GUEST STORY: Overcoming Money Trauma

GUEST STORY: OVERCOMING MONEY TRAUMA

overcoming money trauma - guest money story

We met Scott last October FinCon18 . He reached out to us and asked us to do a guest post on his blog about Why We Quit Our 6 Figure Jobs to Travel in Van. We were honored, obviously, but as I spent some time wandering around Scott's site I was so impressed by his own personal money story that I just had to share it with you all!

Written By: Scott from Simplifinances

Not everyone has to go through what I did growing up. And some people go through way harder things.

My parents were divorced when I was 8. It was a difficult divorce that caused my father not to be in my life. My dad was never good with money. He had accumulated over $1 million in debt by the time the divorce came and that forced my parents to file for bankruptcy.

My mom raised me and my four siblings by herself. We lived with extended family and government support until we could get back on our feet.

I learned how to save money and work hard from a young age because I wanted to create a future for myself. I wanted to be good with money because I didn’t want my future wife and kids to go through what I did.

How I overcame money trauma from the past

The way that I overcame some of the trauma from my past was getting really educated. I read books and listened to audiobooks and I ultimately learned that I was the one responsible for my future. No one else. Just because I didn’t grow up rich or come from a wealthy family, it doesn’t matter. I’ve been blessed having gone through what I did because it forced me to be stronger and it forced me to be smart with my money, even from a young age.

You can’t change the past. And dwelling on the past won’t change your circumstances. It’s better to look toward the future with optimism. The key is to become aware of what happened in your past, acknowledge it and move on.

How I address money conversations with your spouse (and how that has grown over the years)

I’ve always been a frugal person and very interested in personal finance.

My wife and I started out our marriage with good conversations about money because we both managed our money the same way and we didn’t have a lot of expenses. Before we got married, I managed my money a certain way and then she started doing it as well. And that’s when I knew I had to marry her.

We maintained the status quo of saving 10% and not going into debt.

But then I discovered the FIRE movement and started listening to the ChooseFI podcast at the end of 2017, I learned that there are other people out there like me pursuing the same dream of financial independence! I went far down the rabbit hole and I’m still learning new things and meeting new people. It’s been a great community to be a part of.

We’ve since had more arguments about money because I’m the one switching things up and trying to be more optimized and she’s left thinking, “hold up mister.”

The year that I learned about FI, we had a baby, we moved to another state, I started a new job and I started grad school. Dealing with all of those life changes while at the same time learning about financial independence has made it difficult to avoid difficult money conversations with my wife.

It’s a learning process and things will continue to get better as our goals align more and more for the future.

What I'd recommend to someone who grew up in a difficult money environment (whether poverty, divorce, trauma, etc)

If you grew up in a poor home, or a poor neighborhood or your parents went through a divorce or bankruptcy, maybe you’ve gone through a divorce or bankruptcy yourself, perhaps your parents ever taught you that rich people are greedy or that money is the root of all evil, all of these things can affect your financial blueprint. But here’s the hard truth:

No one cares.

No one cares if you grew up poor. No one cares if your parents were bad with money, and no one cares about your financial situation like you might think they do.

You may be comparing yourself with someone else thinking that you aren’t doing as good and you use your past experiences to justify the situation you’re in.

You’re the only one that has the ability to change and own your future. No one else is going to do it for you. So take it upon yourself to learn about personal finances and work hard and look for ways that you can eventually become financially independent.

If you’d like to learn more about how to take control of your finances sign up for my Free 7-day Financial Fitness Email Course!

 

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OUR KETO HEALTH FOOD STARTUP?

DAY IN THE LIFE: OUR KETO FOOD STARTUP

day in the life of our keto food startup

We haven't shared this yet on here, but back in 2017 we started a keto health food company!

Here's the story:

If you’d have asked us three years ago whether or not we’d be the founders of a ketogenic food company we would’ve looked at you with the blankest stare in history.

“Keto-what? You mean no carbs? I could never do that.” Alli precisely recalls that moment three years ago on the elliptical chatting with her friend.

Meanwhile, Matt had been listening to the Model Health Show and Bulletproof Radio podcasts on his two-hour commute to work. He kept hearing of this keto diet and got curious. You see, he lost his dad to cancer at a young age, he watched his mom battle breast cancer, and saw his grandmother die of diabetes. When he started researching the anti-cancer and health benefits of the keto diet, he was blown away. The science made sense.

After much convincing, Alli agreed to try the keto diet with him during the summer of 2017. It was a struggle to say the least. Alli felt hangry and pissed off that Matt suggested this diet in the first place.

This is miserable,” she complained, with a fist full of salted nuts. “I can’t even eat CAKE.”

At the time, Matt was going through a business incubator program and part of the homework was to come up with 20 business ideas a day.

Keto treat company, he scribbled on his notebook, thinking nothing of it.

Little did he know that little notebook scribble would turn into a full fledged business.

Within a year, they launched their first product, a chocolate mug cake and grew from experimenting in their home kitchen to running the operation out of a commercial kitchen.

Every batch is still produced and shipped (with love) by Matt and Alli in Basalt, Colorado.

We spend 50% of our time on Owen Your Future (this biz) and 50% of our time on Primal Noms, our keto health food startup.

We split the days by business, so this past Monday was a Primal Noms day. We took you along for the ride. Next week we will be showcasing a day in the life for Owen Your Future.

Watch the video below!

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HOW WE SPENT $31,710 IN 2018

HOW WE SPENT $31,710 IN 2018

how we spent $31710 in 2018

Last year, we put ourselves on a challenge to spend less than $40,000 and we did it! So we want to show you where our money went in 2018.

The total for 2018 on our personal life is $31,710.

This doesn’t include business expenses- which we spent $9,000 on- but we’ll go line by line. I'm sure you're going have questions when you read the below breakdown...

2018 Expenses

So, why we don’t have a housing payment?

For the first four months in the year we were living in our house in Bakersfield. We were renting out all the other rooms in the house which effectively paid for our entire mortgage and almost all of our utilities.

How We Saved $20,000 from HouseHacking

After we moved out of the house and into Clifford we obviously didn’t have any housing payments because we were living in the van. If you look at our month by month charts you'll see a lot of expenses that include Clifford expenses, maintenance items, we had to replace the transmission, etc.  We didn't count any of those expenses nor the money that we put into build him. We excluded these because we recently sold him in November, so all of that money was recouped on the sale of the van.

Why was healthcare so expensive?

The big payment was health care which Alli had LASIK eye surgery which was around $4,000. That was our biggest expense for the year, but it was totally worth it, being able to see every day, highly recommend it.

Why do we have a loan payment?

We talk a lot about getting out of debt, but Matt actually still owes his mom for college. It’s from the bank of mom at 0% interest. When he graduated school they worked out a payment of $500 bucks a month. We're still paying that. Matt's mom likes income and Matt likes not paying interest, so $500 bucks a month works instead of paying it all off up front.

If you have a 0% interest loan we wouldn’t recommend you pay it off right away, either.

Basically any loan below 7% you have to wonder whether it’s worth your time investing that money or paying off your loan. It all depends on your own personal risk tolerance, some people just really like to be able to say they're debt-free and if that’s really important to you, go for it.

Our next line item is groceries, which was $4359 which is an average of a little less than $400 bucks a month, like $350-ish maybe.

Then gas for the car, utilities for the house, insurance.

What does insurance include?

Insurance does include health (we use Medi-Share), car, and umbrella insurance.

Next up is restaurants. I'm really proud of that one because it’s less than $200 a month. We would have months where it was really big. If you look back on July when we were visiting a lot of friends on the east coast, we spent like $400 that month. Then there were other months where we spent like $80 bucks or less. It fluctuates a lot, but overall for the year we ended up pretty well.

Travel, that was probably the majority of the beginning of the year when we were in Europe for a little bit. We were there the first couple weeks of January.

Other things that ended up in travel: Alli had a bachelorette party in Mexico that ended up in there, Matt had a bachelor party in Denver.

What Mobile Phone Plan We Use

We started off the year with our workplace plans (til April). When we got off our workplace plans, we went to Google FI. Unfortunately, we had a bad experience with Google FI when we got our computers hacked and they weren’t able to protect our phone numbers. Now we are with Verizon and we pay $60 a month for 3GB of data each and that works for us.

When we were full-time traveling in the van we’re using our phones for Internet, so we had Verizon unlimited plan and it was $170 bucks for both of us. That unlimited plan is where the bulk of that expense came from- 6 or 7 months of being on an unlimited plan.

Next up: electronics and software, we bought a drone for our YouTube channel!!

Matt also bought a computer right before we left work so he had a laptop for traveling.

Shopping. A lot of gifts that we bought for people’s weddings, things like that. Christmas gifts all ended up in there too. A few Walmart transactions for backpacking food ended up in there too.

The automotive category is mainly the last few months once we've settled down, we got a new (to us) car, we had to do some registration, stuff like that. Our car was given to us by a friend who owed us.

Most of the Clifford maintenance on the van all ended up under the Clifford category which ended up positive, so it's not included. Since we made $1400 off of the sale of Clifford, all of that got wiped out when you look at it on a 12-month basis.

I'm really proud of our alcohol and bars tab. Super low. When we started dating that was like, a $130 a week.

Entertainment, that’s just like movies or going places. Since we were traveling full-time we didn’t really pay for a lot of entertainment, we just went hiking when we wanted to or mountain biking. Almost all the stuff we did was free, so that was pretty sweet.

So total we spent $31,710 on us personally.

Business Expenses Explained

For the businesses we invested about $9,000 last year, and that’s for our business Primal Noms, we invested a lot of raw material. For this business Owen Your Future we’ve invested in software and some camera equipment.

Majority of the business investment was the last two months into Primal Noms to get raw materials to start manufacturing. Just getting set up with a commercial kitchen was $1000 worth of permitting to get our health license.

If you looked at any of the past expenses blog posts, we post all of the screenshots month by month so you can see how we do it.

For 2019 we’re hoping to keep the spending below $40,000 as we did last year.

Our housing situation might change a little bit, we’re not 100% sure what we’re going to be doing or where we’re gonna be living so we may have some more rents to pay, but no matter where we end up we’re going to try to do something similar to what we did in Bakersfield and house-hack our living situation so at least reduce those costs as much as possible.

We're pretty happy with how we did, we were definitely quite a bit under $40,000 which we expected it would be tough to actually hit.

We’d never spent under $40,000 ever before. The year before we spent around $60k.

Leave us a comment below if you have any spending goals for 2019, we'd love to hear them!

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2018 MONEY WINS AND FAILS

2018 MONEY WINS AND FAILS

2018 money wins and fails

We’ve had some big wins and some big failures this year, but we like to think of our failures more as learning opportunities. So we’re gonna share our learning experiences from our failures to hopefully help you learn and grow from our own mistakes.

Money Fails AKA Lesson

1. $17,500 was stolen from us in cryptocurrency.

What did we learn?

Don’t save your passwords in Google. Don’t download sketchy software from the internet and don’t keep your two-factor authentication codes somewhere on your computer. Print them and keep them in a safe.

Something that you never think will happen to you and when it does, then you’re like, all this stuff people told me is true. A lot of people take their internet security for granted. It had never happened to us before, I’ve never had a hacker that stole information. We didn’t have password protectors or passwords software that like keeps all of them random and we always used the same kind of password for everything.

Not anymore.

We knew crypto was risky going into this and we told ourselves that the money we put into crypto we would be okay with losing. We knew it was volatile and risky, but from losing that much money we learned that we’re not okay with losing that much money.

We learned our risk tolerance is more conservative to moderate and that we shouldn’t have been playing in the crypto game in the first place with that much money. You don’t think you know what your risk tolerance is until you’ve had some experience where the stock market takes a plummet and then you’re like, oh my God, this is not okay.

2.  We don’t like playing lender.

We went into a real-estate deal in 2017 with stipulations that we would get our money back in early 2018. 2018 rolled around and we didn’t get our money back. The partner that we were working with was making a lot of excuses why the deal wasn’t done and we believed him for a while. But eventually ended up having to hire a lawyer to initiate the foreclosure.

What did we learn?

We realized that we don’t like not being in control.  If we had just purchased the house and taken on the flip on our own, we would have felt a lot better. In the future it would be much better if we just invested in it on our own. This guy was a seasoned real estate investor, he had some experience so we thought we could learn some things from him and really it just turned out to be a headache. Now with the foreclosure proceedings, we will hopefully get the money back in the first half of 2019.

3. We went too cheap on the van.

As you know we purchased a 2006 Dodge Sprinter which we converted into a camper van. Some of the financials on that: we purchased it for around $8,000 dollars but ended up having to put in about $8,000 dollars worth of work into getting it running. We also put in six weeks of our time and about $10,000 dollars to convert it. Because it was an old van we could only sell it for $30,000 dollars, so we basically broke even.

If we purchased a newer, nicer van, we definitely could have made a profit on the flip and get paid for the amount of work that we put into it.

What did we learn?

Because we went cheap and we made an emotional decision when we fell in love with the van and saw it and just purchased it, we learned a lesson. The lesson is that it’s not always best to buy the cheapest one you can find.

Our frugal muscle got the best of us. And we fell in love with the red color. It’s always best to try to evaluate big financial purchases with less emotionality and more logic.

We should've taken a second to think about it, move slower, and evaluate our choices more carefully.

Money Wins

1. We stuck to our $40,000/ year challenge!

We spent less than $40K this year, so if you’ve been following us for a little while, you know that we challenged ourselves in 2018 to spend less than $40K for the whole year and we did it.

2. We maxed out our 401ks

Even though we only worked until April, we strategically maxed out our pre-tax retirement accounts. We did this to be tax advantaged and to save as much as much as we can for the year since we knew we weren’t going to be working the full year.

Because after we left our jobs we also knew we wouldn’t be able to continue to contribute to the 401K’s, so it was good to front-load them while we were there.

3. We were able to rent out our house in Bakersfield for around $400 dollars a month in cash flow.

That money is helping us while we’re starting businesses and not making a lot of money.

4. We quit our jobs.

Some people might not think that is the best financial decision, but to us it was because we invested into ourselves and into our businesses. This one has yet to really pay off financially but growing businesses takes time and we finally have the space, time and financial freedom to pour into our passions, so this is a win in our eyes.

5. We’ve got to do lots of traveling.

We started the year off in Europe, traveling through Prague and Berlin and Iceland, and then we went on a six-month road trip around the eastern United States, Midwest and up into Canada on our van.

6. We used our money to buy our freedom.

Now we get to make our own schedule, we get to go skiing on a Wednesday if we want or go to Moab on a Tuesday. We are the bosses of our lives and to me that has been the biggest win of 2018 financially. It took us 5 years to get to this point, 5 years of working at jobs with long hours and inflexible schedules and we may even have to go back to an inflexible job at some point if we can’t get our businesses to take off to be sustainable. For now we’re really enjoying our freedom and space to pursue our own passions and skiing on a random Wednesday in Colorado isn’t that bad.

Leave us a comment below, and let us know about your 2018 money wins and lessons. (They’re not failures!)

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