More Money Podcast - 120 Listener Series - This Is Why You Should Start Tracking Your Spending

Episode Date: October 12, 2017

For this Listener Series episode, I talk with podcast listener Scott McEachern about what tactics he uses to pay down his debt and save for his financial goals, and a big one is tracking his spending. Long description: For this Listener Series episode of the podcast, I chat with Scott McEachern who reached out to me to be on the show after being a long-time listener. Now, Scott actually works in the financial space, but personal finance is really his passion and it’s what led him to do what he does for a living. A big reason is because his dad worked as a financial planner, so he learned at a young age how to be smart with his money. And ever since then, he’s put what he’s learned into practice to live a meaningful life that focuses on being intentional with his money. He shares a number of things him and his wife do to be able to pay off their debt (they have student loans) and work towards affording their financial goals. These things include: Adding small extra payments to his student loans to pay them off quicker Buying used cars instead of brand new Renting a cheaper/smaller place instead of trying to keep up with the Jones’ Delaying starting a family until they are debt free And most importantly, tracking their spending and income regularly so there are no surprises Learn More About Scott Check out Scott’s website Follow her on Facebook Follow her on Twitter Get Access to My Resource Library I’ve got a ton of checklist, worksheets, quizzes and more to help you get your financial life together, and I’m housing them all in one place — my resource library. It’s free, it’s amazing, get in there! Click here to access my resource library For full episode show notes visit: https://jessicamoorhouse.com/120 Learn more about your ad choices. Visit megaphone.fm/adchoices

Hello, and welcome to episode 120 of the Mo Money Podcast and another listener series episode. I hope you enjoyed last week's with Lillian Hearn. This week, I'm talking to Scott McEachern. And if you want to be next on my list, well, that is totally possible because the people that are a part of my listener series, they just emailed me and told me about their story. And that's how we made it happen. So if you want to share your story as part of my listener series, I'm always looking for more people to interview. Super easy. Just go to the show notes, jessicamorehouse.com slash 120 for details on how to submit yourself to be considered to be part

of my listener series. It's super easy, super fun, and I can't wait to hear from you. But for this episode, I talked to Scott, as I mentioned, and he is an awesome, awesome guy. I'm so glad that he reached out. He gave me a really great email pitch and I couldn't resist. So I know you're going to love his story. But before I get to that interview, Scott, I want to share some words about this episode's sponsor. Support for this episode comes from Credit Card Genius, the only tool that compares over 50 features of 150 Canadian credit cards using math-based ratings and rankings that respond to your needs instantly. Now you can get rewarded faster without all the headache.

Visit creditcardgenius.ca to learn more. Once again, that's creditcardgenius.ca. Welcome, Scott, to the Mo Money Podcast. Thank you so much for being on my listener series. Thanks for having me today. You are so welcome. I'm so glad that you emailed me because I really enjoyed your email and everything that you gave me. I love all the emails I get from my listener series people because they're so organized and they always give me a bullet list or a numbered list of the breakdown of what they've done to kind of pay down their debt or save a bunch of money or early retire i don't know what it is you all have in common but you guys are so organized yeah yeah this was kind of a book

that i was starting to write but just never really took off but so i did have it all organized but um i'm just not a writer so hopefully i can a story in an enlightening way that's entertaining. Absolutely. Okay. Well, you wrote into me that you're a personal finance nut, and you mentioned that you were a big fan of Gail's Till Debt Do Us part, which I was a huge fan of. I watched every single episode, was obsessed. And it got me really into personal finance and really understanding like, oh, this could, you know, change my life. So I would love

to kind of get from the beginning, because you said you were 18 when you started watching that show. Is that the time in your life that you really started kind of learning about personal finance and all that kind of stuff? I would say yes. But like my father grew up as a financial advisor. So I knew what was going on. But I'm like my earliest memory was when I'd get an allowance. And we you know, those saving rolls that you can put change into? Yeah, I wouldn't spend anything until I had a full roll of change. So like, I wouldn't buy a penny candy until I had 50 cents, and then I buy a better candy. So I mean, I was like eight or nine years old when I started that. Oh, wow. And I guess that was because your dad wasn't a financial advisor. So we kind of instilled that

in you. Yeah. Yeah. Yeah. And my favorite memory was when I got my first paycheck. I got my first job at age 16 working at Tim Hortons. And I wanted to spend my first paycheck, my first full paycheck before I started saving. So me and my mom kind of teamed up on my dad and said, like, let's let's let me spend my first paycheck. And we finally convinced him and he said, OK, OK. And it was a pretty big paycheck because it was about three weeks because there's that lag and getting right um new employees set up so i went out and i bought a bike that was like 200 and i still had 300 left i was like there's nothing else that i really want to buy okay so i'll start saving now okay you win there you go yeah right on that's awesome and and yeah i was that that 19 year old 20 year old kid whose favorite show was

Gil Vazoxley's Till Death Do Us Part and yeah that must have been a popular choice amongst your friends it's just it's always been a hobby of mine midway through college I started tracking all of my income

and expenses so that helped. I set up an Excel spreadsheet, and I think I picked that up off of Gail's show. But I remember in college, I took business, and we had one consumer behavior class, and the project was to track our spending for the month. And I raised my hand and said, hey, can we get bonus marks if I give you a year's worth of data and kind of analyze that? You know what?

That's one of the things I look back and I really wish I did in university because I was earning an income and I did have expenses, but I didn't track anything. So even though I somehow managed, I don't know what I did. And it's really frustrating. I'm like, I really wish I knew what I did. Yeah, yeah. But you mentioned like, even though you did like track your spending, and it seemed like you were just intuitively, you know, very good with your money, you still you got student loans to put yourself through school?

Yeah, yeah. I was able to live at home. So my student loans were huge. It was about $25,000 for me. And then my wife had about $25,000 as well. So we had a total of about $45,000, $50,000 coming out of university and college. Wow. And what did you study? I studied business. Ah, I see. I have a bachelor's of business.

I did a two-year college diploma. And then university came in and said, hey, you can do a one-semester bridge program and then get another year of university, and we'll give you a full degree. So that's what I did. Oh, yeah. That sounds like a good deal. Yeah, for sure. But I guess graduating with that hunk of debt isn't always easy. Did you find it kind of difficult, even though it seemed like you were

kind of really good with your money up until that point, then coming out of university, you're just starting out in your career and you have a bunch of money that you owe? Yeah. I remember opening that first envelope that OSAP gives you and they say, here's the interest in that six-month period where you don't have to make payments. They tell you that interest accumulates, but you don't really realize how much that is until you get that first envelope. I know. I think that's a key thing.

A lot of people don't even realize that. Oh, no, you're paying interest on that. I think a lot of them just don't read the documents that they get or they just don't know. So what were your instincts to be like, oh, have to like did you like okay let's let's get serious and let's try to tackle this or what happened kind of once you realized how much you really had to pay down yeah well as as i said gail vas oxlade was a huge motivator for me so i was like my goal is to get debt free as soon as possible um so i remember opening the envelope from OSAP and they

said, well, if you pay this much, it will take you nine and a half years to be debt free. And I was like, oh, that's so long. That's so long. Right. So immediately, the first thing that I did was we increased both of our payments and we rounded up to the nearest hundred. So that upped our payments by about $60 a month. And we weren't used to paying back OSAP yet. So adding on another $50 or $60 wasn't really a big thing for us. And it shaves off like two years of interest right away. Wow. So it's like just like a little, and that's the thing I think people don't realize. If you just tack on like little extra money, you're going to have a huge impact. For sure, yeah.

Absolutely. That's awesome. So you are from or you studied in Ontario? Yeah, yeah. And at what point did you, because you mentioned that you lived in BC for a little bit? That was right after university. We got married right out of university and then didn't know where we were going to work. So my wife is a teacher by trade. So we literally applied all across Canada and

drove out to BC to visit her family to have a little wedding celebration. And my sister lives out there and she had two children at the time. And we were like, you know what? We don't really have anything to go back to in Ontario right now. So let's just settle here. So we found a place to rent and we went to Goodwill and Value Village and everything and fully furnished our house secondhand. And we stayed there for about a year and did a few part-time jobs and realized that it was a very small community and there wasn't much room for growth.

So we ended up coming back to Ontario a year later. But it was a great adventure to have and we got to spend time with my sister and her growing family. So no regrets there. Yeah, no. And I kind of have the same sentiments. I mean, I'm originally from BC and I absolutely love it, but it is, I mean, depending on, you know, the industry and what you want to do, I found it very, I mean, the prospects, yeah, as you mentioned, they weren't really good. There weren't as many opportunities as Ontario. So, but it's always

nice to kind of have an adventure like that and live somewhere else for a little bit. Give you some perspective. Exactly. Exactly. And so you moved back to Ontario. What did you do after that? Was your wife able to find a teaching job? And what was your career like?

Yeah, she ended up teaching at a private school my father was actually reading the newspaper one day and said hey there's this new private school that's opening in town you should check it out and she did and she got in and it was really cool because she teaches um they were a private school for athletes so she actually got to teach some of the ont Hockey League OHL players. Oh, cool. So that was pretty cool. And she ended up teaching Aaron Ekblad, who was the number one NHL draft pick a few years ago. Oh, wow. It's like, yeah, I taught him math. And everyone's like, oh, man, did you get his autograph or photo or anything?

It was pretty funny. She's like, no, I just taught him math. Probably be weird to ask him for an autograph. Yeah, yeah. Yeah. Probably be weird to ask him for an autograph. And then naturally just building on my passions, I ended up coming into the family industry as well. And I've become a financial advisor, really focusing on working with millennials and young families in the local area. So that's awesome. That's great. I love that you turned your passion into your job. And it seems like you're kind of, you know, kind of there's not a myth, but there's, you know, kind of a saying where it's like, you know, there's lots of financial advisors out there. But you know,

if we were to kind of look into their background, or how they spend their money, or, or save their money, we'd probably be unpleasantly surprised. But it seems like you're kind of one of the, you know, financial advisors that's actually, you the financial advisors that's actually taking your own advice and living fairly frugally. That's kind of what I got from your story is you've made a lot of probably tough choices to help you guys out so you don't have to get back into debt and you can pay off your debt really quickly. So I'd love to kind of jump into what some of those things are and have they really affected your life? I feel like a lot of people think that if they have to sacrifice this or that or live really frugally or minimally that their quality of life will suffer. Have you found that?

Yeah, a little bit for a year or two. Depends on, I guess, what you do. But it did seem like from what you kind of mentioned to me in your email that you did kind of go the extreme route at first. Yeah, yeah. I mean, it sounds, I don't know, maybe it is extreme, but I'll get into this list and see. As I said, the first thing we did was we increased our OSAP, the minimum payments that they wanted to do. So that shaves off a few years. Definitely.

And then we found a cheap rental and we stayed as long as we could at the place we were at. And basically that's because most rental units have laws on how much rent can increase. I read some horror stories in Toronto with the market being so hot that people were getting basically eviction notices or doubling their rent just because the market's so hot. So that's kind of scary, but we were able to stay in a pretty cheap place. Our friends called it the shoebox. It was just a basement apartment. It was nice, but it was very small. So keeping rent down was a big thing for us. We made it work with one car, which we bought slightly used. So it was about $10,000.

But Steph was able to find another teacher that lived close by so she could commute every day with that teacher and then just recently we got a second car but I don't think we could ever go back to one car so I think the key is to when you get out of school continue living as a poor student because once you upgrade your house or your rental or your car or your phone, it's really, really hard to go back. It's hard to downgrade. Right. But when you don't have it, you don't really know that you're missing it. Exactly. So that's where a few of these things that I said that we do, they kind of seem extreme.

But to us, we didn't really have them to start. So, yeah, I think that's the key thing. And even if you do have to kind of downgrade after you do it for a while, it's like you just get used to it. That's what I've kind of found. Believe me, in my career, it's been up and down when it comes to how I live, how frugally and how I spend. And you just kind of adapt. Sometimes it's not fun, but you do adapt.

And our timing, this was back in 2011, 2012. So data wasn't really on every phone yet. They weren't all smartphones. I had one of those flips that had a full keyboard, so that was pretty cool. But we didn't have data on our phones. So our phone bills were about $50 a month, where I know some people that have $150 just for one phone bill a month. Right. So yeah, no, I did that too. Actually, it was too cheap to get the data because it was like at the time. Yeah. I think it was around the same timeframe. It was quite a bit

more expensive to add data. So I just, yeah, used to wifi and that, I mean, again, you get used to it and you kind of don't miss it. And then once you get data, you can't live without it. Yeah, yeah. And then we got rid of cable and just had Netflix. Yeah. Which is a pretty standard one, I think. I think that's standard and it's really easy. I haven't had cable for years. And I don't honestly know many people our age that have cable.

It's kind of a luxury. It's like, oh, you have cable? Ooh. For me, I found that it's the people that are hardcore sports fans because there's no real sports on netflix so i kind of miss it this time of year with hockey playoffs and basketball playoffs but it's just not worth it at the end of the day when you see how much money you can save on an annual basis i know i know absolutely um so one thing we did was we tracked our spending and our expenses i said that we had an excel spreadsheet in college but once we got married we actually

put it on our fridge so everyone that came over to our house got to see where we were spending our money and how much money we were bringing in and like my grandma came over and she was super impressed so hey you guys are doing great and um but it that was more of an accountability thing yeah where you know here here's everything to see we're on track so that's awesome so it's like helping you keep accountable but like did it also when you did like have people come over and see it did you find it a an interesting new way to kind of open up the conversation? I think that's actually kind of interesting. Yeah, yeah.

Everyone asked, hey, what's this? Because it was just scribbled in pencil. It wasn't really organized. We just said, here's all the expenses. And we put a brief description next to it. And here's what our income was. And it was good cause it, we always just knew, right?

Like that there was more money coming in than there was going out. Yeah. So it kept us on the right side of our income and expenses. Absolutely. Um, one of the things that you mentioned in your email, uh, as you know, a choice that you made was to kind of delay having a family. And I'd love to talk about that because I don't think a lot of people talk about that or are afraid to talk about that. But that is, you know, why did you make that decision? And was it just financial or was it personal? It was definitely the hardest decision we had to make on this list of

what we did. If it were up to my wife, we probably would have had kids right after we were married and started our family because we were ready as a couple, right, to just start a family. It was one of the big reasons that we stayed in BC for a year because it kind of was like the band-aid solution. We got to be around a toddler and a newborn and with my sister and her family and that kind of filled that gap for a little while yeah but um my wife's just she's we always knew she'd be like the perfect mom right so um it was a really hard decision for both of us but we decided you know what we going to wait until we get debt free until we start a family. Yeah. No, I think that's awesome.

Yeah. And it, again, motivated her as well to get out of debt a little more too, right? So it was a commitment for both of us. So yeah. Yeah. Yeah. I feel like it's something that, yeah, just a lot of people don't talk about. I mean, I think for me, when, you know, me and my husband have been together for 10 years, married for four. So we always get the what are you having kids question all the time. But part of the reason for delaying having a family is like we don't feel like we – that's something that we truly are passionate about at this moment. We really want to kind of focus on our careers and other things. But also it is a financial,

I mean, you do have to really look at the numbers and the money. And it's like, we just bought a place and we have all these expenses and I'm now self-employed. I mean, it's, yeah, a really hard choice to make. So yeah, thanks for sharing that with me because I feel like a lot of people may be kind of afraid to say, this is why we're delaying having a family. It's the financials. And kids are really expensive. Really expensive. I mean, when you look at daycare costs alone, it's terrifying. Terrifying. Almost like maybe I should open up my own daycare and probably make a killing. Yeah, yeah, for sure. Goodness, goodness. So you also mentioned that beyond living very frugally, you also have kind of some side jobs, side hustles to earn some extra money to kind of help you pay down your debt and save extra money.

What are some of those jobs that you guys are doing? And again, I love people that do the side hustle thing because it is becoming a little bit more popular. And it's just why not try to find other ways to make extra money to kind of reach your goals that much sooner yeah exactly so um what my wife did was she has a bachelor of mathematics from waterloo so she is a teacher by trade but also does private tutoring on the side um and then she ended up working for a tutoring company a bit while she was on mat leave as well just to get out of the house for a few hours a day so that was that was kind of her side thing and then what we did as well when we initially moved back to Ontario there was a marketing

company that I worked with while I was in college and basically they were about like experiential marketing so doing the huge grand openings where you're doing a carnival for best buy or something or when a new a new store opens in town you're out greeting the community and giving them free gifts and it was such a hilarious job that sounds like an experience there was a Lowe's that opened and they were literally just giving away good quality tape measures. Really? We're walking up to these neighbors and saying, Lowe's wants to be welcome to the community. Here's your free tape measure.

And the looks together, like, what's the catch? You're going to ask me for money next? And we're like, no, like, here's literally just a tape measure. Yeah. Thanks. Have a great day. Oh's so fast yeah i think some people are like if it's too good to be true even if it's like a free tape measure it's like what's the catch what are you trying to get out of me it's like no legit it's just free yeah that's it oh my goodness yeah so those are the side things that we

did um and again just because i had had a marketing background and Steph had a teaching background. So we just, again, found jobs that aligned with what we're good at and trained to do. And there you go. Not that tricky to do. I think a lot of people kind of overthink it. It's like, oh, my gosh, do I have to start my own business? It's like from the people that I know, you know, friends and family, the side hustles they've, you know, figured out to do are just, yeah, aligned with what they already do. It's like they have a marketing background, they find some kind of marketing

thing to do. Or, you know, I have a friend who's a grant, you know, has some grant writing experience. So she helps people write grants and makes money that way. So just figure out what makes sense. What can you already do? And then figure out if there's a side hustle that aligns with that. Yeah, yeah. And then the other thing we didn't do didn't go to movies or eat out a lot and that has to do with the being frugal i guess but at one point i'm pretty sure our friends just stopped inviting us all together because we'd always say no yeah but to compromise we began hosting potlucks and a lot of people really enjoyed that. And we even did some breakfast potlucks and people were like, this is great. Like we had cripes and pancakes and a waffle maker. And they're like, we always do dinner potlucks, but they've never done a breakfast one. So that was a really maybe i should do one of those who doesn't love breakfast exactly and then you're you're building your relationships right like you're not going to a movie and staring at a screen for an hour and a half you're talking for two hours right exactly

that's good times yeah absolutely so before i let you go um you have so many uh you know great tips already is if there's like one or two things that you'd like people to know from your experience, your personal finance journey, what would those things be? I think tracking what you're spending and what you're bringing in is by far the most important thing. It's just like weight loss, right? If you're trying to lose weight, you you just gotta do more than you take in like exactly exactly and and if if you don't know what's coming in or going out you may not know that there's a problem or you may not know where you can cut back right so absolutely i think tracking is certainly the biggest the biggest thing i agree and i think it's a thing that

people just don't know to do or it sounds super not fun and they don't do it. So you just have to kind of do it. I'm so curious because I think a lot of people think that budgeting and tracking your spending takes so much time and they just rather not. How much time do you spend on that per month? I have an app on my phone that has two categories and you put in the amount and you put in a category and it automatically sums it up. So maybe two seconds when I buy something. And then at the end of the month, I spend 10 minutes and transfer it to a spreadsheet. Oh, that's easy.

What app is that, by the way? It's called Spending Tracker. Spending Tracker. Okay. I don't think I've heard of that one. Good to know. It just looks nice and it's super easy. And I know I looked at Mint once and it just looked way too complicated. I don't know that I want to do a budgeting tool, but just tracking and then kind

of figuring out the budget on my own. Okay, we'll go that route. So that's what I did. Right on. Well, thanks so much for sharing. And I agree. I hope people take this episode as the cake in the butt that they need to start tracking their spending. Yeah, I hope so too. Well, thanks again for joining me, Scott. It was a pleasure. Thank you for having me. And that was episode 120 of the Momenty podcast and part of my listener series of the show. And if you loved this episode, which I hope you did, because I personally love doing them, and you want to be on the show, hit me up. Go to show notes, jessicamorehouse.com slash 120. And there will be details in there on

how to get in touch with me and submit yourself to be a part of my listener series because I'm always looking for new people to talk to. I think it's so awesome and important to not only learn from people who, you know, maybe they do this as their career, their personal finance experts, their authors and whatnot. So important to know what people, regular people are doing with their money

so we can learn from each other and improve our finances together. Speaking of improving your finances, I have a few special words about this episode's sponsor. A big thank you to Credit Card Genius for supporting the Mo Money podcast. If you're not aware, they are the only tool that compares over 50 features of 150 Canadian credit cards by using math-based ratings and rankings that respond to your needs instantly. Now you can get rewarded faster without all the

headache. If you want to find the best credit card for you, make sure to check out creditcardgenius.ca to learn more. Once again, visit creditcardgenius.ca to learn more. All right, one last thing before I let you go. I always like to remind y'all if you are new to the show or you just you don't know that I have it. I have a pretty awesome resource library on my website. I have a bunch of, you know, spreadsheets and worksheets and basically everything I could think of at the moment to create to help you wherever you are on your personal finance journey. All free, all super easy to download onto your computer. But all you have to do to access it, you can access the whole library instead of trying to download everything on my website one by one. Just go to jessicamorehouse.com

slash resources and you will get access to my entire resource library. Highly recommend you checking it out. All right, so that is it for me. Thank you so much for listening to another episode of the Mominy Podcast. And I will see you back here next Wednesday. This podcast is distributed by the Women in Media Podcast Network. Find out more at womeninmedia.network.