I wish I’d had the help I needed. Finding the right people can make all the difference.
I kept my house.
In 2008, I separated from my partner of many years. I didn’t want to move from the home we shared with our three children. The house was more than I could afford at the time, but I made a plan that worked. I’m glad I did.
I wasn’t sure my teacher's salary was going to keep us afloat, but I wanted to continue to live with my children in the home where they had grown up, in the cohousing intentional community I loved. I had the great privilege of a father who was able to say, “I won’t let you lose your house.” I never had to call on him to bail me out, but his assurance gave me the confidence and safety net I needed to take the financial risk.
This is how I did it.
Step One: Get out of Debt with Frugal Family Living
I tried to gamify the process of getting out of debt. Winning the game was more fun for me than it was for the rest of the family.
I had barely enough and not a cent more. I was carrying some debt and wasting money on interest payments. I took a hard look at my financial situation and decided how to tackle it.
I told the children we would be budgeting every purchase. It took an argument with my son at the mall about a pair of boxer shorts before he accepted our new way of life. There would be no more impulse buys.
I went through our 4-bedroom, 3-bath house and found every bar of soap, every bottle of shampoo, conditioner and teacher-gift body wash, each stick of deodorant, all the dental floss and every tube of toothpaste. They went into 5 bins in my closet. The children took one item from each bin. When they ran out of something, they could ask for a random ⅓ bottle of Suave shampoo, a half-used bar of French milled soap, a sample tube of toothpaste from the dentist, or some peppermint vanilla sparkly foaming gift soap from Bath and Body Works that I’d received from a student four Christmases ago. “Just go take your shower. We’re not buying more until we use up what we have.”
I have a nice set of clippers and a pair of sharp barber scissors. "I'm happy to give you a haircut, or you can wear your hair long," I told them. (The photo is of a different frugal mother, because my children did not ask for photos of their perfectly-adequate haircuts at the time.)
I planned meals around what we had in the pantry and freezer.
Reducing spending let me pay down my credit card. Paying down the card reduced my interest owed, which let me pay off the debt even faster.
I looked at my monthly bills. I made a list and investigated how much I would save by paying most of my bills quarterly, semi-annually or annually. It was almost $300/year. So I opened a personal escrow account. If I didn’t need to pay insurance one month, the extra funds went into that dedicated savings account. When the HOA dues needed to be paid, the money was already there waiting.
I got a rewards card for regular expenses and paid it off every month. I eliminated my interest payments and got 2% back on my purchases.
My (now) spouse was laid off during the great recession in 2009 and she and her son joined the family soon after. She didn’t bring much money with her, but she brought a food processor and a great ability to cook and feed our family of six quality meals on a tight budget. She won my daughter over with big bowls of hummus. Pro tip: Hummus is a yummy source of high-quality protein, and if you start with dried chickpeas, squeeze your own lemons and crush your own garlic, it’s pretty cheap, too, even if you buy good olive oil.
That first summer, I accepted every tutoring student who came to me at Solterra Way Cottage School. My first student started at 7 am. Vicki cleaned house, drove carpool, and cooked, while she updated her IT certifications.
Step Two: Get Ready to Start Investing
I paid off all my debt except my mortgage and a low-interest car loan. We set aside 4 months of emergency funds. Vicki got hired by a new tech company. We could breathe a little. I finally had some extra funds, and I was ready to learn to invest. That was the beginning of a whole new journey.
The Step I Should Not Have Skipped: Get Help
Help Getting out of debt:
Just looking back at that time in my life is exhausting. I was able to make the transition from paying for debt to being paid to invest, but it was not an easy journey. As I moved from thinking about my finances with a month-to-month mindset, to an annual, and then a lifetime/generational perspective, I wish I had had a financial coach to help me get things under control faster, so I could have gotten invested sooner.
I recently told my story to Dave Fleischer and Brandon Spiece on their 5-star-rated podcast, Financially Independent Teachers. Episode 113- Retired NC Educator Has Done It All!
It’s hard to find a financial coach who focuses on middle-income folks who are at the stage of getting control of their cash flow. Dave and Brandon offer solid 1:1 or group financial coaching. Accessing their services or reading their book would have saved me some time, and probably some pain as well. And their advice is not just for teachers.
Help learning to invest:
My journey to learn about stock market investing was likewise self taught. I figured out how to do it, but it took a long time. (You can read about that part of my journey here if you want to know more.) “Time in the market beats timing the market,” so it would have helped to have someone like… well, me, to help me learn what I needed to know.
The American mindset often values a “do it yourself” mentality. But when it comes to your financial stability, investing up front in a supportive financial coach or a teacher to help you get invested can really pay off. You deserve to find greater peace of mind about your finances, and investments that work for you and your long-term well-being.
If you want to learn more:
If you want to get control of your finances, check out Dave and Brandon's coaching, book (coming soon), or classes.
If you are ready to start investing in the stock market, check out my ebook, or the courses I teach online, for step by step instructions. I'm a teacher. I love supporting beginners!
If you have a financial manager handling your investments, you will benefit from this information also. You can save a lot of hidden fees if you manage your own accounts. And even if you don't take over your own accounts, you can have more informed conversations with your manager.
And if you have been investing for a while, have the resources to invest in at least 100 shares of a stock or fund, and want to learn to safely incorporate options into your portfolio to boost your returns, check out my options trading courses.