Adam H. Kol, J.D. is a Couples Financial Counselor. He helps couples who love each other make sure that the money conversation doesn't get in the way, allowing them to experience greater peace and love. Adam draws on over a decade of experience as a Certified Mediator, Communication Coach, and a former Tax Attorney and Financial Advisor. Adam received his law degree from Duke and a Master's in Tax Law from NYU. Through working with Adam, couples have gone from the verge of divorce to being best friends, all while making huge financial progress. Adam’s work is informed by perspectives of equity and social justice. He is an experienced community organizer, as well as a lifelong musician.

You can find Adam's amazing resources at www.ahkcoaching.com and follow him on social media at @ahkcoaching or on Linked in at Adam H. Kol, J.D.

Resouces mentioned in this episode:

The Essential Money Conversation Checklist: http://eepurl.com/gbTPc1
To schedule a complimentary Financial Harmony Consultation with Adam: http://bit.ly/financialharmonyconsultation
Facebook group: https://www.facebook.com/groups/moneymarriage/

Favorite nonfiction books:
The Wisdom of Insecurity by Alan Watts
Structure of Scientific Revolutions by Thomas Juhn

Full transcript:
It's exciting and I'm grateful to be able to share what I do. Uh, which is, I specialize in working with couples who as you said, I mean they're in a relationship, things are going pretty well. Um, just money is a difficult topic for them. I mean I've also worked with couples who are having more avoidance or fights around money. Um, I've even had couples come to me on the verge of divorce, as intense as that and I've been able to help them get back to being best friends again while also paying off a ton of debt and getting businesses restarted and all kinds of wonderful outcomes. Uh, my goal is to help people and couples come together, get closer, more intimacy, more connection, more love and more partnership. And I actually do that through working on their money stuff, helping them talk about money, helping them understand their own relationship to money. And I like to use art as well to help people kind of draw out their own interrelationship to money so that they can use that to further their partnership with their significant other.
Yep. That's great. Because, you know, we each have to work on our own money mindsets, but then when you're with a couple of, you know, you, you have to work, you both have to work on the individual mindset and then work together. So that's a pretty, um, pretty big task to try and work on your own mindset and then drain other on it. So, so what is the number one thing that couples can do to work together on their finances?
Yeah, I mean, the number one thing is, is talk and listen, right? Like, um, the money is an area of life and relationships. Just like so many others in our minds, it's, we kind of separate it and make it as if it's somehow really distinct. Maybe because we're afraid of the numbers and maybe because we didn't grow up talking about money. It's a taboo topic. We're afraid of it. There's some shame around it. All of which is very common. Um, but the biggest thing is to talk, so your partner, share your thoughts, share your fears, share your hopes and dreams and ask them about theirs and listen to theirs. Right. And, um, a lot of times what I see is that couples will get caught up in, uh, some something on the surface level. Like, oh, we shouldn't have spent $45 on this item. And what's really missing is that they are not align, they're not on the same page. And the way to get there is through that talking and through that listening.
And so I always tell people to, you know, dream together. So just like you said, you know, make sure or work on your goals and have the same like big goal. Um, and you know, a lot of times, and um, correct me if I'm wrong on your aspect and how you see things with working with couples is, um, I totally where I was going with that. Oh, compromise. You know, sometimes you just have to compromise a little bit because you know, especially if both people think that they need to be right or their way is the right way. Um, and it is just kinda like compromising a little bit, giving a little bit both of them so that they can come together and work on the [inaudible] bigger picture. And so like you said, you know, worrying about like the smaller amounts but focus on the big things.
Yeah, absolutely. And of course each situation is different. And for some couples, the, you know, the smaller things may be important if you're living paycheck to paycheck or really struggling. Um, and that happens a lot to families in the u s uh, but it's like about having that, like you said, those shared dreams. And um, I once said like, there's not right or wrong in relationships. There's just intimacy and you know, there's this point where you're like, well, what is right? What is wrong? Like, who, not to be all philosophical, but it's like, is that really what matters? Right? We get caught up in it because we're human and we have an ego and it's our blessing and our curse. And yet like to be able to step back and say, okay, is how I'm showing up right now in service of the kind of partner I want to be in, the kind of relationship I want to have.
Right? And it's okay if the answer's no because again, you're human and we all have times where we show up, not the self we really want to be. However, to be able to be in that inquiry, that self reflection, notice it and then step back and be able to be like, whoa, take a breath. Go to your partner and be like, I'm sorry I was kind of being a butthead. Right? And, um, can we revisit this? Because you love your partner, you have shared, you want to live your best lives individually and as a couple and as a family if you have one. Right? So the point is to get over there, right? Not to necessarily be right or wrong. Um, and that just the best way to get there, like I said, is just to take a breath, step back, take a look at your behavior. As I once saw someone say like, am I in like a space of love right now? Am I coming from love or am I coming from like fear? Right? And if you, the more you can come from love, the better your is going to be. And then by the time you get down to the budgeting, then it'll be seamless to implement the expertise of whatever you're doing in your budget or someone like your programs. Because if you're on the same page and there's no resistance, now it's just a matter of doing the work.
Absolutely. So where, where should couples start when they can't agree on how to manage their money or their budget? Like when they're just butting heads. Like what is some advice that you would give a couple that comes to you and they just cannot seem to agree on how to handle their money?
Yeah, it's a great question and it's very right. And this is something that cuts across the income and like class categories, no matter how much people are making or not, they will often still have this struggle. Um, and the first place that I like to go with couples is to have them each do a little bit of digging into their own money mindset and then share that with each other because it's a safe entryway to the money conversation. See, a lot of people are used to either not having money conversations or when they do, they're like super awkward, super uncomfortable. They may lead to a lot of arguing or tension. And so I like to get it started by getting a healthy conversation under your belt. And when you're just talking about your own history with money in your own past, there's not really anything to argue about.
It's just kind of like, here's how it was for me growing up. This is some of the messages I internalized about money based on Xyz, based on my family, based on my gender or my race or whatever, and the societal norms and stuff like that. You know, I find that to be a pretty safe conversation for people to get started with. Um, and the other thing is to just have the courage to ask for a conversation with your significant other. And to frame it in a constructive way. Like it's not like, hey, we need to talk about our budget. Right? It's actually like, you know what, I love you. I want to have the best possible life together. We can. And money I know is an important part of that. And I'm a little bit anxious because we haven't been talking about it or are actively managing it.
So like when can we have a conversation about that? Right. Something like that that actually frames it. So they see that your teammates, right. Cause a lot of times, like you said, they're having trouble managing their money together. It starts to feel like they're in opposition to each other. Like they're kinda not rowing in the same direction and just reasserting like, hey, we're talking about this because we're teammates because we're looking to both have great lives. Like, I want a great life for myself and I want a great life for you as my partner who I love. Um, so really just creating that context is powerful.
Yes. I love that. That's really great advice. So what tips, um, just to kind of flow into the next topic, this is kind of related then, is what tips would you have for couples to kind of goal plan together? So once they get like on the same mindset or they, you know, maybe understand each other's mindset a little bit better and then moving forward to the next step, you know, goal planning so that they are working together toward the same goal.
Yeah, just like be inside of like love and curiosity within four and about each other. Like, because it's very common for people to not even, we don't even know what we want, knowing what our partners want. Um, and that's an inquiry that is ongoing and changes over time. Um, so just really creating the space to have that conversation. If you've never had it before, you know, it doesn't have to be painful or exacting. It's just like whatever intimacy looks like for you and your partner, you know, do that. Some people, it's light a candle or open a glass of wine or have a nice meal or just cuddle on the couch, you know, whatever it is, create that space where your care for each other as present for both of you. And then just talk about it. Um, and one thing I've been playing with and just kind of an idea that I've had that I tossed out to my girlfriend recently came out of one of my coaching calls, um, is to play with different scenarios.
Like be like, what if we did this? Because sometimes I feel like we have this pressure that we have to just somehow magically know what our top choices, like what we want. And it almost like we have to call Alessa out of thin air versus being like, okay, what if we like worked 50 hours a week now and then retired when we were 55 versus like, you know, working 40 hours a week now and like retiring when we're 65. Like how do you think about those two? Right? And it's not that life is necessarily gonna go exactly that way, but it's always powerful to have a plan and you can always adjust. But like, you know, actually kind of sketch out some different ideas or scenarios and then talk through what are your thoughts on something like that. How does that make you feel? What would be not so good about that?
What would be really awesome about that? Right. And ask these like, I like to call them, well they're called open ended questions where it's not like a yes or no question because it's like you want to retire at 55 is like a yes or no answer and that's fine sometimes, but it's like, what are your thoughts on retirement? Or like, tell me about how you think about when you want to retire or like what are the important considerations for you around retirement, right. You give the other person this like expansive space where they can really think for themselves and, uh, get a richer response.
Yeah. And just kinda dream together. You know, my husband and I, um, you know, with building my business and really wanting to make this like a fulltime thing possibly even for both of us and you know, we sit and we dream about what if we got an RV and just traveled out west and just traveled the country and you know, just having the freedom to be able to do whatever we wanted to because you know, with, with my job in podcast and a blog and all that, I can, you know, as long as I have a computer and Internet I can go anywhere. So, you know, just being able to like dream with your partner about different ideas of what you might want to do or do want to do in the future and Kinda like how to make that happen. I think that is great.
Absolutely. I love what you're visioning as well with your husband and you know, I encourage listeners, I give yourself and your your significant other like complete latitude, like even ideas that might seem ludicrous or like, oh I don't know, we can't do that. Just dream. Just let them just let the words flow, let the ideas flow. Even if all you get is a temporary feeling of excitement and like that excitement and nervousness and the liveliness, right you've been, that is a beautiful thing to experience. But um, just let the ideas flow. You never know. I mean, I was, I have a couple I'm working with. They came to me like their relationships great, but money is uncomfortable for them. They've been slacking on tracking it. Um, and so they wanted some support in that area. And where the conversation actually flowed was too, that each of them is underpaid in their current jobs.
And in having them examine that and uh, get coached to the point where they can go have a conversation with their boss. It's just like transpired. All these different things have transpired and now the wife is like, I actually don't know if I want to stay at this job. I might even want to change careers. There's some interest in starting my own business or even going back and taking some classes and then, yeah, that's true. We're not tied to the bay area anymore. If I'm not gonna work at that job, we could go wherever we want, like our husband's job. There's opportunities for him everywhere. And now they're just like thinking, right. They're like, maybe we're gonna get like a beach house in Monterey and go live there and like, awesome. And I don't know where it's going to go. It's up to them. Right. But they have now seen so much of what's possible doing this work.
Yeah. And they're excited about it now where when they came to you, they were, you know, stressed out and fighting and now they are dreaming together and seeing what's possible for their future. And that's, you know, that's what I want for people. That's so exciting.
Yeah. In fact, like, you know, there's folks like, you actually were like the budgeting experts and while I budget with my clients, my expertise is really on that emotional communication mindset, coaching piece of it. And like what tends to happen with my clients is like, I'll send them a budget template to fill in, but then they just do it themselves. And like with this couple that I was referencing though, I was like, yeah, now like when I do the budget, I'm, I'm super excited. It's not like stressful anymore. I just do it cause it's like I know that it's helping us achieve our goals. I'm like, okay, awesome. Great.
Yeah. Cause the, you know, it's really just the foundation or the stepping stone to getting, you know, what their big picture, their dream, you know, and that's, that's awesome that it's not stressful and overwhelming now because they have something to look forward to and something that they're working for. That's awesome.
Yeah. Yeah. I love it. They're awesome.
So what, um, so I get this a lot. Like even when, um, you know, somebody, they come to me, we're working on managing their money. Um, they get the budget done. They, they are excited about it, but then their spouse just is so reluctant they won't get on board with the budget. They sabotage it. Like they still take the debit card and they go to the gas station. Like they're still spending, even though you know, they need to work together. What is your advice for somebody that's like working really hard to do what they've done? The ground work, you know, they've laid it all out, the PR, you know, the spouse may be like, okay, I'm good with that. But then they turn around and they sabotage the budget anyway. Like what is your advice for a couple that is, that is dealing with that they're just one, one partner is just completely sabotaging it or not. I'm not, they're not on the same page, but they're just recklessly spending still. While one is trying really hard to manage the money better.
Yeah. Yeah. Great question. And I mean there's almost like a couple of questions in there. Um, but if the, you know, I guess I'll, I'll answer kind of like two questions that I heard. The first one is if one partner is struggling to have like the other person's not on board in general, then that's really where some of the things I've been talking about through this call and some of the other things I talk about, like on my youtube videos there are just really helpful for getting the conversation started. Because my recommendation is always, especially if you share funds with your partner, if you two live together, if you're planning a future together, then have like get them on board, right? These are conversations you should be having with both of you as far as creating your goals and your visions and your budget to implement that.
So that, you know, that's really the first place and that's just where getting in their world, understanding what's going on for them. And even if you have to, like I said, that framing of, look, I want to have a great life with you and I know this is an important part of it. Um, so when's a good time to have the conversation? Not like, do you want to talk about it? Like we need to talk about it. And you know, there's, I was at a, on a panel earlier this week and, or I guess it was technically last week now I got asked a very similar question to this and I said, you know, we need to expect our partners to be on board for these conversations just because it's been a taboo topic and past generations that doesn't work because we're missing out on our opportunity to thrive.
And it's creating anxiety and resentment and fear and worry and tension and fighting. It's number one cause of fights and relationships. It's the number one or number two cause of divorce in every study I've ever seen. Uh, at least for like us marriages. And this is a country with a huge divorce rate. So this is not some small beans, small potatoes, whatever you want to call it, kind of issue. This is something that needs to be tackled. And so you like, you got to come at it with that, right? The same way you come at it with like talking about where to live or where to have children or if there were challenges in your like intimate life. Like if those things, the same degree of seriousness with which you take those because of how much they matter to the integrity of your relationship, I think money's the same way.
And you know, there's no one way to do it, but holding your partner to account, like, look, we gotta be talking about this. This is an essential issue that touches every aspect of our lives. You want to buy a home? How are we going to do that without being on the same page financially? You want to have kids, how are we going to do that without being on the same page financially? You want to retire? How are we going to do that without being on the same page, financially start a business, et Cetera, right? It is that important. Um, and of course every day we're spending money. Every day we have bills to pay. Every day we buy lunch or groceries or whatever. So my, it's like we need to be holding our partners to account like, we need to talk about this. Right? Um, and you know, if they're hesitant, of course you want to bring compassion and love, you know, like why, you know, what comes up for you around this?
Why, you know, where do you think your hesitancy comes from? Or like, why don't you like it? Um, you know, and there's, that's where having them do some mindset work and understanding their money story can be really powerful because there's a reason they don't want to talk about it. You know, like for example, men, we're socialized that our value is in providing for our family. And so if we feel like a conversation is implying that we're not doing that job well, um, not at a conscious level even, but like unconsciously, it just triggers like a sense of shame. Like, we're not good enough. We're not doing what we're supposed to do as a man. And that becomes like an existential crisis. Even though the man may be completely unaware that this is what's happening for him, it's nevertheless often what's happening. And so, you know, to be able to traverse that bridge and get to the other side is not always easy, but it takes some listening, some questions, some empathy, some understanding and some patients, um, and uh, of course women have their own ways that they're socialized about money.
And that's like I said before, it's not just about gender, it's about race and sexual orientation. All of this stuff plays into how we see ourselves and how other people see us money. And so, uh, it takes a nuanced approach to really break through those barriers. Um, but the number one thing is to keep bringing your love, your empathy, your curiosity to that person. And it's honestly the same answer as if they're sabotaging the budget even if they agreed to it. Right. Cause if you just got them like you agreed to this budget and now you're sabotaging it, I mean you can, you know how that's going to go. It's not saying you shouldn't hold them accountable right in that spot. It's more like, hey, you know, I feel really like you want to kind of own your feelings. Like, I feel really anxious when I'm ICU using the debit card because we had agreed not to and this plan is really important for our future.
So I get scared. We're not going to be able to have the life we want. I'm like, can you tell me what's going on there for you? Right. Like, ask an open ended question again. Like, can you tell me what's happening there for you? Like, or you know, like in a non accusatory way, just as much as, as neutrally as possible. Right. Because there's a reason they use that debit card. They may not know it, but there's some sort of reason that they did. Right. Um, maybe they just don't like being told what to do. Right. And again, that's an unconscious thing. And so they're acting out kind of like a teenager, but that's cause it's like, you know, childhood crap that, Ooh, excuse my language, but childhood that hasn't been, uh, hasn't been dealt with. Right. Um, and so there's a lot of important work to do around mindset, which is a lot of the work you're doing, which is why it's so great. It's really important to examine that stuff.
That's great. I hadn't even thought about some of the subconscious things like that, so I'm really glad that you mentioned that. Um, so do you have any resources that you would recommend for couples? Um, either your stuff or you know, stuff that you highly recommend to kind of maybe help them work together to get on the same page? Books or workbooks or anything like that?
Yeah, absolutely. So, uh, one place that you can find me is I have a Facebook community. It's totally free and there's, we're having all kinds of conversations like this all the time. It's called money and marriage, but instead of the word and it's not written out, it's the like symbol, the ampersand, some money and marriage a and for sure if you go and join there, let, let me know that you heard about me through this podcast and uh, that'll be exciting to see. And I partnered there with another financial coaches and expert with couples and she's more the tactical and practical expert and I'm the more emotional and communication experts. So we provide a real full spectrum of content there. Um, and I have, uh, another thing, uh, that I put together and perhaps we can link to it in the show notes or something like that is a, I call it the essential money conversation checklist.
And so it's just eight steps that you want to take in each money conversation and you know, they're not what you'd think up front. You might kind of have a feel for what they are after listening to me speak here. But it's about like getting connected to your partner, making sure you're hearing and validating their feelings and then sharing your own and making sure that they understand where you're coming from. And then from there, once you two are actually on the same page emotionally and you're actually in partnership, that you really from there start to look for what compromise might be like, um, rather than trying to jump to it. You know, that's the number one thing I see couples want to go straight to the action items. And a lot of times there's some work beforehand that could really make it more powerful and more long lasting.
So I'll definitely put that link out there for you all. You got the money and marriage Facebook group and if there's anybody listening who's like, you know what, I'd really love to work with Adam directly. I work with couples in a wide range of situations. Like I said, even people come to me where it's a really serious challenging topic that's leading to a lot of fights, intention, happy to work with you. Also couples who are like our relationships, great. Money's just a kind of difficult topic. We don't know a lot about it. Um, also work with those couples and uh, have specific content for engaged couples to plan the wedding, make sure that they are sticking to their budget, talk to the family about the spendings and families usually chip in and uh, also to help them merge their finances with their fiance. And then I have also a specific content for a first time home buyers to be able to get on the same page with their partner for what's gonna be the biggest and longest purchase of your life. You know, you want to make sure that front end. So I help people get on the same page with that and get on top of their finances.
Oh, that's great. I will link to all those in the show notes as well. And just one last question. I like to always ask people what their favorite nonfiction book is. So whether it's, you know, related to couples of money or just something, um, you know, some kind of self-help improvement life improvement book. Uh, I probably should've warned you before so you could think about it.
In college I took a course, I minored in philosophy and I took a course on the philosophy of science and I read a book called the structure of scientific revolutions. I think it's Thomas Kune and it was such like an incredible study of how scientific theories, uh, evolve and become the accepted theory. And then when the data starts to not, uh, fit, then how there's like this kind of interesting process that seems to repeat itself. And uh, then they eventually get replaced by a new theory that fits the data better. And I don't know, something about the way the world works and the way humans operate and like how there's like the zealots of the old theory and they try and cling to it even though the data's no longer fitting it and they try and change it to fit the data. And it's like, it just is a fascinating study of human psychology for sure. Um, but also right now I'm like reading, let's see how far into it I am. I just picked it up off of my table like maybe a quarter of the way through this book called the wisdom of insecurity by Alan Watts. And it's a remarkable piece. Like I can only read a couple pages at a time. It's just such a, so much depth of [inaudible].
I don't even know the book. It's really, it's really just about the nature of how life is fundamentally insecure and like, and uncertain and how we grasp for certainty and how that actually causes so much of our pain and suffering and about that we can actually live in love live in the moment live now if we relinquish that desire. And for me, someone who has dealt with a lot of anxiety and desire for security, that's a big, a kind of growth edge as they call it these days, like a place for me to expand. So I'm really getting a ton every time I pick up that book.
That sounds really interesting and we're going to have to check that out. Yeah. Well thanks for coming on today.

Do you have any last words of wisdom?
You know, um, my pleasure. Again, thank you for having me. Um, what I really want to impart to the world is that having these dialogues can bring you closer in your relationships and people kind of stay away from the money conversation because they think it's going to go poorly and, um, they're going to just end up uncomfortable or fighting. And the truth is right. Like if you don't talk about it, that's what's going to eat away at your intimacy in your relationship, let alone your finances could very well be worse off. But it's by having these conversations and having them in a constructive, productive way, which is what, of course I am to support people in doing that, you can actually have a better life, stronger relationships, more freedom financially, and actually live in a line, a way that's more aligned with your values and your goals.
That's awesome. Well, thank you so much for coming. It was such a pleasure to talk with you. My pleasure as well. Thanks, Ashley. Thanks.

Special Guest: Adam H. Kol, J.D. .

Resouces for you:
Blog: [Budgets Made Easy ](www.budgetsmadeeasy.com )
Beginners Guide to Budgeting
How to Stop Living Paycheck to Paycheck Guide

Full Transcript:
Welcome to the money mindset podcast where you will find the inspiration and motivation you need to manage your money better than you can stress less as living the life you want. I'm Ashley Patrick, founder of the money mind mindset podcast in budgets made easy. This is your place to get the tools, knowledge, and inspiration to improve your finances and your life. My mission [00:00:30] is to inspire and motivate you to take the steps toward becoming debt free and building real wealth. That can seem overwhelming at first, but when you break it down into simple steps and focus on just one thing at a time, the possible the impossible becomes possible. The important thing is to take small steps in the right direction and you will get there, but it all starts with changing your [00:01:00] mindset around money. Believing that you can do something is half the battle.

Once you believe that you can do it, then you can take the steps and make the plan to actually do it. If you don't truly believe that you can do something, then why would you even try? That's why I am focusing on changing your mindset so that you can change your life. It all starts there. No matter what your financial goals are, whether it says stop living paycheck [00:01:30] to paycheck, whether you want to save money, pay off debt, save for your kid's future, you have to believe that you can do it and that you, that it is really an option for you, which spoiler alert it is. So that's what I will be focusing on in this podcast along with tips on budgeting, saving money, and paying off debt so you can stress less and live the life you really want because that's what I really want for you.

[00:02:00] And that's what my mission and my goal and my whole focus is for you, is to get you to change your mindset around money so that you can get past that first hurdle and make the changes and take the steps to really take control over your finances and your life so that you can do what you want to do. I mean, because that's what happened for me. So dinner news myself real quick. You know, a couple of years ago I was an extremely [00:02:30] stressful job. I was a police officer or detective for 10 years, you know, I wore child abuse cases in things that people don't want to, you know, even think that exists in this world is incredibly stressful to kids sitting in traffic just just to get to work and back home. Like traffic is ridiculous around here, you know, and I really wanted options and the only way to do that was to pay [00:03:00] off my debt.

Once I was able to pay off my debt, which will be in more detail in the next episode, $45,000 in 17 months, I was able to have the freedom to make the choice to stay at home with my kids. Once I had my third child and if I still had debt, I wouldn't have even had that option. There's no way I would've been able to stay home. So being at free gives you options. It gives you freedom. You get to do what you want to do. If you want to be able to take [00:03:30] a different road in life, go try something new. Try a different job. It gives you the ability to do that. Um, it gives you the freedom to be able to make choices based on what you want instead of what you have to do to pay the bills. So that's a little bit about myself.
Uh, my ma, my website and all my social handles, everything is budget's made easy. So it's budgets made easy.com. You can get all kinds of freebies. I've got a budget worksheets, I've got, um, you know, [00:04:00] how to stop living paycheck to paycheck guide, uh, debt, snowball worksheets, you know, everything is there. There's also the budget challenge, which is a seven day pay, what you want, budget challenge, which is actually pretty neat and I really love this idea. So the idea behind it is that you pay what you want, minimal of $5, because you do need to have some skin in the game and some motivation to actually follow through. And so that is why I did pay what you want because [00:04:30] you need to choose an amount that will motivate you and get you to actually do it and follow through with it. It's broken down into tiny little baby steps every single day, seven days.
Like even the seven days is not even making your budget. Your budget is like three days worth. So you know, you can have your budget ready to go and just a couple of days without the stress and the overwhelm of knowing where to start. This is where [00:05:00] you start. So the biggest thing people tell me is, I'm overwhelmed. I don't know how or where to start. This is where you do it. Budgetsmadeeasy.com/budget-challenge and you can get started today, have your budget done in just a couple days. Get past that overwhelm, get past that mindset block and just get started. Just do it. Okay, so in the next episode and going forward, I will be talking about how we paid off the debt so that you can do it [00:05:30] to debt payoff, tete tips, tips on budgeting, saving money. I've got lots and lots of guests, uh, that we've already started recording interviews.

So I'm so excited about that. You get to hear about how other people paid off debt and how they're managing their money in such a way that it works for their family and their life. And that's another thing before I get off here that I want to really stress to you, myself and Dave Ramsey and Susie Orman, everybody, [00:06:00] you know, they give you general advice, good budget tips, good money tips, but it's personal. It's why they call it personal finance. So what works for one person may not work for you. You need to do the research and, and you know, look at how different people do things and figuring out what's gonna work best for your family. Because you know, you may need to save more than a thousand dollars is your starter [00:06:30] emergency fund. You may need to pay off something that is in a different order than the debt snowball and that will go into what all that means in more episodes.
But you just really have to focus on your situation, see what will work for you and what will motivate you to start and keep going and finish. Cause that's the most important thing. As long as you keep moving in the right direction, you will get there. You may not get there as fast as [00:07:00] me or somebody else, or maybe you will. Maybe you don't have as much debt as I had. You know, everybody's situation is a little bit different, so don't compare your journey to somebody else, but you just need to get started. Keep going, stay motivated. And that is what this podcast and what I'm all about. I am so excited to get started on this journey with you. Be sure to check out budgets made easy.com for all your helpful resources on getting started by [00:07:30] making your budget, working on your mindset, planning your goals, and everything in between. To get started on your budget, go to budgetsmadeeasy.com/budget-challenge and get started working on your budget and planning out your goals today. Be sure to check out the links in the show notes for all your helpful resources. And the next episode I will be talking about how we paid off $45,000 in debt in just 17 months. [00:08:00] I'll see you there.

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Today I want to talk about paying off debt because it gives you so much freedom. You're able to do the things that you want, save for the things that you want when you're money isn't going to things that you've already paid for already bought, you know it's, it's stuck in the past, you're still paying for the past. Let's start paying for the future and saving for the future and that is possible when you are debt free. All right, so my journey starts back in 2012 we'll start there. I'll try and you know, make this quick, but I want to give you just kind of the overall picture. So in November of 2012 we bought our dream house. We sold our starter home. That just really didn't work well for our family and bought our dream home.
10 acres, uh, had a big shot for my husband. Uh, those, you either don't know him, he's a big car guy does. Um, he works in racing, like cars are his thing. I always have been. So this as a 40 by 60 shot, 10 acres would it, you know, we're, we're out in the country but close enough to uh, grocery shores and stuff like where it's just really convenient and it's just works very well for our family. Well, shortly after we bought our dream home, actually like two months later, um, we found out that I was pregnant with our second child. Our first child was only 18 months, somewhere in there. Whenever we bought our house, well, our new house, the property, everything was great. But the house, the layout didn't work. It had, it was basically a small two bedroom with a separate in law suite that had a small bedroom, a living room, kitchen, bathroom, all that.
But it was only accessible through the garage or outside. So this was not going to work for two kids because our second bedroom and the main house was like, it's so small, it's barely big enough for an office. Like you can barely fit a twin size bed in there. So two cribs were not gonna work like in, there's three doors because there's a door to a bathroom, the main door and the closet door and there's like no room in there. So what we decided to do was to enclose the screened in porch and connect the in-law's suite to the main house. I would add a bedroom at a place space and then make it flow where we can get to the whole house without having to go outside, you know, would work better for do's little kids. Right. So we were trying to where options, figure out how the heck we were going to pay for this.
So we got a couple estimates and it was going to be like $25,000 to do this. And that is with the roof already being there and the foundation aren't even being there. We're literally just in closing the screened in Porch area and you know, finishing touches and it was still $25,000 okay. So we're weighing our options. We just bought this house, there's no equity in the house. And my husband started talking to people that he work with that we thought, you know, were financially savvy. You know, they seem to know what the heck they were talking about with money and things like that. They told us to do a 401k loan. A, it's a low interest rate. You're really paying yourself back and you know, if you lose your job, you know you've got other options and your income will be lower. So it really won't be that big of a deal.
Well I hope you can see where this is going. So we finished the renovation, the money is spent and gone. We have our second child, newborn. I returned back to work in January of 2014 I come home like the first week of January, just are the new year. Literally just went back to work. I was a detective at the time, and I walk in the door and my husband's already home, which was kind of odd because he doesn't get home before me. And I can tell by the look on his face, something is not right. But he is a jokester. And he, even after being together almost 20 years at right now, I still can't tell when he's joking sometimes. So I was like, okay, what's going on? And he says, I lost my job today. And I thought he was kidding. I'm like, you're joking. You know, you did not.
He's like, no, for real. I lost my job. And I could tell that he was being serious. And so after, you know, I panicked and freaked out and cried and all that stuff. You know, I looked through our savings, um, talked to, he ended up getting a severance package. Um, you know, he started looking for a job and then we got a letter in the mail about this 401k loan that we'd only paid on, you know, I think like six months at this point, and we had 60 days to pay it back. Well, the money's gone at that point. We owed $20,000. You know, I don't have $20,000 laying around or I wouldn't taken out 401k loan. Um, and my husband didn't have a job, so how am I going to get another loan to pay off this loan? I, you know, with my income, I could not even pay all of our bills, you know, and I had to worry about feeding two children and making sure that, you know, we had electricity and a roof over our heads and I certainly wasn't worried about this 401k loan, so we ignored it. Um, my husband ended up finding a, everything was great. He's been at the new, his new job like five years now or something like that. He loves it much better. Uh, but then the next year we got a little note in the mail about, uh, you know, a tax statement thing saying basically Canada as a withdrawal and we were going to have to pay taxes on it. Like it was income and penalties and fees and everything for taking out so much money out of our 401k.
So then more panic set in again. It's like, what am I going to do? We went from getting back like $4,000 to owing over $6,000 to the IRS and that's not something that you want to do. Like Oh, in the IRS is panic mode. So I started trying to figure out what, how the heck are we going to pay this? I had some money in savings, but I didn't want to wipe that out. You know what if, what if my husband loses his job again, you know, I'm not going to be without some savings. So decided to do a um, cash advance on my credit card. That was 0% interest for 18 months and just wrote it off as a lesson learned in life, never to a 401k loan again. Well, the next month I started getting the bills for the credit card. I don't know what the heck I was thinking.
I just thought I had 18 months to figure out how to pay this off. Like, I don't know. I don't know why I didn't think that I would have to pay it every month leading up to that 18 months, but for whatever reason, I didn't. And so I started getting the bill in the mail and I'm like, I have to pay this. I've got to take it out of the budget. I don't know how I'm going to pay it and how the heck am I going to pay off? And I think it was at the time, it was $6,000 in 18 months. I'm like, how the heck am I going to pay this off in that time? So I started looking for debt, pay off plans, came across Dave Ramsey, zero based budgeting, the debt snowball, and I'll explain all that. And my life was changed forever.
So those 401k loan was really the catalyst to making the big changes that we needed to in our life and in our finances. Uh, so even though it costs us a ton of money, you know, I'm still thankful for the lessons that I learned from it. You know, e everybody makes mistakes and you have to learn from it. Move on. You can't just keep beating yourself up about it. So what we did was I read the total money makeover, and it was life changing, I read it in like two days. And to me it was very inspirational. Now I know some people, if you've ever listened to his podcast or his well, his podcast or his TV show or whatever, uh, either love him or hate him. So just sworn warn you. Uh, you know, but I really liked the message in the foundation behind it all.
So basically you start with catching up on your four walls. That's food and you know, you had to pay for food, clothing, your housing and your transportation so you can get to work, keep a roof over your head, keep clothes on yourself and feed yourself. So if you're behind on your bills, that's where you start. And you start with a zero based budget, which is planning for every single dollar in your budget. So before I would just write down how much I expect us to get paid, what the bills were for each paycheck. I, and I still do, I've always done it a budget by paycheck and then whatever was left over, we would just spend, like I would say, oh we should spend, you know, $800 a month on food and 400 on gas and Yada Yada. But we would just swipe the debit card and not pay attention where our money was going.
So one of the first steps in this plan is to track your expenses so you can see where your money has been going. And that is one of the most eye opening steps you can do. It's one of the hardest steps, but you have to do it because that is where you will know what changes to make and you will know where your money has been going. So if you're one of those just like me, that at the end of the year and you're doing your taxes and you see how much money you made and you're like, where the heck did all this money go? Because I have nothing to show for it. Like I made all this money, I should have something to show for it. This is where you start. This is where you see where that money has wind going, and then you build your zero based budget around that.
So like for me, um, I was, we were spending $1,200 a month on eating out and groceries. So I was spending so much money on groceries for at the time. Remember, this is just a family of four with one being a toddler and one being a newborn. We were spending $1,200 a month on food. It was ridiculous. So I knew that that was one of the places to cut back. Um, and then I also, you know, cut back on, uh, you know, services like my cell phone bill, the TV bill, like all that kind of stuff. Alright, so started with a zero base budget, cutting expenses, seeing where your money is going, and then whatever is left of your budget. So remember, the a zero waste budget is planning every dollar. So after you get all those things planned for, everything is in, then you've got so much money in leftover that goes toward your goals.
So first you want to save $1,000 at a minimum, and I can go into this in another episode, but you know, for a lot of people you may need to save more than a thousand dollars. But you know, some of you may have never saved a dollar in your life, so thousand dollars seems huge. So you know, that's a minimum. Just get to there and then reevaluate your goals and if you need to save more or if you can go on to paying off debt. So once you save your thousand dollars, then you start paying off your debt. Everything extra in your budget goes toward the debt snowball and the debt snowball is listing out all of your debts from smallest balance to the largest balance. Your regardless of interest rates, there are some instances where you will want to factor in interest rates or even payment amounts depending on your situation.
But in general, for most people that just doing the debt snowball is what will be the most effective method for you because it's more motivating. Uh, you get the quick wins of paying off the small balances and you see, you can actually see the progress quickly and that will motivate you to keep going. Um, if you focus on the interest rate only, you know, that could be your biggest debt and it could take you forever and then you'll give up. Like there's no point in that. Start on a small debt, get it paid off so that you're motivated to keep going. Okay. So we already had the thousand dollars saved. Like I said, we had money, I'm already saved, but I didn't want to use it just in case. So we were able to just jump right into the debt snowball. And the first we only had, so at that time we had the credit card that the taxes went on, which is like $6,000.
We had my car, which was $14,000. And then we had my student loans, which were $25,000. So the very first thing we did was focus on the credit card and we got that paid off in like two months or so. Um, you know, at this time I didn't know I would be talking about it so much. I didn't track like I don't remember exactly when we paid off the first credit card. Uh, and then we paid off my vehicle so we got that paid off at the end of the year. So I do know that. So we started this journey in May, like may or June. And so by the end of the year we had paid off both of those. So that was like half of the debt. And then January 1st, 2016 we started focusing on my student loans, which was $25,000. And I had only borrowed $28,000 and I had been paying on it for 10 years and I didn't even use my degree.
I was a detective, like I had a degree in psychology cause I was going to be a counselor. I always thought I was going to be a counselor. That's what I had planned on doing all through high school, all through college. And then my last semester of college I decided that I was sick of school and I was done. And I was going to go be a police officer instead of going to get my masters degree. And then I had all this student loan debt for no reason. But anyway, that's besides the point. So my interest rate on the student loans was ridiculous. It was like six point something. So in 10 years I had paid off $3,000 and we, let's see. Um, so in 10 years I'd only paid off $3,000 and I was paying almost $5 a day in interest every single day. It was like $4.62 cents, something like that, $4.64 cents, whatever.
And that's one of the things I did to keep me motivated to keep going because it was like, you know, once you get halfway through, when she would kinda get toward your last year, biggest one, it can seem like a mountain, even though you've made all these big changes and climbed all these smaller hills is like, oh my God, I'm never going to be done. So I calculated how much I was actually spending every single day in interest. Um, and some other things that we did. We, um, at this point we decided to shut off our retirement contributions because I realized how much I did the math and saw how much faster I could pay off this debt if we did that. Um, we already have quite a bit saved, um, in our retirement accounts and I still had a pension that I had to contribute to and the town that I worked for, um, well in the state, they, um, the local government, they have to contribute to my 401k as well.
So we still had money going into retirement, um, but not our own money into our 401ks. So we cut that out and that was actually a couple of hundred dollars. So that helped us speed up paying off my student loans. And I only recommend that to people. If you are all in, you are intense about this, that you're not going to go and spend it on other things because you will, um, you will see that you have all this extra money and think that it's extra and spend it and then not turn your retirement contributions back on. So I don't take this recommendation recommendation lightly. So you really need to think about it before you do it because retirement is crucial. So just because I only did it halfway through, like I didn't want to do it at first. So once I sought ran the number, saw how much faster we could do it and be done, I decided to do it.
So, you know, think about it really hard before you actually shut it off. Um, we sold some big things. We sold a trailer and a four wheeler, which for those of you that don't know, my husband, this is huge. My husband is a hoarder. He literally has every single magazine he's ever had his entire life. Literally it's still out in the shop in bins. It's ridiculous. He says he knows, you know, where they all are and what they say and he still looks at him. So to get him to like really sell anything was a major, major feat. And really without him being fully onboard, we wouldn't have been able to do it this quickly. Um, so, you know, if you're struggling and doing it this on your own, I've got, um, I guess coming up on a, on another episode coming up soon about getting your spouse onboard and living on one income.
Um, but anyway, back to why that they all stories. So, you know, we made a lot of changes to do it faster and faster. You know, I didn't just, now I do jump into things, but you know, I went into this and made small changes as we went and as I saw progress and how much faster we could do it and keep going, we made changes gradually. You know, I didn't just do my zero base budget, do my debt, snowball, do cash envelope, shut off the retirement contributions, sell everything all in one day. Okay. This was a increase in intensity and change of behavior over the 17 months. So, you know, that first month, don't beat yourself up if you're not all in, just keep making the steps and changes in the right direction and you will get there. And as you see the progress and as you see that debt balance going down, you'll be more motivated to do it faster and find things to do to make it happen faster and faster.
So like another thing I did was I sold like all my lamps and my wall decor, like I'm wanting to eventually change the style anyway, but like it looked like we just moved in. Like I literally sold the pictures off my walls and all my lamps. Like I was intense about it once we got to that point. And I just wanted it to be done with my student loans because I was seeing how much money we were spending every day for that, you know, when you're spending $5 everyday just to have the loan there, that's insane. So I wanted to add in my life and gone forever. And so that really helped motivate me to go and do it faster and faster. Uh, some other things that we did or that I did to, um, stay motivated while doing this was I joined, uh, groups that were about budgeting, Dave Ramsey paying off debt.
Um, and that really helped keep me motivated to, uh, talk to other people and see other people doing the same things that I did or that I was doing. Um, another thing that I did was I read debt, pay off success stories like every night before going to bed. And that's one reason that I share so many on my website as well. And you can go to my website, go to debt and debt, sex success stories, and you'll be able to see like all the ones that I've done so far, debt free interviews. Um, let's see, what else did I do? I pay a [inaudible].
Okay, so we cut back our food budgets. You know, I've talked about how we were spending $1,200 a month. We cut out there that down to $600 a month. Um, and initially we cut out lunch, but that didn't work very well. So we ended up adding money in for lunch, but it wasn't every single day for my husband and I, that was our social time to get out of the office. We have stressful jobs and like that's our time to talk to people in distress a little bit. So we did add that in. Um, we realized that we just, that was something that we needed to do. Uh, we also, you know, we said no to things like not everything. Like we still had fun, we budgeted money in for things that we wanted to do, but we did, we didn't do everything that our friends wanted to do.
Like we still said no to some things because it wasn't a priority right then. And then if, if there were something that we wanted and it could wait until after we were debt free, it waited. I mean, the last month that we had, my husband actually asked me were more debt free, can we buy shaving cream again? Like that's how intense I got there at the end because I just wanted it gone. And so like I bought generic stuff. I didn't, if it literally, if you could do without it for a month or two months, I didn't buy it like it could wait. And then of course then once we paid it off, you know, I caught back up on things. I just wanted it out of my life and I wanted the freedom and be able to say that I did it and you know, feel like I accomplished something.
And that's what I did. And you know what, we were able to pay it off in seven in, well the student loan was 10 months. So that was 10 months of it. We paid it off in October of 2016 total of 17 months, $45,000. And you know what, I'm so glad that we did. You know, I had people asking me while I was doing this as if you died tomorrow, would you still be, um, would you still be doing this? Like, and I said yes. Like I want my family to be set up financially to be able to live without me, to be able to grieve, to do what they want to do once I'm gone and without doing this, you know, my husband would have to go right back to work, uh, not have any time off. You know, somebody is going to have to pick up the slack at home with babysitters and house cleaning and all that stuff.
You know, and I have life insurance, I have a plan, we don't have debt. So that it just make things a lot smoother and easier if something does happen to me. But you know what? I still enjoy my life. It's not like I'm not having fun. I still had fun and it was temporary. Now I'm on the other side of it. Been debt free for, um, almost two years. No three years now. Yeah, almost three years now. And of course I'm still thankful for. I'm glad I did it. I'm glad I made the sacrifices then so that I can live the life I want now because without it, I wouldn't be able to be at home with my kids, building my business. I'd still be stuck in a very stressful job that I just was burnt out on and didn't want to do anymore. And I wouldn't be able to take my kids to school over day, pick them up, work on my business.
Um, help you guys get your lives. And finances together so that you can do it too. If I was still in debt, I would still be working a regular job and being on call and having to see and deal with things that nobody really should have to see and do. And so that is why I am very, very thankful that we made the sacrifices to get to where we are now. You know, and I, and then human now I still have people say, well, you're just lucky. I, you know, that must be nice. Yeah, it is nice. But I'm not lucky. I worked hard. I made a plan. I followed through on that plan and I did what I needed to do so that I could live this life that I want now. And that's what you have to decide for yourself is what are you willing to sacrifice now for what you want later.
And once you do that, everything else will fall into place. You will know what you need to say no to what changes you need to make so that you can get to your bigger goals. And you know, don't let anybody discourage you and tell you that you need to have debt, that there's good debt, there's a, you know, you should always have a car payment. You should always have a mortgage payment, student loans, good debt, no debt is good debt. You know, mortgage is not considered in this debt free journey just because it is a much bigger loan. But we are working on paying it off early. Like that is the end goal. Uh, but for right now, you want to concentrate on your consumer debt. So your credit card, your car payments, yes, you can be without a car payment. You don't have to always have a car payment.
You just have to decide that that's what you're going to do and then do it. Uh, and you know, find the ways to make it happen. You know, and like I said earlier, you may not be able to do it as fast as I did. Um, but that doesn't mean you can't do it. It, it'll, it'll happen in your time and as fast as you can do it. So. Okay, I'm going to quit on my rant today and I will talk to you soon. We've got some great guests, podcasts coming up. Uh, and I will be talking about how our 401k loan cost us almost a million dollars. So, uh, look forward to that. I am so excited about this podcast and sharing these stories with you to help motivate you to pay off debt. And remember, you can go to budget's made easy.com for all my free resources and helpful advice and follow me on Instagram at budget's made easy. I will talk to you soon. Bye.