Afford Anything - Starting Over at 40 with Six Kids, with Wendy Mays

Episode Date: June 3, 2019

#196: When Wendy Mays was in her early 20’s, she earned $12 an hour working as the office manager of a pest control company. She wanted higher income, so she enrolled in college at age 22. By the time she finished her undergraduate degree, she was 26, married, with a child. Her husband worked low-paying jobs to make ends meet. They struggled to pay the bills. Wendy decided to enroll in law school, so that she could bring in more money. She graduated around age 30, and became the primary breadwinner for the household. She opened her own law practice. The couple starting bringing in a combined household income of around $200,000 annually. They bought a large house, with a swimming pool. Sounds like the American Dream, right? Except it was all financed. By age 38, Wendy and her husband accrued nearly $800,000 in debt. Around $480,000 came in the form of mortgage debt. Another $20,000 comprised of vehicle loans. The other $300,000 came in the form of student loans. They lived paycheck-to-paycheck. They decided to expand their family through adoption. Rather quickly, Wendy and her husband had six children. They realized they needed to repay their debt in order to give their family a more stable home life. At age 38, Wendy and her husband committed to repaying their debt, building their retirement accounts, and getting themselves onto a smart financial track. How did they re-start their financial life at age 38, with six children and $800,000 in debt? Find out in today’s episode. For more information, visit the show notes at https://affordanything.com/episode196  Learn more about your ad choices. Visit podcastchoices.com/adchoices

You can afford anything but not everything. Every decision that you make is a trade-off against something else, and that doesn't just apply to your money. It applies to your time, your focus, your energy, your attention. It applies to anything in your life that is a scarce or limited resource. A yes-to-one thing is an implicit no to something else. And so the questions become twofold. Number one, what's most important to you? What are your highest priorities?

And number two, how do you align your daily decisions in accordance? Answering these two questions is a lifetime, practice. It's something that we have to work on every single day. And this podcast is here to explore and facilitate that. My name is Paula Pan. I am the host of the Afford Anything podcast. And today, we are talking to Wendy Mays about starting over at the age of 40 with six kids. When Wendy was almost 40 years old, when she was 38 years old, she looked around and realized that she was in trouble. She and her husband were in a serious. amount of debt. And they had nothing saved for retirement. So she realized she needed a complete

financial transformation. That's hard enough no matter who you are and no matter what your circumstances are. But Wendy also has six children. She is the primary breadwinner for her household. And she wanted to scale back at work. She wanted to work fewer hours so that she could spend more time with her six kids, except she's the primary breadwinner and they have six figures of debt and no retirement savings. So, starting at almost the age of 40, Wendy realized she needed to completely turn the page. She needed to totally radically transform everything about her life so that she could put herself on solid financial footing and scaled back her working hours at the same time. How did she do it?

We're going to hear that story right now. Here's Wendy Mays. Hey, Wendy. Hey, Paula. We met in San Diego in person, and that was when I learned about your story about starting over at 40 with six kids and how that impacted your path to FI. I want to talk about that and I want to share that with the world. But before we talk about starting over, let's talk about where you were prior to that. So introduce us to the 18-year-old Wendy. Oh, boy, the 18-year-old Wendy was, she didn't. know who she was. She was probably very, very self-conscious. No, she wasn't probably, she was. She was very self-conscious and really just was going through the motions of life, going to community college because that's what I thought I was supposed to do. I didn't really know what I wanted to be. And I didn't really get any sort of direction in career or anything like that until I stopped going to school. I just was working. And by the time I was about 21, 22, I was working and I saw all these

other people my age coming back from college. They had graduated and they were progressing. And I'm like, I think I want to go to college. I think I'm ready. And that's kind of where things started for me. I really fell in love with being educated and taking classes and learning new things. And that was where I met my husband. So that's really where it began. So what type of work were you doing and how much were you making? I was just doing normal customer service, secretarial sort of stuff. I was an office manager with a pest control company for a little while and then did customer service on the phones at a phone bank. So I really just was doing very entry-level sort of stuff.

And so I'm sure I wasn't being paid much more than minimum wage. And so at 22, you decided to go to college. Right. You went to a four-year college? I did. I did. I started at the University of Nevada, Reno. Oh, nice. Yeah. I had grown up in Sacramento and loved being there, but my parents moved from there at about that time because his base closed. And so he worked civil service for the Department of Defense. And so they moved to a small town outside of Reno. And I took that as an opportunity to go there. Nice. And so you were 26 then when you graduated from college? Was I 26? No. I was probably more like, no, that's about right. Yeah, that's about right. 26 with my bachelor's degree. And during the course of that, I did have my daughter and we got married. And we also transferred to Arizona.

Oh, wow. Okay. So take us to that moment then. You're 26 years old. You've just received your bachelor's degree, your undergraduate degree. You're married. You have a daughter. You're living in Arizona. Still clearly not making very much because you've been a full-time college student for the last. four years and now you have a daughter as well to support. Right, exactly. My husband, he ended up just towing the line for us. And it was really hard during that time. We were trying to survive on his income. He wasn't being paid very much either. He was in, I don't know what you call it, but basically it's for juvenile alternatives to juvenile detention facility. So they had like these ranches and stuff like that out in the deserts. And so he was, he dropped out of school to support. us and I would work part-time at the phone bank for Wells Fargo. So not making very much money, maybe $12 an hour, also going to school full-time, trying to graduate. And then I had decided

that I wanted to go to law school. And so then there was my final sort of transfer of education, and we moved to San Diego to pursue law school at Cal Western in San Diego. And that was another big move and another pretty difficult, you know, stressful time in our lives. He was working several jobs to support us while I tried to get my education and raise our daughter. Wow. Were you in any debt at this time? I would imagine there'd be student loans. Yeah, there was student loan debt that, you know, we're trying to keep in deferment the whole time. So this whole time, it's occurring interest. So neither one of us had any sort of financial education from our parents, you know, our parents, you know, they're just doing what they need to do to raise us. And my dad was the first in

his family to get an education. My husband was the first in his family to get an education. And I was the only female in my family to get an education. So we didn't really have a whole lot of experience. And so we just thought, you go to school, you get student loans, pay them off later, not really worrying about the consequences of all the student loans that we were taking out. So we're struggling and we're taking out as much as we could take out and using it to live on. Had we known better, hindsight is 2020, of course, and we probably shouldn't have taken out as much as we did. We should have done other things to minimize our education costs. Did you have car loans or any credit card debt at this time? I don't remember if we had credit

card debt, but I do believe we had a car loan. I think that when my daughter was born, we were just talking about this the other day. My daughter was born, we needed a car. I had had a little Nissan truck and it didn't have room for a baby seat. And so my parents co-signed on a car note for me. We went and got a brand new Honda Civic finance the whole thing and worried about, you know, just could we afford a payment on it. When you graduated from law school, you would have been around 29 or 30 at that time? Yeah, 29. And we made, we moved quite a bit during that time. So we moved back to Phoenix, so there's no way we could afford to live in San Diego then at 29, just starting out. So we moved back to Phoenix, and we stayed there for quite a while.

Graduated, had my son, my last semester, my oldest son, my last semester of law school, planned it that way. My husband is now starting to get back into school and finishing his undergrad and starting a master's program and teaching. I'm now trying to work, but this was right around 9-11. So the economy just tanked after that. And I had a really difficult time finding a job. And I was unemployed for quite a while right after law school and was not making any money. And so we were in some pretty dire financial straits at that point because I do believe we had debt at that time. Oh, wow. So I mean, everything that I'm hearing, you've got two children. You've just graduated from law school, which means for the last seven years, you've been a full-time student. Yeah. Your husband

is now going back to school. So he's now a student and you're unemployed. Right. Wow. Okay. Yeah. That was hard. It was really hard. That was a really hard time. But eventually I did get a job and, you know, things started looking up. I got a job. He graduated. He got his master's. We started making more money and things started to turn around, which was really, really great. You know, we were making more money. We were finally in a position where we could buy a house. We got our credit to where it needed to be to buy a house. We got just enough money scraped together to put on a down payment. We bought her house. And we were coasting for quite a while.

Live in the American Dream financed the house, the two cars in the driveway. We financed a pool. And we lived paycheck to paycheck for quite a while. And we still put the loans off, still put the student loans off. We never really made a huge debt in those because we couldn't afford it. The big idea that we had was right around 2007. seven to because we had accumulated so much equity in our house that we'll become real estate investors and we will buy this property and we'll fix it up and we'll make a lot of money and everything

will be great. We bought the house. It did look great. It turned out awesome. We put it up for sale and we got three offers on it. Every single one fell through and then the market just the bubble burst and then we were stuck with two mortgages that we could not afford and we lost everything. That was in about 2008. Wow. And this house you couldn't rent it out? We did rent it out. We rented out for a little while, but we could not rent enough to cover what we, the monthly mortgage was on it. Okay, so it wasn't viable as a rental property? No, no, it wasn't. Wow. Yeah, so that was hard. That was really hard. But then we found Dave Ramsey and we started getting things in order. We became renters again and we started getting things back on track. And during that time, things were okay.

We're still living paycheck to paycheck, not making a whole lot of progress on our debt, but really trying to. And about that time, we decided that we wanted to add to our family. And we decided that we would do that through foster adoption. And we began the process of adoption to add one more child to our family. So let's pause here. So how old are you at this point? I think I was about 38 or 39. So you're 38 or 39. You have found Dave Ramsey. So you've started paying down your debt. You've decided to adopt a child. Now, another question looking at this picture, this you at the age of 38 or 39, Do you know approximately how much debt you had at the time that it was at its worst? Because what I'm hearing when you tell your story is two mortgages and a car loan and a lot of student debt.

Oh, yeah. It was probably approaching. So maybe about $800,000. Wow. It was a lot. We're talking about all the mortgages. Yeah. We're including all the mortgages about $800,000. Student loan debt was almost $300,000. And then one mortgage was $300, and another was $180. And then there's some cars in there. probably right around 800,000. It was a lot. You lost both homes to foreclosure, I would assume. So what did that do to the $480,000 mortgage balance? We were fortunate that most of that was covered by Arizona's, oh gosh, I forget what they call it now. But basically, since it was a deed and it was foreclosed, they couldn't come after us for the primary residence. But they still could for the investment property because that law only covers primary residence.

Right. They never did. Oh, good. Yeah, they never did. By the time they did contact us, it had been outside of the six years that the law allows, we got very lucky, very lucky, and that they waited too long to attempt to collect that debt. Oh, that's fantastic. Yeah, I mean, it sucks because you know, you want to honor your obligations, but at the same time, it worked in our favor and the bank got the house. Right. So that took care of about $480,000 worth of debt, but there's still another $320,000 to go. Exactly. Exactly. And we were trying to focus on the other debt that we had. So like the rationale that we gave is that, you know, we're trying to run through the baby steps. We're trying to run through, let's pay off the lowest balances first. So we knew that we were never going to get to take out a big chunk of the student loans for quite a while until we could pay off the other stuff. And so that's what we were trying to do. And we were coasting doing that for a really long time. You know, at the same time, we're going through the adoption process and things got very complicated with the adoption process and kind of through a wrench and everything. And then also in the midst of that, there was another move back to California. We had just adopted our son.

He was about 13 months old. We're doing our baby steps. We're going through the motions. We started to contemplate a move back to California for my husband's job possibilities. He had contacts here for coaching, and that's really what he wanted to do as coach. So we started thinking about that and trying to make that work after we had adopted our son. And when my son was almost, he was two, we got a call from CPS that he had two little brothers that were in CPS custody. CPS is what?

CPS is child protective services. They had been taken, and they tried to keep siblings together, if at all possible. And so we were the first phone call. And they asked us if we would be willing to open our home to his brothers. And without hesitation, we said, absolutely. You know, these are my son's brothers. And they have every right to know one another. And so yes, we will do it. We'll figure it out. We'll make this work. So that's what we did. We had them come into our home and we were really excited. And we thought, you know, this must be happening for a reason. And so we're just going to go with this and see what happens. And so unfortunately, things got very ugly, very fast with their mother. And it was a very different situation than with the adoption of my son. She was completely MIA with my son. But with these two children, she hadn't had much time to adopt form a relationship with the newborn baby. But with the little boy who was about a year and a half, she had, of course, bonded with him.

So she fought really hard to get him back. And it just got very nasty. So they were going to leave our home. And that was hard. It was devastating. It was awful. And in that process, CPS and friends knew that. And there were these two other little boys not related to my son that needed a home.

And so they knew our situation. They knew that two children were leaving our home. And so they approached us and asked us if we would open our home to these two little boys and adopt them. They were already on track to have their right severed. their parent and they needed a home that would be willing to take both of them. They were trying to keep them together. We weren't sure. We thought, oh, you know, this is really hard. We're trying to move, but we'll go meet them. And then it was over. We met them and just fell in love with both of them. And we knew that they were going to be our children. And so as the two other

little boys were leaving the home, my son's brothers were leaving the home, Aidan and Ezra came. into our home and they were three and a half and seven months old and my son was two and half by this time so we had at that point we had five children in our home and yeah it was nuts it was nuts our family you know exploded in a really short period of time but it was it was a crazy time but it was also just really amazing and wonderful and busy and it was just a really cool time. In that whole process, we're still trying to move. We're laying all the groundwork to move. My husband is, as we got closer to May at the end of the school year, we were making arrangements for him to have an apartment out here in San Diego. We were going forward. The only holdup was the adoption of the boys. I couldn't go until the adoption of the two boys were final.

So that's what we did. And then as far as, you know, our finances go, we're just trucking along. We're not doing anything earth-shattering with paying off our debt. We're just going through the motions. So we're halfway through the adoption process of Aiden and Ezra, and I get a phone call from CPS. It always starts with a phone call. And this time, you know, it's different. It's different because by this time my husband is in California. He's taken my oldest son, Michael, here with him, and I'm living in an apartment going back and forth to San Diego on the weekends to spend time with my husband and we had a call from CPS. A baby was born yesterday and do you want the baby? And, you know, I wanted to say yes right away, but it was just different then. So I had to call my husband. We talked about it for quite a while. We said, you know, if CPS will let us take the baby back

and forth to California with us, then we'll do it. And so I called them back. They were willing to allow us to do that. And so that call came in on a Wednesday. And Friday. And Friday. I had this little 40-old baby in my arms and we're on the road to California. Wow. Yeah, it was nuts. Wow. So that's how you get six kids. Yeah, it was nuts.

So as you can imagine, like that was just a very stressful time. It was, you know, it was still wonderful and everything, but it was very, very stressful. And at the same time, I'm still trying to run my law practice since 2000. I had had my own law practice in Phoenix and I was the primary breadwinner. I supported the bulk of my family income. My husband's a teacher. You know, raising six children, driving back and forth to Phoenix to deal with the practice, you know, trying to support a family, trying to get through the final adoption process of the kids. Things just started crumbling. And at that point, I was 44. You know, and when you're older, you just can't. deal with things the way that you used to when you're younger and have all this, you know, energy and, you know, I'm approaching that age where, you know, hormones change and stuff. And I was just in a very different place than I was when I was 29, 30 years old. And so I started really filling burnout in that I couldn't keep doing everything. I couldn't keep my practice. I couldn't

serve my clients in the way that they deserve to be served. And I couldn't be the kind of mom that my kids deserved. And so I started really just longing for a way to work from home, do something different. And so I just started searching. I started searching for a way to do that because I didn't know what to do. I felt like we were going to have this debt forever. I felt like I was just drowning in everything. And that's kind of where our financial independence journey, we began. And it was during one of these searches to find laptop lifestyle income that I found the mad scientist. And it was like this just epiphany moment of just realizing that there were other people out there who were making normal incomes and normal salaries. And they were saving 50% of their

income and they were able to make it work. And just this idea of early retirement, it just opened up a mindset for me. And I knew that that was the answer for us. If we could find a way to increase our savings, we could make this work somehow. What kind of income were you making throughout this, you and your husband combined? Let's go back to right around the time that you were 38 or 39. You were living in Arizona. You had just adopted your third child. And you just found Dave Ramsey at that point. What type of income were you making at that time? Combined, we're making really good incomes. We're making great incomes. I would say we were fluctuating every year to just under 200,000 to about 200,000. And so we were making really, really good money.

We were just spending it all. We were just spending it all and not being good stewards of it and not using it in the best way. And did that change when you found Dave Ramsey and started focusing on the debt? It did for a while. It really did. We were really good for a really long. while and then I think just lifestyle creep came back, getting tired of having a strict budget all the time and wanting to have what other people had. So lifestyle creep came back in for a little while. And then we were at a position where I wanted, I wanted to do better and I wanted us to be debt-free and we had found the mad scientist. And so when that happened, we were not following the baby steps anymore, but that's when we kind of got back on the wagon entirely, but also adding in the

saving for retirement component, because that's something that we never did, because according to the baby steps, you don't do that until your debt was paid off. And that was a source of lot of anxiety for me because we were in our 40s by that time. And so I always felt very defeated during Dave Bramsey because I'm like, okay, well, we're paying all this debt. It's going to take a really long time. I don't feel like we're making any headway. And in the meantime, we don't have any retirement. And I see retirement coming. Right. That reminds me of something David Bach said when I asked him a question about the trade-off between saving for retirement versus paying off debt. And he commented that sometimes when all you're doing is paying off debt, it can be demotivating

because you don't see yourself growing. So his remark was that one of the benefits of growing assets, is not only that the habit forms, but also that it's motivating and it's exciting. Right. And that's kind of the switch that was flicked when I found the mad scientists like, oh, you know, I can do this. I can do both. And so then that's what we started doing. We said, we're going to be committed to saving to our retirement, and this is what our goal is for that. And we're going to do that no matter what. But then we're also going to look at every single piece of our spending and figure out a way to either cut it or eliminate it. And we just started doing that aggressively. At the same time, you know, I'm still dealing with this burnout. And so

Brad and Jonathan on Chuse Fies, they talk about levers all the time. And so in my mind, I was trying to pull as many levers as I could both to accomplish this goal of saving for retirement, paying down our debt, but also figuring out a way that I could leave my law practice because I just couldn't do it anymore, but we needed this income. So the only way to accomplish all of those things and allow me to transition careers was to get rid of the debt. And so we just started doing that aggressively, paying off debt, but also getting rid of expenses. So any expense that we could think of, you know, the little things, but also the big things, you know, cable car payments, just everything. Our food budget. Our food budget was ridiculous. That was one of the

of the biggest sources of savings that we were able to make in our house was just being really intentional with our food budget. We cut it by thousands. We'll come back to this episode after this word from our sponsors. We've all read some surprising online reviews, right? If you're trying to get a sweet deal on something that you've been saving up for, it's usually a good idea to read the reviews first so that you know what you're getting into. Why would finding the right software for your business be any different? You can read thousands of real software reviews, and find the right software for your business at captera.com slash Paula. Kaptara is the leading free online resource to help you find the best software solution for your

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So do you know approximately what your savings rate was? If you define savings in a way in which it includes debt payoff, do you know approximately what your savings rate was, starting at around the age of 38 or 39? When you found Dave Ramsey, you started paying attention to the 300,000 in student loans. At that point, around what was your savings rate? And then how did that fluctuate over the course of the next 10 years? My husband has been a teacher for a long time. He's been a teacher for 14 years. Both in Arizona and both in California, they have mandatory or three.

retirement that you contribute to. So when we were in Arizona, I believe that was 7%, and that's it. That's all we were contributing to. I've never contributed to any sort of retirement at that time. Then when we moved to California, it's a much bigger percentage. I believe it's 10%. And so in the beginning, that's all that we were contributing was whatever he was mandated to contribute to his pension. And then once we made the commitment to save and everything. I use the calculations that Big Earn does on his website. And I think I calculated it after we made the commitment to do it. We were at about 39%. So we had gone from about 10% savings rate to 39%. Nice. Yeah. Fantastic. Right? Yeah. So let's talk about how you did that. You mentioned saving on groceries. How did you do that? And what other actions did you take?

that the people who are listening to this could also imitate or replicate? We just really took a look at everything. So we went over our bake statements for like the past. We looked backward three months on our bake statements and saw, okay, where's our money going? Because we were still making pretty good money then. I was still working as a lawyer. So we had plenty of money coming in. We needed to figure out where it was all going.

So we just looked at everything. We said, what are we spending on groceries? How can we cut that down? Why are we paying $250? a month on cable. How can we cut that? Do we really need cable? Can we get something else? Can we do Netflix or Hulu? The kids don't care. We looked at, okay, what is taking the most out of our budget? Because at that point, we just really needed cash flow. It wasn't about the balances. It was more about cash flow. So I started looking at, okay, what is this $2,000 bill a month? It was an old tax bill,

and it didn't have a very big balance left, but it was still $2,000. a month. If I cut that out right away and paid that off right away, I just immediately infused $2,000 into my budget and I could then start attacking maybe lower balance stuff. So we just kept doing that. We kept doing that over and over and over and over until we got about, I think we're up to about $6,500 a month savings from what we originally were. In addition to increasing our savings, So it ended up being about a total chunk of maybe $10,000 a month that we made into our budget. And that's what allowed me to begin the process of closing down my practice in addition to still paying off debt. Because we had created such a big gap in our spending that we were now able to make some moves.

So calculating that, you'd mentioned that combined you were making somewhere around $200,000 a year, which is $16,000 per month. But after taxes, that would be about $10,000 a month. And then at this point, you're saving about $6,500 of that. We upped our savings by $3,000. And so then the rest of that was going towards the reduction in my income and debt payoff. Ah, okay. That amount is what gave me the ability to close my practice because I didn't need that income anymore. Okay, cool.

So you've cut your expenses by $6,500 a month. half of it went towards savings and half of it went towards time savings. Yeah, right. That's great. We were pretty methodical about closing the practice. It wasn't like I just closed up shop one day. I did several things that gave me a longer runway. So I got very creative about my calendar and I would schedule the days that I had to appear in court on certain days of the week so that I could be in California much longer and only have to go back to Phoenix.

once a week or once every other week. So that was the first thing I did. The second thing I did was I took away an area of practice so that that lessened the amount of stress that I was having and gave me a little bit more time. It also lessened the income. It was more of a graduation and the reduction of income and then I got finally to a point where I just kind of let cases atrophy. And then in October of last year is when I finally got to the point where I felt comfortable enough that I could completely close it. And there was not as much need for me to bring in as much money to pay the bills in our house. So I officially closed in October of last year. How old are you now? Forty-eight. Okay, so you're 48 now. A lot of this progress that I'm hearing

seems to have happened in the last decade between the ages of 38 to 48. Because when you were 38, you had just adopted your third child. And it was at that time that you first encountered Dave Ramsey and you started paying attention to your net worth. And then over the course of that decade from age 38 to 48, you then found the mad scientist. You began saving more for retirement. You began aggressively cutting your spending. You began thinking about building assets instead of just paying off debt. Right.

And you eventually got to the point where you could shut down your law practice. So there seems to be a lot that's happened within this 10-year period. And you also adopted three other children. Right. It's been a, I wouldn't call it an awakening, but I just think that both of us, both Curtis and I, we just really got to a place in our elite 30s where we really understood who we were. And I think what the boys did for us is that they solid. for us what we wanted for our life, that we wanted more time with our children, that they deserved that from us. And we couldn't do that the way things were. We couldn't do that with the debt that we had. We couldn't do that without working so hard that if we really wanted to provide the life that we wanted for them, that we had to make changes. And so they were really the catalyst, I think, for the change of everything. One thing that I find fascinating about your story is that I hear so many people say,

once you have kids, it becomes really hard to save money. And yet I hear in your story the opposite message, almost. I hear the message of, because I have kids, it's necessary to save money so that I can spend my time with them. Absolutely. And I do believe that. And it's one of the messages that I do want to spread is that. Yes, absolutely children give us, there are different considerations when you have children.

If there are bigger housing costs just by nature of needing more space, there's sometimes bigger vehicle costs. But you make choices, you make choices about what you're going to spend your money on. Do you need a 3,000 square foot house? No. Could you live comfortably in a smaller square footage house and have children? Absolutely. You just have to decide what's more important. Is it more important paying that $4,000 mortgage or is it more important maybe paying $3,000

mortgage and using that $1,000 to put into retirement? Do you absolutely have to do private school? No, you don't. There's perfectly good public schools with wonderful educations. Do you have to put your kid in three different extracurricular activities? No, you don't. Can they get just as much love and fulfillment in their life by maybe doing a local YMCA Sports League, absolutely. It's a matter of priorities and looking at the big picture. You know,

you can raise wonderfully well-adjusted children without spending all of your money on them. What about groceries? You mentioned that you were able to drastically slash that bill. How did you do that? Yeah. Again, we just made some very intentional choices. We do a couple different things. So, for instance, today, I stopped what I was doing for a little bit. I looked at what I had in my pantry. and I shopped my pantry first before making my grocery store list. So we're going to eat out of our pantry and our freezer and our refrigerator, making most of our meals out of that. And I have five things on my list that I need to get now to feed our family dinner for the rest of the week.

So, you know, it's little things like that. It's buying things that don't have a high cost per dollar servings like rice and beans to make your meals and pasta to make your meals go. go farther. It's shopping what's on sale, paying attention to where you're going, not paying with a debit card necessarily using cash because you spend less when you use cash. There's all these different little things that you can do and when you combine them all together, they can lead to really big savings in your budget. How do you handle expenses like clothing, health insurance, toiletries, you know, classic? Like, I went to Target and spent $200 and I don't even know.

on what? I stay out at Target. I don't go to Target. It's one of those stores that are really dangerous. Same thing. I've cut back a lot on Costco. I just know that I want everything when I go to Costco, so I don't go there. Unless it's something that I know that I really, it's on my list and it's much cheaper to get it there, things like shredded cheese, and sometimes it's better to get any meat that we're going to buy there. So I'll do that. But for other expenses, things like clothes, we're really good at accepting hand-me-downs from other people, limiting the times of the year that we shop for clothes if we need to. Again, shopping on sale, try not to pay full price for anything. Toiletries, I treat just like any other grocery shopping trip. I try and get the best deal with the best store.

So yeah, just really thinking about our purchases. Also try not to shop randomly. So shopping is planned. I don't ever want to go without a list and without a budget. I try not to do those daily trips to the store because invariably you're going to buy an impulse buy if you do that. What were the adoption costs like? Zero. Oh. Yeah. Yeah.

So that's one of the things that I don't think a lot of people know when you adopt through foster care is that essentially your costs are zero. The only upfront costs we had were things like fingerprint clearance. those are about $65. We did pay $800 out of pocket for a home study. However, that was reimbursed back to us after the adoptions were final. Our attorneys to do the paperwork on the adoption were paid for by the state. So we really had no out-of-pocket costs for the children. And while they were fosters, we got monthly subsidies for them to offset expenses and their

daycare was provided while they were foster children. After they were adopted, we no longer got the child care cost. However, we do continue to have insurance for them. It access secondary insurance because we have primary insurance through curse employer. So we don't have those expenses. And then because all of our boys are classified as high risk, we continue to get a subsidy for them. It's a small subsidy. But we we'll get that until each one turns 18. Yeah. So, and that helps offset some of the expenses that we have from having, you know,

four little boys. And there's adoption tax credits that you also get for each child. I don't know that you have to talk with a tax professional to see if there was any changes with that in any of the recent legislation changes. But for each one of the boys, there was a one-time tax credit of $12,000 for the year that they were adopted, which was a nice little benefit. We'll come back to the show in just a second, but first, don't you love overpaying for drinks? Of course not.

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I mean, what does your financial picture look like now? So the financial picture right now is we still have quite a bit of debt. We still have the student loans. We put them in deferment for so long. So they crude interest that whole time. So that's our biggest debt. And then we have our house in Sandy. which we actually are putting on the market, maybe tomorrow.

As soon as I get the sign. I'm putting the sign up. I just ordered the sign. So we are making a big move and we are because we bought this house before we found the mad scientist and it was a big purchase. Southern California, you can imagine. But it was a good choice because we got quite a bit of equity in it since we bought it as a foreclosure.

And so we're going to sell it. We're going to sell it. And we're going to be renters for a little while. and that will actually save us quite a bit of money again. We can put that towards our debt payoff, and we're going to look into maybe jumping into investment properties, but we're going to just hold tight for a little bit. We're going to rent and see what happens.

Wow, that's fantastic. Do you mind if I ask how that's going to change the financial picture? What do you think you can sell it for? How much equity could you get? And what will your rent costs be as compared to your mortgage, your current mortgage? Yeah, so right now the mortgage, with the HOA and all the other expenses that come along with that, like the insurance, our monthly costs for the house is $4,100.

We can probably find a rental for between $3,000 and $3300 that will fit our family and stay in the kids' school district. So right off the bat, we're going to save $7002,000. That's just in straight costs, monthly cost. And then we're going to pay off the cars. And that will save us another $1,100. So just with those two things, we're going to save quite a bit a month. Then we can really start being aggressive again with the debt payoff of the student loans.

We can finally start tackling those as well as start my retirement savings. How do your retirement accounts look right now? In the two years since we started just really going to, going hard, we're up to about $56,000. So I think we've done pretty good. That's fantastic. And what about college for the kids? That is not on our list right now. We feel like it's more important for us to be debt-free. My daughter, we did help her, and I paid that out of pocket for her to go to technical school. So she got her esthetician license, and I paid for half of that for her, just paid for it out of pocket.

And then my oldest son, Michael, he's getting ready to graduate in a couple weeks. And we will pay for his community college education. So we'll probably do that out of pocket as well. Nice. What do you think are some of the biggest things that you've learned during this last decade? The biggest thing is to not let lifestyle creep happen to keep your costs as low as you can. And the second biggest thing is to have not put off saving for retirement that we would have been, even if it was just a little bit, even if we could have scraped together $2,000 a year,

even though that seems like such a small amount. If we had just done even that much, we'd be in such a different place than we are now and not feeling this urgency and making up for lost time. What is it about the financial independence movement that keeps you inspired? For me, it was we finally had hope that our life could be different, that we weren't going to die with this debt around our necks, that we were going to actually be able to pay off our debt and retire. It wasn't one or the other that we could actually do both. Wow. What do you teach your kids about money? 50%. 50%. 50%. My 17-year-old starts his first job next week at McDonald's, and he knows right now 50%. 50% is going in his savings, and he can live off the rest.

My first job was at McDonald's. Yeah? Yeah. He was concerned. He wanted to go high-end. He wanted to go like Chick-fil-A or in-out burger. He didn't want to do McDonald's, but like, hey, bud, you know, like, you got to go where you get a job. And he had a friend that was there that helped him get a job. And I'm like, dude, you got to do it. Like, you just got to do it. You get a job. You can move up. I had the same experience.

I got rejected from Taco Bells, so I went to McDonald's. But it's a job, you know? It's a job. And he can move up from there. So it's good stuff. If you could go back and talk to a 22-year-old version of yourself, what would you tell her? Don't take out student loans. Don't do it.

Stick with community college as long as you can and get good grades. Like, I know high school was hard. I know it was hard. And, like, you know, there's so much going on. But, like, do well, get good grades. Try and get as many scholarships as you can. anything to avoid student loan debt because I really feel like for us that was it was such a big albatross that we almost had like this well you know screw it we already have this much debt what is

another you know 10 20 30 thousand dollars who cares like we already have this other stuff that we're never going to pay off so you know who cares what's you know more as long as we can make the monthly payments who cares so I would just encourage her to, you know, find a way to not have student loan debt. Who wants to start their life with that sort of responsibility? And I feel so much for this generation and the millennials who are graduating with all of this debt. And I just feel so bad because I know, I understand. I'm 48 freaking years old and I still have all this debt. So I get it. Like, I know what a burden that is. And I know why this generation is trying to do something different because they don't, they

don't want it. You described how when you were in your early 20s, you worked as an office manager for a pest control company making maybe $12 an hour. Given that your law degree was what helped you ultimately get to a point at which you could be the primary breadwinner for your family and you and your spouse combined could bring in a combined $200,000 a year, was it worth it? financially no financially no because we have nothing to show for it now had i had the mental capacity to keep my practice open and if we were maybe still in arizona maybe but circumstances being what they are now no as far as satisfaction in career and identity and doing good work it was an amazing career it was an amazing career for a really long time and i loved it for a really long time so in

that sense it was worth it and i learned so much about who I am and what I care about. And I did a lot of good, like, social justice sort of work. And so in that sense, it was absolutely worth it. And I wouldn't trade it for anything, even given the fact that we're still in such a bad financial position. So if you could go back, you would do it all over again. You would have still gone to law school. I think so. I just think I would have done it smarter. How? I would have maybe not gone to a really expensive. of private school in San Diego, California. I would have, I was waitlisted for ASU and I maybe would have just tried again to get into ASU's law school and that way I wouldn't have the $30,000 a year that

I had from Cal Western. So you'd have gone to a more cost-effective school? Exactly. Other than the lesson of don't get into student debt, or at least if you do keep it reasonable, what else would you tell your 22-year-old self? I'd heard you mention save something for retirement, even if it's only 2000 a year. Yeah, absolutely. I don't necessarily agree with Day Ramsey anymore that you shouldn't save for retirement or you should suspend saving for retirement while you have debt. I think that that's okay if you have a very short window to paying off the debt.

So let's say your window is a few years. Okay, maybe that's okay. but I really just, we wouldn't be in as bad a position if we had saved something. And so I think that no matter what, you should save something. How do you right now make decisions about retirement savings versus debt payoff? Given that you are still doing both, you're still saving for retirement and also paying off debt. How do you decide how to split the pie? So I read profit first. One of the things that he talks about in that book is that, you know, you started a very small percentage. you increase that over time, what I decided to do was started a smaller percentage. So still putting some in. We were maxing it out for a while, maxing out Kurtz for a while. But I scaled that back to like 5%. The goal is to then scale that up every quarter and it will shift. It will shift over time.

So there'll be more going to debt pay off now, less going to retirement. But every single quarter, that's going to shift. But at the same time, the balance on the debt is going to going to get smaller with the goal being that at some point we'll get back up to maxing out and we'll hit sort of like an equilibrium. Well, we'll stay status quo for a while until we can pay off all of the student loans. Are there any other major takeaways that you want the people who are listening to this to walk away with? Yeah, I think it's really important that you have a community that has the same goals that

you do because this journey can be hard. It can be hard and it can be long. And I think surrounding yourself with like-minded individuals, and that doesn't have to be necessarily physical human beings, although I think that that is a good idea, you know, find meetups, et cetera. But listening to podcasts, reading books, joining Facebook groups, I think it's just so important to have a community that believes the same things as you do because the general population doesn't necessarily get it and understand. They're full on and 100% immersed in consumerism. So you think it's extremely helpful to know that you have other people that are going through the same challenges that you are in to just get that support. Well, thank you, Wendy. Where can people find you if they'd like to

know more about you, learn more about your story? My podcast is houseoffi.com. I do that with my husband, Curtis. We focus on families on the same journey that we are. So they can find us there at houseify.com or they can email me at info at houseify.com and then we also have our Facebook page with the same name. Fantastic. And I'll link to all of those in the show notes. I appreciate it. Thanks, Paula. Thank you, Wendy, for sharing your story with us. What are some of the key takeaways that we got from this conversation? Here are four. Number one, always, always save something for retirement. Saving for retirement is something that you do all the time. No. matter what, like buying groceries, no matter how much financial stress you're in, you always

buy groceries and you always save for retirement. It is that core. Now, this doesn't necessarily mean that you have to save a lot. We're not talking about saving 20, 30, 40, 50 percent of your income towards retirement if you have competing financial priorities like repaying debt. That stage, those bigger numbers can come later. But if you don't save any, you don't save any, If you neglect your retirement accounts because there are other pressing financial priorities like debt payoff, then you find yourself at the age of 40 looking around and saying, wow, I'm really unprepared. And I wanted us to be debt-free and we had found the mad scientist. And so when that happened, we were not following the baby steps anymore. but that's when we kind of got back on the wagon entirely, but also adding in the saving for

retirement component, because that's something that we never did, because according to the baby steps, you don't do that until your debt was paid off. And that was a source of a lot of anxiety for me because we were in our 40s by that time. And so I always felt very defeated during Dave Bramsey because I'm like, okay, well, we're paying all this debt. It's going to take a really long time. I don't feel like we're making any headway. And in the meantime, we don't have any retirement.

And I see retirement coming. And so even if you are committed to paying off debt, at least make a big enough retirement contribution that you get your employer match. Or if you don't have an employer match, if you're not eligible for one or if you're self-employed or if your job doesn't offer one, then at a minimum, put aside 1% of your income towards retirement. Do that this month. Do that right now. And then next month or in two months, amp it up to one more percent. And then in two more months, amp it up to one more percent. Get to the point where you're saving at least 5 percent of your income towards retirement,

regardless of whatever other financial priorities you have. Because as Wendy says, if she had even just put aside $2,000 a year, on an income of $200,000, we're talking 1% of her gross income. If she had even just put aside that $2,000 a year, that would have, put her a lot further ahead than she is now. So don't dismiss the power of 1% incremental change. These 1% improvements over time can change your life. The other aspect of this, however, is that when it comes to the age-old question of should I repay debt versus invest, do the one that lights you up. I mean, do them both, of course, but focus your efforts on the one that lights you up.

You heard Wendy talk about how demoralizing it is to be approaching her 50s. and realize that she has to make up for lost time, that she's behind on retirement savings. And so it's clear that, yes, paying off debt is a big priority, but building retirement assets is something that is going to give her a lot of motivation. It's going to light her up. It's going to make her feel like, wow, check out how much I'm progressing. Yes, we have this anchor over here, this burden in the form of debt, but look at what we have on the positive side of the ledger.

Look at these assets that we have in retirement accounts. So prioritizing the thing that lights you up, and oftentimes that can be, for many people, building assets, can serve as the fuel that keeps the fire burning. So that is key takeaway number one. Key takeaway number two, you always have a choice. I hear from plenty of people who say, it's impossible to save when you have children. They're so expensive, there are so many costs associated with them. They take up so much time. there's absolutely no way that I could save money, pay off debt, safe for retirement, safe for college.

I hear this all the time. I get emails and comments about this all the time. People often blame their kids. And what I hear in Windy's story is the message that you always have a choice. Yes, there are going to be expensive bills. That is absolutely true. But inside of that, there is still choice. There are different considerations when you have children. There are bigger housing costs just by nature of needing more space. There's sometimes bigger vehicle costs. But you make choices. You make choices about what you're going to spend your money on. Do you need a 3,000 square foot house?

No. Could you live comfortably in a smaller square footage house and have children? Absolutely. You just have to decide what's more important. Is it more important paying that? $4,000 mortgage or is it more important maybe paying $3,000 mortgage and using that $1,000 to put into retirement? One thing that I loved from this conversation is that Wendy says, hey, you don't need a 3,000

square foot house. And remember, she has a family of eight, herself, her husband, and six children. But still she has the message, you know, you don't need 3,000 square feet. You can live in a smaller home. Your kids can wear hand-me-down clothes that come from other people. people. They can take part in after-school activities at the YMCA. And her message is very much one of, don't just sit there and wring your hands and say, I can't because of X. Instead, ask the question, how can I? And find the opportunities, find the choice inside of whatever your situation is.

Speaking of kids, that brings us to key takeaway number three, your retirement is more important than funding your children's college expenses. This is a difficult pill to swallow. Many parents want to pay for their children's educational costs, and yet, to be perfectly frank, your kids have time on their side. You don't. And so the greatest gift that you can give your kids is the gift of knowing that mom and dad have a secure retirement. Your kids are young and energetic. They can work part-time. while they're in school. They can attend community college. They can receive vocational training. They can defer college for a year while they work full time and save up. They can test out of certain courses through AP exams or KLEP exams. They can start at the bottom and work their way up. They have time on

their side. You, however, especially if you're in your 40s or 50s and you're behind on retirement savings, you don't have time on your side. That's the blunt truth. And so that has to be priority number one. That is not on our list right now. We feel like it's more important for us to be debt-free. And so that is key takeaway number three. Your retirement comes first. Finally, key takeaway number four. Avoid lifestyle creep. Lifestyle creep is the silent killer of wealth. Keep living at the same level that you did when you were younger. And as your income grows, the gap between your rising income and your status quo spending will grow wider and wider. And so as that gap grows bigger, you can then apply that gap towards debt payoff and retirement

savings and your kids college fund. But the foundation of all of that is to avoid lifestyle creep. The biggest thing is to not let lifestyle creep happen to keep your costs as low as you can. The second biggest thing is to have not put off saving for retirement. that we would have been, even if it was just a little bit, even if we could have scraped together $2,000 a year, even though that seems like such a small amount. If we had just done even that much, we'd be in such a different place than we are now and not feeling this urgency and making up for lost time. Those are four key takeaways from this conversation with Wendy Mays.

Thank you for tuning in. If you enjoyed today's episode, here are a few ways you can stay part of this community. Number one, we have a Facebook group. Just go to Facebook and search Afford Anything community and you can join our Facebook group. You can also go to afford anything.com slash Facebook. That link will take you to the Facebook group. Again, that's afford anything. com slash Facebook. That's where you can discuss this episode, share ideas, ask questions, get support from the whole community. Number two, if you are interested in real estate investing, I have a free ebook called seven expensive rental property mistakes to avoid. You can download that for free at afford anything.com slash real estate. Number three, please do me a huge favor. Go to afford

anything.com slash iTunes. Write a review about this podcast. I read every single one of these reviews and these are super, super helpful. So thank you so much to everybody who's written us a review, everybody who's rated us, please in whatever app you're listening to podcasts, rate this show and write a review. And while you're there, hit the subscribe button or the follow button so you don't miss any upcoming episodes. Coming up in two weeks, we have an interview with Japan's Zen Millionaire. His name is Ken Honda. And he is a leading thinker in Japan about the intersection between wealth and happiness. He's going to be joining us on this show in two weeks to talk about the four core principles

of sharpening your money EQ, your emotional intelligence around money. So make sure that you hit the subscribe button or the follow button in whatever app you're using to listen to this podcast so that you don't miss that episode. Thank you again for tuning in. My name is Paula Pant. This is the Afford Anything podcast. I'll catch you next week.