BiggerPockets Money Podcast - 105: Budgeting Yourself OUT of Debt and Into a Fantastic Life with Jen Hemphill

Episode Date: December 30, 2019

Jen Hemphill was born in Colombia and lived there for the first eight years of her life. The economy was really bad, and her earliest memories were of a scary time when her educated father did whatever he had to do to make money. Her redheaded dad stood out in Colombia, and it wasn’t a safe place for him to be. So, they moved to the U.S. Jen remembers being embarrassed for not having money, knowing her friends had it. She attended the same college where her mother was a professor. Discounted tuition coupled with scholarships and a bit of parental help allowed her to graduate with no debt. She bought a car, paid it off quickly, and felt very proud of herself for doing so. Then, she met and married her husband. They took 15 years to pay off his $40,000 in student loan debt. She thought they were doing great, but a deeper look at their finances about 10 years in revealed a huge mess. Thinking back to her childhood, she realized she needed to make big changes in order to get ahead. Her family went on a budget, cutting out all unnecessary spending to focus on paying off the debt. Jen uses a series of labeled bank accounts to ensure they stick to their budget and now saves for purchases rather than raiding the emergency fund to pay for things. Jen took what she learned and became an Accredited Financial Counselor, knowing that there are so many others who need to be pointed in the correct direction. She calls herself a Money Confidence Coach, because when you have confidence in your money management skills, you can tackle any problem. In This Episode We Cover: Jen's money story How she made money to buy things she likes Her position entering and leaving college The reason why she got a discount on college Having a mindset of being an extremely frugal person How long it took to pay off her family's debt The reason why she took a hard look at finances within her marriage Her financial awakening Her upbringing Her Thrift Savings Plan and emergency fund The importance of accepting and understanding individual money stories Having 15 separate bank accounts What her future plans are Money issues that she sees repeatedly in her clients Examples of variable expenses And SO much more! Links from the Show BiggerPockets Forums Waffles on Wednesday: Make Your Own Free Mobile Expense Tracking App in 30 Minutes BiggerPockets Money Facebook Page BiggerPockets Money Survey Check the full show notes here: https://www.biggerpockets.com/moneyshow105 Learn more about your ad choices. Visit megaphone.fm/adchoices

Welcome to the Bigger Pockets Money podcast show number 105, where we interview Jennifer Hemphill from Her De Niro Matters and get her story of financial independence. No, I mean, I just always, when money trips you up or it gets complicated, the key question I always ask myself with anything, even in just life, not just with money, is how can I make this more simple for me? And just let your thoughts simmer is how can I make things more simple for And that will help. Just asking those key questions helps a lot. Hello, hello, hello. My name is Mindy Jensen. And with me, as always, is my phenomenal co-host, Scott Trench. Scott and I are here to make financial independence less scary, less just for somebody else and show you that by following the proven steps, you can put yourself on the road to early financial freedom and get money out of the way so you can lead your best life.

Yep. Wherever you are in your financial or life journey, you can begin rapidly moving towards a position capable of generating a great income, saving a huge percentage of that income, and setting yourself up to make larger and larger investments on your way to financial freedom. Whether you want to retire early and travel the world, go on to make big time investments in assets like real estate or start your own businesses. We'll help you put yourself in a position capable of launching yourself towards those dreams. Okay, Scott, we have some big news. We have created a Facebook group for Bigger Pockets Money listeners to get together and chat about the episodes, chat about money issues they're having chat about tips and tricks they've learned. And it is located at

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Audible has been indispensable for me over 10 years. kickstart your well-being journey with your first audiobook free when you sign up for a free 30-day trial at audible.com slash BP money. Jen Hemphill, welcome to the Bigger Pockets Money podcast. How's it going today? It's going well. Thank you so much for having me. I'm so excited for you to be here. Jen is from the podcast Her De Niro Matters. And Jen, I'd love to hear your money story. Sure. Well, goodness, where do I say? start. And I love that you're talking about this because this is part of like the big thing that

I do on my podcast. And I'll share a little bit later as to why it's so important to me. But basically my money story, I was born in Colombia. My dad's from the United States. So he was always called the gringo. And in Momans from Colombia, I was born there. And we didn't have much. My dad basically met my mom here in the U.S. and left to Colombia. He didn't speak Spanish and he didn't know if he was going to marry or she was going to marry him. So it was just in the hopes of like, I'm going to go. I'm in love. I'm hopeful she'll say yes.

So he left. He was very young. He left everything here. And they just made do. My mom was or still is a college professor. And but there wasn't much money. Back in, and I'm major myself here. Don't make fun of me, Scott.

And back in the 70s, early 80s, in Colombia, the economy was really bad. The economy, the security, and if you look in Colombian history, so it wasn't, it was a scary time. So I always have these memories with my father who was educated. He had a business degree and was, he literally was making do with whatever he needed to do to make some extra money, baking bread. He was teaching, doing all those things, pumping gas, at the gas station. And I remember that because he, you know, was very clear to me that he was different. He was this back then, six-foot man with red hair, blue eyes, freckles. That stood out in Colombia, right? That stood out. So it was gringoes or people from the U.S. were associated with a lot

of money, which wasn't the case with my family. And so it was a lot of when I was with my father, I remember had memories of him grabbing my hand and we would start running because people would try to rob him because they thought he had a lot of money. So it was a lot, have a lot of memories of money being really a trigger for arguments, a big stressor because there was a lack of. And even though my dad was trying to do a lot of different things in terms that he had this entrepreneurial spirit that was killed very, very early in life, because he, things would fail completely, you know, and I think it had to do partly with the economy and who knows, who knows what else. But those are some of the things that I grew up with, with a lot of money. I was that kid when I was,

you know, probably eight years old. Usually kids ask for money. I wasn't that kid. My parents told me they had no money, so you only have to tell me once. I didn't ask for money. I was babysitting, probably at 9, 10 years of age, which probably isn't happening anymore. Newborn. So I was, saving that money to buy those little things that I wanted that my parents couldn't afford to buy me, especially when we came back to the States because we moved to the U.S. when I was eight years old and started over literally. So once you got to the U.S., was that when you started the babysitting and all that kind of stuff? What was your relationship with money as you kind of went into your teenage years?

Yeah, so basically with that, I was definitely making money. I was that kid, we were living in Georgia. There was this store that I was called Richway. It was kind of the equivalent of Kmart. So that's where my parents could go to buy clothes. And in those teenage years, I was that kid on that reduced lunch or free lunches. So we had those tickets that really gave us away, right? And so it was like this, I don't know if it was a stigma or maybe just my own just because

I knew we didn't have money and my friends did, right? So it was the differentiation of not having money and my friends having money. So I was always like trying to make that extra money babysitting. So I can buy the guest jeans. So I could buy the tree towards those things that I'm aging myself again. But back there were like, we're the big things, right? So that, I mean, I just knew I had to work for money and I had to be really. I think what was taught to me was I had to be independent.

But it was money was scarce. and that really led into my adulthood. I continued that to repeat that story of scarcity, of not having enough money, even though we were in a better financial spot when I got married with my husband. Did you accumulate any of that money, or did you spend it mostly right when you earned it?

That's a good question. I spent some of it, but I think I continued to save. Goodness, you're taking me way back. No, no, this is all fascinating. And just an awesome different perspective on growing up and how your circumstances are impacting, guess who you are today. I mean, very few people have that kind of circumstance that you went through. So maybe can you walk us through what happened when you kind of left high school and went into college?

How did you finance that or what was your position entering and leaving college? Yeah. So basically, remember my parents said we don't have money. So my mom is a college professor. So I didn't really have, I didn't really search for colleges because. I was just going, I was known that I was going to go to the college my mom taught at because she got a good tuition, a discount, and so I applied for some scholarships. So I was fortunate. So looking back at that time, I was like, oh, I can't even choose where I want to go. I had these aspirations of different colleges I wanted to apply to. But it was what it was. But looking back, now I'm thankful. I came out of college undergraduate and graduate school without any debt. You know, I had scholarships. And then my parents helped. me because it was, with both schools, I went to the schools that my mom was teaching at. So that was basically, I lived on Mary Little. I lived at home for a while. And then my parents, it was funny.

I didn't move away. They moved away to my mom started teaching at another college or a university. And that's when I was like, oh my goodness, you know, making do just trying to make sure a waitress. I waitress, worked at the bookstore, anything that I could do outside of my classes to buy the groceries and everything that we needed. So it was always like about survival. And that's something that I noticed. And I had a conversation actually several months ago with my parents. They didn't come on the podcast, unfortunately, but I had a conversation because they are from two different cultures. So I wanted to see like what the differences was and there's money stories. Because I knew growing up how they thought about money was completely different, right?

My mom was definitely very tight with money because she grew up around no money. My dad, even though he didn't grow up with a lot of money, it was more, his view of money was more on savings and having that safety net, having insurance. My mom was more about stability, meaning owning a house. That was like the big thing was having a house and my father, even though that was fine. was more having that cushion and the insurance and those things. So it was interesting. So what was your position upon graduation of college? My position for me was I knew that for me that I was determined to be in a better financial spot than my parents were. And that I was going to

have an excess of money. But what's funny is what I didn't know, and that's why I love that you all are talking about money stories, is that how I continue to repeat that money story of scarcity if we don't have enough. Because when I graduated college and I got a job and I, you know, bought my first car, paid off my first car in the first few years, I got married, we moved off. I've always been a big saver. But what I noticed was that I became this extreme frugal person, meaning I didn't, I was afraid of not having enough. So I would put money aside. But with my husband, especially when you're in a marriage, is a whole different ballgame, right? So he wanted, he came from a family where they didn't have much, but they just made it work. Right. So his stop

was like, I go to work to make money and so we can spend it. Even though he led me, you know, handed it to me to save. But for me, it was more the fear of not having enough because of how I grew up. So what year did you graduate from college? 1997. I was like 93, no, 97. Okay. So we're the same age. Okay. So that was a good time to be graduating from college. There's people that are, that we've interviewed that graduated from in 2008, 2009, 2010. They didn't get a job. But you graduated into a fairly easy. What did you study in college? I don't think we did that. I studied. I studied was called movement and sports science. So I was going to become a physical therapist. And then I know completely off tangent.

Then I met my husband, because when I met my husband, I had finished undergrad. So I met him when I was in graduate school. So I was in graduate school as kind of filling some time while I was looking into some physical therapy schools to apply for. Then I met my husband. He's active duty in the military. At that time, he wasn't. He was in the ROTC program. I fell in love and I forgot about becoming a physical therapist. I just went off with him. And this was still in Georgia? Actually, no, this was in North Carolina. Georgia was very early on. Oh, okay. So you're in North Carolina. You are married. Did you get married before college or after college? After. After graduate school. I'm sorry, you just said that.

Okay, so you're married. You have a job and he's still in school or he goes into the military? I have a job and I was going to graduate school. And then he was in school working part-time as a bartender. And then once we graduated, we graduated at the same time. And he commissioned into the Air Force. And then we moved off. Okay.

So you are both graduated. He's in the Air Force and you have a job. I actually quit my job. You left your job to go with him. Yes, because. What sort of debt did you have when you got married? Was there any sort of debt at all? My husband has student loans.

So I came in with just that little bit of my car loan. And then my husband had the student loans that he, it was funny with him. He, his parents had saved some money and then ended up using it. And then he just didn't know. you don't know what you don't know, right? So he went and, you know, was in school because he was actually on a scholarship for soccer at one of the universities. Then he left that university. And then he just applied for financial aid, not really understanding what financial aid was, right? Or what, the different, you know, the different types of financial aid. And then, yes, he got into some student

debt. Do you know how much debt he had? It was a little over. for 40,000. So not too bad income, you know, especially working with clients to have a ton more. So you went to four years of undergrad and got a graduate degree and you cash flowed the entire thing by working on it. So how much was tuition, even with your discount that you got? Oh, back then with a discount at I went to Purdue University. I think the tuition then a semester was maybe $1,600, so I got 50% off, like literally, $800 a semester, something approximately, give or take. Awesome.

And then how much was grad school? Graduate school, I pretty much got the scholarship for most of it. Isn't that sad? No, this is great. And I forgot. But it wasn't that much more. I mean, it was more than Purdue, but it wasn't that much more. It wasn't like $10,000 or a semester.

or it was like maybe a few thousand and yeah. I just want to say way to go on cash flowing really great degree and graduate degree, even at the same time as your ROTC husband assumed $40,000 in debt, which you think is one of the purposes of ROTC is to not assume that much, that much debt going in there. So it's a very interesting dynamic there. Yeah, and that was something back when we talked about marriage, that was something that really hung over him.

like he felt bad. But to me, I was like, don't worry, we've got this. You know, since I was at savior, I'm like, I, and I had these big aspirations. We're going to knock it out as fast as we can, which we didn't, actually. I was just going to say, how long did it take you to pay off that debt? It took us 15 years. Oh, 15 years. So, mind you, so when I look back, so in my mind, it was going to take a lot fat, you know,

we were going to knock it out quickly. But when we first got married, we had a little different views on money that we eventually came united on. And then it was literally, even though it took us 15 years, we didn't get really much in any other debt. So like we would buy a car and we would quickly pay it off. Or we would buy a piece of furniture, but it would go from our emergency funds. So it was we were saving, but at the same time, I don't think we were saving like we're saving now, where I save, you know, for emergencies, but we also have savings for big purchases. So where before I was literally lumping, you know, we had two accounts, you know, our checking to pay

everything and our savings in terms of just the, and of course we were contributing to his TSP, but we had the savings that literally was supposed to be emergency savings, but it was savings for everything for trips. So that always got used up really easily. So when was your financial awakening? When did you have that? Aha. This is what I'm supposed to do with my money. Yes. 10 years into our marriage. So we were in New Jersey. So that was probably our sixth or so duty station. He was deployed. And so I was looking at our finances because when active duty members deployed, we get a significant number, extra chunk of change. And I'm like, okay, we've got to do better. So I was looking at our finances, try to really make a really good game plan. And I noticed how much student loan debt we had. We had a car

loan. We had actually, we had borrowed from his TSP several times when I was looking at it. We paid it back. And then our emergency funds continue to be depleted. So I'm thinking something's got to give. And that's really when that aha moment happened because I noticed within myself that the story of we don't have enough, we don't have enough money, where there's not enough money, all that continue to play in my mind. And that's when I discussed. the book that happens to be like really a book that changed my life, a book by T. Harvecker, The Secrets of the Millionaire Mine. And that book opened my mind to the mindset and really how our money stories really affect how we think about money and how we treat money, essentially.

And so what I realized was that my money story, we can't afford it, we don't have enough, continue to replay in my mind instead of creating a new money story. right, instead of shifting that mindset and really shifting my thinking on money, which is why it didn't allow me to think clearly as to how to manage our money better, right? So it was literally we're paying bills, yeah, we were putting into savings, putting into investing, but that was it. We weren't really, we kind of had a budget, but it was for me, and looking back, I'm like, it was more of a check-off list, a bill, check-off list than really a plan for, the money. Awesome. So at this point, 10 years into your marriage, what are you guys doing for income?

Is he working? Are you working? I wasn't working. So I was actually two, when we had our first kid, two years into our marriage, I decided, or I, we, we decided, it was more mainly. I really wanted to be at home with my child. So we went from two incomes to one. And at that time, he was. was a second lieutenant, which doesn't get payment. And I was working in New Mexico. I was making more than him, not significantly, but I was in the $30,000 range of 30 plus, and he was in the lower 20s. So we went from two incomes to one, and I wish I recorded what in the world I did to this day. So that's when I stopped working. And we had to really focus on taking care of that time, one child, just because in my upbringing, everything was so focused on work, right?

And that there was not that quality family time. There was some. And so I wanted to make sure that I was there for my kids, especially with my husband and his job, taking him away so much. Awesome. So, okay, so at this turning point, the aha moment, Secrets of Millionaire Mind, you have just one income and it's a military income from your husband.

Do you have any savings? Yes. Basically, what was in the TSP, which we had borrowed from multiple times and paid back. And then our emergency savings. The TSP is your version of a retirement account fund, right? Correct. Yes, I should say through savings plan. Yes. And then our emergency fund that would kind of continue to cycle up, cycle down just because it was really a savings for everything, which it should have been separated. Awesome. So how much was in that emergency fund? fun, give or take? I would say at that time it was about 4K. 4K, great. And do you have any debt besides that at that time? We had the student loans and we had just bought a car so we would have had that

and that's it. So basically, and then we, yeah, we didn't have, oh, wait, hold on. Was that the year? Well, we had a mortgage. That's right. We had a mortgage because we had just PCS or moved to New Jersey. I bought a house in Wichita, Kansas, which we were there for four years. The house we bought, we weren't there for four years. And we were renting it. And then we were the tenant left when the 2000, yeah, it was around that time where that was the other trigger of me thinking why, of like, why are we in this position? Because the tenant left.

So we also had the mortgage payment plus our rent and the house wasn't selling in a market, which is so Kansas is known for it's pretty much a stable real estate market. And yeah, that was fun. What year was this? That was 2010. 2010. Okay, great. So in 2010, you have one income.

You have family. You're staying at home. You have $4,000 emergency fund. it sounds like $10,000, in cumulative debt, maybe 30? So cumulative debt, it would have been not counting the mortgage. Oh, with a more with them, not included mortgage.

Yeah. With not include a mortgage, I would have said, I would say it would probably be about 40. Yeah, with a car, my guess. Yeah, something like that. Love it. All right. So you read this book, Seek it to the Millionaire Mind.

What changes? What starts happening? That's different. start shifting how we manage money, meaning how we distribute our money. So like I said, before we had just the checking and the savings account. And so I started distributing into different buckets. So yes, we need the emergency savings, but yes, we wanted to travel. We wanted to figure out how fast can we pay off the debt that we have. And really those non-monthly expenses that people, they get into a point, a big expense comes and they're, you know,

trying to figure out. I was like, I need to change that because that was happening to us. So when I have clients, they're like, I don't know how we're leaving paycheck to paycheck. We have enough money and then we go back into debt. Anyways. So I started changing that. And it wasn't like immediate, but it was little by little where I've kind of, I've started changing how we manage your money. So I really, my husband and I that year, while he was deployed, we did this game to get to know each other. So it's, and I'm not really that woo-woo, but it's kind of a woo-woo game. It's, oh gosh, I don't remember the name. Abraham Picks. So she has this prosperity challenge. So basically, we made it our own and him being deployed and here stateside.

we would, but basically the preface of the game is that you start off a month for 30 days. You start off a month with a certain amount of pretend money, right? So this is pretend money. And you decide how you're going to spend that money, right? And then from there, the next day, you're going to increase that amount and you decide. So every day for 30 days, you're going to increase the amount of money that you spend. Now, this is not your real money, but this is just pretend money. And that was so mind-blowing because we got to know each other on another level of what his dreams were, what my dreams were.

And it was hard to spend the money because I think we started off at $100. And of course it was like to save or to pay off debt. And then when it got into the bigger numbers, it really stretched our minds that, hey, you know, he can have, he wanted to have four of those quadru, not motorcycles, but the one of the four. Four-wheelers. My goodness. English was my second language. I'll put that. And so he wanted to have those in a house with like the, I don't know how many multiple garages. And I'm like, what? Where did this come from? I knew he was this adventurous person. Because when we first got married, we bought a motorcycle. Like, it wasn't a Harley. It was like the speed things. So it was just. The crotch rocket. Yeah. Oh, my goodness. So it was really mind-blowing. It was such a great exercise because we, we one, it challenges us to really think bigger, right? Dream bigger so we can do bigger and better things. What were some of the big surprises or differences that you guys, but it had? For him, he was definitely wanting a lot of the material, like he's a giver.

So he wanted those four wheelers. He wanted to, he's a big family person. So to help his family financially. And for me, it was like, saving, saving, saving. It's saving some more. And okay, I'll splurge a little bit. And it was saving, no, we got to save more. And I think it was still me working through that mentality of not having enough.

Got it. So I come from the same position you're at where my parents didn't tell me we didn't have any money. You know, I don't remember them saying that outright. But we shop to garage sales. Like every Saturday, my dad would, this was, I'm the same age as you. So this is before the internet. He would get out the map of the town and the newspaper and circle. all the garage sales he wanted to go to and map out the most advantageous route to get to them.

And I just thought everybody did that. And I don't know if I didn't ask for a lot of things or if I just got everything that I needed. But I mean, I got to make garage sales. They were so cheap and, you know, whatever. You said that you were of this frugality mindset. And playing this Abraham Picks makes you, like, forces you out of your comfort level. How did you and your husband get on this? same page to be in this game in the first place? So it was basically me accepting him for who he is,

which I thought I did, right? I thought I did. And him accepting me for who I am that safe. So it was really understanding our individual money stories, right? And having in, besides understanding and awareness, but just an acceptance of them. So to even to this day, I know there's certain things. that maybe I don't agree upon like him that he needs to buy, like the needs wants. You know, our individual needs and wants are different, right? But it was just an acceptance and being able to put some money aside for those things that maybe I don't agree upon, you know, his money and my money, right? He has his money to spend on whatever he wants.

I don't question it. I don't look at it. That's not my business. And I spend money on whatever I want, you know, my cushion of money on whatever I want. Because that gives us that, I think it's important to have that continued independence, even though we're married and really we have some joint accounts, but we also have those separate accounts where we just gives us that freedom. Okay, I was just going to ask that because I have heard from a lot of couples where they have the main account that pays, you know, all the bills,

but then they each have their own separate account. I can use this money for whatever I want and you can't question it. And I think that's really interesting. That's not something that my husband and I have done, but, you know, I hear that over and over again. I think that's very interesting if you and your husband are having fights about little tiny things, you know, maybe that could be a good solution. Right. I think that that has helped us because, like I said, his upbringing is different. I can't change that. My upbringing is different. I can't change that. So I think we just have to have that acceptance of our partners and just kind of manage it. He's a big giver. One thing that was huge, like a huge, like, sticker, stickling point, if you will, early on our marriage was that he's this big giver.

And I feel like I am too. I always tell this story. But anyway, so if his family, there was a need for money, there was no question. He would give it. And I'm like, that can affect like our bills, right? And so it was that it was like, no, but they need it more than we do. I'm like, I realize, but we are sticking ourselves in the foot by giving them that amount of money, right, that we had saved.

So we finally can't, you know, all of a sudden, years later, I don't know why two years later to think about it, but it's just budgeting a little bit of that money in to set aside. So when those things come up, because it does, it doesn't affect our day to day. It's just some extra money set aside. Because I have, there's those cash envelope systems. I don't do well with cash. That's another story. But I have virtual envelopes. So virtual accounts, different virtual accounts that serve different purposes. And it just works so well for just not having to track because you can just visualize the sense it's a very, you know, very specific for travel or for the next car or whatever it is for family emergencies, other family emergencies. So that really has worked so well. So what was your kind of progress?

What happened to your net worth in the years following this revelation, months and years following were you able to start paying down debt? What kind of changed? And what were the levers that you pulled there? Was it just in the expense front or was there income involved or investing involved as well? So basically our net worth definitely went up because I was so focused on that debt. I had him agreed to no cable. We had moved to what I call the North Pole, which is Grand Forks, North Dakota. So there I had him agree to no cable and really we cut down some expenses. I still wasn't working. I was actually starting. That was the beginnings of starting a business that I was like just learning. I really wasn't making money. It was like little trump change here and there. But that's when we

really buckled down on really watching what we spent. And all that extra money, we just put it towards debt. And it just made an increase actually managed to increase the percentage of what we were putting into retirement as well. Because that was important. important. Can you walk us through that timeline a little bit? What was the, sorry, you had the revelation in 2010 after you read that book. Were you in North Dakota at that point? Or was that a few months later? That was New Jersey. We moved quite a bit. So then we went to New Jersey. We were just there a year. So that was, we were there a year. We had that mortgage. So that mortgage and rent. So that kept us back for a bit. But then we moved again. to come back to Kansas and then to North Dakota. So that was 2000. I have to think of how many years

we were there. 2010, 2011. I think that was 2012 when we were in North Dakota. And you feel like that is the time when things began to start accelerating a little bit? 2012. So 2010, I had the revelation. We were still dealing with the lovely house because you all are in real estate, which we decided from then on, normal houses for us until we settled down, because that was the second house, and the second time that the economy or the real estate market decided to work against us. So, yeah, so 2012, we were there for two years, and then when we moved here to D.C., which we've been at a couple years later, we were done completely out of debt. So in matter, I think it was four years. We, that 50, and we actually, we actually,

bought another car as well. So in 2012, you moved to North Dakota and you still have roughly the same amount of debt. Yes. But you're able to resolve the situation with the Kansas House somehow. How did you resolve that? A short sale. Short sale. Okay, great.

And then you pay off $30, $40, $50,000 in debt over four years while you're in North Dakota? Yes. In North Dakota and here in D.C. Yep. Got it. Okay. Awesome. And as most of that, you're saying most of that was due to the fact that you

were able to start keeping a budget and maintaining control over your expenses rather than any increases in income. Correct, because I still wasn't working or I had just in North Dakota is when I began my journey on entrepreneurship. And we know that's not an overnight process. No, this is awesome. So when did you get back to zero? What was that point? To zero debt. That was in 2000, so about four years later. So that was here. And that was still, that was literally on just that one income because our thought process is to live on his income. And what I make is it goes investing, savings, all that good stuff. Like we don't live on my income.

That's love it. That was always the goal. This is awesome. All right. So you get to zero in 2016 in Washington, D.C. Yeah, somewhere around the 15. I think it was somewhere around there. But yes, close enough.

Perfect. And now what happens next? Do you begin the process of investing? What kind of changes about your goals with money? Yeah. So we increased our investing more, some more, our percentage, increased our investing. Because for a while in the military, it was just the TSP, the Thris Savings Plan in terms of just like the equivalent of the 401K. They added the IRA. So we started with that. I had already was putting away in the Roth IRA for myself as So it was just increasing those as well as not just that. So, yes, investing was definitely important, but also increasing the savings to travel, increasing the savings for the next car, those things that were important to us as a family,

those value-based things because we didn't. We're the type that we drive that car 10, 8, 10 years, as long as it'll go. and then we buy a new one. So travel and not getting into that, you know, people getting into three or five years loans for cars. We didn't want that. So really giving us that a little bit of a cushion to do more things of what we wanted without having to, you know, go into debt,

which we were never, we never carried a balance on credit cards. That was one thing. Actually, my father, thank you. I thank my father for that. He's like, there's nothing wrong. with credit cards, as long as you pay him off at the end of the month. And that was the talk. He sat me down to have that talk, which was the money talk.

And that was basically he told me how to balance a checkbook about credit cards. And he's like, as long as you pay it off at the end of the month, you're good. And that's from then on. I was like, okay, I'll get a credit card paid off. And so those type of things we didn't have just because of that, or those early lessons that we actually thank you, my father. Tax season is one of the only times all year when most people actually look at their full financial picture, including income, spending, savings, investments, the whole thing. And if you're like most folks, it can be a little eye-opening. That's why I like Monarch. It helps you see exactly where your money is going, and more importantly, where your tax refund can make the biggest impact. Because the goal isn't just to look backward, it's to actually make progress. Simplify your finances with Monarch. Monarch is the all-in-one personal finance tool designed to make your life easier. It brings your entire financial life, including budgeting, accounts and investments, net worth, and future planning together in one dashboard on your phone or your laptop.

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You're completely debt-free. You live in Washington, D.C., which is not the cheapest place to live, I've heard. It's not. So basically, it's gotten, of course, over the years, it gets better. This coming year will increase our savings against because that's always the goal.

But our net worth, oh gosh, I don't check it every day. I let it just grow. But our net worth has probably since Grand Fork, since we really started making the changes, I would say has probably, I wish I had that information in front of me, doubled or maybe tripled, maybe I'd have to look. So that's been nice. And of course, not adding the extra debt. So do you kind of presently have a large savings account or several savings account

for all these different accounts for these different types of areas, travel, your next car, your emergency fund, all those types of things? How do you kind of manage all your money today? So basically, I have, I siphon the different money. So there's the checking or the checking account. we call it the billing account. And from there, all the money goes in there. And then it's basically it's distributed to different accounts. So our daily account, so that goes to groceries, gas. Our pet, our dog has his own account for a vet bills or when we go out and way on trips for his boarding, those type of things. We probably have at least 15 different accounts. So we have it for the family, as I mentioned, I have it for uniforms for my husband's. He's very finicky about his uniform.

And uniforms are not cheap, especially when you have to add all those different, the names and all that, getting all that stuff on there is not cheap. So uniforms, of course, just regular emergency savings, trips, the family. We just have the different, oh, and just the boys' sports of health, you know, dental, medical, those type of things. that can come do anything you can. I mean, we have a little bucket, if you will, sometimes or just blow off money. Sometimes we kind of go over. So we have an account that gives us that cushion and to blow it off, those type of things. You have 15 separate accounts. Are these actual separate bank accounts for each thing? Okay, that's fantastic because that is, I can only pull from here. It's like you said,

with you have an issue with cash that's another story. Cash to me, this is a horrible thing to say because I talk about money all day long, but cash to me is free. Like, that's throwaway. I can't. That's my, that's my, that's what I think too. I track all of my spending in on my credit card. So I did that, you know, the waffles on Wednesday, had that make your own mobile spending tracker. We have that on our phones. And every time I swipe the card, I put it in there. But I have a very small amount of cash for like if I want to buy a soda at Costco and it's 50 cents, I'm not going to put that in there. I just take, I say that I put $20 from the, I took $20 from the ATM. And now I've got, you know, $20 in fund money. I already accounted for it. So having a lot of

cash for me is very. I'm not accountable to it. Yes. And I do this every day. I'm not because it's just there. If there's $20, $50 in my wallet, oh, I can just use this. And then I'm Maybe it wasn't for that. So I'm not accountable, but with a different account. So basically, and I teach this system to my audience, but I don't have different debit cards for everything because that gets a mess. The checking or the billing account, we don't even use a debit card for that because that's just, we just want bills to get paid from there.

That's it. And then the daily account, that's where we use the debit card. And everything else, we just transfer over. Like if we need money for whatever expense that is, I just transfer it to the daily account from the appropriate account. Because it's easy to do. You just pick up, you know, open up your phone, the app, and transfer. So it's for us, it's made life a lot easier because it's easier to track me

and tracking money, writing down for me that was just very tedious. But instead, I know this amount of money is what we have for this particular thing, whether groceries or whatever. And this just made it so much easier for us to track. So it sounds like this is just a digital cash envelope system. And that, you know, in this day and age, that that can work for a lot of people who can't handle cash like you and I can't handle cash, which is so awful because we're both. I don't even know what cash is. Oh, yes.

Okay. Okay, that makes me feel a little bit better. You're not alone. You're not alone. India and the same way. So it sounds like most of your net worth is in your TSP, your retirement account, and your Roth IRA, right? Correct. To the military. And then and then in this, in these cash, and the cashier, do you have any additional future plans or is that, are you going to kind of continue accelerating the growth of those investments for the foreseeable future? I honestly,

even though we bought homes and I said, we won't do it until we're out of the military, I, do definitely want to invest and learn more about that in real estate a little bit and do more investing outside of that. But that is something that I want to do once we know where we're going to be, once we decide where we're going to settle down. And that's when I'll, you know, put my game face on and figure that out. But that is something that before I've married my husband, and even met him, that was something that for some reason that really stuck out at me, that real estate was something that I wanted to invest in. I had these dreams of buying apartment complexes.

I don't know if there are the best things to do, but that was the thing that I want to do. I don't know if enrolled in apartment complexes still, but that's something. Once he has, this is year, almost year 20 in this coming in 2000. and we'll see how many more years he'll do in the military, which I'm guessing five to six more years potentially, and then from there. Wow, Scott, do you know of any place she can learn how to invest in real estate? I know of only one, but yeah. Well, tell us a little bit about your business.

Sure. So I am what's called an accredited financial counselor, which for, I think it's becoming a better known term, but for a long time, people were always thinking I was a financial planner, which I am not. So I started to use the term money coach, or now I call myself a money confidence coach, because my audience and my clients, that's really what they felt I gave, I helped them with is, yes, managing their money better, but I gave, I helped them to create a bigger, or have more confidence with their financial life and what they're doing. So basically with my business, yes, I provide the one-on-one coaching and the group coaching,

a little bit of digital products here and there, as well as speaking, my book, then starting to work with some brands as well. So always trying to add on to those income streams. Awesome. And all of this came overnight, right? Within the first three months. Absolutely. I'm that overnight success story. An overnight success in what, five short years, seven short years? Yeah.

So what's a money issue that you see repeatedly in your clients and people who are having a need for a financial counselor? Not budgeting adequately their non-monthly expenses. That's really what I see day in and day out. So people can budget their bills. It's easy to do because the money, you know, you get paid and you get paid the bills and boom, you're done. But what I've seen time and time again, that even though they may have the haircuts or travel and their budget, it stays on their budget and their spreadsheet and their

tool. And nothing's done about it. And I always tell my clients, like, and even on my podcast, it's great that you have it. It may look pretty, but if you don't do anything with that, it's not going to work for you. It's not going to do anything for you. So I'll always help them to really look at their money a little different because I know we have these different budgeting rules, right? So I help them create a bucket system, if you will, for them. Because sometimes what people get confused or not confused, but where it gets complicated for them is let's say you do all or most of your shopping at Amazon. And at Amazon, you can get groceries, you can get household supplies, you can go clothes, you can get literally everything, is taking all those expenses and pretty much

separate it into those different categories, right? Because that's what we're taught to do. We need to separate, you know, household items and groceries. But why can't that, if you do your, mainly your shopping at Amazon, why can't that be its own bucket, right? And make life simple. So I'm always looking for to see how we can create a system for them that they can implement and be consistent with something simple, right, that makes sense for their lifestyle. And they can implement and be consistent because consistency, as we know, is key. And that's what people lack. But really those non monthly expenses or the variable expenses is what I see that people get tripped up over. What are a few examples of variable expenses or non-monthly expenses?

Non-monthly expenses or it can be haircuts. It could be maybe, maybe depends on the person, some medical bills. Like for me, that would be a variable expense. But for some people, maybe a monthly expense, depend on their health, travel, clothing, any of those things, maybe some bills that come annually or semi-annually, right? right, those type of things are some of the variable or non-monthly expenses. One of the things I always forget about is my car insurance and my house insurance because those, so they're automatically billed because I've had the same insurance company forever.

And I know that we just talked to Jay Money and he had this whole article about question everything and whenever your bills come up or your like your insurance or whatever comes up, see if you can, you know, find a better rate. I need to do that, but I always forget about those. So that's one. It's easy to do. It's so easy to do because, you know, oh, it just gets put on the credit card. I don't have to pay cash for it.

I don't have to think about it. Right. So, okay. Great. Well, this is awesome. I am, this is a question that I'm going to ask in our new Facebook group to get other people's ideas. What are some of your non-monthly expenses?

What are some budgeting ideas that you see other people or you yourself forget to put into your budget. And, you know, they budget, it's like a budget killer and it doesn't have to be, you know, do you recommend people putting in, you know, just like extra? You said you have a cushion bucket that is just for when you go over on something so you don't have to worry about that. How much do you recommend people budget for extra unexpected or I forgot about expenses in the beginning. I would say look at what your income is, what your expenses are. And typically, like in the past year or six months, what have you typically, how much have you gone over? And just kind of get an average of that. And you can either, some people are like to leave it in their their account,

but I'm afraid I'm going to, it's going to be gone. So that's why I separate it. I separate it. Because I'll forget, you know, so if I separate it, I know I can go into that account. But I think it just depends on the person and when they overspend, you know, just get an idea of how much typically they go over. Okay, great. Yeah, I just love this idea where, you know, you don't take my budget and put all of your expenses into what I'm spending money on. Look at what you're spending it on and put it into your own, you know, the whole purpose of personal finances to make it personal. And, you know, what you spend money on isn't what I spend money on, isn't what Scott spends money on. And that doesn't make Scott wrong for wanting to spend so much money on video games.

That's right. It might be a need. I mean, I love coffee. And even though I, and it's funny because I'm from Colombia. I was just going to say, wow, a Colombian who loves coffee in the world. Yeah. And I, and I'm spoiled. So my family was here and they brought me like,

six bags of coffee, right? So I'm always with coffee. I'm always with coffee, but sometimes I like to go to the coffee shop just for, I can't say the experience, but just to just kind of sit there and read or maybe we're just for, just for the experience, I guess it's the experience. I don't know, but even though I might not love the coffee as much as I like the coffee from Colombia, but it's interesting. Well, and as long as it's not, you know, preventing you from paying your bills on time or keeping food out of your kids' mouths, that's your money. Spend it how you want. Well, I did feed them for nine months. They can share it with me. Exactly. Exactly. That's how it goes. Okay, Jen, is there anything else you want to add before we move on to Our Famous for?

No. I mean, I just always, when money trips you up or it gets complicated, the key question I always ask myself with anything, even in just in life, not just with money, is how can I make this more simple for me and just let your thoughts simmer is how can I make things more simple for me. And that will help. Just asking those key questions helps a lot. That's fantastic. Okay, Scott, are you ready for the famous? Oh, it's not your show, Scott. It's Jen's. Jen, are you ready for the famous four questions? I hope so. Okay, these are the same four questions we ask of all of our guests? Number one, what is your favorite finance book? I would have to say the T. Harvecker book, The Secrets of the Millionaire Mine, just because it shifted my life completely.

You know, I have, we've had that book recommended before, and we just started this new Facebook group for Bigger Pockets Money listeners so they can come in and have a conversation about the, um, the show itself and ask additional questions. We also want to have a book club where we talk about different books. And I can't think of a better book. This show is airing on December 30th. I can't think of a better book to start reading on January 1st than the Secrets of the Millionaire Mind. So if you are interested in joining us for a discussion about this, please go to the BiggerPockets Money, Facebook group and the Bigger Pockets Money Book Club Facebook. Bigger Pockets Money Book Club Facebook group.

That's a lot of words. I'll put links in the show notes, which can be found at biggerpockets.com slash money show 105. Awesome. What was your biggest money mistake? The biggest money mistake was not being specific on what an emergency fund is for. What is an emergency and what is not? Because as I mentioned before, the emergency fund became pretty much for everything. And maintenance on the car, what you can say for that, things like that are not necessarily

emergency. So I always think it's really important for you and your partner to be clear on what emergency is. So when that emergency happens or that thing happens, you know whether to take. take that money out of that emergency account or not. I love it. That's great advice. Yeah, I love what you said. Make sure you and your partner agree on what constitutes an emergency.

Because maybe for me it's coffee, right? Yeah, well, I totally agree. 100% emergency. If there's no coffee, I got to get some. No, at the office today, our coffee machine was out. And that's an emergency, right? You have an, after the state we're recording this, the Monday following Thanksgiving, December 2nd.

and, you know, if you come back from a holiday weekend to no coffee, you have a very unhappy team here at the office. So that's an emergency. We went out, got some coffee, brought it in. Yep. Absolutely. We all agree. That's interesting. Well, I guess you are my partner, Scott, just in a different way. Okay. Oh, I didn't tell you, somebody asked me if you were my husband. No. Whoopsies. I could be his mom. We're partners.

We're partners, but not that kind of partners. Okay. Jen, what is your best piece of advice for people who are just starting out? I would say, go always trust yourself. There's a lot of personal financial advice. There's a lot of personal finance experts. And they're all great. But you have to remember that they're speaking to the masses. So their message is for the masses. They don't know your specific situation, whether you have some health issue or kids with special needs, whatever it is. So you have to trust yourself and take that personal advice that is good for you at this season in your life and run with it. And don't feel like you have to implement everything.

Just take what you need and trust yourself and be confident. What is your favorite joke to tell at parties? Well, I don't know if it's, I haven't told this one, but I saw this on Instagram. And it's not even a joke, but it's just I, because it's the holiday season. Okay, I'm going to try to say it without laughing. much. And it might not be so funny to you all, but it's basically a meme that says, one door closes and other opens. One door closes another opens. One door closes another opens. And it's a quote and it's me eating through the chocolate advent calendar. Get it?

I'm easily entertained. Yes, my kids are super excited about the chocolate event calendar for like five days. And then they forget about it or we go someplace or whatever and they forget. So then I come back and like, oh, one door opens, another door opens. Yep, I do that. I milk chocolate jokes for all their worth. Oh, my God. I quit. Oh, my goodness. Too funny.

Okay, Jen, where can people find out more about you? Well, you can just look me up at jenn-hemphill.com or you can search up my podcast, which is called Her Dina Don't Matters. Awesome. And we will link to both of those in the show notes there. Jen, thank you so much for coming out on the show today. It was an amazing story. And I think there's a lot of really good advice here that's going to help a lot of people. So we appreciate it. Well, thank you so much for having me. And thank you for talking about money stories because I love, love, love that.

Thank you. Yeah, I love it too. It's really, it really helps to see where you came from. And you can kind of see, you know, in all the stories that we tell over and over again, when I come from here, I go one of two directions usually. And when you see somebody going in this direction, oh, that's I did it. I see their tips too. I get it and now I can, you know, so it just, it helps people figure out their own financial. Right. And it's part of, I, in my opinion, it's part of financial literacy, a piece that's missing because we talk about saving, getting out of debt, but this piece is not talked about. You know, I think it's a really important piece to talk about is your money story and being able to shift it and reframe it and making a better money story for yourself.

Absolutely perfect. I can't add to that at all. Okay, Jen, thanks so much. We'll talk to you soon. Thank you. Bye-bye.