insider, MarketWatch and NBC News. Trusted as a personal finance influencer by national financial brands like Quicken Loans, Andy’s message of family financial empowerment has resonated with listeners, readers and viewers across the US.

When he's not "talking money", Andy enjoys wrestling with his two kids and singing karaoke with his wife.

Find out more about Andy on his podcast, Marriage, Kids, & Money podcast as well as his website, https://www.marriagekidsandmoney.com/

Resources mentioned in this episode:
The Slight Edge by Jeff Olson (affiliate link)
The FREE Debt Snowball Starter Pack

Full Transcript:

Welcome to the money mindset podcast where you will find the inspiration and motivation you need to manage your money better so you can stress less and live the life you want. It's Ashley from budget's made easy. And the money mindset podcast, I'm so excited. Today we are talking to Andy Hill. He is an award winning blogger and podcaster behind marriage kids and money, which is dedicated to helping young families build wealth and thrive. And his advice and personal finance experience had been featured in major media outlets like business insider, MarketWatch and NBC news shares sued as a personal finance influencer by national financial brands like Quicken loans. Andy's message, a family financial empowerment has resonated with listeners, readers and viewers across the U S when he's not talking about money. And he enjoys wrestling with his two kids singing karaoke with his wife. So I am so excited to talk to Andy today about how they, he actually has a couple of topics today, so we're going to talk to him about paying off $50,000 in debt in just 12 months. And then they paid off their mortgage of $200,000 in just four years. And then I talked to them about getting your kid or teaching your kids about money and the different things he does with this kids, which he had some really great ideas that I'm going to actually implement with my children as well. So if you would like to get started on paying off your debt, just like Andy, you can go get my free debt, snowball starter pack, but a budgetsmadeeasy.com/debt-bundle and I will link to it in the show notes as well. So welcome Andy. Hi Andy. Thank you so much for being here today.

I'm so excited to be here. Ashley, thank you for having me and I am so excited to talk to you about your debt payoff story. You know, I share a lot of those on my podcast and on my blog. I just love how inspirational, motivation, motivational they are to me and other people as well. Um, but before we dive into your, um, debt payoff strike, can you just tell us a little bit about yourself and how you got started?

Yeah, sure. So I host a podcast called marriage kids and money. It is a weekly show that allows me to talk with folks like yourself and learn from them on how they paid off their debt or how they became financially independent or how they paid off their mortgage, or I became a young millionaire and I take that information and I share it with the audience that listens to my show. And the reason I did that is that I wanted to learn and I wanted to help my young family thrive. And I thought that would be a really fun medium to do it. So I've been doing that for about three years and that is been keeping me busy in the personal finance world.

Yeah, that's awesome. I love your podcasts. So, uh, if you're, if you're listening to this, go listen to his as well. But so how did you decide to start paying off debt and how much debt did you have? Like, what was your aha moment for change? Yeah, sure. So in 2010, my wife and I got married and at that point we were very happy and young and in love and I went to concerts and going to the bar and going to restaurants, just having fun, you to live in for today, enjoying ourselves, being young, being fun, you know. And uh, right around the time that we learned that we were going to be parents, I had sort of this click in my brain that happened that said, wow, aye bringing a human into the world. I need to take care of her. I need to give her the [inaudible] best life possible. And the first thing that came to my mind maybe cause I'm a money nerd, is I need to get my financial situation straight.

I've always been like a saver, but I've been trying to kind of keep up with the lifestyle that I was used to before. I have, you know, when I was younger, but I didn't really have the income and the debt sort of piled up. And, uh, I had about $30,000 of student loans. I had a home equity loan that I was kind of using as sort of my ATM machine to kind of take extra money out. And um, my wife and I got together and just said, Hey, what can we do to pay off our debt? We had around $50,000 collective at the time. And we said, well what can I do to pay this off? And then we could start off our Parenthood as debt-free parents. Wouldn't that be cool? And it took a little bit of convincing cause I was mostly kicked about it and she was like, Oh, I'm having fun man.

This is fun. Let's going to the restaurants, the bars and having fun and going to concerts. But over over time my conversation about the numbers transferred into a conversation with her about her desires and her emotions for her. She was working in a job that she wasn't really that excited about and she thought, Hey, it would be great if I could eventually stay at home with the kids. So my desire to become debt free was matched with her desire to eventually become a part time worker to a full time stay at home mom. And that kind of became our driving force that we worked on together to pay off our $50,000 of debt. And do you have any tips for getting your spouse on board? Like if, you know, somebody listening is like you and me kind of the money nerd but their spouse, you know, it's just kinda like, well you know, I don't know if I really want to do that.

I'm having fun. Um, you know, cause my husband is kind of the same way. He went along with my crazy plans and everything, but you know, he wasn't like fully on board right away. Yeah. I can give you some anti tips in the beginning, which things that I did wrong but might help. So right away I read this book called the total money makeover by Dave Ramsey and I was watching a TV show, Susie Orman show, and it was just kind of getting really geeked about these, these shows and these books and things like that. So I would come up to my wife and say, all right, here's our plan. We're gonna sell your car and we're going to become debt free. Does that great. And it would be like after a busy day at work, she'd come home and look at me like with this death stare, like, what are you talking about?

What is all this plan? So I guess my first anti tip is like, take it slow, don't get too excited, like come up with a plan and also speak in their language a little bit. That took me a little while to kind of figure out, she's not much into the numbers, she's more into what's the payoff? You know, what does becoming debt free? Get me. You know what I mean? Like for you and I, it sounds like we're kind of in the same boat, like being debt free. That's awesome. You just get a sense of freedom. It's awesome. But for her it's like, well what does that mean? What do I get? You know? Oh well you'll become a part time worker. That's kinda cool. And then stay at home mom, which you want. Oh, okay. I'm interested in that. That sounds good. Um, and so I guess some of the other tips that we eventually did at that point was we decided to get together for what I dubbed the budget party, which kind of was drawing my wife and being like, Hey, this is cool thing called a budget.

And if I call it a budget party, then maybe you'll show up for a little meetings. I'll have wine and champagne and some pizza. We'll have fun with it. Uh, so that worked in the beginning. I mean she saw right through my tactics of calling a party. She's like, yeah, whatever. But um, so we met on a monthly basis to go over our budget. And what we did at the budget party was review our numbers from the previous month. How'd we do on our spending a review our plans for the next month, and then always look at our goals. So what are we, what are our goals right now? We want to pay off our debt, we want to move towards you being a part time worker. Then eventually a stay at home mom. And how are we tracking on those goals. So we would meet every month and have some fun together.

Yeah. And review that budget and eventually over that next 12 months we were able to pay off our are $50,000 a debt. And essentially what we did is we looked at that budget and said, Hey, you know, we were both collectively living on each of our own incomes before we got together. What if we try to just kind of live on half and then pay off this debt and get through it. And since she was pregnant and we couldn't really go out as much anyway, she was kinda apt to, that's where a lot of our extra spending was entertainment going out and things like that. So we figured out a way to kind of live on half and then we paid off that debt and about 12 months. That's amazing. I mean $50,000 in 12 months is crazy fast. Yeah. Yeah, it was good. I'm going to say it was part collaboration, you know, part us working together and figuring out out.

And it was also part increasing our income right around the time we were making to combine just a little over six figures, so maybe 110, 120 something like that. So it was a good healthy income for our family. And then as we continued, we got really kind of excited about, Hey, what can we do to grow our income, pay off this debt even further. And I had a sales commission job, so I said, well, what can I do to just kind of kill it at work during this time frame so we can pay off this debt as soon as possible. So I found different opportunities, different growth opportunities for my new job and if some commissions started to come in and instead of taking those commissions and you know, going on a vacation or doing something exciting, we would just take it all and throw it at the debt. Much to my wife's chagrin. Uh, but um, but it worked man. So we were able to pay off that 50,000 and about, uh, about 12 months.

That's amazing. Did you guys, so you increased your income and then you did a budget, you know, followed your goals and stayed focused on like what your intent was, um, or did, did you do anything else like meal planning or you know, cutting expenses or was it primarily increasing your income and sane focused getting? It was more of those two, but we also looked at certain areas of our budget over the years following that, you know, reducing our grocery spending. We used to go to Kroger, uh, and then we switched to Aldi. That's simple change helped us to save about $300 per month. Uh, we cut the cord on cable. We weren't really watching cable that much. Netflix was, you know, fine for us and that little change made things completely fine. Uh, we were able to negotiate some of our insurance bills that hadn't been negotiated in a little while. You know, sometimes they're little, they're sitting there for a little while, they just keep raising the rate and you're saying, Oh, why am I paying $1,000 more than I was a couple of years ago because we're not negotiating. So it's a little things like that kind of helped, you know, nip at the old, uh, the debt. But, uh, overall it was just being intentional saying, Hey, here's what we're going to live on this month that'll help us to get to this goal of paying it off and then just increasing my income. Yeah, absolutely.

That's amazing. So I also know that you paid off your mortgage. So tell me about paying off your debt and then moving into paying off your mortgage.
Yeah. Yeah. So we kept sort of the same intensity after we paid off the debt. We said, well, wouldn't it be cool when I say we? I keep saying we, I said, wouldn't it be cool if we paid off our mortgage then we would never have a payment on our home in our, in our mid thirties. Wouldn't that be nuts? And she said,
ah, okay. Yeah, I guess let's still had some fun.

We just paid off our debt, so let's make sure that we're putting vacations in there and having fun and spending time with our daughter and you know, making some memories. And I said, of course, so that, that was the balance right there. And right around the same time my wife said, my wife said, well, I would also like to consider moving. We've been in your bachelor pad bungalow for a couple years and while it's nice, and I tried to fix it up a little bit, it's still a bachelor pad bungalow. So let's look at maybe a different neighborhood and a different community. And for me this was like [inaudible] no, no, that's gonna. That's not going to help us to pay off the mortgage. You get another bigger mortgage that's going to slow things down. And I'm not really, you know, I don't really want to feel like I got this gigantic mortgage on my back and I always have to make the income in order to pay it off.

So what we decided was, okay, let's get the house that you want, but let's pay off the mortgage together in five years. So that became our commitment to each other. We said, okay, that's fine. You'll get the awesome house in the nice neighborhood and I'll get the mortgage free life cause that will just make me feel less stressed and you know, overall just enjoy things better. And that was our agreement. So that's what we decided to do at that point. And again, we kept that same intensity. We met every month for our budget party, reviewed the numbers, reviewed our goals, I continued to increase my income at this point. Nicole then went down to full time stay at home mom. So we had a loss of our income at that point. But I continued to do some great work at my office. I kinda got my, my income to around 150 to $200,000 Mark for the next three, four years. So that really helped us to put some major intensity on paying down the mortgage. So our mortgage that we got was around $200,000 and throughout the next four years, a little less than four years, we were able to pay it off completely. So that's about $50,000 extra at the mortgage each month in order for it to be completely gone. So that's what we did.
That's amazing. I think that's awesome that you were able to increase your income that much with your wife staying at home. Like that's, that's amazing that you were able to not only pick up her income but also increase it altogether.

Yeah, it helped a lot. I've had a really great employment opportunity over the past 15 years. I work in corporate event marketing and I'm in a sales role, so they need sales guys to bring in new business and then when it's there, you know, they are, there's a great opportunity to grow your, your salary and your commission depending on where you work. And that's, um, I had a commission job and my previous home and then when we moved to the new home, I had a full salary job and then that helped us to kind of have a more stable income. But, uh, the opportunity for commission kind of went away, but the salary was great and it helped us to have a good life together.
That's awesome. So what are you doing now? Like, you know, you said that, um, this all started when you were going to be a father and that kinda changed your perspective on everything.

So what are you doing now to kind of teach your kids about finances and managing their money?

Oh, that's, that's a great question. That's my favorite question. Thank you. Um, so the whole time, since I get so geeked about this stuff, I have a lots of conversations with my kids about contributing and being rewarded for your contributions. Um, you know, I use the example of my, my job, I work really hard. I sell more stuff for my, for my company and number worded right. So I try to implement that for my kids as well. So we started a charter award program at our house on every Saturday morning my kids wake up and make a little breakfast and then they come down and they complete three chores, uh, very, you know, with kids size but very important chores around the house and they are paid a dollar equivalent to their age. So Zoe's seven right now and Calvin is five. So Zoe gets seven bucks, Calvin gets five bucks and this helps us to start a lot of about Hey, you're a part of this family.

So contributing and being helpful is very important here and air go that helps you in your career down the road or your business that you're going to start down the road. And then what do you do with that money that we after you get it right? [inaudible] so we have a five jar system in our house. I got the three jar system originally from another Dave Ramsey book. But then I said, Hey, we can add two more jars cause they're really important. So the five jars that we have a spend, save, give, and then the other two that I've added are college. And invest because college costs are so crazy right now and they're only going to get even crazier by the time my daughter goes to school in 2030, um, and my son in 2032. So we're already having conversations about, Hey, the work that you're going to do here at the house and the money you received for gifts from birthday parties or Halloween money from grandma that's going to go in these different jars and they're going to help us to achieve the goals that you want in your life.

And one of them is to go to college. And so it allows us to have important conversations about college very early. And then the invest jar is, gives us an opportunity to talk about compound interest and what that can do in their future. So with that money, we've been putting it into a UTMA brokerage account so that they can see how competent truss works. And I show them the balance and we have conversations about it. And yes, they are very young. But from what I've heard and the conversations I've had with individuals, a lot of kids, money habits are a lot of kids' money. I guess beliefs are set by the time they're seven. So having these conversations early [inaudible] they might not get it all, but at least they're understanding and seeing what you're modeling on a very early basis and it could really help them with the path they're on in their life. So that's something that we're doing to help our kids learn about money and, and kind of be money smart kids.

Yeah. I think it's so important to talk to your kids about money in, you know, even if you don't, um, do the jars or anything like that, but just even talking about it, cause a lot of times, you know, previous generations, they don't talk about money. They don't talk about bills. Like it's taboo. Like, like you just don't bring it up. So I think it's great that, um, to start early and just at least start talking about it. Um, you know, with my kids, I, I'll tell them they only have so much money, um, just spend at Walmart like when they're looking at a toy, when they of course, I don't buy them any toys, but uh, you know when they do and they have to stick to the budget. So, um, you know, that's just kind of one way that we've kind of started with that. Now do you have a question about these jars for college and for investing? Like do they actually have a jar and then you wait till it's like so much money and then you take it to the bank or how do you work that?

Yeah, so for, for all five jars we've got just clear plastic, clear glass jars. Like you've seen those Mason jars and so each week they'll fill it up in certain increment. So for spending we give that about 60% for saving, giving, invest. In college we do 10%. So you just sort of round up for the numbers based on there. But essentially little amounts of money is going to build up throughout the month. And at the end of the month we sort of do a little calculation. So for the saving we say, all right, you got a five bucks in here or six bucks in here. I take that and then I, I transfer it into their ally savings account. And then for the college we say, okay, there's an a minimum investment for our Michigan education savings of $25. So we wait for that to build up to be $25. And then for investing, we'd just do that on a once a month basis and we throw the money into their, uh, their accounts with your UTMA. So we just wait until the end of the month until it's calculated up. Then we have just a quick conversation about, Hey, here's what we're doing with the money and here's what it's going to do. So that allows us to have a chat once a month about compound interest about college, about saving up for the bike that she wants to buy and things like that.
That's awesome. Now do they, um, are your kids good at staying focused on what they want to spend their money on? Like my kids go from one thing to another thing and it's like [inaudible] trying to get them to say for just one thing. Like do you have any uh, tips or advice on that? Like trying to keep them, keep them focused on saving for like the one toy or your kids kinda like mine all over the place.

But one thing that we do do is in the beginning we did this program and our kids started to pile up a lot of money in their spend jar and that's nice cause we want them to have fun cause they worked hard for it, right? But then the requests for wanting to go to the store over and over and over again were just like a little overwhelming. Right? So what my wife decided, she goes, okay, I like this program. It's cool. But what we're going to do is just have one big shopping trip per month. We're going to say, Hey, save up your money and what's your November purchase? What's your December purchase? Then they can write it down and if they get excited through the month, just write it down. Say, Hey, this is something you're going to want. And this is actually a good lesson because sometimes Zoe will write it down and then a week later she'll be like, nah, I'm not into that anymore.
Okay. That's one less plastic toy sitting around our house because we have so much stuff around here that we're also, my wife's big into like organization and minimalism. So for her to see all these toys everywhere just kind of makes sure go crazy. So it was sort of her idea saying, Hey, let's just do this. Once a month you will pull up whatever, 20 bucks or 30 bucks depending on how much you've gotten from, you know, birthday parties or grammar or your chores and then you'll have a good amount of money to buy something decent instead of, you know, the, the, the dollar store thing that breaks in five minutes. So, um, yeah. So that's what we've been doing.

I really love that idea. I'm going to have to steal it cause my, yeah, my kids are, yeah. Is they're just like, Oh I want this, I want this. I don't want this. Oh wait, no, nevermind. I don't want that.

That's all trial and error too. You know, like we, we've tried some things sometimes and we're like, well that was a big failure or we try this thing or we get suggestions from other people. It all depends on your kids and their, their, their styles. Like my, my daughter has become a lot more patient than my son because she's seven and he's five and she's a little more mature. But you know, over time things are gonna change and we'll have to modify things accordingly. But it's fun. It's really fun for me to do and, and have fun with. It's a fun tradition and it's so funny how different they are. Like my oldest child spends every penny she gets and then she tries to con her younger sister into spending her money as well, where the young, the middle child, she saves it all. And you know, she's so funny. She tells me all the time. She's like, when I'm rich, I'm going to buy us a new house. I'm going to buy us a swimming pool. I'm going to do all this stuff. She's like, when I'm rich, I'm going to, it's so funny how different conversations are happening. That's good. I know she thinks she's going to make a lot of money. Apparently someday. Hopefully she will and everybody's getting a swimming pool. She says it's a good world to live in. I'm like, sure, buy me some. Cool. Good. So do you have any last words of wisdom for, you know, paying off debt or budgeting and getting your kids to focus on saving or talking to your kids or anything like that?

I would say that there's probably no right one way to do any of those things. I think a lot of it's just going to be some trial and error that you're going to have to discover because listening to a show like this, you might have, Hey, that's kind of a neat idea. Or you listen to Ashley on another show saying, Hey, that's a neat idea. If you try it and it works for you, that's great. And if it doesn't work, that's okay too. You're at least discovering what works best for you and your individual situation and just modify it accordingly and have fun with it. Yeah. And having fun is so important cause you don't want to just like dread, you know, doing this stuff. It's supposed to be fun so that you can live the life that you really want, you know, stay at home with your kids or whatever it is.

Yeah. We read these books or listen to these shows sometimes and we're like, well that's what's, that's what the person said. So I have to do it exactly like that. No you don't. And I fall, I've fallen into that trap a lot where I'll come up to my wife and be like, well no, this financial experts says this is how we're supposed to do it. And she's like, I don't care man. This is how I know. This is how I feel and my feelings matter too. And I like, absolutely they do. And it's just taken me some trial and error to figure that out.

Yeah, absolutely. Like I'm kind of the same way. Like I need to have like follow this plan, but you know, just take different things from other people and make your own plane, whatever's going to work for you. It's just important to actually do it and roll through with it. Exactly. Now I always like to ask people what their favorite nonfiction book is because as you probably know, you know, they say millionaires read like something like a book a month. Uh, and so I like to see what other people are reading. Like what's your favorite book?
Yeah, I really like the slight edge by Jeff Olson. It is actually a very quick read, but the reason I like it is that his main point is that we make small incremental improvements on a daily basis that will get us to the big results in our lives. Sometimes we try to do the big thing and make it all happen right away. His whole point in the book is that if you make small incremental changes in your health, your, you know, your finances, your uh, your, your spiritual nature, things like that, things that you want to improve in your life, you make those small incremental changes that's going to have compound growth, compound impact over time. And I just really liked that concept because it helps me to realize that I don't have to do it all today. Right. You know, make the small improvement today because it's going to have a big impact on your future. So that's the slight edge by Jeff Olson.
Yes. I love that. It's just small steps in the right direction and you will get there.

Well, thank you so much for being here. Now, where can people find you?
Well, if you are listening to this podcast, a great place to hang out with me is on another podcast called marriage, kids and money. So if you go into the podcast player you're listening to right now and just type in marriage, kids and money, that's the best place to find me. And if you're into reading, you can go to marriage. Kids and money.com where I have a blog as well. So would love to connect with any of you and your listeners and I really appreciate your having me on today actually on the opportunity to speak about all this crazy fund that my family has had together.
Well, thank you so much for being here. It was a lot of fun.
Thank you.
Thank you so much to Andy for being with us today and giving us some great ideas on how to teach our children about money. Don't forget to go check out his podcast as well and get your free debt snowballs starter pack so you can start paying off your debt as well at budgetmadeeasy.com/debt-bundle and I will talk to you guys next week.