Today we welcome guest Deacon Hayes, a personal finance blogger who budgeted his way out of $52,000 in debt in 18 months. Learn how he cut expenses, earned more on the side, and became a full-time online entrepreneur.
- Well Kept Wallet
- The Complete Beginner Guide to Budgeting
- Personal Capital
- Mint and Mint Alternatives
Eric Rosenberg: Ladies and gentlemen, boys and girls, children of all ages, welcome back to the Personal Profitability Podcast. As always I am your host, Eric Rosenberg. And I’m thrilled today to have a special guest with us who knows a heck of a lot about budgeting, something I’d been writing about a bit on a blog lately. Now I talk a lot about how to make more and earn more in the side over the last few months and this guest knows quite a bit about that as well but this week, we just posted my big super epic post on everything budgeting. I want to keep that topic going and keep the discussion going on that.
So today, I have a guest, Deacon Hayes, he’s someone I know through the FinCon community who I’m actually going to see and gets high five in person in a few weeks today. We can only digital high five. But Deacon is here with us and here on the site called Well Kept Wallet which we’ll talk all about in a few minutes so say hello, Deacon to the many listeners.
Deacon Hayes: Hello, many listeners.
Eric: So Deacon is in the Phoenix areas. That’s right, right?
Deacon: That is correct, yeah.
Eric: So how did you get started in the personal finance world?
Deacon: Well it’s kind of hot in Arizona so you’re going to find things to do indoors and- no, I’m just kidding. Yeah, you know, it’s funny. I was actually wood flooring salesman and when my wife and I got married, we decided to combine our finances and at that point, we know, we realized we have 52 thousand dollars in consumer debt outside of mortgages. And so at that point, I just started researching better money habits because we have really bad money habits. And then we decided through that process, let’s set a goal, we want to pay out for that in 18 months and so we really this kind of put together this plan and I created this website, Well Kept Wallet, to kind of track our journey and kind of be an encouragement to people as we were paying off our debt.
Eric: Speaking of a being hot in Phoenix, two things. First my mom went to school, she went to college in the Phoenix area, she went to Arizona State. Is it true that, she told me of that people’s windows would blow up because it’s so hot from the pressure in the summer? Did you ever see that happen?
Deacon: In the 21st century, I don’t think that’s happened but possibly in the 20th century, it was possible.
Eric: It was like, wow, it’s crazy! She was there, she wouldn’t say how long ago. She was there couple of years ago so that people would come out to their cars on a really hot day after class or after work and it was like a 197 degrees or whatever it gets to be out there. They would get out to their car and their windows and a blown out if they hadn’t. That was a funny thing.
But also speaking of hot, we want to keep it cool, I always say personal finance should be fun and it should not do so little or so. Deacon and I are having a virtual beer together. We’re actually are having a real beers but virtually toasting them. You know I have a lot of Oregon beers living in Portland but I’m going to my old home state, Colorado. I’m having a new Belgium Slow Ride Session IPA. I like it because it’s got all those good hoppy IPA flavors but a session beer for those who don’t know is a lot lower alcohol content which I know some people say, ‘where’s the fun in that?’ You know I’m recording podcast. I have to keep an up and up so that’s what I’m having. How about you Deacon, what are you drinking?
Deacon: You know, I’m just going with the good old standard, Blue Moon Belgian White Belgian Style Wheat Ale, that’s kind of my go to.
Eric: That’s actually also a beer with Colorado roots. In New Belgium, it’s from Fort Collins, it’s one of the bigger craft breweries from the state but the Blue Moon Brewing Company was actually founded inside of Coors Field where the Rockies played, the baseball team.
Deacon: No kidding.
Eric: It ended up being bought by Coors that’s why it’s so big and you can find it everywhere but the original recipe’s the same original recipe and if you ever in Denver and you are downtown when it’s baseball season, you can go to the Blue Moon Brewing Company, it’s still there and a get a Blue Moon where they made them. It’s kind of a fun little tidbit about your beer.
Deacon: Well, I will put that on my bucket list man. Thanks for the heads up.
Financial Game Plan
Eric: For sure. So we’re talking about budgeting. You said you paid off $52,000 in consumer debt. I’m guessing it’s mostly credit card type debt, is that right?
Deacon: Credit card, student loans, we put into that consumer debt area and also car loan.
Eric: Okay. Those are all things that a lot of people had to deal with and when you’re dealing with debt or any real personal finance situation, there’s kind of the two sides, input and the output. The input being how much you earn, the output being the budget. When you decided to start tackling this debt, where was your first focus?
Deacon: You know, the first thing that I focused on was creating what I called a financial game plan. And it was kind of, I really didn’t know a lot about personal finance so I actually put my net worth statement on my budget and I called that a financial game plan. I wanted have one piece of paper that I can look at with my wife and say, ‘Hey, where we at this month?’ Not just with our income and our expenses but with our debt and our assets because that really was important to us because it’s motivating every time we saw that our debt was decreasing and our net worth is increasing.
So I created that form, we actually go over it every week and talk about it. One of the first things that we did was go line by line on the expense side and say, ‘Do we need this and if we do, how can we make that smaller?’ And so I think that focus part of going on every line of the budget in either eliminating or making it smaller was huge for us.
Eric: Where there any specific big wins that jumped out that early on you were like done with this, done with this, just marked it out with the black pen or the red pen, whatever pen?
Deacon: Cable was a first thing that went. As well as things were and I don’t think we have Netflix at that time. We could have basic TV and not to have a cable on, that was free. And we’re newlyweds so we could go out and do stuff and hang out with family, that kind of stuff, so really cutting the cable. Also gym membership. I don’t know about you, but back then, I wasn’t really active in gym. I have a gym membership now but that was one of things where I said, ‘Hey, you know what I can go run outside. I can find other ways to be physically active, go hike Camelback Mountain, which is a mountain that’s pretty well known in Arizona.’
And so we got rid of those type of things and the big thing was actually the car. When I look at that and I thought, ‘okay, the car payment was like 360 bucks a month plus on top of that, my insurance cost significantly more because it’s a brand new vehicle and plus on top of that, the registration cost even more.’ So I just thought, “Man, if I can just get rid of that car, that would be probably about $400 a month in savings which is almost five grand a year. And for us, for being newlyweds, like five grand a year, oh my gosh, that’s amazing. So we’re on our journey to figure out how do we get rid of the car even though it’s upside down so that’s what kind of one of the big things that we actually ended up getting rid of and coming up with the difference that freed up that extra 400 bucks a month.
Eric: So that’s, if we add up that cash flow from just those few changes, 400 a month from the car, just like fifty, hundred bucks a month from the cable. Let’s say hundred just to make it easy rounding and the gym membership, just like 500 dollars a month, you came up with right away that they were able to save.
That’s a big lesson to a lot of people I think. I cut cable myself. I cut it to think back a few years, I was still single living on my own but I thought you know, I’m spending seventy dollars a month just giving the money to Comcast and I did watch TV but how much do I really watch it that I needed it and already did have Netflix. I actually found one of the coolest things for me when I cut cable was it just saving 70 bucks a month though that’s a lot of money that I definitely enjoy having.
One part that I really enjoyed was like actually went out and did stuff like you were talking about hang out with friends and family. I went outside for when the happy hours with can get little bit of a cost but less than 70 dollars a month and was spending time with real people instead of staring at the screens. That was a huge life benefit in addition to financial benefit.
Debt Payment Plan
Eric: So after you started all that budgeting, how long did it take you to pay off that debt? Where there any other moves you made along the way that were really helpful?
Deacon: Yeah, so it took us 18 months and that wasn’t like a magical number, it was, I have read somewhere that the average person, who kind of puts together a plan to get out of debt, got out of debt between 18 to 24 months. And I was like okay, well, I feel like I mean I’m not going to be above average but if someone can do it in 18 months like we can do it in 18 months, so let’s just figured it out.
And so let’s just say, we sell the car, we got an extra 500 bucks on top of what we’re paying already. We’ve eliminated a few debts at that point in time, so the car was like 17 grand so let’s just say we’re from 52 to 50. And then we sell the car and now we’re down on the 30s whatever, like 33 grands and so now it went from 52 to 33 and we’re feeling that momentum and so we’re selling stuff on Craigslist, some stuff on eBay, just finding stuff that was in closets, in drawers, in cabinets and just sitting there collecting dust or like kind of put the budget, do we really need this, right?
And so we sold a lot of stuff and on top of that, anytime we got win fall, right? Like so, we got tax returns. All that money went to go paid on debt. So it was like anytime extra money came in, we had a purpose and a plan which was to pay off our debt and so that really allowed us to get that momentum and paid off in 18 months.
The Debt Snowball Method
Eric: So when you paid, did you target one specific loan or credit card first or did you try to spread the wealth and paid them all down together?
Deacon: So we targeted one at a time and we used the debt snowball method. And we found that to be really effective for us because we realize that our debt was a psychological problem that we just, we bought stuff that we couldn’t afford and it was immediate gratification. So we needed to use a method that was less mathematical and more psychological, like the debt snowball and so that was really helpful for us.
Eric: Can you walk people through, for people who don’t know what the debt snowball is? Can you walk people through what you’re logic process was and what order you paid things off?
Deacon: Sure. Yes. So the debt snowball is where you list your debts on a piece of paper from smallest debt to largest debt regardless of the interest rate. And so I think we have maybe some small credit card, maybe $300, maybe $600, you know things like that. So those were at the top. And so the idea was you took all of your extra money, you know, when we sold something on Craigslist or eBay, we take that extra money pay out debt. Well, the beauty is, using that snowball, we paid off our first stead, probably within our first 30 days. We saw progress early on so where we have like this confidence like hey, this is working, we can do this.
There’s another method that’s called the debt avalanche where you pay off the highest interest rate first. Well, that’s a larger debt and you feel like you’re spinning your wheels, you’re not making progress, it’s easy to give up. So the beauty of the debt snowball is that it builds momentum and confidence so that you feel like you’re actually getting somewhere.
It was funny because every time we paid off a debt, it was like a game like I had this visual on our fridge and it was an Excel spreadsheet like a chart and let’s say, October, 52 thousand, November, 51 thousand, and so literally, we could see our debt melt away on our fridge so it’s kind of like this game; like we gamified it. Using the debt snowball, focusing with every act just paying out this smallest debt, just really was huge for us.
Eric: That’s great. I’m a huge fan of either debt snowball or avalanche. I think, if you go through the financial calculations, the paying off high interest debt, first, will make the most financial sense but as you point out, the psychological part is huge and feeling like you have a win, can mean a lot more than that $20 you save in interest.
So if you are paying of any kind of big number of debt across multiple accounts really think about what way is going to work best for you because there’s like personal finance is personal, there’s never right or wrong answer, it’s what works for you. Deacon and his wife, definitely found a way that worked for them. That’s awesome, I applaud you. Great job.
Eric: So on the other side of the coin, we’ve talked about budgeting. Have you taken any steps to try to or while you’re paying off the debt, you’ve talk about selling your junk on a, well of course not junk necessarily, stuff that you didn’t use them anymore, on eBay or Craigslist? Did you do anything else to try to bring more money in the door while you’re paying down your debt?
Deacon: Yeah. One thing that I ended up doing was getting second job, delivering pizzas. I remember when I was in college, I delivered pizzas on the weekends and at night and I knew that it was something that I could work two or three days a week. It paid good money and I think I probably average, I don’t know, 15 bucks an hour for a part time job which at that time was decent side income. And a couple of weeks’ worth of paychecks or tips would pay off one of our debts, right? So it definitely gave us a little bit help as well.
Eric: That’s great. So if you were going to face this problem again or talking to someone who’s facing this problem, who have a bunch of debt, feel overwhelmed, they don’t know what to do, they have a full time job, they’re getting by but definitely not making any big progress in their debt, what advice would you have to give them now that you’ve done it, that you didn’t know in the beginning that could help them paid off?
Deacon: You know the funny thing is it sounds so simple but really putting together the budget or tracking your expenditures, right? It’s funny I’ve lost weight before and the thing that was key for me was to track my calorie intake. And so it’s the same thing with finances. If you want to be able to figure out a financial goal and how you’re going to get there, you have to track your spending and your income. And so that was the first thing and then once you do that, it’s almost like this aha moment like oh my gosh, like, I know why I can’t get ahead or I’m not paying off my debt it’s because I eat out too much or I buy too much of groceries or I do move too much when it comes to entertainment or I have too much unnecessary debt like a car loan or whatever it might be.
And so really putting in get to that budget analyzing it saying okay, how can I make this smaller or how can I make my financial picture better and then creating a plan to increase your income and decrease your expenses whatever way that’s works best for you, maybe you can deliver pizzas at night or maybe you can deliver papers in the morning. Or maybe you can do something online. There’s a lot of online opportunities where you can make money from the comfort of your home.
So really just kind of mapping out that plan and that’s it, I mean really if you’ve got a goal, right? Your goal is to pay X amount of debt, now, it’s just an equation, increasing your income, decreasing your expenses and the more you do both of those, the sooner you’re going to pay off your debt.
Eric: Oh that’s great. So when you’re paying off your debt, when I started paying off my old student loan, that was my big debt pay off I did, I used mint.com, now I use Personal Capital more myself as a budgeting tool. Did you use any software budgeting tools? Did you go to old school pen and paper? How did you track your budget and put it together in the beginning?
Deacon: So in the beginning, we did it in an Excel spreadsheet. I really like that because I have full control over where everything is categorized and how the format was. Because like I said I want to see a one piece of paper, two numbers – if we have a deficit or surplus. So for you’re in the black or if you’re in the red, and then if we had, if our net worth was increasing, you know, those are the two things I wanted to see in a regular basis so the excel spreadsheet allowed me to do that.
Today, we fast forwarded. We use mint.com but we take the information from mint.com and we put it in our spreadsheet. So we get to see in the way that we want to see it but Mint will help us in categorizing and organizing and kind of get us an 80% of the way there. We use the combination of both.
Eric: That’s great. Actually, I’ve never heard someone doing that. I’ve seen the export features, I was wondering what I would use it for. It’s a great way to do it. I know people who are very manual with their budgets and it works great for them. But for me I know I wouldn’t do it, it just takes so much work and time. And with all these great free tools out there that’ll categorized your spending, it’s like, it seems like a no brainer or you can use the time that you save you know, go make 20 bucks doing whatever it is that you’re good at. So that’s how I do it.
So here’s another question, something that, there’s more of a conversation topic. So I’ve talk a bit of on a blog lately about the differences between budgeting at a very, very detailed level and kind of a midlevel. A detailed level would be budgeting for restaurants and fast food and groceries as an example. A midlevel would be saying just a food budget line were all those rolled into one. And you can also if you are really on top of your spending, maybe you can just do a high level of spending goal as long as you’re tracking towards that. Is there one of those you think works best for you or for most people? I guess that’s two questions.
Deacon: Yeah, I really am a fan of making it simple. You know I think the more that you have to, more complexities the less likely someone is to do it, right? So for us it was really simplifying it. And in fact for the longest time we put eating out in the entertainment category because we just felt like that was one of the things that we did for entertainment is we went out to restaurants. And every once in a while we go to a movies and things like that so we just had that category combine them to make it simple. We have seen kind of, because we’ve been doing it for a while for a number of years, we kind of expanded. So now, we kind of have like a fast food slash eating out budget.
So it really is what works best for people but I really encourage you, if you’re listening to this, to make it simple, something that’s doable, something that works for you. And then once you get comfortable with it, maybe you can expand from there.
Eric: It’s funny, for me I’ve actually ended up doing the opposite. When I started with budgeting in the beginning, I was so inspired to knock out my debt. My grad school’s estimated cost was about $90,000 and the student loans I left with was some around $40,000. That was my big chunk of change, I wanted to pay off before as quick as I could. And I was so inspired, I was, I am little budget every single dollar and every single lines, I had every possible break out, almost that I could I had a budget for. And over time of lump things together more and more or made up, more simple especially now that I don’t have a big debt anymore. I feel like I don’t have to put the time in that I did before as long as I know my spending is still under control. Though I know for some people, the opposite is the case. It’s really a, find what works right for me especially now we’re both married and was a, before when I was paying off my debt, I was a single guy. Now, I’m married so I have another person to put in the equation with our budgeting. It was also something I find interesting to see what works best for different people and finding your own way. Do you have any more thoughts on that topic of how to do that, how to best categorized?
Deacon: Well, but I think, you know, you also brought up another point that I think is key – having your spouse on the same page. We won’t be able to pay off our debts in such short period of time if it wasn’t for us both being on the same page. And then coming up with a budgeting system that worked for both of us. So I love what you said because it’s so true. I mean earlier, you said personal finance is personal. Some people are a little bit more detail oriented, they’ve got to track every penny. And some people are a little bit more, you know, hey, I just need to be to the closest dollar or to the closest five bucks and we’ll be okay. We’ll still achieve our goals. For us, it was really kind of figuring out more the girl and guy categories, is what I kind of label them as. So girl category would be, you know, make-up, you know, clothes like, and I’m not talking about clothes that you need to buy. You’re buying clothes because you want them.
Deacon: Yeah, so that’s a girl stuff. And then guys like, I like technology and some guys like sports and buying tickets to concerts or whatever it might be. We actually set a budget for girl and guy categories. That was, I think the best thing ever because that eliminated the fighting about money because my wife could buy whatever she wanted within those boundaries and I could buy whatever I wanted within those boundaries.
And so that really helped us in that process because the hardest part is people will go say, gosh, I’d love to do this but I don’t want to fight with my spouse because of that money so they avoid like the plague because they don’t want to get in those situations. That was one of the key things, it’s just making sure that we each had a category. We had some blow money, some girl and guy money to spend.
Eric: Good communication and all these stuff is, I found this so important. When you’re dealing with your personal finances by yourself, if you make a mistake, you’re only accountable to yourself. Unless you have a blog, in which case you’re accountable to your readers as well. Because that’s something that I always said I would do is to hold myself accountable for everybody.
But when you have a spouse, that’s someone that you’re not just making a mistake with your money, it’s their money too and whether, I’m in the opinion that every dollar earned is a shared dollar; whether I earned it or my wife earns it. And every dollar spent, I feel the same way. If I go out and blow a bunch of money on, I don’t know, gambling in Vegas, that’s not something I ever done. I have gone to Vegas and blown money but not gambling. It’s something I would feel terrible about. But I know some people don’t have that so having that really good communication, giving yourself freedom within the certain bound, I think is very important when dealing with money as a couple. In your guy category, would you mind sharing some of your vices, any big purchases you may have that you’re super excited about?
Deacon: You know I’d say at the time it was probably like a PlayStation 3 or something like that, you know. It’s funny because I always thought like growing up that video games are for kids and then I met my father-in-law who is now 71 years old and he has an Xbox 360. It was one of the things like you can have this kind of like fun things that you do once in a while. As long as you buy them within your budget, right?
Another thing that we like to do, not necessarily guy but we like to travel so we created like a travel category. I’ve used some of my guy money kind of separate from that like if we go and we travel somewhere like we been to Paris, in London, in Hong Kong and Singapore-
Eric: Do you play ping pong in Hong Kong?
Deacon: That would have been sweet, but no. They would have whooped me, man. Those guys are fast over there.
Eric: There was a Netflix movie. It was really, really bad I watched lately about a guy, it was called ping pong player something. It’s a way to not waste two hours but it was funny.
Deacon: Hey, you know, if I got two hours to waste, I’ll check it out.
Eric: If you want it, just totally zone out, find this guy just play ping pong. He’s really good.
Deacon: Sometimes we do travel in some of these places and if I wanted something, I just use my guy money to buy it and not have to worry about it. So it really just kind of depends on the person.
Nowadays, like I bought a smartwatch, a Moto 360, because I’m an Android guy and I was really disappointed. I had an awe factor like, oh my gosh, this is exciting like I can do stuff from my hand instead of pulling my phone out of my pocket. But after like a month of using it, I just didn’t use it as much. And so now, I’m reselling it on Amazon but you know- these are some of things that I- that’s where my guy money go.
Eric: I‘ve had some similar kind of purchases. I was really excited, if you heard of Automatic, it’s a like smart thing you put in your car that feeds your car data to your phone?
Deacon: No, I was thinking of the company that owns WordPress, but no. Tell me more about this.
Eric: That’s automatic with two Ts. This is automatic with one T. It’s a device, it would cost of hundred bucks, it’s a little gray thing. There’s a computer port every cars since 1982 or 84, somewhere of the 80s I think, has one, that’s U.S or foreign made. It’s got an ODB II port then you can plug this thing into your ODB II port, that’s the place that your mechanics when they say, you have to plug into your car’s computer, that’s how they do it. And it talks to your phone and tells you all these stuff about your car. I was so excited about it and after like four days I was like oh, it just tells me these stuff about my car. It was the same thing, costs a hundred bucks. At least I was able to write a blog post about it and write it off as a business expense. I had those, too, those fun purchases.
My big one right now were, I definitely had to have a serious budget talk with my wife about it. I just started private pilot lessons. Actually, I have my third one coming up this week. Those are very expensive and something, you know, if I were in debt, I would definitely not be able to do this. I’m happy to be in a point where I’m no longer able to, but that was a serious conversation going into something that will cost thousands of dollars that I get the primary benefit and my wife does not. So that was a, it definitely a conversation that had to be had overtime. It was not like one day I walked up to her and said, ‘Oh I think I’m going to start maybe how to fly a plane tomorrow.’ So that was a big one; any big purchase I think that’s important to.
Saving Up for Big Purchases
Eric: When you have a big purchase coming up, that you’re planning on whether its guy money purchase or a shared purchase, do you have any budgeting techniques that you use to save up or plan for that?
Deacon: So I use what I call a countdown fund when there is an end goal and that the end goal is x amount of dollars, right? And so for instance, my wife wanted a MacBook Pro and Macs are expensive because I’m a PC guy because I’m a personal finance blogger. I don’t know about what you are but..
Eric: I’ve had both.
Deacon: So she wanted a MacBook Pro and I was just say like, ‘oh we can’t really afford that right now.’ And so really, she just put away a hundred and I think it was just like a hundred bucks a month for 15 months and then she bought a MacBook Pro.
It’s like one of the things like you think it’s a big expense and if you just put together and plan and say, ‘hey, I’m going to put away this much money a month until I’ve got the entire amount.’ So here’s why it’s called a countdown fund is, you’re starting with your goal is 15 hundred bucks and you put a hundred bucks way, now, you got 14 hundred bucks left, 13 hundred, 12 until you have zero left to save and you have the amount that you need. So really that’s the method that we used so that we lived within kind of our budget and our boundaries.
Eric: I have a closet behind me, I have DJ equipment. I have been a night club DJ in the past. And that is, when I wanted to start being a DJ, I was like immune to it. I actually, all the way back in high school thought about being a DJ, I was like a, ‘that would cost so much money, how would I ever afford that?’ And as I was paying my debt off, I don’t think it’s possible. It’s possible to be super so laser focused on debt, you don’t do it anything fun while you’re doing it. But I don’t know if that’s sustainable for most people. One thing that I really wanted then was to get a DJ mixer and the one I wanted was with the speakers, it was like $2,000. I did that exact same thing. I budgeted about $200 a month and I saved it, and saved it, and saved it, and after in a little less than a year, I was rocking like Tiesto in my living room. You can picture me like boom baroom boom boom.
Deacon: I’m picturing you right now, man. I’m picturing it right now.
Eric: It’s all fun. So when you, you and your wife, have you ever had any of those big purchases and you didn’t want to save the countdown fund and you just gave in and did it?
Deacon: That’s a good question.
Eric: I’m trying to knock you off the rails a little bit on your perfect finance record.
Deacon: I know. I mean, we honestly didn’t, for like the first 25 years of our lives so we didn’t have a perfect one though. We had a perfect one from the past like seven years so. No, I’m just kidding. You know, it’s funny, so we bought a house at the end of last year.
Deacon: Thanks. One of the things I was thinking let’s put 10% down and in that way we’ll just have more cash on hand if something happens, we’ll have a bigger emergency fund. I’m really more on the mindset of people really should put 20% down and avoid the PMI and have a lower expense, your mortgage is lower because you put it more down and you don’t have the PMI. And so I was at crossroads and a buddy of mine whose completely debt free in his 30’s, he’s like, ‘Deacon, put 20% down’ and kind of was like my voice of reason in my ear, right? And so I was about to make like this decision and I ended up putting 20% down.
And so we don’t have PMI and the mortgage like nine hundred eighty five bucks and so, if we are getting another recession or my income goes down because I’m self-employed and my income’s variable where in a better position because we did that. So you know I think even be in the personal finance blogger/expert I still face those decisions and struggle with them just like everybody else does. And I’m just blessed because I’m around a lot of guys like you Eric and my other buddy who kind of whisper in my ears and say, ‘you know this is what you’re telling in your audience like you’re talking about being accountable, being a blogger,’ I should practice what I preach right?
Eric: I have a, I don’t know if you know Jeff Fruhwirth from Sustainable Life blog. He’s been on this podcast a couple of times so far and he’s my buddy that’s my voice of reason if I’m about to make a stupid financial decision. I usually know it but I think most people realize when they about to make a bad decision you’re getting a little bit of a feeling. So if I have a little bit of a feeling of financial decision even if after talking with my wife I might still send him an IM and say, ‘hey, Jeff I’m about to do this.’ And he’ll tell me straight up if it’s a dumb idea or not.
So it’s nice to have an accountability buddy or however you would like to call him. Someone who can, I know a lot of people we’re being pretty open with finances a lot of people very private with them but I still think it’s good to have at least one person you can talk to that’s not a parent or relative, somebody is not invested in it and can really look at it objectively and tell you, ‘oh yeah you’re making a smart choice or no it’s not a good choice.’ And ideally that someone who also has some finance knowledge and has done well and made good decisions, someone you can look up to or at least look to as an equal. You don’t want to ask somebody that has a hundred thousand dollars in credit card debt for financial advice, at least I wouldn’t want to. That’s great having that accountability partner there.
So when we bought our house we were faced with a similar decision. Living in Portland, the real estate market here is absolutely nuts. There was one house that we really like that came on the market and within twenty four hours before we even have time to put an offer down there are already four. So when we saw something we like we knew had to come up with a strong offer and a lot of cash. We actually ended putting up 40% which, every dollar more you put into your down payment lower’s your mortgage payment. So it’s something to keep in mind and as Deacon was just saying, having a mortgage payment under a thousand dollars a month gives a lot more flexibilities and freedoms. And he also mention PMI, Private Mortgage Insurance, that’s a monthly cost on top of your mortgage payment you make every month. If you’re equity in your home is less than 20%, that’s what banks, that’s the standard charge here, so, good choice on making a 20% down payment. I agree with you and your friend.
Deacon: Thanks, man.
Eric: So now you mention you’re self-employed. What can you tell people how you went from delivering pizzas on the side and to now working for yourself and running your own business?
Deacon: So, yeah I never realized that you could make money with a blog. You know, I knew you could make money with like Facebook, you know or it’s like who came up Twitter is an idea or something like that but yeah so I’m gonna have [crosstalk] exactly, well some people use Facebook but we won’t go there.
Eric: It’s another discussion for another day.
Deacon: Yeah. So I realized that I had an audience. I had a natural organic traffic coming from Google and you know, I started coming across people other bloggers that were making money and I’m like “Gosh, this is, how do they do that?’, you know. So just reading whether it’s their income reports or maybe them talking about an affiliate that they have.
I decided to research affiliates that I thought would be really good for my audience and that would wind up my values, you know. I don’t want to be selling, I’m the get out of debt guy so I don’t wanna be selling like title loans or payday loans or even credit cards for the most part or like a steer away from those. I don’t think they are bad, that’s not something that I partner up with.
So I found all this types of affiliates like Personal Capital that you mentioned earlier, mint.com at the beginning, highlight affiliates a long time ago. There’s a bunch, now I do EverBank, but they pay me a small commission every time someone signs up for the services. So it’s like a win-win like I talk to someone else and say, ‘hey, you need a place to park your emergency fund? You should check out EverBank they’re paying 1.2% whatever for the first six months and then after that it’s like 1%.’ And they’re like, ‘oh that’s great.’ And so it was kind of a win-win deal. And then obviously, as you probably aware I’d twit with AdSense and media.net ads and those kind of things but they don’t really pay a lot but you know, a couple hundred bucks a month here and there.
So that and then I started doing an online course in coaching, I do skype calls and I do in person deals. So really kind over the years just developed all these different ways of getting incomes and not just dependent on one thing. I have multiple different streams of income that kind of provide for our needs.
Eric: That’s great. That something I think even people with full time jobs need to keep in mind having multiple income sources.
Eric: Just about thirteen months ago from maybe today, the day we’re recording or the day this goes live somewhere in that week, whenever you hear this just think it’s about a year ago, I was like go from a job very unexpectedly, it was a Friday, I went in one day and then they said that it was my last day. And a lot of people would totally freak out in that situation but because of, I have a business similar to Deacon with my online business through my blog and I also freelance, write, and web design on top of that. And having that to fall back and I knew I might not be bringing as much as I was before but I can at least scrape by on the bare minimum cover the rent, I’m not gonna go hungry. And we also have plenty of savings. I think having a good emergency fund in one of those banks like your mentioning with a good interest rate is a good way to go.
So everyone definitely you remember to have multiple income streams just in case you never know. If it happen to me it can happen to anybody, it’s not a fun experience, especially if you have to go home and figure out how you gonna pay the rent next week.
Deacon: It’s funny you say that because I actually, I somewhat got fired from my last job as a financial planner. What happened was at first I got an e-mail from this producer in New York City for Fox News and he said ‘Hey Deacon, we’d love for you and your wife to be on the show.’ And I was like, are you serious? You want me to be on there?’ And like, ‘yeah, talk about how you guys paid off your debt and that kind of stuff.’ So as a financial planner were regulated by the SEC which is you know a federal agency. And because of that I represent the company and if I’m on the news and if they were to mention that I worked at this company, my compliance department would have to kind of vet what I say.
And so I go to my boss and I tell him, ‘hey I got this really cool opportunity, what do you think?’ And they are like, ‘oh that’s so exciting let me talk to the corporate office.’ Well as soon as they did that it was like total change of tone. It was like, ‘why you gonna be on TV?’ ‘Oh you know I paid off this debt and I’ve got this site where I kind of documented our journey and kind of helping other people. ‘Well your site has ads on it and you’re doing financial advice so you’re basically getting paid for giving financial advice,’ is kind of what it kinda what it came down to. And I was like, “well but I submitted my blog for approval through the compliance department, they did it. So it’s this long dry out thing and they’re like, ‘Well Deacon, where you want to be, you know in the next ten years?’ ‘Really honestly like I’d rather be helping average people with their finances and that firm I was working with high net worth individuals and I just not fulfilling you know I feel like I just wasn’t meant to be there and so they gave me a severance. So they technically fired me but I kinda told them that’s where I’d rather do. So they’re like, ‘we’ll help you do that.’
And so kinda like you, so here I am, well like I have a job one day and then the next day I don’t. And I had some income coming on the side. I built up that emergency fund but I wasn’t a hundred percent sure like how everything was gonna shake out. And now I make about 4 times what I made as a finance planner. It was just unbelievable and I never would have imagined that but I had to take that leap. But like you said, I mean we did a lot of planning in the process, right? We paid off our consumer debt first we had actually 9 months’ worth of emergency fund, you know, and I had income coming in from my blog and my side business already. So it wasn’t like I just quit my job and didn’t have any plan. It was coming but I kinda was forced into it quickly.
Eric: It was a very funny situation when I lost my job I was I actually unexpectedly I was kind of grinning as I walk out to the car after the shock wore off. And I got my stuff and I was thinking, ‘wow, I can work full time for myself.” I think it was 2 hours after I got home and told my wife, called my parents, told the people who I wanted to know, that my employment situation changed. About 2 hours later, I got a LinkedIn message from a recruiter. And it was a month later, I think to the day, I started my new job. I’ve actually been there a year now.
I did go back to full time employment and still do all my online incomes stuff on the side. I would never want to give up my side income. I’ve learned the lesson, you need to have something fall back on just in case.
So thank you so much, Deacon for being here, sharing your story. It is definitely an inspiration to see how you paid off debt and went to it now, working for yourself, buying a house, putting 20% down, doing the right things.
If people want to connect with you and learn more about you, give you a virtual shout out, how should they do that?
Deacon: Yeah, the best way is go to wellkeptwallet.com and click on the ‘start here’ tab and that will give them everything that they need to know. And then there’s also ‘Ask Deacon’ tab if they have a question and they want to get in touch, I’d love to talk with them.
Eric: Great! So everyone please do that. Go give Deacon a tweet or like or any of those social network things that you like to do out there, give him one of those. And thank you so much for being here and being a part of it.
Listeners, if you enjoyed what you’ve heard today, please it helps a lot if you go into iTunes or Stitcher or however you listen to podcast and give a like, a 5 star rating if you think I’ve earned it. If not please send me a note as well, let me know firstname.lastname@example.org. Tell me what you like, what you didn’t, any questions, what I can do better, what I could keep doing that you like. Just reach out and say hello. Don’t be shy and I’m sure Deacon feels the same way for people on his site. So thank you everyone for hanging out with us today. I’m lifting up my beer, giving a cheers to Deacon for joining us. And to all the listeners, have a wonderful week. And until next time, stay profitable.
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