From Broke to Financially Woke Interview Series – Life For The Better
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 Tim from Life For The Better. His story is similar to mine in the fact that a purchase of a brand new car landed him in Broke Phi Broke, but only for a brief period.
He hates debt so he paid it off as quickly as possible.
Let’s see how he did it…
Introduce yourself. Where do you blog? What are some of your interests outside of financial independence?
Hey! My name is Tim and I blog over at Life For The Better with my wife “L”. We love going to the gym, hiking, playing guitar, traveling the globe, and helping others with random acts of kindness.
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 remember when I was just starting with the Air Force I didn’t have the most amount of money at the time. I couldn’t stand the anxiety and stress of budgeting and watching my accounts.
At my lowest point, I know it doesn’t sound like much to others, but it was just my car. I think I had $8,000 left to pay on it. I hate having to owe others any money. I paid the car off as quickly as I could so I no longer had that burden on my shoulders.
I recently bought a rental property and I now owe $130,000 to that property. Granted, my net worth is $245,000 now, I still can’t stand having that debt. It’s a weird mental psyche that makes me want to pay off the house as soon as possible.
What are some of your biggest financial mistakes?
One of my biggest financial mistakes was buying a new car when I was graduating high school and going into the Air Force. I figured I needed a car now that I was older and the payments were highly doable with little expenses. I wish I just bought a used car instead. Now, I only have bought used vehicles and vow to never have a payment again.
Describe your upbringing. Where did you grow up? What did your parents or teachers teach you about money?
My parents, especially my dad, and I talked about money a lot growing up. I was younger in elementary school when I’d go on odd jobs with my parents helping out. I didn’t understand it at the time but they were doing side hustles before side hustles were cool.
I also talked to my parents a lot around the age of 14 when I got my first job. We talked about checking and savings accounts at the local bank. How to balance a checkbook. How to transfer money from one account to the next and not keep it all on your debit card. Simple little things about money that made me want to learn more and more. I noticed my accounts were rising with my new job at the grocery store and this led to my dad talking to me about saving $30,000 by age 30 and I’d be a millionaire. We discussed more as I got older about a Roth IRA and different investment accounts. We still talk at least once a week about various business ideas and how to tweak and modify business to expand more.
I think having an open and honest conversation about money from a young age made it not feel like a taboo. Do you know how you’re not supposed to talk about money, politics, and religion at the dinner table? We, as a family, flipped that on its head to educate us on those topics. This gave me a sense of confidence in money management at an early age versus trying to figure out everything in college as a “real adult”.
How important is becoming financially woke to you? What steps have you take to increase your financial knowledge?
Being financially woke to me is highly important. This is because there is a sense of relief from not having money lurk over you. I don’t want to be burden by money. I want to use money as a tool for freedom.
Increasing my financial knowledge is a never-ending process. One step I have is when I’m reading about finances and I don’t know what the topic is about I stop and go to Google and research it.
Another step I have is to listen to people around me and figure out what they don’t know about finances. I then either teach them about the topic or I go home and research it more to see why they don’t understand it. This simple process has helped me learn the basics and master them.
What are some of the key principles you have used to improve your financial life?
“My philosophy is that if I save 50 percent of my income then I can do whatever I want with the other 50 percent.”
Some key principles I have used to improve my financial life are to think, “will this item bring me happiness and do I really need it?” This simple question has saved me from buying things I know I would regret later on in life.
I also stick with treating my savings as a bill and pay myself first. I have learned that I need to pay myself first in order to hit my financial goals. Most individuals, it seems, take the opposite approach and buy what they want and then use leftover money as savings. My philosophy is that if I save 50 percent of my income then I can do whatever I want with the other 50 percent.
How often do you consume personal finance information? Name 3-5 of your favorites sources (books, podcasts, blogs, etc.).
I love to learn and don’t want to stop learning. I consume finance information nearly everyday in some way shape or form. Whether that be from the news, books, magazines, podcasts, blogs etc. I think there is so much to learn about personal finance the possibilities are endless.
Taking the money aside for a second, I think there is also a mental side of personal finance that isn’t talked enough about. That is how and why we make the decisions we do. This relates to having a budget and buying items that don’t fit into a budget. I could talk more and more about this but I think you get the point.
Here are some of my favorite money books:
- The Millionaire Next Door by Thomas Stanley
- The Simple Path to Wealth by J.L. Collins
- Your Money or Your Life by Vicki Robin
I enjoy listening to these podcasts:
- Podcasts: Afford Anything
- Choose FI
- Business Wars
- Mad Fientist
- Planet Money
[Editor’s Note: Two of his podcasts are on my 7 Peerless Money Podcast Recommendation list]
Where are you on the path to financial freedom now?
I actually just logged into Personal Capital today and checked my net worth. It said $245,000. This doesn’t factor in the truck and Jeep or silver I have invested as well.
That’s where I sit monetarily, but I sit extremely happy at my position in life. I think money is only a tool towards freedom and it shouldn’t be based off of net worth. I feel very financially free by being able to save a lot of my income right now and not have any stress or anxiety about how I’m going to pay for groceries or bills. To me, that is also financial freedom.
Is there any advice/encouraging words you can give those who are struggling to escape Broke Phi Broke?
Breathe. I know that is a super simple answer to a complex situation but it’s so true. Sometimes we just rush to the next thing in life and don’t actually take time to look at all of our options. If you are in debt, try slowing down for 30 minutes or an hour right now or sometime this week. Grab a pen and paper and just sit and think about your debt and write it all out. Come up with ways to cut spending and tackle some of the debt that you have. Figure out ways to earn more by side hustles or a different job.
What I’m trying to get at is don’t rush forward without a plan of action. Take just a little bit of time and formulate a plan to get out of debt. Far too often most people skip this simple step and just rush around to make a buck but don’t stop to think about how they could have made more. Breathe and come up with a plan of action before taking a step forward.
“Give me six hours to chop down a tree and I will spend the first four sharpening the ax.”
– Abraham Lincoln
How can the readers contact you?
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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