I try to go on regular walks during the week. Today as I walked out the door and down the street, it was quiet. Really quiet. Hardly anyone driving the streets of our neighborhood, and during the course of my 45-minute walk, I only saw a couple of people. The one person I encountered walking towards me on the same sidewalk deliberately avoided me (for good reason) and stepped off the sidewalk to pass farther from me in the street. The sky matched the mood, threatening rain with dark streaks streaming from the sky on the horizon. The feeling was nearly apocalyptic.

This pandemic seemed so far away for many of us when it was first reported. Every day, it seemed to grow more and more ominous, reaching closer and closer to home. Some parts of our country started to practice social distancing, then restaurants and bars started to close to serving the general public. Before we knew it, only “essential” business was allowed. As the giant gears of our economy and society seemed to grind to a seeming halt, all of a sudden there became a new fear of not enough work, and with it, not enough money to get by. The stock market tumbled and erased all the impressive gains our current president has seen during his time in office. Unemployment applications skyrocket each day, with more than two million claims made just this past week. There is a staggering amount of fear in the news, in our homes, and in our minds. These are unprecedented times. Is there any hope?

I’ll just start off and say that yes, there is hope. As my walk continued, the clouds above the mountains broke slowly and exposed the previously-hidden sun. The warmth on my face reminded me that the world continues to turn, and life does go on, even when it seems that it may all be falling apart. Now, I don’t want to discredit anyone that is going through a particularly rough patch right now. I know there are some extremely challenging situations facing people out there. But you already know all these things simply by turning on the news. I think a different tone and take on things can be helpful.

In the very near future, relief is coming in the form of $1,200 checks for many Americans facing an immediate need. Soon, many businesses should have access to various forms of relief via low/no-interest loans and other financial supports to help float them in these tumultuous times. Mortgage payments are being deferred or suspended in some cases and in some parts of the country. Most notably for this blog, student loan interest AND payments are paused until the end of September.

All of that said, there can still be a lot of panic about what can be done before that relief arrives. While some things may be out of your hands, there are a number of things that are still in your sphere of control. Here are a few things I would suggest:

• Keep cash in hand. Not literally, but try to stay as cash-rich as you can.
• Hold off on paying your student loans for now (double-check with your loan company before doing this). If your loans are federal, they are not accruing interest right now, and payments aren’t expected until the end of September.
• Avoid at all costs any unnecessary expenses if you are short on cash. Review your recent bank statements, and cut out any “extra” expenses that you typically incur. If you are short on cash, one of the best things you can do right now is to minimize expenses.
• If your work has laid you off or your hours have been significantly impacted, file for unemployment. Our country has these systems in place for you as a tax-payer to leverage when there is a need.
• Avoid taking on debt if you can, especially on credit cards. It is tempting to swipe a credit card in these trying times, but take a step back and evaluate if your purchase is truly necessary. If you are honest about it, you might find it is not a necessity.
• If you own a house and are truly in a pinch, check with your lender to see if your mortgage payments can be lessened, postponed, or if something else can be worked out. REACH OUT TO THEM before you become delinquent on payments (this is true for any debt you have). If you are a renter, reach out to your landlord and try to reach an agreement. In all likelihood, they will be reasonable about payments.
• Take a deep breath. This too shall pass. It really will. While we don’t have a solid timeline yet, we do know this won’t last forever.

This pandemic is causing a lot of mayhem, but it is also a gift that we may not see if we don’t recognize its disguise. Time at home may give you the opportunity to reconnect with your spouse, your kids, or your pets. If you haven’t talked to a loved one or a friend in a while, now is a great time. Chances are, they have a whole lot of nothing going on right now, just like you!

While it may be difficult to see the light at the end of the tunnel, I would encourage you to take advantage of the gift that is today. Try to lead a balanced life when possible, eating as well as you can, exercising when you can, and turning off the news. If you are a person of faith like me, take this time to pray that these difficult days would soon pass us by.

If you or a loved one have specific questions about your specific situation, feel free to drop me a line at justinovenell@gmail.com. I am not a financial expert, but I would be happy to verbally work through your situation with you. Sometimes it’s just nice to have someone to listen.

Above all, stay well, stay healthy, stay six feet apart. 🙂

Ready for a way to get free money today? This isn’t a scam! It’s just being smart with your money.

Have you set up a retirement 401k or IRA with your work already? If you haven’t, this would be the first step. You can typically reach out to your HR department to get started with this. If you have done that already, well done, you are headed in the right direction. It is usually very easy to enroll in your company-sponsored retirement account, and I can’t stress to you how important it is to take this step. The magic of compounding interest over the course of your working career is crazy!

The way to get free money, legitimately, from your employer is to take advantage of the company match (if it is offered). My most recent job included a 100% company match up to 4% of what I contributed. This means that if I made $50,000 a year (this is just for an example), and I contributed 4% of my annual paycheck, which would be $2,000 that I would contribute to my retirement each year. With that match though, my company would throw in an additional $2,000 to match the $2,000 I had put down. Without hardly lifting a finger, my retirement savings have already doubled! That is free money if have ever heard of it!

One of the tough things about getting out of debt is knowing when and where to cut back or contribute to your savings, spending, retirement contributions, and other financial goals you may have. Unless you  are completely strapped for cash on a paycheck to paycheck basis, the minimum you should be contributing to your retirement account at work is whatever it takes to max out your company’s match. If they match  4%, I’d recommend contributing at least 4%. If they match 8%, first pinch yourself because that is a great deal, and then contribute at least 8% yourself.

While it is easy to think that you will be able to save more tomorrow, there really is no time like the present. Here is a quick example of what your retirement account would hold if you put in $1,000 at the age of 25, 35, and 45, and retired at 65. This is assuming you made no other contributions, and earned a conservative 8% on your investments:

Age 45 – 65 (20 years): $4,926

Age 35 – 65 (30 years): $10,935

Age 25 – 65 (40 years): $24,273

Pretty crazy how much the age you start at has such a huge bearing on how much your money can grow. Sure, you may have more disposable income as you get older and further along into your career, but without compound interest working as hard in your favor, catching up is extremely difficult, and sometimes impossible to do.

If your company offers a match of any sort on your retirement account contributions, take it seriously and think about how much your future self will thank you!

As I have noted previously in other posts, I use a handful of online tools and apps on my phone and computer to keep a pulse on our finances.

One of the most important things for us in making progress in our financial journey has been having a clear picture of the money that we owe. As the saying goes, the first step in recovering is admitting that you have a problem. This is true with debt as well. And one of the best tools to track that “problem” that I have come across is called Undebt.it.

The concept is pretty simple. You manually add each account that you owe money on – the total balance, interest rate, due date each month, the monthly payment, and other information if you’d like to add it. You go through and add each account separately, whether it is student loans, credit cards, personal loans, medical debt, whatever it may be. While this can seem overwhelming, this is an awesome way to come to terms with all that you owe. Once you know what you owe, it’s much easier to come up with an effective gameplan to get moving in the right direction financially. For the sake of transparency and for an example, here is what my main dashboard currently looks like. The Quicksilver credit card has an introductory 0% interest rate, and we are going to pay it off in the next couple of months, so not to be too alarmed.

 

Once all of the information is entered for each of your debt-related accounts, you can begin to get an idea of how to best attack each of the accounts to effectively and efficiently pay each of them off. That’s where the usefulness of this tool really begins to shine. Under the Payoff Plan section, you’ll find the Debt Snowball table.

I’ll quickly review two of the most popular methods for paying off debt: the Debt Snowball and the Debt Avalance. The Avalance method is the logical way to pay off debt. You start by making the largest payment on the debt with the highest interest rate and work your way down the list, paying off the highest interest debt to the lowest interest debt, until all of the debts are paid. This method will typically guarantee that the least amount of interest is paid over the lifetime of your loans. The second method, the Snowball, is slightly less logical, but more psychological. With this method, the smallest debt is attacked first, followed by the next largest, and so on. We’ve been using the Snowball method ourselves as it has proved to be an excellent motivator to stay the course as the smaller accounts have “dried up” and gone away as we have successfully paid them off. It’s how I was able to extinguish all of my undergrad debt, paid off our initial credit card debt after getting married. We still are running with this strategy today.

The real fun comes in with Undebt.it when you start to calculate what you can pay on your debt each month. To be able to know what you will be able to put toward your debt each month, an existing budget is necessary. With the zero-based budget, you’d basically add up your total income, subtract all of your monthly expenses and spending categories and then whatever is leftover would be part of your debt snowball. In this screenshot, you’ll see what the first few months of paydown would look like for us if we were sending $2,000 per month toward debt:

If we did this $2,000 per month toward debt between the two of us, all of our debt would be gone in 39 months, or 3 years and 3 months from now.

Perhaps we were only able to send $1,500 per month toward that debt instead. This would balloon the payoff timeline to 4 years and 5 months. Much less appealing.

Now say we were able to really ratchet down our spending and send an outrageous amount of money to our debts, say $3,500 per month. That would shrink down the pay-off timeline down to only 1 year and 9 months. Pretty crazy swings in the amount saved in interest and the time it would take to pay everything off. Even making an extra $50 or $100 payment each month on debt can make a pretty large impact on the amount of money you save and the amount of time you take to pay it all off.

For me, this “hypothetical situation” tool is awesome in keeping me motivated. Every dollar that can be freed to help fight debt is a small win that multiplies.

You can see here that there are two very basic truths that arise with this payoff process. Decreased expenses are extremely valuable, and so is increasing income. Side hustles, getting a raise, a promotion, a bonus, or any other influx of income can make a huge difference in making this process a better experience. Got a tax return in your near future? You can use the Additional Payments section of this site to visualize what kind of progress this would help you make if you sent some or all of this amount toward your debt instead of potentially spending it elsewhere.

Tools like this can be daunting and sobering, pushing you to stare your true financial situation square in the face. But this can also be a huge opportunity to realistically evaluate your situation, construct a gameplan, and start to execute it.

Perhaps this is a tool that you would like to use, but don’t know where to begin. I would be happy to get you going in the right direction with a free tutorial and quick test drive of the website. I think it is that valuable! You can reach me at justinovenell@gmail.com.

I will also mention that the creator of this website offers a premium Undebt.it+ version and subscription to their site. I think it is great to support other people’s work, and this is a great way to show appreciation for this innovative author’s creation if you feel so inclined.

Spark EV Video

For those of you that may not know, I’ve owned a 2016 Chevrolet Spark EV (electric vehicle) for about 9 months or so. I bought it as a way to save money on gas (the tie to this blog) and for the tech it features. It’s great not having to use gas at all and being able to charge up at home. Hopefully you enjoy this first video of mine! Hoping they get smoother and easier to watch as I get better and producing them.

I have meant to write about this topic for some time now, so today I’ll finally bite the bullet and get ‘er done.

This is a word of advice to any of you who find yourself in a serious relationship or married, primarily. I know everyone has their own way of approaching finances, and I’ll just open by saying that this is my opinion, and nothing more. Like anything written on this blog, you are free to take what you like and leave the rest! So without further ado…

Trust is a vital cornerstone of any relationship. Trust is something that is earned and built over time, not overnight. Every small action every day in a relationship either builds or erodes away at the trust between two individuals. In finances, this is no different and is maybe even amplified. So how is financial trust built?

Transparency – Like I said, I know people get it done in different ways, but we have found that complete and total transparency is absolutely critical in being able to build healthy financial trust. Our primary checking account is through a bank called Simple. With Simple, we each have our own personal account, and then we share a joint checking account in between. Sort of think of it like a Venn diagram. We each have a very small amount of money in each of our personal accounts, but the lion’s share of our money at any given time is in that shared checking account. When I got to BestBuy to purchase a gadget, I slide my debit card for that shared account, and both Jos and I get a notification on our phones instantly with the business and total amount spent from the account. If that makes you sweat, you should probably have an inward look at why that might be!

This transparency has become as normal and easy as breathing for us. The point is not to be the police for one another, but rather it is to keep each other in check. If I saw Jos swiping for a coffee a few days in a row, I might ask her about it. When I buy something technology-related, say for $50, she is going to kindly ask me what I bought. Both of us know where our money is going. “Our” money – this will lead me to my next point.

Togetherness – The Bible tells us that we are not to keep track of a record of wrongs with our spouse. This is basically scorekeeping, right? Keeping a scorecard of the way that our partner has hurt us or messed up. So why would we do that with finances? I am a firm believer that the bulk of a couple’s money should be in a joint account, with both names on it. When you get married, the two become one flesh, and the bank accounts should too. When Jos was in graduate school and unable to work, I didn’t lord it over her that I was making money and she wasn’t (or at least I didn’t try to – sorry honey, for when I did!). The money that landed in our account from my payday was always OUR money, not my money. When she needed to go out and buy some new clothes for a placement or internship, I didn’t tell her to go use her own money. It’s our money.

The main reason I would encourage this mode of operation is that it is so easy to get into the mindset of owing this or that to one another. This way of thinking clouds the fact that in a relationship, both sides bring specific talents and abilities to the table. Currently, my salary is a bit higher than Jos’. Ask me to decorate or make the house feel “more like home” and I am basically useless. Our house would look like the inside of a prison if the interior design was left to me. Jos loves to cook and is an incredible hostess! If I was in charge of that, it would be Little Caesar’s pizza every time. When I get dressed, I can barely get anything to match or look decent. If it wasn’t for her, I’d go out on the town on a Friday night looking like trash. One of the biggest ways that we’ve been able to cut down our spending the last few years have been with meal preps on Sundays. Once again, ring up a bunch of points for her for all the ways she contributes to our financial well-being. There is way more to a relationship than simple dollar amounts. We each pull our own weight in unique and completely valuable ways.

My last point I’ll make about togetherness is that the victories and defeats are shared when all the money is a collective “ours”. Early on in Forest Grove, we had to replace the wheel bearings in the front of our 2008 Prius. It was $600 and we had very little money to spare. Instead of this turning into a fight about who was going to pay for it, or who’s car it was and who’s the responsibility it was to maintain it, we both were able to discuss it and spend the money from our joint account. On the flip side, when we finish paying off a loan, it is a chance for us to both rejoice equally in that win together. She didn’t pay it off, I didn’t pay it off. WE paid it off. So let’s go celebrate!

Teamwork – Life is more bearable, and more fun, when you have someone on your team. Ecclesiastes 4:10 says that “If either of them falls down, one can help the other up. But pity anyone who falls and has no one to help them up.” There are days when I do not make good choices financially. I want to go out to eat when we’ve already been out recently, or I want a new gadget to add to my tech collection. There are days when I just want to say screw it! and give up on our journey towards being debt-free. And Jos is always right there to help remind me what we are doing and why we are doing it.

When I have a strong paycheck or bonus, I don’t feel the need to pocket it or put it in my personal account, because I look at all the ways Jos lifts me up along the way, and my heart’s inclination because of that is that I want to help put us both into a better financial position. We both contribute, we both make loan and debt payments, we both keep one another on course for the goals that lie ahead. Because of the trust we have, we are able to spur each other on.

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Trust takes time and it takes intentional steps. But the reward is worth it. You will find that financial trust spills over into other areas of your life and relationship, and can bring you much closer than you would be otherwise. Trust builds intimacy, intimacy grows love, and the cycle can continue to feed itself.

If all of this sounds like too much or too scary of an ordeal, start with a simple conversation. Try to be honest and open with your significant other about where you are at, what your expectations are, and how you would like to help one another toward achieving your goals (financial and otherwise) together. You’ve got this!