2014: Meet the “Fockeringhams”
As we both grew increasingly interested in nutrition (which we realized could be leveraged to overcome chronic health issues we both faced like weight gain, depression, etc.), we decided to shift our careers to nutrition. That fateful decision led us both to sign up for the Nutritional Therapy Association’s Nutritional Therapy Practitioner Training Program. The class is mostly online, but there were three in-person workshops in Portland, Oregon. We met for the first time at workshop one in November 2014 and both knew right away that we’d met “our person!”
Both of us had been given loans from our parents to cover our class’s $3,900 tuition. Rosemary worked at a local health food store to pay her parents back while she took the class, and also applied for and received a $500 scholarship, which helped her pay off the last of what she owed her parents. John had income coming in from sales of his language-learning guides, so was living off of that. Both sets of parents graciously allowed us to stay with them during our NTP study, so our living costs stayed relatively low.
- Scholarships are always worth applying for. A couple of hours of work ended up in $500. That’s a $250/hour paycheck!
- We used to think that “love at first sight” and “you just know when you’ve found the right person” were Hollywood clichés. We now know both can be true!
2015: Winter Wedding Bells
We graduated from our Nutritional Therapy Practitioner class and started a business together, an earlier version of Flourish Fundamentals focused on nutritional coaching. Rosemary earned her first $1,000 as an entrepreneur from a group class she taught and felt like a badass having created revenue out of thin air.
A few months after graduating, John got hired as the new Director of Education at the Nutritional Therapy Association, so we both moved to Olympia, Washington. Rosemary got a part time job in the same city at Biotics Research NW.
A few months later, we had a winter wedding on a beautiful rainy day in December. We managed to find a great wedding venue that was only $600 and we kept costs low by self-catering and creating our own decorations (John’s mother and sister are both amazing artists and created a magical winter wonderland).
Though we kept costs down for the wedding, our marriage started off with some sobering financial realities: John’s $40,000 in credit card debt, a $20,000 family loan, and $6,000 still owed for the 2006 Scion xB we’d bought from John’s parents. Bringing our debt total to $66,000 as we said, “I do.”
- Earning money you made yourself is way more exciting than through a paycheck.
- It’s best to have the money conversation early on in the relationship. Fortunately, John’s debt didn’t scare off Rosemary. Now that’s love!
2016: Year One of Paying Off Debt
Despite a dual-income-no-kids situation, we were living paycheck to paycheck. John was earning $66,000 a year before taxes, and Rosemary’s part-time hourly job became a full-time job with a $40,000 salary. Yet despite a combined pre-tax income over $100K, we always seemed to have more month at the end of our money. We weren’t yet being intentional with our finances or discussing financial matters regularly.
On top of that, we had spent a lot of money on moving. We had moved into a beautiful space with rent at $1,500/month and foolishly bought whatever we wanted to “make our house feel like a home.” It was our first home together, so we had to make it perfect, right?
One day, Rosemary happened to came across Dave Ramsey’s book The Total Money Makeover. John saw it sitting on the coffee table, and started flipping through it. He began reading it with earnest, spending hours at a time underlining sentences and writing in the margins. While sitting together one day (when he was about halfway through the book), he suddenly stopped, put the book down, and said:
Okay. I’m ready. Let’s do this.
Rosemary was so relieved that she didn’t have to try to convince him to adopt new financial habits. The book’s logic had swayed him and he was ready to change.
Side note: For those wondering “how can I convince my partner to change their financial habits,” we highly recommend Gretchen Rubin’s book The Four Tendencies: The Indispensable Personality Profiles That Reveal How to Make Your Life Better (and Other People’s Lives Better, Too). Figuring out which “Tendency” (Questioner, Upholder, Rebel, or Questioner) your partner is will save you both a world of frustration! Here’s a quiz you can take, though I do think the book gives you better explanations of each Tendency. This is our most gifted book to our friends, by a long shot! If you’re curious, I’m a Rebel and John is a Questioner. As a Rebel, I relish in going my own way and not following the crowd (not having a credit card, for example, is usual these days, and I’m rather proud of that fact). As a Questioner, John will only do what makes sense to him, but can change very quickly (e.g. he changed his money philosophy and habits pretty much overnight because Dave Ramsey’s arguments were so compelling to him).
We followed Dave Ramsey’s “baby steps” pretty closely for the most part. Baby Step 1 was to save a small emergency fund of $1,000. Check! Baby Step 2 was to list out all our debts, small to big, and then pay them off in order of smallest to biggest (the “snowball” method): These were:
- Our iPhones.
- Seven credit cards, with various balances at various interest rates (one eye-wateringly high at around 27%!)
- Family Loan 1: $1,500
- Family Loan 2: $2,000
- Family Loan 3: $20,000 (with $350 monthly minimum payments)
- Family Loan 4: $34,000 + $6,000 for the car
The argument for paying off the smallest debts first is that you get a few quick wins under your belt, which gives you energy and motivation to keep going. We definitely found this true for us.
There’s another school of thought that says the “avalanche method” is better, which is paying off the debt with the highest interest rate first. Mathematically, the avalanche method makes more sense. But we decided to stick with the snowball method, knowing that for us, this game was much more psychological than mathematical. Or as Dave Ramsey puts it:
“Money is 80% behavior, 20% head knowledge. It’s what you do, not what you know.”
If it were just a matter of understanding the math, everybody would have their debt paid off!
We then categorized and listed all expenses. The first thing we had to do was stop the hemorrhaging of money going towards all the extraneous purchases, like eating out, going to movies in the theater, getting manicures, buying new clothing and home decor, and our ridiculous grocery spending. We were spending anywhere from $1,000 to $1,500 a month on groceries for just the two of us! (“We neeeeeeed this $14 bottle of pomegranate molasses, because this recipe won’t be right without it!”)
We then drafted a budget with all the spending categories we needed to keep: Rent, Groceries, Gas, Clothing, Car Insurance, etc., and filled up envelopes for each with cash (Dave Ramsey strongly advocates using physical currency to make things more tangible and emotionally meaningful). After a few months of this, however, we realized that the approach was not working very well for us because we kept forgetting to bring the envelopes with us to the store, and got frustrated with how to account for online purchases. Our solution? Switch to “virtual” envelopes using Simple (a smart, elegant banking solution designed for tech-savvy Xennials and Millennials). Their site and app let you create as many goals and expense buckets as you like, and you can even set up auto-spending from each bucket for specific expenses).
Lesson learned: The imperfect method you actually stick to beats the perfect method you quit.
Once we had our budgeting and tracking system in place, it became easier to separate “needs” from “wants,” and continually cut out more and more spending that was not required for survival or contributing to our happiness.
Did we really need Netflix, Hulu, AND HBO if our #1 priority was to get out of debt? Nope. Cut them.
Did we actually need to get a second car, which would mean more debt and regular payments with interest? No, we could make do with one.
With these reductions in expenses, we got our phones paid off quickly and then started paying off the credit cards.
Along the way, we devoured books, blogs, and podcasts about personal finance, minimalism, and intentional living, including Mr. Money Mustache, The Life-Changing Magic of Tidying Up by Marie Kondo, and The 4-Hour Work Week by Tim Ferriss. We started to think hard about what were needs versus wants, and we naturally started paring down our belongings to just the things that really “sparked joy” as Marie Kondo puts it.
We also looked for ways to increase our income. Rosemary wrote an ebook about how to detox from sugar, and it brought in a few hundred dollars in revenue that year.
About halfway through the year, John’s work situation was taking a big toll on his physical and mental health. He wanted to quit and go back to being a solo entrepreneur, but we couldn’t afford the place we were living on just one salary. We tried to think creatively about where we could move and still pay debt on just one salary (plus the income from John’s language books). Rosemary had already negotiated working 1-2 days a week from home (thanks, 4-Hour Work Week!), and had an incredibly supportive boss who understood our goals to get out of debt and was willing to keep her on as a remote employee.
John’s brother, now-wife, and son lived in California, and they had a baby on the way. We offered to be nannies (John prefers “bro pair” or “manny”) if they would let us stay in the separate mother-in-law studio in the back of the house. We downsized our possessions to what could fit into the xB (in one week!) by applying the KonMari method (yes, it was about as crazy as it sounds), and drove down to California with all of our worldly possessions in tow.
Funny side note: Our frozen wedding cake, set aside to be eaten on our first wedding anniversary, made the journey with us in a cooler bag, but it defrosted. We decided the only solution was to eat it with our hands as we navigated LA traffic, laughing at the absurdity of the situation.
- Debt is a giant, screaming emergency. Priority #1 is getting rid of it.
- The time needed to complete a task will stretch to the amount of time allotted for the task (called “Parkinson’s Law,” another gem from The 4-Hour Workweek).
- If you only increase income and never work on changing how you spend, you will stay stuck on the hedonic treadmill and never reach financial freedom.
Photo by the fabulous Allison Turcotte.