More Money Podcast - 011 Life After Debt - Jordann Brown, Blogger at My Alternate Life

Episode Date: July 29, 2015

Personal finance blogger Jordann Brown from My Alternate Life and I talk about her paying down $38,000 in debt and completely changing her lifestyle to prevent getting into debt ever again. Long episode description: I am so excited to share my episode with Jordann Brown from My Alternate Life. I’ve been following her blog since it started (close to the time I started mine over 3 years ago), so it was so fun to chat with her about her journey. I actually first met Jordann at the Canadian Personal Finance Conference in 2013 and she was just as sweet and friendly in-person as she is on her blog. We also hung out at FinCon 2014 in New Orleans last September, partially because we Canadian bloggers stuck together for a lot of that conference, and partially because Jordann and I are both major introverts who aren’t good at networking in big crowds. What I think is so cool about Jordann’s story is that it’s the same story as a number of millennials out there. She went to university, graduated with a whack of debt, then expected her post-grad life to be relatively smooth sailing. I thought the same way after graduating, expecting a full-time job and an awesome apartment right out the gate. Well, that just isn’t how life goes, especially when you graduate during an economic recession. But instead of just putting her hands up and wallowing in self-pity about her situation, Jordann worked hard at turning everything around. She’s now completely debt-free and living the life she wants. Listen to the episode to find out all the details. Jordann mentioned a few links during our conversation, so here they are below. I also wanted to include links about student debt repayment and forgiveness that may be helpful to any of you who are currently chipping away at your student loans. Note these are resources just for Canadian student loans as I don’t have much experience with student loans in the U.S. or overseas. Maybe that would make for a good future episode though. Any experts out there want to hit me up? Blog posts Jordann mentioned Jordann’s Net Worth Updates How to Pick the Perfect Dog Can I Afford a Dog? My Travel Fund is Full! Jordann’s Helpful Resources Page Helpful Debt Repayment Resources Canada Canada Repayment Assistance Plan Canada Student Loan Forgiveness for Family Doctors and Nurses Canada Student Loan Rehabilitation How to Manage Your Canada Student Loan Debt British Columbia (B.C.) B.C. Completion Grant B.C. Completion Grant for Graduates B.C. Loan Forgiveness Program Alberta Saskatchewan Saskatchewan Student Loan Repayment Manitoba Manitoba Student Loan Repayment and Assistance Ontario Paying Back OSAP OSAP Grants and Loans Quebec Quebec Student Loan Repayment Nova Scotia Nova Scotia Student Loan Forgiveness Program New Brunswick New Brunswick Timely Completion Benefit New Brunswick Tuition Rebate Prince Edward Island (P.E.I.) PEI Student Loan Repayment Assistance Shownotes: jessicamoorhouse.com/11 Learn more about your ad choices. Visit megaphone.fm/adchoices

Hello, and welcome to Episode 11 of Mo Money Mo Houses, the personal finance podcast for the Dash of Sass. I'm your host, Jessica Morehouse. And today I'm going to be talking to a blogger I've known for several years, probably since I started my blog three and a half years ago. Her name is Jordan. She runs the personal finance blog, My Alternate Life. And we're going to be talking about a couple of things, including debt, life after debt, and living like a minimalist. Kind of a trend, I think, with people that get into debt, get out of debt, and then are trying to figure out what are the next steps. And minimalism seems to be a trend, a good trend. I'm all for living simply. So very excited to have Jordan on the program today. Wow. Thanks for having me.

You're welcome. So let's start from the beginning. I mean, I think lots of people already know your story if they follow your blog, My Alternate Life. But what was the kind of moment or what happened in, you know, as growing up? What was your, let's start with, what was your relationship with money growing up? Did you have frugal parents or were you always like a saver or did that kind of come in time? I think the best way to describe my relationship with money growing up was that I didn't really have one with it. Okay. I knew that you needed money to buy things and I had a job in high school,

but it didn't, like my parents weren't overly frugal. Money was never really talked about in our house. So it was just sort of like a non-thing in my household, which probably is why I got into so much student loan debt. Right. Because I never really thought about it. Absolutely. So you did your degree and then you graduated school. How much debt did you end up with?

So I ended up with after university, I had $ 38,000 in student loans. Wow. Yeah. That's a big chunk of change. Big, big number. And then that July, so like just a month or two after I graduated and I was like just out of school, not making very much money. Um, I was driving back to Halifax from my hometown and I got in a car accident and my, it was my husband's car and it was totaled, like totally written off. So then we needed to buy a new car. So that added another $12,000 onto that total as well. So a lot, a lot of debt. A lot of money. Yeah. So how did you, what was the moment where you're like, okay, I need to figure out how to pay this off? Because honestly, lots of people have debt, especially student loan debt. I know a lot of people with

student loan debt and they're like, well, like sometimes the number just seems so astronomically crazy. They're like, I am 50 grand in the hole. I'm not, I'm just going to kind of make that future, you know, a future problem. And they just kind of don't deal until they're like, eh, maybe I'll worry about my student debt when I'm in my thirties and hopefully making more money in my career. But you kind of went a different route. You went kind of the, let's aggressively pay this thing off. Yeah. Um, my personal finance awakening definitely was the day I got into that car crash because we had no savings. So we had no emergency fund to fall back on during that time. And it was really, I still have my student credit card. So I didn't even have like, I couldn't even put stuff on credit, like hotels and that kind of thing. And then we had this new car that we had to pay for, which was not in the plan. So I had all these, all these student loan debt, all the student loan debt. But I sort of figured, like you said, like I figured, you know,

everybody has student loan debt. I'll just pay it off over time, whatever. It's not a big deal. But then this car payment also came along and suddenly our budget wasn't adding up anymore. And I was like, oh my gosh, like this is really bad. I need to get this under control. And then I started surfing the internet because that's what I do when I have a problem. Of course. That's what everyone does. Yeah. And I found personal finance blogs. And I was like, oh my gosh. Other people have these problems too. Yeah. Yeah.

So then it was really that summer when I decided, no, we're going to do something about this. Having all of these payments, this is not going to work for us long term. And I never wanted to feel that like fear that I had right after that car crash because like my wrist was broken, too. So there was like potential for me to not be working and all of this stuff that like normally a 21 year old doesn't have to deal with. Exactly. And I knew that I didn't want to have that feeling anymore. I never wanted to have that feeling again. So that sort of was the motivator. So where did you start? You started doing research online and like, how did you start with a plan? Like what, what did your plan initially look like? Like you mentioned that you, did you and your husband have a budget regularly in your daily lives or nothing at all at the beginning? We had sort of a rudimentary budget. Like I always kept a rudimentary budget all through university, which was basically, this is how much money I've gotten from my student loans. And this is how many months until I get my next student loan installment money.

So I need to make that money last. If that was the extent of my budgeting knowledge. But then once I started getting a regular paycheck and my husband had a regular paycheck then it was easier to build like a monthly budget so I started that summer and I didn't really aggressively start paying off the debt until that November because that was the first that's when my student loans were due was that November but by that point I had sort of trimmed our budget enough to the point where I could start making extra payments right away. At first, I only made $50 a month in extra payments. And then it was $50 a week. And then it was $70 a week and then so on and so forth.

So did it kind of just snowball? Like, you know, first you just kind of pay what you could afford, but then like for me, whenever I've have like, it's a bit different, like with a savings school, you're like, okay, I'll just put like 50 bucks, you know, per month and then biweekly and per week. Cause you kind of want to see that number either go up or go down. So is that kind of what happened? You just got, you know, kept on seeing that, you know, debt number go down. You got motivated and you're like, let's just keep doing this. Let's see how far we can go with this. Yeah, definitely.

Like I started out with those little extra payments. But then every time I was able to either, you know, get a raise or make some kind of savings in our budget, instead of spending that money, I would put that towards the debt repayment. And then eventually after probably six months of this, I started developing this debt repayment spreadsheet, which you can actually download off my blog. Oh, awesome. Yeah, it's for free and it's there. And so basically every time I made an extra payment, my debt-free date would get a little bit closer. Oh, and that's a big motivating factor. Yeah. So maybe it was October 2016 and then I got my tax return and I put a thousand dollars on it

and then it was, you know, October 2015. And like, that is so motivating. Exactly. Cause you can kind of see the light at the end of the tunnel and you're like, oh my gosh. And I guess also a big thing is you just can't wait to live without debt. Yes. So when I first started paying off my debt, my minimum debt payments were taking up 25% of my take-home pay. Oh, wow. So all I could think of it was like all the things I could do with that money if it wasn't going towards my stupid debt. Totally, totally. And that's, yeah, that's a big percentage of your paycheck every week. Oh, for sure. Yeah. Like that was huge back then. And now actually I'm putting almost the exact same amount now that I'm debt free. I'm putting almost the exact same amount towards my retirement

as I was putting towards my minimum payments, which makes me feel so much better. Yeah, exactly. You don't have that fear anymore. Instead, now you're like, oh my gosh, I feel a little bit more relief every time I put some more money into my retirement savings. So how long did it take you to, because now you're debt free, how long did it take you from start to finish to pay off all of your debt? It took me exactly, almost exactly two years. That's not bad. Like that's like really awesome. Yeah. I had a lot of help along the way. So I, I was living in New Brunswick for those three years and New Brunswick has some of the best student debt relief programs in the country. That's interesting because, yeah, not many people I think would know to even look into something like that.

Yeah. I don't even remember how I stumbled upon them, but it was probably when I was on my Googling craze. But there was two main programs that I took advantage of, and I always recommend these to any new student who I know that's graduating in New Brunswick because they're so helpful. The first one was the timely completion benefit, which is basically if you graduate from university on time. So like if you're in a four year program, if you graduate in four years, the New Brunswick government will forgive their portion of your student loans down to $26,000. Wow. So I was able just by filling out this one application and sending them proof of my

graduation, I was able to get my student loans from $38,000 down to $26,000. That's, and that, so that would have been like another two years. Yeah. Your money. Yeah, it was huge. And I'm sure. sure that's really helpful. I'm curious if other provinces have that. I'm sure they have something similar or something.

So that's definitely something I'm going to look into. Just because I'm curious now. Yeah, there are definitely programs out there. Like everyone's a little bit different, but most provinces offer something. And then the other one I took advantage of basically allowed me to not have to pay any New Brunswick income tax. Oh, wow. That's awesome. Yeah. Which was super

helpful. Like if I ended up having to pay on my income tax return, they would just give, give it back to me. Wow. And that was probably $4,000 over the few years that I claimed it. And all of that money that I was getting and along with my income tax returns, I just put it right towards debt. Like didn't even think about spending it. I just, you just made it like a habit and a priority to do that. Cause I can understand how it's difficult to, you know, yeah, I'll put it towards debt. Okay. Well, maybe just a little bit of that. Cause it is hard to, especially you kind of did this like aggressive debt payment, um, plan for two years. That's a

long time to like maintain your motivation. Um, like what were like, how did you do that? Like, I just don't, like, how did you not, um, I don't know, kind of slip up or anything like that? Or did you? Because it's, I mean, failure is part of the course. It's kind of part of success. So there were lots of days for sure where I had bad days where I was like, I'm sick of paying off debt. This is stupid. Nobody else I know was doing this.

That was a big one. Being the only one. And like, I'm so happy I had the personal finance community for that. Otherwise, I don't think I would have made it because I didn't know anybody else who was actually trying to pay off their debt. And I would just splurge and I would like spend a hundred dollars at the mall or something. And then I'd feel terrible after, but I also felt kind of good because, you know, it was just nice to not be so constrained every once in a while. But even those little slip ups, like in the grand scheme of things, they weren't that

bad. And obviously I needed to do it. So yeah, I think once in a while is fine as long as you kind of acknowledge that, okay, this happened. It can't really happen again if I want to get that date and just kind of, you know, move forward. I did splurge a little bit. Like occasionally I would splurge

because I knew that I would just go crazy if I lived like... Oh, you can. Yeah, you will go crazy if you literally don't let yourself buy anything. That's insane. So one of the things I did almost right in the beginning, probably a year after I first got serious about paying off my debt was I got a dog.

Oh, that's a nice splurge though. Yeah. I've wanted one forever. Like basically since I had moved out of my parents' house, I wanted a dog of my own. And finally we were in a place that allowed pets and I was like, screw it. I know that this money could go towards paying off my debt, but I'm going to adopt a dog from the SBCA. It's like, it is going to make me happy. That seems like money well spent to me. Exactly. And it totally was like definitely the best money I've ever spent. She's, she's so awesome. And then the other thing I did was, um, I got married and I did, uh,

also good money spent. Yes. Makeup did pretty frugal, but it did splurge on an all-inclusive honeymoon. Just get away. and that was definitely worth it too a honeymoon is whenever i talk to people about weddings like older people that have been married for a while they're like you know you can skimp on the wedding but don't skimp on the honeymoon exactly yeah my honeymoon cost as much as my wedding and i don't regret that exactly i we spent a little i don't know how much, honestly, on our California vacation, honey, but it was money well spent, I'll tell you that. And I'm like, I don't even remember the number because it doesn't matter because we had a good time. Exactly.

Get groceries delivered across the GTA from Real Canadian Superstore with PC Express. Shop online for super prices and super savings. Try it today and get up to $75 in PC Optimum Points. Visit superstore.ca to get started. Yeah, so I guess one portion is like you had this debt and you paid it off. But I think almost as important is how to maintain a lifestyle after debt because I feel like lots of people you know will be inspired by you and other bloggers and uh be able to pay down to their debt but then and it's hard to get into a mode where you're aggressively saving or you know you have different goals it's not like you're

paying down something that's bad it's like now you're saving something for it's good and sometimes it's kind of hard to kind of switch that in your mind. So what were some of the things that you did once your debt was paid off that you're like, okay, I'm going to change my lifestyle and make it manageable? Well, at first I would definitely say that I did not feel any decreased sense of urgency right after my debt was paid off. Well, this is how I like to, to explain it. Like paying off debt is like you're digging, you're climbing out of a hole, right? And your debt is paid off and you're at zero. You're on the edge of the hole, right there on the edge. And it would be really easy to fall back in. So I didn't feel comfortable.

What I wanted to do right after I paid off my debt was get as far away from the hole as possible by saving a lot of money. That's fair. So I wanted to put some distance between me and that debt hole. And I did that by building up an emergency fund, like a big emergency fund. Which is important, obviously, if there's an emergency, you want to be able to pay that. And I'm an example because sometimes people were like, oh yeah, but what's going to happen? Well, case in point, when me and Josh, my husband decided to move from Vancouver to Toronto,

well, we weren't moving with jobs and we only had the money that we had in the bank. And thank God we had an emergency fund because it helped us survive for like whatever, you know, three or four months that I didn't have a job. Yeah, exactly. Like it's just, it's so that, that I felt like was, was almost as important to making me feel less anxious about my money as paying off my debt. And once I had that, then I felt like, okay, now I can go at this with more of a balanced point of view instead of just being like super frugal and trying to get as much money as possible. After that, I found it a little bit more challenging to, you know, set goals where I'm saving aggressively but where I have enough life balance that I feel like it's sustainable. Exactly. Because it's not, yeah, it's not sustainable. Just completely aggressively

saving. Like you can try it, but you know, it just like my debt payment repayment scheme, my debt repayment scheme was not sustainable. If it was, if I had to do that for five years, I probably would have gone crazy. It's such a short period of time that it was okay. So after that, I tried not to push myself too hard. Like I set savings goals and I tracked them really close and I still do my side jobs and things like that to achieve the goals and go beyond them. But I don't give myself a hard time if I want to spend a little bit of money. And I think one of the things that I really like about your blog is you also do these net worth kind of recaps, which I think I'm not going to do on my blog, but I definitely think I'm going to do that just in my personal life because, you know, I use like mint.com. So I have an idea, you know, whenever I get a paycheck or whenever

Josh gets a paycheck to, you know, see how much money we have. But I don't actually look at the month over month progression. And I think that actually helps because it's a way to look back and be like, oh, look, we actually have made quite a bit of progress. Yes, definitely. I definitely recommend tracking your net worth just to see, you know, this is where I was a year ago. And maybe you don't feel like you've accomplished all that much. But if you can look and see, oh, well, I added $10,000 to my net worth. Like that's not nothing. That's a really, really good improvement for one year. And then you feel like you're actually making progress instead of just, you know, putting money into savings accounts and it's not really affecting your life at all. Exactly. So what are some of your kind of new goals now

that you're debt free and you have the, you know, really good emergency fund? What are some of your goals for the future now for money wise? Yeah. Right now, my big goal is to save for a down payment on a house. So I'm I moved from New Brunswick in January and I'm living in Halifax right now. And the houses here, they're not as expensive as Toronto or Vancouver, obviously, but they are going to require some serious savings. So my goal for just this year, I like to break my goals down into bite-sized chunks. So my goal just for this year is to save $5,000. But overall, I'm probably looking at closer to $40,000, which is quite a bit. It's a bit, but it's also like, for me, I feel like when you're saving up for a house,

especially, it's such an important life thing that you almost, you know, you'll always kind of be motivated to save up for a house because you'll probably always want to move out of wherever you're living. At least in my circumstance, love my apartment, but I'm sick of renting and I want a dishwasher badly. My landlord is terrible. Yeah. Yeah. And every time she doesn't respond to my phone calls or text messages or emails, I'm just like, put more money in that house. Exactly. I can't wait to be a homeowner. Oh my gosh. And another thing that you, sorry, just looking at some of the things you've been talking about in your blog lately is lots of, another big goal is obviously travel, which I feel like a lot of people can understand that. Me especially, I feel like that's kind of what I spend most of my money on.

Yes. Travel is one of the most important things to me, more important than stuff or having a nice car. I could also replace my car this year if I wanted to. There's lots of things that is wrong with it, but I would rather spend that money on travel so this year we're going to Ottawa this summer and then doing Mardi Gras in uh February 2016 and like that's a major bucket list item for me so yeah I couldn't say no to it like we had some people who wanted to go and that will be worth every penny. I definitely would recommend to anybody that spending money on travel over material items is just like

such a better use of your money. And so when you do kind of, uh, are saving out for travel, do you research like specifically what you're going to do on this trip, create a budget of how much that will cost. And then you have that particular number to try to save up to. And then you just add that to your like every, you know, paycheck, then I'll take this amount of money and put it in this fund. That's exactly it. My husband is the travel guru in our household. So he's the one that will research how much hotels will cost how much flights will cost and then we usually can get away with like a daily food budget of a hundred dollars a day or something like that seems good and will cost out how much the trip will cost and then obviously divide that

by the amount of time between now and the trip and then just every week we save a little bit of money towards that um if i get some extra income, because I do a lot of side jobs and freelancing and things like that, I'll put that in there as well, just to meet the goal a little bit sooner. Because I like doing that because it's fun and motivating to hit your goals before you're supposed to. And yeah, it's $100 a week right now that we're saving towards travel. That's so cool. Well, thank you so much for joining me today. I feel like your story is so identifiable.

People are probably in the exact same boat you were a few years ago. So it's really cool to find out that it is possible. Most people in your friend group, and you mentioned this earlier, it's true. It's like I know people that have debt but not once were they ever like oh and I'm aggressively paying it off and I have this big goal no they just kind of brush it under the rug and be like I'll deal with it later so it's really awesome that uh you know you are a perfect example of someone who you know kind of like well I know my friends aren't really doing that but I want to make sure that I can pay off my debt so I can kind of move on with my life, really. Yes, absolutely. I mean, the whole reason I started the blog and the reason I named it My Alternate Life is because

I had graduated from university and I thought like, okay, I'm ready to start my life. You know, I have a full-time job. I'm going to be a grown-up now and I'm going to, you know, have the apartment with the clothes and the car and all of these things that I've been working towards for four years. But I couldn't do that because I had all this debt and it was holding me back and it was forcing me to adopt this alternative life that I didn't think that I wanted, but I had to do. And now I realize this life's actually better. Like if I had not paid off my debt, like a lot of people do, I probably wouldn't be as happy. I'd be more stressed. So I think that everybody who has a lot of debt and thinks that they can't pay it off or, you know, that they're not able to, for some reason, they need to find the personal finance community.

They do. We all did it and we're not amazing people. We're just regular people. That's the thing. It's like I know I talk about a lot of bloggers on this podcast, but we are all just regular people that started a website and talked about our money. I'm not superwoman.

I'm actually probably below average. And if I can do it, then you can do it. I totally can. I promise. Awesome. Thank you so much, Jordan, for being on the program today. Really appreciate it. It was so nice talking to you. And if you would like to find out more about Jordan and her personal finance journey, make sure to check out her awesome blog, My Alternate Life. And if you'd like to find out the show notes for this show, it's momoneymohouses.com slash 11. So before I wrap up, I just want to give some shout outs to some reviews I got on iTunes. First, I've got Anthony Lohan. He writes, this podcast is amazing. Loving how much I'm learning about personal finance in a really relaxed way.

Finance doesn't have to be boring. No, it doesn't. I'm so excited that you think so, Anthony. Thanks for listening and thanks for commenting. Another one, great new podcast from Tom Drake. I love this new podcast that Jessica Morris has just launched. She's chatting with great guests and covering interesting topics. Looking forward to hearing more episodes.

Thank you so much, Tom. And one from Edange, excellent PF podcast. Short and to the point. I like it. Very efficient. Thanks, Edange. And one more before I wrap up. Real Money Talk.

Really like how casual this podcast is. Like I'm listening to someone's conversation in a coffee shop about money. From Derek M1111. Thank you so much, Derek. Thanks for listening. And if you want to get a shout out on here, make sure to leave me a review on Stitcher or iTunes, and I'll make sure to give you a shout out on a future episode. Thank you so much for listening. Make sure you check back here next Wednesday. I'm going to be interviewing Liquid Independence. He runs the blog Freedom 35. And we're going to be talking about farm investing, investing in farms. That's right.

See you next Wednesday. This podcast is distributed by the Women in Media Podcast Network. Find out more at womeninmedia.network.