Archives for March 2019

The Only Requirement for Membership is a Desire to Achieve Financial Independence

March 28, 2019 By Deanna 5 Comments

So as many of you know, I’m 9 years sober. Additionally, I dug my way out of debt and now am on the path towards financial independence.

I had the idea for this post the other day when I was telling someone the similarities I see with people in recovery and people in the Financial Independence Retire Early (FIRE) community. This post is a dedication to the people in both communities.

Membership is Free

In recovery programs, the requirement to join is minimal. Basically, you need only have a desire for help. You don’t even have to have quit whatever addiction you want to recover from to join. You simply need the desire to quit.

Many people who come into recovery want to stop but don’t know how. However, in being surrounded by an entire community who has found a way to abstain, they find hope. Within that glimmer of hope, many people find sobriety if they have the ability, to be honest with themselves and others.

I came into the FIRE community when I was still paying off my debt and had very little saved for my retirement. People welcomed me with open arms and cheered me on. Furthermore, those who had gone before me were willing to share how they achieved financial independence.

I soak up as much information as possible from the community. Now that I’m above the line financially, I’m taking the appropriate action steps in saving for my retirement.

Seriously, the only desire for FIRE membership is a desire to achieve financial independence.

Commonalities Between People in Recovery and People in the FIRE Community

I was asked this question in an interview the other day – what similarities are there between people in recovery and people in the FIRE community? It’s a great question that I’m qualified to answer being I straddle both.

If you humor me, I’ll share some of the similarities I see…

Intentionality

People who are going for the audacious goal of financial independence are very intentional with all things surrounding money. This intentionality can include all sorts of things like:

Those things don’t just happen by mistake. They happen with effort, planning, and oh yes, intentionality!

I don’t know about you, but this fox looks pretty intent!

People may stumble into recovery because things are out of control. However, in order to stick and find a fulfilling recovery, one needs intentionality. This includes things like:

Admission
Asking for help
Taking direction
Trusting something bigger than you
Believing
Reviewing past resentments & relationships
Identifying your part
Letting go
Making amends
Forgiving yourself
Forging healthy relationships
Helping others

Tenacity

The quality or fact of being very determined.

This is also known as perseverance! So whether you are aiming to create a life of sobriety or to save for financial independence, you will need to possess this little trait.

While staying sober happens one day at a time, quality recovery is more than just not picking up. It’s about the things listed above so that you can heal, restore, and find a more meaningful life.

It’s a rich life too but you need to work through the muck in order to find the riches. In trudging the road of happy destiny, you’ll need to be tenacious in your effort.

Achieving financial independence does not happen overnight. Although, it does happen via making small decisions over a lifetime. The little things snowball into big things and one day with the glory of time & compound interest, you’ll hit it.

However, that is nothing to scoff at. There are always pressures to give into lifestyle creep and/or to keep up with the Joneses. Your best self-defense mechanism, IMHO, is to find what truly makes you happy.

When I was paying off my debt and making all kinds of sacrifices, I realized something. That something was that I was no less happy. My relationships with my family and friends are where I find the most joy in life. Getting out of debt and curbing my spending taught me how to enjoy relationships naturally without spending a lot of dough.

All this to stay, the marketers are really good at trying to get you to spend your hard earned money. So in order to stay the course, you’ll need to stay focused and determined. Moreover, you need tenacity.

Purpose

I see this as a common overlap with the FIRE community and the recovery community. We all seem to find our purpose and calling in life once we enter one of these communities.

I don’t want to shame anyone if you haven’t yet found your purpose. It takes time but just know that if you are in either community you on the road to discovering purpose in life.

People looking to retire early are typically retiring to passion projects that have a lot of purpose and meaning in their lives. Usually, when you are passionate about something, you are really good at it. Typically, when you are really good at something, you can earn money. See retirement can still be about making money!

I discovered my purpose in life is to teach. I was thrown off of it when I headed deep into the throes of addiction, but I’m back on track. Furthermore, I re-kindled this passion and purpose in working with women in recovery.

Today I get to teach in ways I wouldn’t have imagined.

Closing Thoughts

So do you think I’m crazy for the parallels I’ve drawn between the FIRE community and people in recovery? I totally see it and wanted to give insight because I suspect many people who read this blog are in one or the other but not both.

There is a lot of common ground.

Moreover, I hope you know that if you have a desire to join either community, you’ve already hit the minimum requirement for membership. Perhaps you simply have the desire to achieve financial independence, we’ll you are in! If you don’t know where to start, you can virtually participate in blog comments, forums, and Facebook groups. For in-person meetups, check out some local groups or a CampFI.

Or perhaps you have a desire to get sober and if that is the case you are welcome into recovery. If you don’t know where to go, please see my recovery resources page. Additionally, feel free to send me a message.

Desire is just the first step. If you have that awesome! You are ready to take the next step. The next step requires action and reaching out to someone in the community. 🙂

P.S. I got to be interviewed by Curt & Wendy on the House of FI podcast and you can listen to it right here!

People are Basically Persevering – Featuring Pomplas Pennies

March 25, 2019 By Deanna 4 Comments

Hello and welcome back to my series where I interview really interesting people and give them a platform to tell their story. If you are interested in being featured, please reach out to me.

Today I’m featuring Ethan & Rebecca from Pomplas Pennies. Rebecca is the author behind the blog. I met Rebecca through our local ChooseFI Group. She posted in our private Facebook group looking to connect with others in the community. I replied and we had our first meet up.

Rebecca & Ethan are millennials with promising careers but a lot of student loan debt. What is so impressive about this pair is their intentional lifestyle in an effort to get to zero. Furthermore, they are doing it as a team to build the future they want. As I learn more about their story, one word comes to mind – persevering.

So without further ado, here they are…

People Are Basically Persevering

My name is Rebecca Arko, soon to be Rebecca Pomplas this August 2019! My fiancé is Ethan Pomplas. I am 25 years old (Ethan is 27).

We live in Northeast Ohio, about 40 minutes outside of downtown. We both were born and raised here. I grew up in the city and Ethan grew up in the country. He has since converted me to a rural lifestyle and I love it!

Both Ethan and I are taking advantage of house-hacking by renting a basement apartment from a wonderful couple who wanted to make the most out of their empty nest. This living situation has allowed us to save so much money and help us contribute to our goals of debt freedom!

We are getting married this August! Although, we view our finances as if we are already married. We are 100% a team.

Do you have any children?

Currently, we do not have children, but we do plan on having them in the future! One of the main reasons for our goal of debt freedom is that we want to be parents first to our children, and our careers will come second.

We know if we are debt free, we can have the opportunity to perhaps live off one income while the other stays home with our kids. We both were blessed to have our moms stay home with us while we were young and we saw the sacrifices our parents made to make that possible. Moreover, we are incredibly thankful for this.

Additionally, we also want to start saving for our children’s higher education (whether it be a trade school or college) from the day they are born, so that they do not have the same battle we have with student debt.

What are your careers?

I am a registered nurse and Ethan works as a certified personal trainer while he is in school to become a physical therapy assistant. When I am not working as a nurse, I am active in my side hustles of nannying and dog-sitting. These side hustles have allowed us to really make progress towards our financial goals. Ethan’s priority is school right now, so I try to do my best to use my free time wisely while he is studying!

Our total household income is about $65,000 combined before tax from our jobs. In addition to that, our side hustles earn us about an additional $4,000/year. Our monthly expenses are approximately $2,800/month, including our debts. Everything extra goes to debt and savings/investments, and I contribute to an employer retirement plan pre-tax.

When Ethan starts working as a physical therapy assistant once he is done with school, our income will nearly double. However, we plan to keep our cost of living the same for as long as we can!

Did you go to college?

Yes, we both did! I went to Case Western Reserve University’s Frances Payne Bolton School of Nursing here in Cleveland. Additionally, I received my Bachelors of Science in Nursing (BSN) in January 2017. I began working as a registered nurse right away after passing my state board exam.

Ethan went to the University of Toledo and studied Exercise Science. He graduated in May of 2014 with his Bachelors of Science degree and has been working as a personal trainer since.

He currently is enrolled in Kent State for their Physical Therapy Assistant degree program, where he will achieve an additional Associates of Applied Science degree. I hope to go back to school in the future to obtain my Masters of Science in Nursing as a nurse practitioner!

Do you have any debt?

We have debt and lots of it. We currently have $90,859 total in debt. About $84,559 is student loan debt, and then we have an additional $6,300 in an auto loan.

In the Financial Independence community, you often hear about people who are our age with a net worth of $300,000, which is absolutely incredible. For us, however, our goal is to simply have a net worth of $0.

We want to start fresh, with a clean slate. Would we like to hit complete financial independence one day? Yes, of course, but for right now hitting zero sounds like the most incredible thing in the world. Lucky for us, there is this awesome community to motivate us and help us formulate a plan.

We like to say that we take “a little of this and a little of that” when it comes to creating our debt pay-off plan. For instance, we take Dave Ramsey’s gazelle intensity and snowball method, we take ChooseFI’s smart, every day smart actionable tips, we take the Frugalwoods family values of living with less in the style of “luxurious frugality”, and we take Mr. Money Mustache’s creative everyday lifestyle hacks.

We are so grateful for those who have created this framework for us. One day we will hit zero and it will be the best day of our life.

We certainly plan on avoiding debt in the future by living within our means and paying cash for as much as possible, such as cars and vacations! We are even paying for our entire wedding in cash!

What is the biggest obstacle you’ve faced in life?

The biggest obstacle we have faced in life we would say is this experience right here. Although it is a blessing to have found the path that we are on, it’s not an easy one. It is as exhausting as it is rewarding.

As much as I love what I do and loved my education, I often wonder “what if?” What if I didn’t go to college? Maybe I shouldn’t have gone to college. If I didn’t, I wouldn’t be in this mess. However, I feel a great amount of sadness when I think about that because it was an experience that made me who I am. It was an experience that has allowed me to change lives every day and help others.

The thought that I would ever regret that is a tough thought to have. I didn’t make poor decisions with consumer or credit card debt. Rather, I simply tried to better myself through obtaining an education. I did exactly what everyone told me to do growing up. Work hard and get a good education… but now what?

When Ethan and I first met, he didn’t have debt. He had to take out some loans for his current program, but before that, he had a positive net worth. I brought this student debt into our relationship, which I felt an incredible amount of guilt for. His patience, understanding, and willingness to help me in this journey is something that I will never not be thankful for. We are facing this obstacle as a team.

Do you know what your purpose is?

I believe our purpose is to help others, and we want to incorporate that into our lives daily. Whether it is through my career as a nurse, Ethan’s job as a personal trainer or career as a physical therapy assistant, or by writing our blog to help others reach their financial goals of eliminating their student loan debt, we want to help others.

We know how dark and heavy student debt can make people feel, and we want others to know that we feel that too, but are finding a way out. Also, when we reach debt freedom, we want to be able to give back. We have learned how to be happy with what we have, so anything left over we want to be able to use for a good cause.

Photo by Eidy Bambang-Sunaryo on Unsplash

What is your investment/retirement strategy?

Currently, I contribute to a retirement plan provided by my employer. Additionally, I am an Ohio Public Employee, so I have an OPERS plan, as opposed to a traditional 401K. I contribute 10% of my salary and my employer contributes 14%, which is INCREDIBLE. My employer also offers a deferred compensation program (457B), which I plan to start contributing to.

Ethan will start contributing to a retirement plan once he starts his career as a physical therapy assistant, and we plan to max that out. We also have a Roth IRA.

For investments, we love Betterment. We love index funds and we love the minimal effort involved when using Betterment. We plan to dive deeper into investing once our debt is gone!

Also, we are building up our emergency fund, which we feel is incredibly important to have. We have about one month’s expenses in it right now, but we also have a good deal of cash saved up in other places, like our wedding fund. We have a little extra cushion here and there so we know if we needed to pay for an emergency, we would be covered. Once the wedding is over we will stock it with 3 months expenses, slowly working our way up to 6.

What else would you like to share?

One way we have fun and enjoy life while maintaining frugality is through being outdoors. It saves us money and we adore it. We love to camp, run, hike, and kayak! You may think that camping equipment and kayak is expensive, but we have found ways to save!

The initial investment for camping equipment can be a little pricey, but it’s a one time cost that you can continue to enjoy for years to come. As for our kayak, we bought an inflatable two-person kayak from SeaEagle. It’s so convenient because we can take it anywhere! We just inflate and deflate it anytime we want to use it! It collapses down into a duffle bag, so now worries about getting a kayak mount for the car. SeaEagle has sales all the time too, so we got ours at half the cost!

How do you give back?

As stated above, we want to make giving back a priority when we are debt free. However, even though we are tight on a budget now, we still find ways to give back. We like to donate to our friends and family for good causes, or local charities, such as A Special Wish Foundation, the Cleveland Chapter, or local animal shelters.

We also like to actively give back, by participating in events like the local 5ks that donate proceeds to a cause. One big event we have done for A Special Wish Foundation is the Anytime Fitness 24 in 24 event, where we run 24 miles in 24 hours, one mile every hour, to raise money for local children and their families with life-threatening illnesses. Our gym, the gym Ethan works at as a personal trainer, puts this on every year. I have done it two years in a row, and Ethan has done it 3! It’s exhausting but so rewarding. This year we raised $120,000 for the event!

Our gym, the gym Ethan works at as a personal trainer, puts this on every year. I have odne it two years in a row, and Ethan has done it 3! It’s exhausting but so rewarding. This year we raised $120,000 for the event!

Closing Thoughts

Thank you, Ethan & Rebecca, for sharing your story with Ms. Fiology readers. I’m inspired by your tenacity to achieve your goals and have no doubt you’ll achieve them if you keep on persevering.

I’ve found that some of the keys in working towards incredibly tough goals are accountability, community, and knowing why. Rebecca & Ethan have these three things in place which is why I know they’ll succeed. They know their why. Additionally, they have reached out to people, started a blog to chronicle their journey, and are helping others in the process.

It’s in the giving that we get.

Alright, readers, what are your big audacious goals? Who is your community that is keeping you accountable? Moreover, what is your why?

Learn Something New & Re-Wire Your Brain

March 21, 2019 By Deanna 4 Comments

“Every brain is wired differently.” – Dr. John Medina

I’m excited to continue with my series on brain health. In my sobriety, I’ve focused on understanding how to aid in the healing of my brain. I’m always fascinated by what science says; hence this series.

I’ve been reviewing the book, Brain Rules by Dr. John Medina. Additionally, one of my friends and readers has gifted me the book, Brain Food – The Surprising Science of Eating for Cognitive Power by Lisa Mosconi, Ph.D., INHC. As I read and unpack this book, I will be, no doubt, inspired to write some articles in this series on brain food.

For the purposes of this article, we are going to learn a little bit about how brains are wired and most importantly how we can change them. Spoiler alert: it involves learning new things.

And the really good news is that if you are on the path to better financial health through education, you are changing your brain!

The Benefits of Automation With Our Finances

March 18, 2019 By Deanna 3 Comments

My Dad gave me a great idea for a post and that is the benefits of automation. Automation is not only a time saver but can result in some reduced expenses and may even contribute to a higher savings rate.

Electronically Paying Your Bills

Most banks (or perhaps all banks) have an online portal to your account where you can set up bill pay. You are able to enter your different bills and pay them electronically each month. My bank even allows me to pay private individuals through this service and they will mail them a check at no cost to me.

Additionally, you can link certain accounts so that your bank will even notify you when bills are due.

You can essentially pay bills via this service one of two ways:

Set up recurring automatic bills – this works well if the same amount is due every month.
Manually log in and pay your bill when it’s due – this works well if the balance is different each month.

The Benefits of Electronically Paying Your Bills

I tend to think that most people are paying their bills electronically these days. In the event that is not true, I thought it a worthy mention.

There are several benefits to doing this:

You can save money on buying checks
Save time on writing out & mailing checks
Keep more $ in your pocket rather than paying for postage
Save some trees – which BTW, you should also sign up for paperless statements

Disclaimer on Credit Cards

Before I get into automation on credit cards, I have a disclaimer. First and foremost I only recommend using credit cards if you can responsibly pay off the balance in full and on time every month. If not, you will be paying crazy high-interest rates.

If you are currently in the process of paying down credit card debt, I recommend you cease from charging more on these credit cards. The reason is so that you don’t have compound interest working against you. I found once I developed the discipline to pay down my credit cards, I was then able to learn to use them responsibly.

Automation in Paying Your Credit Cards

So if you are using credit cards responsibly you can log into each credit card’s online portal and set up automatic payments each month. There are typically two options here:

Pay the statement balance in full every month
Pay the minimum payment due every month

I always choose the first one. If you choose to pay only the minimum payment, you’ll carry a balance over every month and be charged high-interest on it. On that latter scenario, the credit card companies win. Don’t do that!!

Now that I set up all my credit cards to pay the statement balance in full every month, I notate on my budget which time of the month each one is paid. I’m notified via email before the payment is taken and I put that amount into my budget.

The key is here is not charging more than you can afford to pay off in full. That can be accomplished by tracking & budgeting

The Benefits to Automation in Paying Credit Cards

Some of the benefits are primary and others, secondary.

The primary benefits here are that you will never be late a payment and you will always pay off the balance in full (if you set it up that way).

The secondary benefits are that you are establishing good credit by using and paying off your credit cards each month. Additionally, if you have chosen credit cards that award travel miles and/or cash back, you are getting some more perks!

Automation With Savings

This is my favorite! It allows me to pay myself second after I first tithe off the top.

I’ve set up to max out several retirement accounts two of which are taken pre-tax from my paycheck:

Employer-Sponsored Simple IRA
Health Savings Account

I started maxing these accounts out in 2018 and now each year in the late fall, I verify the new allowable contribution limits for the next year. Then I alert my company’s accountant to up my contributions if the limits have risen.

I don’t see this money as it is taken right off the top.

Furthermore, I’m maxing out a traditional IRA for 2019 which will count as a deduction on my 2019 taxes. This can be set up as an automatic withdraw from my checking account into my Vanguard account. Currently, I have it going into a Vanguard settlement account until I get it to the minimum needed ($3,000) to buy VTSAX. After that, I can set it up to buy the mutual fund automatically.

If you are building up an emergency fund and/or doing some type of savings in a money market account, you can also set up automatic transfers. Be sure to write this in your budget so that you account for it.

The Benefits to Automation with Savings

There are some strong benefits to this one and I’d argue that everyone needs to be doing this. Perhaps you are not yet in a position to max out your retirement accounts and that’s fine. However, everyone should be saving something for retirement even if it’s small.

Furthermore, if your company offers a match for the employer-sponsored retirement account, you’ll want to contribute up to it. That is free money and we all like free money!

The benefits I see on this automation are:

Once it’s set up I always hit my retirement goals
It reduces my taxable liability
I don’t have to pay FICA taxes on pre-tax contributions
I won’t accidentally spend this money

Closing Thoughts

Automation is a time and money saver. Moreover, it can assure that you hit all your savings goals each and every month.

Before you can implement automation, you need to set up a good strong budget. This way you can assign all of your dollars to a category – bill pay, saving, spending, etc.

Automation is another tool in our toolboxes to help us maintain control of our financial lives. These tools will work for us if we use them properly.

How are using automation in your life? What benefits do you find?