Anne is having a parade, socially-distanced, on her 55th birthday this summer. Friends, family and colleagues are walking with her to Wells Fargo to make her final payment on a mortgage she took out in her 20’s; a mortgage she could barely afford.
Paying off a mortgage when you’re financially comfortable is celebration-worthy, and 55-year-old Anne is financially comfortable. But paying off a mortgage when you’re poor? That is parade-worthy. The parade isn’t just a celebration of her last payment; it’s also a celebration of a younger Anne who struggled through years of barely being able to make ends meet. Years of beans and rice, driving old cars, and do-it-yourself home projects because that’s all she could afford.
When 20-something Anne first bought her home, she was making mid-$30,000’s. It was a tight stretch to make her mortgage payment. Two years later it became even tighter when she shifted her career to urban forestry, choosing a job she had passion for, but at a nonprofit that paid significantly less than her former job. Suddenly, her $35,000/year struggle was a $23,000/year struggle. It was a career shift that aligned with the impact she wanted to have on the world, but it came at a steep price. Maintaining a mortgage and home maintenance on a $20,000, or even a $30,000 or $40,000, annual salary is draining.
I met Anne about a dozen years into her home ownership struggle. She loved her home, but she did not love the struggle. We spoke about it a lot because she was trying to figure out how to stop struggling, and because I talk about money a lot. I talk about money a lot because I’m an accountant, but more so because I had my own period of life where I struggled rather spectacularly. For me, that struggle turned my accountant-background into a passion for financial coaching, and eventually led to publishing a creative workbook on personal finance.
So it’s through that lens that I tell Anne’s story of how she stopped struggling, stopped living paycheck to paycheck, became financially comfortable and paid off her mortgage six years early.
Most people think that if they could figure out how to spend less, pay off their credit cards, or some other magic balancing of their financial picture, then everything would be ok. All too often the people I’ve worked with aren’t focused on the one thing that would make the most difference: earn more. If Anne was to stop struggling, she needed to make more money.
When you ask Anne how she accomplished paying off her mortgage, she’ll say that my book gave her the roadmap she needed. I appreciate her testimonial. Indeed, the book was written for people just like her: people living paycheck to paycheck; people that are ready to make a change. In a way, Anne helped me write it - much of the book came from evenings sitting on the porch drinking a bottle of wine and talking about money, the struggle, the dreams and the goals.
However, it is rarely just one thing that changes our finances. Rather, it’s a synergy of intention, tenacity, consistency and a dedication to oneself and one’s future. She’ll say it’s the book, but I’ll tell you that before the book, there were other milestones that prepared her for the guidance in the book:
- She began a habit of selecting annual personal and professional goals, a suggestion from a few life coaching sessions. She shared them with those close to her.
- She continued to gather certifications that would make her more valuable in the workplace.
- She courageously joined a financial mastermind group – a small group of peers that met monthly to deeply discuss the challenges they were having and make commitments to tackle those challenges.
- She began a habit of investing - small amounts, but it was the habit that mattered.
- She began a habit of philanthropy. Again, small amounts, but habit matters.
- She made another career shift, still doing the urban forestry work that matters so much to her, but this time, earning more, not less.
By the time she began reading my workbook her financial world had already improved. However, this is where many slack off. Once they get beyond the struggle, they don’t have the same urgency to focus on their money. They don’t take advantage of their newfound extra money. They don’t spend as much time working on their money. They don’t use their newfound extra money with focused intention.
Not Anne. Anne is intentional, tenacious, consistent, and dedicated to herself and the world around her. Now that she had more money, she focused more than ever. She paid off a second mortgage and she began in earnest building her emergency reserves and retirement (though she’s still playing catch up for her many years of working without a robust retirement program.) She’s also traveled more and started driving a car that cost more than $200.
Then she set her sights on the prize: her mortgage. She set a goal to make her final mortgage payment on her 55th birthday and have a parade to celebrate. I’m so proud of her; she has met her goal.
I asked her what she’s going to do with her extra money. Her answer shouldn’t be a surprise to those that know her: “Two things – philanthropy and retirement savings. When I was young, I always wondered who those people were whose names were on donor walls. As a lifetime community volunteer and small-dollar contributor, it means a lot to me that I can now make a difference financially. Sacramento’s LGBT Center’s capital campaign will be getting a chunk of my former mortgage payment for the next few years.”
Anne Fenkner is an ISA Certified Arborist/Municipal Specialist making a difference in our world through urban forestry.
Stacey Powell is founder of Finance Gym and Creating Answers, a CFO and financial coaching firm, and author of The Finance Gym Action Plan for a Better Life with Money.