How To Pay Off a Mortgage When You’re Poor

It is ok to struggle with your money, and it’s ok to talk about it. But most of us don’t talk; most of us struggle in solitary silence. This is a story about my friend Anne who struggled for years, and then she started talking about it. Next she started doing something about it.

Anne is having a parade, socially-distanced, on her 55^th 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 55^th 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.”

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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.

Finance Gym Weekly Workout - Should You Do Your Own Taxes or Hire an Accountant?

Hi, welcome to The Finance Gym Action Plan for a Better Life with Money video series. My name is Stacey Powell and if you're ready to not just know better but do better with your money then you've come to the right place. 
Lately we've been talking about the grown up stuff around our money. Today's grown up stuff? Taxes... Sorry, we all have to like what's that saying? Death and taxes. We all have to do it! So today I'm going to teach you a little bit about how to choose how to get your taxes done. I get asked that question all the time.. Should I do it myself? Who should I hire? Where should I go? And for me, it's about how complicated are your finances? How complicated is your world? If you're not married, you don't have kids, you don't have a house yet, you don't have anything unusual going on then you absolutely should do your own taxes. And here's why.. Simply by doing them, by buying Turbo Tax or whatever tax software product it is out there, letting it walk you through the questions, seeing where it puts the answer and really kind of paying attention, hitting the little help button, the little question, googling things you don't understand, you're gonna learn, you're gonna get a little tiny tax class and have a more comprehensive understanding and that's good for you and then as you add complications on, have a kid, well you've learned then you're gonna be able to learn what that means. Get married, you're gonna be able to learn that. Buy a house? Maybe you're gonna be able to learn it. Then it starts to get a little complicated. Did you get stock options at work? Did you have to like sell back some stock options? Then it starts to get super complicated. Did you become a business owner? Then it really starts to get super complicated and that's the point. The point at which you kind of start going, maybe I should really seek the advice of someone who is experienced. You'll know when it's time I think. And then who do you hire when it's time? Do you go to one of the big box tax places? Maybe. Um.. Well.. Maybe but I'm often hesitant to send people there because, not always but often the people there they're well trained, they're well supervised they are often not very experienced. So I'm always hesitate to send people to a big box place. That's not to say there aren't some good ones, there are. Shockingly enough, they aren't that less expensive than a good tax accountant. I have for years sent a number of my clients to just a few people, I like to talk about Mike. I send people to Mike because when I send people to mike, theres a couple of things I know, one I trust the man personally, two I know he's going to teach people about their money. Not simply hand them a 50 page questionnaire, have one his staff people enter it into their tax software and spit a tax return back out without actually talking to you about it. I think that's what it really comes down to, is that when you're hiring somebody, you want to hire somebody who's going teach you a little bit. Somebody who has been doing this for a while and is trustworthy and is going to get your stuff done. You don't want to hire the person who just has the best tax strategies in the world. Unless you're in a unique situation there are very few best tax loopholes in the world. If you have the kind of money that can afford you that, you're not watching this video and there are very few tax strategies for you. It's simple, we earn money, we pay taxes, that's the truth of the matter and any reasonable tax account will tell you the same thing. 
Hopefully I've taught you a little bit about how to get your taxes done. If you would like to ask me some more questions, come on over to our FB group Team Do Better and you're welcome to ask questions in that forum. You can sign up for our newsletter at www.TheFinanceGym.com and subscribe to our video series below. Now go have fun doing your taxes!

Adulting: Achieving Financial Security For Yourself & Your Family



Welcome to the Finance Gym Action Plan for a Better Life with Money video series. My name is Stacey Powell and if you're ready to now just know better but do better with your money, you've come to the right place. I'm getting ready today to film Chapter 7 which is call the "grown up stuff". When I was picking out chapter names everybody said, "you can't name it that". I actually wish that I would have used a word that my daughter uses. She's 21 and she uses the word "adulting", and I wish I would have just named the chapter adulting. Let me tell you a little secret if you're like under the age of 40, the truth is you learn this when you get to be 50 and then 60, I think that we all think that when we grow up, somehow it's going to be easier to go see a financial planner or easier to make decisions about insurance or easier to do estate planning. Maybe I just don't hang out with the right people but let me tell you, it doesn't get easier. And almost everybody that I know when they do one of those kinds of tasks that we all kind of dread and don't really want to get done, we all feel this like wow good job Stacey you got that done! And I don't care who it is that I've worked with, whether it's been somebody struggling on a $40k salary or one of my multimillionaire clients, they've all still felt the same way, the uncertainty, the dealing with professionals and you know not really feeling like ah man I don't know as much as this person and I have to trust this person, am I trusting the right person and just the general drudgery and then the complication you know. I'm a finance person but sometimes some of these conversations about insurance is complicated and somebody who's an insurance agent knows a ton more than me even though I know a lot! So I like the word adulting and in my next series I'm going to be talking about the stuff of adulting. My take away for today is, I don't care about how old you are it's alright to smile at yourself it's alright to laugh at yourself a little bit. Just roll up your sleeves and get it done be a little easy with yourself and you can give yourself a little prize at the end in whatever adulting thing you're putting off doing. As always, if you want some support come over to our Facebook and join our team Do Better Group, you can sign up for our newsletter at www.TheFinaneGym.com and subscribe to our Youtube series below. Have a great day!

#1 Money Rule for Couples: You Must Play Together to Stay Together

Welcome to The Finance Gym Action Plan for a Better Life with Money video series. My name is Stacey Powell, and if you’re ready not just to know better, but do better with your money, then you’ve come to the right place.

Lately, we’ve been talking about our relationship with money and how it impacts our financial life. Today, we’re going to be talking about one of my favorite pieces of advice for couples, and that is to have monthly money date night.

I don’t care if you’ve been married for 50 years, if you’re a newlywed or if you’re thinking about getting married. Having a money date night every month can make a huge impact on your financial life.

Here are a couple of reasons why:

1. The only time you talk about it is when you’re trying to solve a problem, a big enough problem that requires the both of you to talk about it. It’s usually frustrating, stressful, ugly. So that’s your framework for how you show up to any conversation about money because most of your conversations are kind of icky, and frustrating without any simple solutions.

If you consistently talk to your significant other about money, your goals, and your dreams, you’re laying a framework in your head that that’s your money conversations are good. Not just icky stuff.

Then when the icky stuff happens, you’re much better equipped with a shared language and know how to work together. So that’s reason number one.

2.  It’s a stereotype, but I think it’s a true stereotype. In most couples, you’ve got the person that loves spreadsheets, loves accounting software, loves all that stuff and figuring out. Then you’ve got this person over here who wants absolutely nothing to do with any of it and is so happy that the other person is going to do it all. So there is one person making the vast majority of the decisions and actions around your money. While that might be convenient, it isn’t best. Here’s why.

I tell my clients all the time. Imagine I’m your accountant. I’m going to give you a ton of advice. I hope you’re going to take most of it. But I also hope you’re not going to take all of it because my framework – I’m conservative. I’m not always going to take risks. I’m not always going to go for the quick path. I’m going to spend 6 hours on a spreadsheet when I should have only spent 1 hour on a spreadsheet trying to make a decision. I should have followed my intuition more, right? That’s my framework.

Another person’s framework brings great value to your financial decisions and so bringing your two heads together is actually important and better. You might think you’re not good at money, but that’s not true. That’s the story you tell yourself. You have great value to balancing out your partner.

It’s not the end-all-be-all to fixing your money situation. It’s only part of the equation. So those are my top 2 reasons why it’s really important to have money date night with your honey. Keep your marriage together, going strong, and being fun.

So if you would like to join me and more of these conversations, you can Subscribe to these videos. You can join us over at Team Do Better on Facebook whenever you can come in and talk about money, and you can also sign up for our newsletter at TheFinanceGym.com. So I want you to sign off and schedule your first money date night.

Start Treating Money Like Your Favorite Hobby

Welcome to The Finance Gym Action Plan for a Better Life with Money video series. My name is Stacey Powell, and if you’re ready not just know better, but do better with your money, then you’ve come to the right place.

Lately in these videos, we’ve been talking about our relationship with money and so today, we’re going to talk about hobbies. In the book, I asked you, “OK, what if you’re really into fishing? What if you knew nothing about fishing but all of a sudden you got this great passion for it?”

So I scoped around. I have this friend Maya who is a bass fisher, not a fly fisher, bass fisher, and she watches bass fishing TV shows. She gets magazines. She has friends that are her peeps but then she has these bass fishing friends. She goes to tournaments, classes and bass stores.

I make fun of her because I come from a fly fishing family. But the thing is that she’s really good at fishing. And she loves it, and she enjoys it. So one of my points in the book is, “Wow, what if we approach money as if it was a hobby?” because you know how most of us are with money. And we’re like, OK, Saturday morning in between laundry and taking the kids to soccer, maybe I will get around to looking at my bank balances, filling out all my bills as fast as I can and then moving on, right?

We spend as little time as possible dealing with our money. So are we really good with it? Would we ever become great bass fishers or gardeners or cyclists or whatever it is you’re into? Think about your favorite hobby. What are the kinds of things that you would do to become really good at that hobby? What if you did that with money? What if you read a book, watched a video?

So you’re already doing something. You’re watching a video. What if you joined a group? What if you did the kinds of things one needs to do to become good at our hobby? Sit down and write a list of everything you did to become really good at your favorite hobby and then do the same thing around money.

Here’s my list in the book:

• Who could you talk to?

• What kind of equipment do you need?

• Do you have the right equipment?

• Are you using the right apps, the right software?

• What friends would be into learning about this with you? So it would be fun.

• Any TV shows or books? - There's my book. It’s called The Finance Gym Action Plan for a Better Life with Money that you could read.

• How much free time do you think that it would take to become really good with your money?

These are some ideas about making money one of your hobbies and becoming super good at it.

So as always, you can Subscribe to these videos below. You can join us on Facebook at Team Do Better. Great place to spend some time worrying about money and you can sign up for our newsletter over at TheFinanceGym.com. So go find yourself a new hobby.

When is Your Credit Score Not Important?

Welcome to The Finance Gym Action Plan for a Better Life with Money video series.

My name is Stacey Powell and if you’re ready to not just know better but do better with your money, then you’ve come to the right place and today we’re going to be talking about your credit score.

Today’s video, it’s actually really just meant for the people who are so strangled by the debt in their life that it’s time to take some drastic measures.

Credit scores are important. They’re absolutely important. You not only need them to get good interest rates when you buy a home. Sometimes you need them when you’re going to be renting an apartment or taking a lease out for a commercial building space or for some people, when you’re trying to get a job or government clearance or something. Credit scores are important. What I’m going to talk about today is when credit scores aren’t important, when you become more important than your credit score.

So I’m going to do a little play today about a conversation that I had with a client once and I’ve had many similar conversations but here is the way it went.

She came in. She was like under water. She was drowning in credit card debt. She couldn’t pay them and she didn’t know what to do.

Her solution up to the point of coming to see me was take more credit card debt out to pay the credit cards because she could. She had this great credit score. It was like how – it was close to 800. It was really a good credit score and she was not going to give that thing up. So here’s the way this went.

“Well, what would it look like if you stopped paying your credit cards?”

“Oh my gosh. I couldn’t do that.”

“Why couldn’t you do that?”

“Well, because if I stopped paying my credit cards, then I couldn’t get more credit to pay my credit cards.”

“Well, what would happen if you stopped paying your credit cards?”

“My credit score.”

“What do you need your credit score for?”

“To get more credit.”

Back and forth and back and forth. I kid you not and it took some time to – for me to teach her, for her to step back and really realize that she was in a loop that there was no solution to.

In the end, her solution was to stop paying her credit cards for a while and like I said in the beginning, this is really for those of you that are really just in the most dire circumstances. I don’t take this lightly but for some people, this is the right solution. When you’re so strangled and worried about your credit score, that you’re making crazy decisions and digging yourself a bigger hole because you’re trying to keep that credit score alive, well, then it’s time to give your credit score up for a while. It will rebuild. I promise it will rebuild. It rebuilds after bankruptcy. It rebuilds after short sales. It rebuilds after periods of not paying your credit cards.

With integrity, you want to circle back and get all that stuff done and you want to rebuild it. But if you’re really to the point where you’re struggling to that level, I suggest you get my book and read it and I talk a lot more in detail about this. It’s another one of those things that you probably don’t want to do alone. I would love it if you would come join us over at Team Do Better. There’s a group of us that will support you on your mission. You can also sign up for our newsletter at TheFinanceGym.com or subscribe to our videos right here on YouTube. Thanks for watching!