Thanks for checking out this week’s Simple Inspiration Interview. Today I have the pleasure of interviewing not one but two individuals this week. This week we have an opportunity to hear from the Debt Free Guys. I am sure many of you can relate to John and David’s financial struggles. They offer some great advice on how they were able to overcome their financial struggles and begin to live a debt free life.
Let’s hear how John and David have simplified their finances and began to live a debt free life:
What event lead you to realize you needed to eliminate debt and improve your financial life?
About ten years ago we found ourselves as two thirty-something professionals living in a friend’s basement apartment and had two beat up cars. Our peers were passing us by and we wondered why. It didn’t take long to realize it was because we had $51,000 worth of credit card debt. We were borrowing from our future and had nothing to show for it.
What area of your finances needed the most improvement outside of eliminating your debt?
We had no budget. We spent unconsciously. If we wanted it, we got it. It didn’t matter if we spent cash or credit. Eventually everything was on credit and we were living paycheck to paycheck.
What was your biggest challenge or roadblock to improve your financial lives?
Our biggest challenge was realizing that we didn’t have to spend a lot of money to enjoy life. Once we realized that we could have a good quality of life within and even below our means, things changed for us financially.
How did you overcome this challenge or roadblock?
This took a lot of self-reflection and open dialogue between the two of us. We ultimately realized that we both had two primary goals in life. The first is to travel extensively. The second is to save for retirement. Once we realized those were the areas we want to spend our money, it was easier to get our spending in order.
What steps did you take to change your financial lives?
Initially, we eliminated all non-essential spending and travel. We did this until we paid off all our credit cards. This helped us embrace budgeting. When we were finally able to loosen the purse strings, we did so on a budget and have done so ever since.
How long did it take you to get your finances in order?
We quickly came up with a budget and payment plan to pay off our debt once we realized what we most wanted in life. It took us about two and a half years to pay off our credit card debt. It took us another year or so to feel more comfortable financially. It was at this point that we moved out of the basement apartment into our own condo.
How did you feel once you had your finances in order and eliminated your debt?
Amazing! We occasionally think about how we felt when we were mired in debt and how good we feel now. We have less stress. We’re happier. We can do the things we want. We own what we have. It’s just an all-around good feeling. We want others to have the same feeling.
What financial habits have you developed so you continue to improve your finances?
We’re what we call “money conscious”. We know how much we truly make. We know where every dollar will go before we receive it. We save aggressively for retirement. We have accounts for home improvements. We have an account we’re funding because we’ll need a new car in two years. We have these accounts because we want to spend cash and not credit on the things we want and need.
What advice or tips would you give to others who want to simplify their finances?
Our advice is to just simplify your financial life. All the spending, all the shopping and all the stuff makes our lives more complicated than they need to be. Figure out what it is you truly want financially and work for those financial goals. Just because something is important to your neighbor, sibling or coworker doesn’t mean it’s important for you.
Are there any areas of your finances that you still need to improve on?
Yes. We love to dine out on good food and wine. We don’t go into debt because of it, but we’d do better if we cooked at home more often and drank cheaper wine.
What book, blog, or podcast would you suggest to someone who is looking to eliminate debt or improve their finances?
We documented our experience and what we learned in our book 4: The Four Principles of a Debt Free Life. In 4, we break down what it takes to quickly pay off credit card and other debt and have a good time.
Do you have an emergency fund established, if so how did you determine the amount need to fund it?
We do have an emergency savings account. We have three month’s worth of living expenses in a credit union account that has no check writing or debit cards privileges. We have not had to use it, but it’s a great feeling know that it’s there.
What percentage of your income are you saving?
Among our retirement, saving for a new car and other financial goals, we’re currently saving about 25 percent of our income. We’re currently making a lot of changes to Debt Free Guys, LLC, too, and that’s taking some of our income.
What’s your best savings tip?
It’s almost too simple, but we still use the envelope method. We have a budget for groceries, gas, social spending, etc. Every other payday, we withdraw the money we need for each category and that’s all the money we get to spend in each category until another two paydays.
If money was not a concern, what would you do for fun?
If money wasn’t a concern, we would go on a world tour. We’d travel to everywhere in the world we want to go and see everything we want to see.
Any other thoughts you would like to share with others who are looking to simplify?
We think living simply is really a mental shift. It’s easy for us to get caught up in the hectic, fast paced, always on our phone lives and have the insatiable need for more, more, more. Once we make a shift in thinking, everything else falls into place.
Thanks John and David for sharing your story with my readers. As I mentioned earlier I am sure many can relate to your story and are looking for ways to improve their finances. You provide some great advice to help them turn their financial lives around.
If you can related to their story want to learn more about John and David, check out their new and improved blog www.DebtFreeGuys.com. They use their blog, video and podcasts to help others with their personal finances. Whether it’s getting out of debt, investing for retirement or creating a budget, www.DebtFreeGuys.com has the answers. You can also follow them on twitter @debtfreeguys or friend on facebook.
To read previous interviews in the series click below
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If you are interested in sharing how you have simplified your financial life, send me an email and I will follow up with you. Enjoy the rest of your week. Til next time, take one step at a time to simplify.