From Broke Phi Broke to Financially Woke – Lisa Duke
Today, I am excited to share with you the latest interview in the From Broke to Financially Woke series! The purpose of this series it to give hope to those struggling to escape from the not so secret group Broke Phi Broke. A group whose chant is, “We ain’t got it. Broke, Broke, Phi Broke! We ain’t got it. Broke, Broke, Phi Broke!”
To help me accomplish this goal, I have invited the best and brightest of the financial independence community here to share their stories. As you read their interviews, pay close attention to the mistakes they made. Take mental note of the success principles they used to turn things around.
When trying to apply these principles to your own life, realize that success in life is rarely linear. You will encounter some struggles. But stay persistent. Keep moving forward.
Our special guest today is Lisa from LisaDuke.net. Even though her parents set a good example of living below their means, Lisa decided to embrace lifestyle inflation. That, along with flirting with credit cards, made it hard for her to build up her savings account.
How did she go about turning things around? I’ll let her tell you the story…
Introduce yourself. Where do you blog? What are some of your interests outside of financial independence?
My name is Lisa Duke, and I blog at LisaDuke.net. In addition to playing with money, I enjoy travel, hiking in nature, and reading.
Tell us about a time where you were a member of Broke Phi Broke. How did living paycheck to paycheck make you feel as a person? At your lowest point, how much debt did you have?
I did pretty well living on a budget during school and in internships. Having a set amount of money that I had to make last a certain period of time was doable. But when I got a long term job I started flirting with credit cards. It seemed easier to live a bit outside my means when I knew I had more coming soon.
I don’t remember the exact amount of credit card debt we got into, but we let it build up and then paid it off several times. We had a hard time building up a savings account. I always felt like the money was bored in there. It’s current, it wants to flow!
Luckily we had a good advisor who pushed us to invest in our retirement accounts for the tax benefits. I always understood that was important. Over time that built up and grew until one day it was really impressive. I believe if we never invested another dollar and just let it grow we’d be set for retirement age just by letting it grow. The goal now is to close that gap so we’d have enough to retire early.
What are some of your biggest financial mistakes?
Soooo many…. It’s hard to choose! I had a good example of how to handle money from my parents, who always lived below their means. We never talked about money, though, and so like Pinnochio at Pleasure Island I sort of followed what the culture was teaching about money. I don’t care about keeping up with the Joneses, but the Joneses made things look normal. We SuperSized our house, and we had an SUV and a fancy pickup truck. We thought we were being savvy, because the house was building equity (forced savings, right?!?) and we bought the vehicles used.
After the worst of the recession, I got to a point where I felt like if I wasn’t going to win the “more money/more stuff” game I didn’t even want to play. We downsized the house, got rid of the cars, and are now sharing a used Honda Civic. That freed up a lot of money for other goals.
Our financial planner was really impressed, and mentioned that with these changes we were on the path to financial independence. When he said that, I felt it like a lighting bolt in my gut. I wasn’t sure what that was, but it sounded good. A few hours of Googling later I’d found the FIRE community.
Describe your upbringing. Where did you grow up? What did your parents or teachers teach you about money?
I grew up in a small town in Southeast Arkansas. My parents gave us a really good example of living below their means and not being flashy with money. But money was really taboo, so other than theif example I didn’t learn anything. I didn’t even know they’d been saving money all that time until this year, when I visited them and started asking some taboo questions to see what I could get away with asking. 🙂
The only financial education I can remember from school was some worksheets about the value of coins in elementary school – the value of nickels, dimes, and quarters. Nothing on interest rates, financial products, etc. It’s a shame that we leave the job of financial education to salespeople in this country.
How important is becoming financially woke to you? What steps have you taken to increase your financial knowledge?
Diving down the FI rabbit hole has made me see how chasing money has led me over and over again to making choices that were wrong for me. I’m trying now to do what I enjoy and to try to trust that money can flow for that – that the things I enjoy can make me a living. I had a belief that work has to be suffering. That’s not good.
My husband and I have worked with a mentor for almost 15 years, and I’ve done a lot of reading over that time period. More recently, I studied for and passed the Association of Financial Counseling, Planning, and Education’s exam to be an Accredited Financial Counselor. That gave me a good, well-rounded baseline of knowledge. I just need to finish the hours to earn the credential. And hanging out with the FI folks is an education in and of itself! I just got back from a beach weekend with two ladies I met at CampFI. I thought I was pretty savvy, but I realized they are playing at a whole other level. I love to learn, so it’s exciting to know I can help others get to where I am and also learn more myself.
What are some of the key principles you have used to improve your financial life?
Earn more, spend less, and save the difference. Just because it’s simple doesn’t mean it’s easy.
Track your spending, know your values, and your budget will improve.
How often do you consume personal finance information? Name 3-5 of your favorites sources (books, podcasts, blogs, etc.).
Books – The Millionaire Next Door
Podcasts – ChooseFI, Bigger Pockets Money, Paula Pant’s Afford Anything
Blog – Tanja Hester’s Our Next Life
Where are you on the path to financial freedom now?
Our goal is to get our work situation so good we don’t want to retire and get our money situation so good we can. We aren’t there yet, but we are getting close.
Is there any advice/encouraging words you can give those who are struggling to escape Broke Phi Broke?
Money is a skill like anything else. There was a time you were bad at walking, but you figured it out. If you think you are bad at money, know that you can figure that out, too. Learning, practicing, and finding mentors is key.
How can the readers contact you?
My Facebook page:
I also have a Facebook group where people can ask questions and share. I post live videos there. It’s called Money Club with Lisa Duke. Everyone is invited to join and post questions or share tips!
Read more interviews in the From Broke to Financially Woke Series.
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Jerry is a Business Insider Contributing Writer who is obsessed with personal finance. He believes you can improve your financial situation by applying principles taught by the financial independence community to your financial life.
If you are having trouble saving, he recommends that you join the SaverLife Savings program where you can get a $60 reward after six months (no income requirement). All you have to do is put a minimum of $20 a month into a savings account. Easy, right?
For a fun read, check out his article 10 Signs You’re a Personal Finance Addict to see if you are a personal finance nerd.
Before you go, check out the new From Broke to Financially Woke Interview Series.
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