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Divorced and $250K in Debt to Financially Free in 10 Years

The BiggerPockets Money Podcast
39 min read
Divorced and $250K in Debt to Financially Free in 10 Years

We know financial freedom is possible for those in their 20s and 30s, just starting their careers, without children and serious financial obligations. But what about those getting started on their journey in their 40s and 50s? What about the stories of those who’ve had lifelong debt, went through a financially destructive divorce, or didn’t know early retirement was an option?

Monica Scudieri, author of Grab Your Slice of Financial Independence, wasn’t financially free until recently. For the past decade, she’s been working hard to pay off a quarter of a million dollars in debt, get her investments in line, and rebuild a life that was financially set back thanks to divorce. While she sounds like a veteran money expert, Monica wasn’t always this frugal. She remembers spending 90% of her paycheck as soon as she got paid, and her ex-husband did very much the same.

After her divorce, Monica was left with an astonishing amount of debt, very few assets, and close to no cash. She worked hard for the next decade digging herself out of debt, building up a cash-flowing rental property portfolio, and financially optimizing her life in every way she could. Now, she’s financially free, coaching others on how they can do the same!

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Read the Transcript Here

Mindy:
Welcome to the Bigger Pockets Money Podcast, show number 345 live from FinCon 2022, where we interview Monica Scootiere from grabyourslice.com and talk about going from six-figure debt as a single parent to financial independence in just 10 short years. Hello. My name is Mindy Jensen and joining me today is the military guide, Doug Norman from militaryfinancialindependence.com. Doug, thanks for joining me today.

Doug:
Hi Mindy. This is always fun at pen hop.

Mindy:
This is always fun. It’s always lovely to see you, Doug.

Doug:
Thank you.

Mindy:
Doug and I are here to make financial independence less scary, less just for somebody else, to introduce you to every money story, because we truly believe financial freedom is attainable for everyone, no matter when or where you are starting.

Doug:
Whether you want to retire early and travel the world or go on to make big time investments and assets like real estate or start your own business, we’ll help you reach your financial goals and get money out of the way, so you can launch yourself towards your dreams and freedom.

Mindy:
And freedom.

Doug:
And freedom.

Mindy:
Oh, I love that little addition, Doug. Doug is joining me today, because Scott is not at FinCon, he’s off galvantic, should we call him lazy?

Doug:
He’s the un-laziest person I know.

Mindy:
I know, right? Scott is wonderful. I am the president of his fan club. I am just talking smack. Doug is stepping into Scott’s shoes, because Doug knows Monica. And Monica has recently written a book called, Grab Your Slice of Financial Independence, where she tells her story of being in six figure debt as a single parent, all the way to financial independence in 10 short years.I have to tell you, if a single parent in six figure debt can become financially independent in 10 years, you can too. I don’t care what your situation is, you can become financially independent too. So Monica Scootiere, welcome to the Bigger Pockets Money podcast.

Monica:
Thank you very much. It’s a pleasure to be here. Thank you.

Mindy:
Let’s jump right in, because FinCon has a very tight time schedule for recording. Where does your journey with money begin?

Monica:
So my journey actually began when I went through my divorce and we went through the divorce. The kids were really young. I took on the debt of the marriage, that $257,000 of debt and yes, and I went through… In the first five years, it was actually really hard, because I had a temp job that ended. I was on unemployment actually for 22 months, because I lost three temp jobs in the first five years.

Doug:
Not due to your own misconduct?

Monica:
No, it’s just the economy. It was temp work. And when you’re a single parent, you’re limited to, you can’t drive very far to a job. You have to be nine to five, because you have before and after school care, you can’t do overtime. And so all of those limitations really kind of put me in a wedge of these are the certain jobs I can take. So if they wanted weekend work, night work, these are things that I could not accommodate when you have small children. But the first five years were really hard, but I kept my why with my kids to reach that financial independence. I’ve never wanted to rely on a paycheck or child support or anything. And so I just kept that in my forefront of my mind. And then there was an opportunity after those five years to sell the house and downsize.
And then I was able to pay off the debt and put money down on my house. I was able to, I’m probably jumping ahead here, but I was able to use a [inaudible 00:03:46] of my personal home, to be able to put money down to buy my first rental property. And then from there I was able to buy two more. And then the next year I bought two more. And between that and putting money in 401K and [inaudible 00:04:01] and HSA and a bunch of other things, I realized at the 10 years that I became financially independent and that I could quit my job. And that and in of itself was, it was a lot to take in. So I didn’t quit my job right away, because first of all, it was disbelief that I could do that. And so I took some time to figure out what I wanted to do and the direction COVID came along and I thought, I’ll just stay at work for a while longer.
And then I just actually recently quit my job in March and focused on the book and go from there.

Doug:
Exactly.

Mindy:
Okay, so let’s rewind.

Monica:
Yes.

Mindy:
What year did this all start?

Monica:
So in North Carolina you are required to be separated for 12 months. So it started in 2008. Yes, I know.

Mindy:
That was an audible sigh that I hope my editors keep in, because that is super annoying.

Monica:
Yes. So we had to wait the 12 months and then file and once we filed, then it went very quickly. So it was 2008, 2009, to go through that process.

Doug:
I can’t think of a better time to have a divorce case going through.

Monica:
Absolutely, yeah.

Mindy:
Of course.

Monica:
And it was kind of crazy, because the house is valued at one thing and then everything caves in and then it’s not valued at that, but you’re filing the divorce at that. And so that’s how the math worked out. But it’s fine. It worked out in the end anyway.

Mindy:
Well yes, it worked out in the end. But let’s go back to the beginning.

Monica:
Yes.

Mindy:
What was your financial position before the divorce?

Monica:
So when we were, I guess dating, we both worked. And so we never thought about who thinks about saving money for retirement. I mean, we had a 401k, we put very little in it. We were more going out to dinner and we both had family in Europe, so we would travel to Europe, we would just live life. And for me, I made my paycheck and then so I would spend 90% of it and I paid all my bills. And then for their dad, it was more of a, I made my paycheck and I can spend more, because I have this credit card and just pay the minimum, because isn’t that what everybody does? And so we never really had the money conversation. We never really talked about mindsets. And even after we got married, we still didn’t have those conversations even though there were clearly many opportunities where we should have. But we never did that. And so that was just one more thing that we didn’t agree on.

Doug:
It was the real problem with the budgeting too, right? You had to figure out what your budget was going to be, but you were ready to talk. For example, what was your debt? What was that made up of?

Monica:
So when I managed the bills, I paid everything off at the end of the month. When we got married, I said, you know what? I think you need to step up and take over. And he didn’t really want to do that, but he did. And then about three months into it, we got the credit card in the mail. Because that’s what we used to get. And I opened it up and there were thousands of dollars of debt on there, not paid. I’m like, why? What is going on? And he’s like, oh, I paid the minimum. So I mean, it’s credit card debt, everybody has credit card debt. And I was like, I need to take this back, because this is not working for me. I do not want to live. I mean it’s bad enough we don’t have a lot of savings, but I don’t want to have debt.
And so I took it back and then I was really excited, because it took me three, four months to pay it all off. And it was like maybe $6,000 in a short period of time. That’s a lot of money that racked up. So ended up paying it all off, I was super excited and I went to him and I’m like, guess what? We have paid off all of our debt. And he was kind of like, okay. It was didn’t really matter him one way or the other. So we really just had very different money mindsets. But see, that would’ve been the perfect opportunity to have that conversation of what are we going to do moving forward? But I never said that, he never said that. We never had that conversation. So I just continued to manage the money.

Doug:
Was some at least mortgage debt or was it all consumer debt?

Monica:
So when we divorced it was some mortgage debt was half mortgage and then the rest of it was consumer and we bought a, what do you call it? A townhouse.

Doug:
Okay.

Monica:
Because we live in North Carolina. So we’re like, oh, everyone’s going to want to come and visit and they can stay at the townhouse, which is ridiculous.

Doug:
A townhouse in addition to your primary residence?

Monica:
3000 square foot house. It had a guest room and plenty of space, it was completely ridiculous. So, which he got that and I ended up paying for it.

Mindy:
Okay. So what did he do with the money instead of paying off the credit card bills?

Monica:
Yes. That’s a really wonderful question. That’s a really good question. It’s hard to know where, I mean, he just kind of went out to lunch with friends and bought stuff. It’s one of those things where, oh look, this is really cool. I really really want it. I need that. It’ll make me happy. And then, you know, buy it.

Doug:
Wow.

Monica:
Thinking it’s going to make you happy. And then two weeks later it’s sitting there collecting dust, because you’re onto the next thing that’s going to make you happy.

Doug:
Wow.

Monica:
And yeah, that’s where the money went.

Mindy:
So I think it’s safe to say you did not have the money conversation before you got married?

Monica:
Correct. Big mistake.

Mindy:
That’s a big mistake, I think a lot of people make that mistake.

Monica:
Yes.

Mindy:
We’re not here to rate you for past mistake. You can’t go back and change everything, you’ve got a time machine, please call me, email me-

Monica:
Yes.

Mindy:
[email protected] I’m not going to give my phone number out, but email me, let me know, because I have some stocks I’d like to invest back in 1982.

Doug:
I’d like to reconsider some of my life decisions.

Monica:
Yes. Yeah, for sure.

Mindy:
Oh my goodness. Some life decisions I’d like to reconsider, but having the money conversation is so important.

Monica:
Absolutely.

Mindy:
I didn’t have the money conversation with my husband, but I also used context clues. He used a coupon on our first date, which is so him, like he’s here too, because he’s in this space. But did you and Marge have a conversation about money before you got married?

Doug:
Oh we did.

Mindy:
Doug’s going to be perfect and say yes.

Doug:
The conversation was Marge showing me how I needed to have a budget, how I needed to be, because I was that legendary college student that had money graduating from high school and managed to get rid of all of it by the end of my first year of college.

Mindy:
I thought you walked on water when it came to money, Doug.

Monica:
Me too.

Doug:
Before you walk on water, you got to hit rock bottom.

Monica:
Tell more.

Doug:
Exactly. When you’re in The Bahamas, finishing your summer training as a midshipman in the Navy and they have an exit tax at the airport of five dollars to get on a plane to go back home from where you have to be, and you have to borrow that five dollars from your best friend, that’s when you know you’ve hit rock bottom.

Mindy:
Oh, wow.

Doug:
But I had a wonderful time and I know this, because I can hardly remember any of it.

Mindy:
We need to have Marge on the show.

Doug:
Oh yes.

Mindy:
Does she do podcast interviews?

Doug:
Oh no.

Mindy:
Okay. I now have a new goal.

Monica:
Yes.

Mindy:
But this isn’t the Doug show, this is the Monica Show. Let’s get back to Monica’s story. Did you combine finances during your marriage or did you keep them separate?

Monica:
We combined.

Mindy:
Okay.

Monica:
The finances. Yes.

Mindy:
Do you think if you had kept them separate, that may have changed the outcome? Or was it never?

Monica:
No, I don’t think it would’ve worked.

Mindy:
Okay. And do you think the financial situation, did the financial issues contribute to the divorce?

Monica:
The financial issues contributed. It wasn’t the main thing, but it contributed.

Mindy:
Okay. So how did you tackle this debt? You had $257,000 of random debt, including the mortgage on the unnecessary townhouse.

Monica:
Right. Well that was, it’s all the townhouse, the mortgage, and just random other credit card and other stuff that never mattered.

Mindy:
It never matters.

Monica:
Yeah. I mean, so when I had a job, I was trying to pay it down and after about a few months of doing that and realizing that this is not going to work, because it was trying to pay down, it’s like trying to shoot a little water gun and it’s just you’re trying to paint a whole wall with a little tiny paintbrush, it isn’t going to work.
And so I took the debt, took the mortgage and I for right or wrong, but I rolled it all together to make one big mortgage and did away with the home equity line of credit and took all of the debt, just rolled it all together. My thought was, first of all, I needed to get the house in my name only. And so when I refinanced, it gave me the opportunity to take his name off the title.

Doug:
Oh, good move.

Monica:
And so it was worth it to me to do that. And it gave me a bigger mortgage payment, but I had no equity, no credit to be able to do anything.

Doug:
That does stretch the payments out over 30 years.

Monica:
Yes.

Doug:
Your home is at risk, you’re using your home equity.

Monica:
Yes.

Doug:
But you now have a lower payment at a much longer time.

Monica:
Yes.

Doug:
And if you want accelerate, you can pay off a minimum 30 year payment or you could accelerate.

Monica:
Yes.

Doug:
And pay it off on short terms.

Monica:
Yes. And it did give me that flexibility. So it really was good. When I was unemployed for five, six, seven, eight months to make ends meet, I dog sit. I cooked for people. I sold, since we had 3000 square foot house, I sold furniture out of the house, but I had to borrow money from my mom, which is a very, very humbling experience when you’re in your 40s. But yeah, I mean you get very, very creative. So after those first five years, I finally had an opportunity to sell the house in downsize. I had somebody finally make an offer on the house. And that was a whole crazy situation, because my realtor was telling me that you should have men’s clothes in the closet. I said, why do I need to have men’s? She goes, because if they see, obviously they’re going to see children live here, they’re going to see that there’s only women’s clothes in here.
They’re going to rake you over the coals and try to take advantage, because they know you’re in a vulnerable position. And I said, I mean, I’m like, who am I going to ask to say, can I borrow some of your clothes to put in my closet? So I did not take her advice. And sure enough, the one couple that came in to put an offer, did break me over the coals and nickeled and dimed me for every little thing. And I told my realtor, I’m like, I don’t have the money to fix this laundry list of stuff. And she’s like, you know what? Let’s fix this one thing that was some dry rot on a window frame. I said, okay. And she goes, the rest is stuff, honestly, it’s just filler. They’re just looking to squeeze you for everything.

Doug:
Just haggling.

Monica:
Yeah. And then they asked for a four week closing, because they had to sell a house that was out of state.
And so they thought four weeks they can get all their paperwork and everything. And I’m like, fine. So I did that. But then the four weeks came and my-

Doug:
You’ve seen this before. How many?

Monica:
Yes. So well then you’ll love the finale. So at the end of the four weeks when we were supposed to go sign to sell the house, they had the nerve to call my realtor and say, we’re missing one piece of paper, we need another week. You just move out of the house and we’re going to move in and then we’ll get you the money later. I said, well, I said a couple things I’m not going to say here.

Mindy:
Thank you. We’re family friendly.

Monica:
Yes, we’re family friendly.

Doug:
We can still edit that out.

Monica:
But yes, we can still edit that out. But yeah, so I said absolutely not. My realtor was like, absolutely not. So I left all my worldly possessions in a truck, at the top of the driveway and slept in a sleeping bag. And it turned out my kids were going to see their dad, because it was the first week of summer. So they were going to be at their dad’s house anyway. And then I just kind of stayed there with my two little cats and waited until paperwork cleared. I mean, I couldn’t move to my house, because I couldn’t get the keys, because I didn’t have the money to close on that house.

Doug:
Right.

Monica:
So I was like, no, we’re not doing that good. Yeah. But then in the middle of all that, this is another thing, this is in the book actually, is that during those four weeks while we were waiting and I was trying to sell stuff, my car broke down. And so I went to my-

Mindy:
Of course.

Monica:
Of course, right? Murphy’s Law. And so I went to my mechanic who’s really, it’s family run. And he sat me down and he said, it’s a money pit, you have to get rid of it and buy another car. I’m like, I literally have no money to buy a car. And he goes, if you put money into this car, you’re just throwing good money away, you really should get another car. So I got a used Honda Civic, which my daughter still drives today.

Doug:
Oh yeah.

Monica:
Yes. And what was crazy about it, was I was selling furniture out of the house and I had big pieces of furniture. So I had saved up $5,000 from selling all this crap out of the house and the garage was like a gold mine. But anyway, so I sold $5,000 of that. Turned out the car that I had, even though it wasn’t very good, they could sell it for parts, because it was discontinued. So I got $5,000 for that and then I was able to pull a couple thousand out of my emergency money and I got to buy the car for cash. So it’s still my favorite car, even though it’s a 2003 Honda Civic, but it’s still my favorite car.

Doug:
These cars last a very long time.

Monica:
They do.

Mindy:
I currently drive a 2003 Honda Element.

Monica:
Oh see? So you understand. It goes forever.

Mindy:
Yes. So this is your primary residence. What happened with the townhouse?

Monica:
Oh, he got that in the divorce.

Mindy:
Okay. So he took that and the mortgage and all of the things associated with the townhouse?

Monica:
Yes.

Mindy:
Okay.

Monica:
Well there was no mortgage, because that was part of the debt.

Mindy:
Oh, you got the mortgage on the townhouse and he got the townhouse?

Monica:
Yes.

Doug:
It’s still a bargain, in the long run it’s still a bargain.

Monica:
Yes, absolutely. Because I am so much further ahead.

Doug:
Right.

Monica:
Yes, absolutely.

Mindy:
But still.

Monica:
And I got the kids, which to me is worth everything.

Doug:
Yes.

Mindy:
Yes.

Monica:
Yes. I’m very blessed. I’ve got wonderful babies. But I mean, they’re not babies anymore, but, you know.

Mindy:
So you refi the house, you kind of roll everything into one great big 30 year mortgage.

Monica:
Yes.

Mindy:
And you start your unemployment journey.

Monica:
Yes. I start this-

Mindy:
Sorry, I’m not laughing, I sound like such a horrible person,

Monica:
No.

Mindy:
What else could be thrown at you?

Monica:
Yes.

Mindy:
Your car breaks down, you get the mortgage on a house that you don’t get to live in and all the debt, but you get the kids.

Monica:
I got the kids.

Mindy:
And then you lose your job. And then after five years, so how long did it take to pay off the debt?

Monica:
Well, once I sold the house, I was able to pay off all of the debt through selling the house.

Mindy:
Okay.

Monica:
And put down 50% on my new little house.

Mindy:
Oh.

Monica:
So I was able to open up a brand new home equity line of credit.

Mindy:
Okay.

Monica:
And that home equity line of credit, I used to buy my first rental property. So what I did was, I used it, jumping ahead a little, but I used that to buy my rental property for cash and then I would turn around and go to the bank and I had a pre-approved loan, which is very important, I want to say, make sure all your paperwork is lined up. But I had a pre-approved loan and so once I bought the house for cash, I turned around, went to the bank and then financed 80% of it, paid off the 20% and then got my taxes ready and waited until the next year to buy two more.

Mindy:
How much was this house?

Monica:
The five houses that I ended up ultimately buying were anywhere from 56,000 to 78,000 each.

Doug:
We don’t see that in Hawaii.

Mindy:
I was going to say.

Doug:
You see that in Colorado.

Mindy:
Hawaii, right? Yeah, same. We buy those all day long.

Doug:
So this is invest work makes sense to buy investment rental properties.

Monica:
Yes.

Mindy:
Yes. Are these local to you?

Monica:
Yes.

Mindy:
Okay.

Monica:
Yeah, these are all local to me.

Mindy:
Oh my goodness. I’m so jealous that you have local two properties. I mean, that’s not the price they are now, this was no 2015 that you were buying this property?

Monica:
Yeah. It was 13, 14, and 15. It was three years. So it was very, very different market, for sure.

Mindy:
So the first property, what did it need? You bought the house for cash for 50 cents?

Monica:
No, the first one I bought for 70, say 79.

Mindy:
79,000 dollars.

Monica:
And that needed nothing.

Doug:
Wow.

Mindy:
And it needed nothing. What did it rent for like $12,000 a month, right?

Monica:
And I was renting it like 850 a month. Yeah.

Mindy:
Okay. So that is…

Doug:
It does make the one percent rule.

Mindy:
That’s the one percent rule.

Monica:
Yes.

Doug:
Nice to see that happen to a rookie.

Mindy:
Yeah.

Monica:
Thank you. Yeah.

Mindy:
Love it. Do you still own that property?

Monica:
I do.

Mindy:
And it is under a mortgage or paid off?

Monica:
So today I have three properties paid off and I own one consolidated mortgage on two.

Mindy:
Okay.

Monica:
It’s a crazy story, right?

Mindy:
It is a crazy story.

Monica:
You cannot make this stuff up. That’s why I wrote the book.

Mindy:
You can make it up, but it is not as good as the truth. Okay. So property two, you bought property number one. How long did it take to buy property number two?

Monica:
It was the next year.

Mindy:
The next year. And that was, how much was that?

Monica:
That one was probably like 72.

Mindy:
Okay. And what did it read for?

Monica:
Well, they’re all around 850. In the beginning, that’s how they went.

Mindy:
And how much work did that one need?

Monica:
So then they started needing roof and HVAC, but not right away. And so we just do some minimal stuff to get it ready to rent out. So painting the inside and maybe if it needed carpet, we would do stuff like that. Then as the roof started to leak, then we would put in five, $6,000 to replace the roof.
And I had somebody manage the properties for me, that helped walk me through the process of what it takes to… So in those three years, they all at some point needed a new roof and a new HVAC. The property that I bought for, it was like 56, almost 52,000, but that needed the most work. And it came with the renter that was renting it for $800. So I’m a softie. I left her there, never really raised her rent, because she’s on her own and there were health issues, I don’t know. So it was definitely renting below market value. But eventually, after three years, I had to evict her, because she was a hoarding situation. It was, and there’s a long story, but when she left, it needed windows, inside paint, new carpeting, new kitchen, new bathroom, new outside. There was a lot of glass and we rent to families, and so I had to make sure that all of that was cleaned up.
So that one, I mean honestly for the money I put into it, I almost feel like we could have torn it down and built a brand new house. It was practically there. Yeah.

Mindy:
I’ve bought that house.

Monica:
Yes.

Mindy:
How much did you put into that house? That house I put in about $45,000.

Monica:
Oh.

Mindy:
Yeah, do you still own it?

Monica:
Oh yeah.

Mindy:
And what is it worth now?

Monica:
Oh, now all of them are in the 200,000, 220.

Mindy:
Oh, okay.

Monica:
Yeah.

Mindy:
So a 100 in, 95 in, and you’re at 200 value. That’s a fair deal.

Monica:
I think so.

Doug:
And you’re replacing things like roofs and air conditioning and heating that has a return on investment. We’re not talking granite counters or koi ponds.

Monica:
Right?

Mindy:
Yes. Well it’s got a bit of a return on investment. But it’s like you need a roof.

Doug:
And you need the air conditioning.

Mindy:
You need the air. Well, depending on where it’s at.

Monica:
Yeah.

Mindy:
You need air conditioning. You need HVAC or H heating in most places. You don’t need a heater.

Doug:
Well…

Mindy:
Do you have a furnace in your house?

Doug:
No.

Mindy:
Okay.

Doug:
No. This is my advantages of living in Hawaii, is we do not have a furnace and we do not have air conditioning.

Mindy:
So he doesn’t have to pay $12,000 every 30 years.

Doug:
You don’t want to know what my electric bill is.

Mindy:
I know what your electric bill is. Okay. So you’ve bought your first house, you bought your second house over two years? At year three?

Monica:
So yes. The first year I established the LLC, when I bought the properties, everything went under an LLC. So I’d only did the first house, because that was all I was approved to buy with the bank. So when I got my tax returns, I was lined up and ready to buy. So I bought two the second year and yeah. Yes, absolutely. And it’s funny, because they’re all close to each other, but they’re all on the same three bedroom, one bathroom, little hardwood floors, little carpet in the bedroom. I mean, they’re a 1,000 square feet more or less. And they’re perfect for families, they’re great for couples and it’s close to downtown area.
Then the third year, I actually bought the next two, number four, number five. I bought them within two weeks of each other, which was really crazy. One of them was a section eight, was my first time experiencing a section eight, which we ended up converting it. Wonderful people there.

Doug:
Wow.

Monica:
Yeah. So definitely we could do a whole show just on rental property adventures. The good, the bad. Some people, they’re like, oh, landlords can be so hard. But I think everybody decides to run their business differently. I mean, I think there’s good landlords, bad landlords, there’s good renters, there’s bad renters. But I like knowing that I’ve got families in there and helping to provide a roof over their head.

Doug:
And they’re taking care of the place.

Monica:
They do, they do take care of the place. Yeah.

Doug:
With all this experience, did you invest in anything else? Was it just strictly real estate? Did you put money in your retirement accounts?

Monica:
Yeah.

Doug:
What other wealth building was there?

Monica:
So it was 2008, everything and everybody got 50% discount on their retirement funds. I didn’t take the money out, even though a lot of my friends were like, no, take the money out. We don’t know what’s going to happen. But I left it there, because there wasn’t a lot there to begin with. So half of, not a lot, may as well leave it. But when I had temp jobs, I always signed up for the 401k and I put, it wasn’t a lot, but I put a little money in there, even though there was no match there, there wasn’t anything to it. But so important is it was a lot of it was about building that muscle to discipline myself and invest that. And then the other thing was just learning how to budget. I think when I tried budgeting in the past, my biggest takeaway, and I write about this in the book too, was not to go look at it backwards. Reverse engineer.
Don’t just start putting numbers in and saying, okay, you have $400 to spend on groceries. Instead, and when I coach people, I tell them, let’s look at what you’re spending today. Don’t change your spending habits the next four weeks. Just record what you spend. And it’s such an eye opening experience. And then from that, you can make your budget, what you’re spending and then think about is it worth it spending $500 going out to eat every month? Do you remember where you ate? Did it bring you joy? And a lot of times people are like, I don’t even remember. I remember spending that money. Did I really spend $500, $600?

Doug:
Where did it all go?

Monica:
Where did it all go? And so it’s having those conversations. Look at your spending, that’s the conversation I always have, is my spending matching what’s important to me? Am I putting the money where I say, the words that come out of my mouth, the kids are important, family is important, friends, am I spending my money that way? So it’s having those conversations and taking that time.

Doug:
But everybody got to decide for themselves where the money was being wasted?

Monica:
Yes.

Doug:
Where they wanted to do something that was more valuable to them?

Monica:
Yeah. It’s just really interesting conversations. I mean, some people, I had one guy, he had three gym memberships, we were talking and yeah, there’s a lot of money for three gym. So I was like, well why? Why do you have? And I’m not saying it’s right or wrong, but really think about is that.

Doug:
Yeah.

Monica:
Well…

Doug:
It’s hard to get a pickle ball for-

Monica:
Yeah. I mean, there were some interesting reasons for it, but in the end he decided to cancel too and take that money. And it’s just really thinking about it, thinking about where your money’s going and does it make sense for your life?

Doug:
Well, it’s the first time too that you’re being judged. It’s just the first time in a long time that you’ve had to reflect on that expense that you probably started on impulse a long time ago. Never really spend much attention to whether you use it or not. But now that you’re looking at, it’s part of the big picture of the B word, the budget, it becomes clear that you would prefer to spend that other places.

Monica:
Yeah. Absolutely. And it is, it’s very interesting conversations, because what’s important for one person, not necessarily the same for another. Mindy, maybe you’re not a three gym membership person.

Mindy:
How could you tell?

Monica:
But I mean, so it’s like everybody’s got their thing they want to keep.

Mindy:
Yes. Everybody does have their thing they want to keep. And what does Paula Pan say? You can afford anything. You can’t afford everything.

Monica:
Yes.

Mindy:
I am a huge proponent of just tracking your spending when you first start out, because yeah, you’re absolutely right. If you put, oh, I’m going to spend $150 on groceries, if you have no idea how much you’re spending on groceries, $150 isn’t going to cut it. But if you have, unless you’re Justin from Saving Sherpa.

Monica:
Unless you’re growing most of your food and using coupons on pizza. Yes.

Mindy:
Justin from Saving Sherpa has some crazy, it’s like $125 a month. But he shops the sales and he’s like perfect. And he’s a very interesting grocery story. But everybody else on the planet doesn’t spend 125 dollars a month.

Monica:
Yes. True.

Mindy:
So you do have to see where your money’s going. And that alone is so eyeopening.

Monica:
It is.

Mindy:
I’ve told this story multiple times on the show, but I started track, we were like, why are we spending so much money? We don’t do anything. We have small children. Why is all this money leaving our wallets? Let’s track our spending. So I started pen on paper, writing it out, and I was going to the grocery store literally every day for one thing. But coming home with five.

Monica:
Yes.

Mindy:
For one thing and coming home with 15. And one thing and coming home with 27. And it’s no big deal if you go to one thing and you come home with five once a week or once a month. But when you do it every day, it adds up. And I didn’t need those other four things. I mean, it was two weeks. I was going to track it for a whole month, but it was two weeks. And I was like, I see the problem. I see the hole in our spending.

Doug:
I’m going to the grocery store twice a month.

Monica:
Yeah.

Mindy:
I already said you were perfect, Doug.

Doug:
Thank you. I try to stretch it out. I don’t like shopping.

Mindy:
And that’s the thing, I love grocery shopping.

Monica:
Me too.

Mindy:
I love cooking, I love eating.

Monica:
Yes. I love eating.

Mindy:
And when I’m at the grocery store, oh, I don’t just go with the list. At the time I did, I could just wander up and down. I have two small kids, you got to eat up a day.

Doug:
Right?

Mindy:
Going up and down the grocery aisles. Oh, look at this interesting thing. I’ll try it.

Monica:
Yes.

Mindy:
With no regard for what I’m going to do with it or the 37 other ingredients I need to make pickled pigs feed or whatever it was. I was not making that. But all the things you need to use this one bottle of giraffe snot or whatever. And what are you going to do with this stuff? I had no plan, but I would just randomly put things in my cart. So once we started tracking, it was very easy to cut down our expenses, because I didn’t want to be spending 11 billion on [inaudible 00:33:39] It’s that one thing. Track your expenses, I’m sorry, not track your expenses, track your spending.

Monica:
Yes.

Mindy:
In real time.

Monica:
Yes.

Mindy:
There are a lot of people, and I don’t want to say that they’re wrong. If Doug were to track his expenses at the end of the month, retroactively, that’s fine, because he’s got it dialed in. She’s been doing this for a minute.

Monica:
Yes.

Mindy:
But if you’re just getting started, you don’t track them at the end of the month.

Monica:
Correct.

Mindy:
Backwards. You track them in real time, because you can’t remember, I mean, do you remember what you spent at Target last week? What did you buy? You don’t remember all the little things, but when you’re there you’re like, oh, it was $17 in this category and $14 in this category. And when you track it so hard, it’s so helpful and eye opening. And you can make changes in the same month.

Monica:
Yes.

Doug:
When you have to look at those numbers and realize what you’re spending it on in real time. And it only takes a minute a day.

Mindy:
It really does.

Monica:
It really does.

Mindy:
If you’re staying on top of it. And that’s a really great segue, Doug, for me to have my confession. I have been-

Doug:
I am not setting her up.

Mindy:
You’re not setting me up. However, I have been publicly tracking my spending for all of 2022. You can follow along @biggerpockets.com/mindysbudget, until July. And we went all the way through June and did it great. And then in July we kind of fell off the bandwagon [inaudible 00:35:01] as we fall off the bandwagon. So now we have two months of expenses to go back and enter manually. I have to show you my spending tracker, because it is really, really detailed, because I want to know. I don’t just track groceries, I track groceries and restaurants. Sorry, I don’t track food. I track groceries, I track restaurants, I track parties. I have a pool in my backyard. I host a lot of parties. But if I lost my job and the stock market went to zero, I would have zero parties. That’s an expense I could easily get rid of. So I track it. I’m trying to open it up, but boy, my computer is not.

Doug:
This FinCon routinely crashes all the bandwidth in the hotel.

Mindy:
Oh my goodness.

Doug:
It’s sweet.

Mindy:
It’s like a bunch of people.

Doug:
We need our own satellite. They just don’t believe us.

Mindy:
We do need our own satellite. Doug for president.

Doug:
2000 nerds together, talking about money. That’s a lot of bandwidth.

Mindy:
With the computer, with everybody, with the computer. And they’re just opening it up and everybody’s opening up everything all at once. For real. Okay, my guys edit this out. This is so awful. It’s opposed to just come right up. Come on. But this is populated by an app on my phone, a Google form that is on my phone and I have it with me. Whatever I spent, I open it up, I type in the date, how much I spent, what I spent it on, into the category and where I spent it.
And that is enough for me. I have prepopulated categories and that’s enough for me to know where I’m going. I really like the taste of alcohol. I go to tap rooms a lot. There’s a lot of tap rooms in my city. But I also will, I have parties at my house, so I might go to the liquor store and buy some alcohol too. Those are the different categories, because liquor in bulk at the liquor store is a different. It’s not retail prices. I mean it is, but it isn’t. And then do you see this, the red categories are where I go, where I went over in my spending, but every month I learn, well, I don’t learn.

Doug:
You learn you don’t like to look at red.

Mindy:
I don’t like to look at red. Not that you can tell, as I miss in every single month in my grocery budget. But it’s a learning experience. I know, hey, I’d love to spend $400 a month on groceries. Not going to happen. So if it’s not going to happen, I need to adjust my budget. And if that has to go up, something else has to come down. Where can I cut? Oh, alcohol is real easy to cut. Tap room’s super easy to cut. I can have people over at my house. It’s like seven dollars a beer to go to the tap room. It’s like $14 a six pack to go to the grocery store and buy it and bring it over into my house. That’s cheaper. Let’s everybody come over to my house and have a big party.

Doug:
But it’s not just that. You’ve learned that beer is an essential part of your life and you’re only going to negotiate how much you spend for it. Not whether you’re going to have it at all.

Mindy:
Exactly.

Doug:
And you’re willing to work for that expense. It has value and it brings that value to your life. You’re willing to work to buy those groceries.

Mindy:
Alcoholic. Whereas clothing, I mean, my clothing budget’s like a 100 dollars.

Monica:
Yes.

Mindy:
I do not care.

Monica:
I see. And that’s how I am. Because I’m a big foodie too. I mean unfortunately, not all food loves me, but I love all food. But I mean, that’s where I spend my money. And to your point about going to the grocery store, like, oh, I don’t know what this is, but this looks really cool. I’m going to try what this is. And sadly, my daughter is the same way. She loves trying food. And so what I learned, though, is that if I find myself getting a little out of hand with the food budget, we have this thing where I’m like, I’m not going to the grocery store for another week or two weeks. We have to shop inside, whatever’s in the pantry, in the fridge. We have to get creative now. And that forces us to really whittle it down the freezer and just so it gets a little creative toward the end of those two weeks. But it’s a good way to kind of remember, well listen, we bought this, before it expires, let’s eat that. Let’s not.

Doug:
But that’s valuable to you. You’re willing to spend that life energy for that money to buy that thing that brings you so much pleasure.

Monica:
Yes.

Doug:
And so you’re going to find a way to afford that. Whether you have to cut the spending a bunch of other categories or whether you’re going to go out and work extra hours or find a way to get promotions and salary boosts?

Monica:
True. But I mean, I’m not a closed person.

Doug:
Don’t look at me.

Monica:
Yeah, I don’t drink a lot. I’m not big on my hair. A lot of things that, but food to me is like food’s like you say, it’s like that’s your time that people come together and it’s very social and it’s the experience that goes with it.

Doug:
Experience, good word.

Monica:
And to me that’s everything.

Mindy:
Okay. So that was a little detour.

Monica:
Yes.

Mindy:
Let’s get back on track. After you had five properties, when did it click that you were financially?

Monica:
It’s when actually it was after I was buying the properties, after that, that I started children learn about the buyer movement. It was toward the tail end of that journey. And it started to click when I started to read about it. And I understood that you don’t have to wait until you’re in your 60s or 70s to retire. You could do it sooner.
And so then it became kind of a game to see, well where am I with this? What does that look like? How do I have income stream to know that I can be financially independent? So when I looked at the properties, they were all fixer-uppers. And so I decided that when the big things were done, the last one I did was that 45, some odd 1,000 dollars to get that one fixer upper done. That was the last one I did. So I knew that when I had all of those done, I thought, okay, I can be ready to quit. And then I finished them and I thought, I’m not ready. So I kind of fell into that trap of, it’s like Doug would say, and Jay Money would both say, don’t wait three, four, five, six years saying, oh, next year. Next year I’m going to…

Doug:
Just one more year.

Monica:
Just one more year. I was starting to do that, that just one more year. But I mean, COVID came along and I think that for me, it wasn’t the money, but it was the realization that, that journey, that 10 years, that was just step one. And that I spent so much time trying to figure out how was I going to replace that paycheck that I never thought about, what was I going to do after? And so that took a little bit of time. My mom got sick and she ended up passing and that took a little bit of a toll. So for me, it was just a little bit of just trying to take a breath and take a step back and figure out where do I go from here?

Doug:
At this point though, you had plenty of cash flow from the rent properties and it’s probably going up with market rents and keeping up and you’re not feeling like you’re losing out with tenants or expenses.

Monica:
Correct.

Doug:
And you also had been investing in your 401k.

Monica:
Correct.

Doug:
Retirement accounts.

Monica:
Yes.

Doug:
So you could put together a plan for financial depends, knowing that you might earn another dollar or two in your life after reaching financial [inaudible 00:43:03].

Monica:
Yes, absolutely. But I knew that I could, whether I earned a dollar or two or not, that my expenses are covered every month.

Doug:
Good.

Monica:
Still take a vacation or two and everything was going to be fine.

Doug:
It all fits.

Monica:
Yeah, it all fits. But that still didn’t get me to-

Doug:
Just one more year is the most powerful influence in personal finance. And it keeps you from making the leap.

Monica:
Yes.

Doug:
But on the other hand, now that you’ve made the leap, you’re not laying awake at night wondering if you’ve overlooked something horrible mistake or incredible expense that didn’t see coming.

Monica:
Correct.

Doug:
You’ve got [inaudible 00:43:37]

Monica:
Yes.

Doug:
You’ve got resilience.

Monica:
And I did. Bazillions. Yes. And bazillions, yeah, absolutely. And it’s funny, because, so when I quit, I think it was the first four weeks that I thought, what did I do? I need to go find a job, because it was a bit surreal. But now I’m like, best decision ever. Best decision ever. I love not having my nine to five. I mean, I loved my teams and what I did, but I love this more.

Doug:
I should point out at this point that once she was no longer going to work, she was trying to replicate that pace and the deadline pressure and everything else about her old life, in her new life. And somebody had to step in and suggest that maybe she should slow down a little bit, space it out. It’s okay to take a break.

Monica:
Yes.

Mindy:
How did you convince her? Because I’m married to her.

Monica:
So no, I believe the words were, you don’t have to do everything in the first three months of quitting your day job. But you’re so ingrained in the long hours and the working and the drive, that it doesn’t turn off, because quit your job on a Friday and Monday comes around and I still, literally Monday went downstairs the same time I always do, get up at six. I was on my laptop by 7:00 AM. I had my coffee and I was looking at emails and thinking about, okay, so what am I going to do today? And I work on the book. That was a big thing.

Doug:
That’s what writes the book, is that daily habit.

Monica:
The daily habit. Yeah. So I’m still in that. So that’s a work in progress. That’s definitely, because I’d only been, what, six months?

Doug:
Only?

Monica:
Yeah.

Mindy:
It is a work in progress.

Monica:
Yes.

Mindy:
It’s only been five years for my husband and he’s still bangs it out every day, because now he says it’s his time, so he can’t afford to waste it. I’m like, it’s okay to enjoy doing nothing. It’s okay to not be productive. It’s okay to sit there and read a book that you enjoy and that teach you something. It’s totally okay. And then he is like, oh, okay. I’ll read Stephen King’s IT in bed. Really the one book that I had to put down and never ever pick up again. That’s the book you choose to read?

Doug:
I share your concerns.

Mindy:
Face down.

Doug:
Yes.

Monica:
Face down. Don’t ever leave that book face up in the bedroom. Okay. Sorry. In terms of your rental property income, how does that compare to what your W2 is bringing it? So the rental property income, it covers not everything, but it covers just over half of my monthly expenses. Then I have-

Doug:
This is the net rental income after you’ve paid all the expenses of maintaining and repairing property?

Monica:
Right.

Doug:
And now you’ve got the actual-

Monica:
My little mortgage.

Doug:
Cash flow to work with. Okay. Over half of your living expenses?

Monica:
Yeah, it’s just over half. And then I have some just in a savings account, I have cash there.

Doug:
And you’re drawing down your assets perhaps, maybe not at a rate that’s going to bankrupt you in five years, but you’re using a four percent safe withdrawal rate or something else that makes you comfortable?

Monica:
Yeah, I think right now it’s a little less because the rental is doing well and so I don’t need to-

Doug:
You got cash flow, you got annuity income from rent property, so you can afford to have a much more sustainable withdrawal.

Monica:
Yes.

Mindy:
Do you have plans for more rental properties?

Monica:
I do. I don’t know. Not really. I mean, there are a couple of things I was looking at, syndication that looks really interesting. So I’ve been having some of those conversations, but nothing concrete. I think right now I’m really excited about just the book and sharing my story and helping other single parents out there, know that it’s hard when you’ve got little kids and you’re on your own. But I really wish I had a book. I wish I had people to lean on. And then that’s really my focus right now, is serving and giving back.

Doug:
She’s been to two financial conferences since she stopped showing up for work. And despite the idea that she’s surrounded by real estate investors, she is held firm. She has not bought anything good.

Monica:
Actually, my third one.

Doug:
This is the third one?

Monica:
Yes. Because-

Doug:
You’re still [inaudible 00:48:09].

Monica:
Real money was the first one.

Doug:
Okay.

Monica:
Yes. And then it was Camp Five.

Doug:
That’s right.

Monica:
And then I came to FinCon.

Doug:
Okay.

Monica:
But it’s my last one for the year, but I’ve already signed up for another one in March, but okay. But I love it. I love it. It’s wonderful.

Mindy:
Okay. So what is next for you besides a whole year’s full of CampFi’s and finance for conferences?

Monica:
I recommend CampFi. It’s wonderful.

Mindy:
I love it.

Monica:
Yeah, no, it is a lot of fun. So what’s next? So I started blogging on the piece of the pie, but I put that on hold to write the book. Now that the book is out, I’m going to spend the rest of the year, I hired somebody to help me rebrand, because I learned that WordPress is not my forte and I’m better at giving the content and not good at making it look pretty.
So I’ll be rebranding that. I’m looking to build a community with the blog. So it’ll be blog, directions on how you can build your slice of how you can grab your slice and make your own five pie. And then the third section, I want it to be for community, where other financial coaches can come and showcase some of their case studies and people that they’ve worked with. So that when people come to the site, they can go, oh, I relate to this story. And oh look, Tina, who is the financial coach, that’s her, she gets me. And so I can call Tina. And I want to build that community on the site. So that’s something that the rebranding that would be part of this year. The site will be ready. I think January is a fair timeline. And then I also am going to turn my book into an audio book, which will be ready probably February time.
And then after that, I think people learn differently. And so I want to do a workbook and online classes, so that if you can read the book and follow the directions there and hear my story. Or you can have your own workbook and make your own [inaudible 00:50:16] or have online classes. So yeah, that’s the near future.

Mindy:
I don’t think there’s enough workbooks out there. I think there’s books and then they don’t really give you… Some people, you’re right, they learn differently and they go in and actually write it out, see it, and you see the steps and oh, that makes sense, in a way that reading it maybe.

Monica:
Yeah.

Doug:
Exactly.

Mindy:
I really loved the workbook that we did for First to a Million, where we teach kids about money, by Dan Shakes. He did a workbook.

Doug:
Yes.

Mindy:
I actually, I like the workbook almost more than the book itself. It’s just so helpful to kids, who are already filling out stuff at school all the time.

Monica:
Yes.

Mindy:
It’s such a natural progression.

Monica:
Yeah.

Mindy:
Okay. Well, tell people, Monica, where they can find out more about you.

Monica:
So I have a site called grabyourslice.com and you can hear more about me, the author. You can see where you can buy the book, which is anywhere books are sold. And then just follow along, because there’s a link back to the blog of The Piece of the Pie, and you’ll see the progression and the rebranding and where we go. It’ll be an exciting, 2023 is going to be very exciting. So yeah, I’m looking forward to it. I have a few other projects that I’ve got, once I get past this, that are very exciting.

Mindy:
You’re retired.

Monica:
Yeah. No, I know.

Mindy:
You’re retired.

Doug:
She has projects, they just don’t have deadlines.

Monica:
I have to meet your husband, because I’m like, oh, it’s like my brother.

Mindy:
Okay, well he’s just down the road, so we’ll go, as soon as we wrap this up, I’ll go introduce you to him. Okay. Well huge thanks to the National Endowment for Financial Education for sponsoring the podcasting booth at FinCon 22 in kind of stormy Orlando, Florida.

Doug:
I’m surprised we haven’t been interrupted by Thunder and Lightning yet. Right?

Mindy:
Yeah. Well there was some thunder earlier today, but yeah, I’m glad the power stayed on the whole time we were recording. From episode 345 of the Bigger Pockets Buddy podcast, he is the military guide, Doug Norman from militaryfinancialindependence.com. Doug, tell us what’s going on over there.

Doug:
I’m updating the original version of the Military Guide, which is now 11 years old. The book is largely evergreen. There’s a few things that the military has changed in personal finances over the last decade that I’ll update. Once that’s done, I’ll start working on my third book and this will be about living your financial independence. I’ve been beta testing some of the concepts on some of the people that I’ve come in contact with.

Mindy:
I love it. Okay. Doug, thank you so much for stepping into Scott’s shoes today while he galvanse around.

Doug:
I’m not going to make a joke about tough shoes to fill, but I will say that I’m happy to show up whenever you need help.

Mindy:
Like the military always does.

Doug:
There you go. We like that stepping in and taking care of things.

Mindy:
Okay, so he is Doug Norman and I am Mindy Jensen saying, chop chop, loly pop.

 

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In This Episode We Cover

  • Financial red flags to look out for when dating (and what to do if you spot them)
  • Budgeting, tracking your expenses, and the smarter way to ensure you’re not overspending 
  • Having the “money conversation with your partner or spouse before it’s too late
  • Downsizing and ignoring lifestyle creep even if your partner can’t
  • Building a small rental property portfolio and the huge benefits of investing early
  • Side hustles and doing whatever you can to get out of consumer debt
  • Why the Honda Civic remains the FIRE movement’s vehicle of choice
  • And So Much More!

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Books Mentioned in this Episode

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Note By BiggerPockets: These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.