Becoming a Debt Free Millennial with Justine Nelson
Episode 215: Show Notes
Today on the podcast we welcome Justine Nelson. Justine is a friend and previous co-worker who embarked on a personal journey to get rid of debt… and then decided to teach other people how to do it too. Justine is the founder of Debt Free Millennials, an online resource blog and coaching center helping thousands of millennials ditch debt and live like a boss. Today we are speaking about all the fun things – like student loans, debt culture and budgeting. We are also going to be discussing how to navigate conversations around debt with your partner and family and how having a budget and goals in your personal life leads to amazing things in your business life.
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We hear how this Midwest millennial got into debt in the first place, how she broke out of debt's chains and was able to start a business from the ground up and do things in her life that she never even imagined. Since Justine has been in the dark pits of debt herself, she is a really great person to get some tips and advice from on how to cope with these financial practicalities, as well as the emotional strain that debt can place on your relationships. If you are feeling overwhelmed by your own debt, Justine is going to show you just how doable (and surprisingly fun) paying off your debt can be. If you want to live that debt free life and grow the business you have always dreamed of growing, then this inspirational episode is a great place to start!
How Justine Got Into Debt And How She Paid It Off In Two In A Half Years
In 2008/2009 when Justine was a sophomore in college she received a phone call from her mom saying that she had be laid off her job after working there for 25 years at a corporation and that she and Justine’s father could no longer support Justine financially. Justine was on her own and was completely freaked out because she had no means to pay for college on her own. She got a job and tried to pay for her schooling with as much cash as she could possibly make working at Chilli’s as a server. She took out more student loans than she needed and when she graduated in 2011 she had over $35,000 in debt, was living back home with her parents and making $10 an hour at an internet ad agency. This was not the life after college she had imagined. Justine got pissed off at herself for taking out all those loans in college, not realizing the consequences she would face after she graduated. She then started reading personal finance books about how to budget and how to get out of debt. Justine read Financial Peace Revisited by Dave Ramsey and the book changed her life. She decided that she was going to be debt free in five years. Two and a half years later she had paid off all of her student loan debt, making an average of just $37,000 per year.
Helpful Tips For Navigating Debt Conversations With Your Partner
When it comes to finances, it’s not “your’s and mine.” When you get married, two become one and that is how Justine views money. Your money is not separated from your boo’s money. It is one income and this is the thing that a lot of entrepreneurs struggle with because their income is so up and down. We can’t show resentment toward one or the other in terms of the weight we are pulling. When you and your partner are working towards the same goal, you can make incredible things happen very quickly. When it comes to tackling debt with your partner, together, Justine advises listing out all of your debts and your money goals and to sit down with your partner and have a budget meeting together once a month. If you have a partner that is hesitant about tackling debt together, then you need to approach it one thing at a time. What is one thing you can get rid of or do to help you reach that debt free goal? Money makes people emotional and a lot of us view money as a security blanket. The more money we have, the more secure we feel, particularly for women. For men, money typically equates to power and status. As an American society, debt has been normalized and Justine wants to flip that around to say that living in debt is not normal and we need to be weird about it! Talking about it openly and honestly is really just the first step.
Budgeting: Where Should We Be Cutting Down And How To Start Small
Justine encourages us to ask the question, where do you want to be financially 3-5 years down the road? What is going to help with the budgeting is doing a money audit of your spending. An audit of you spending means that you are going to look back at the past 2-3 months of your spending and break down your spending into different spending categories. For example, for millennials, a lot of us are foodies. We love to go out and eat at restaurants and that can be a big budget buster! So, if this is you, Justine advises going through this budget and adding up all the eating out costs. Justine recently did this with a friend who thought that she was spending $150 per month on eating out. After looking at her spending records, it turns out that she was spending $350 per month on eating out! All that money adds up and you can take that money and add it towards your debt. Having your money goal visually set out in a separate account is so helpful too. So open up a separate saving account and rename it to whatever you are saving for. For example, “Our vacation fund,” or “College,” or “New car.” What also helped Justine was making a debt-free chart and sticking it on her fridge. Seeing that chart and crossing it off, was a motivating factor and you can do that with any money goal that you have. That everyday visual reminder is huge.
The Way You Treat Money Personally Leaks Over Into Your Business
What really helped Justine on her debt free journey was to cash-flow everything. She has taken one-on-one client work so that she could implement Debt Free Millennials and get things up and running. Taking advantage of things like Quickbooks and then tracking her income on a monthly basis was a huge help. She even set up budgets for her various businesses when she was starting out so that she could see what she was spending money on and what was worth her while. We can so easily let budgeting and accounting slide and most entrepreneurs, when they’re starting out, hiring an accountant is the last thing they’re thinking about! So it’s important to sit down, put this on your calendar that once a month that you are going to go in and take a look at all of your expenses for that month and see what income you’ve generated and how you can use that moving forward. If you are spending a lot of money just taking clients out or on conferences that aren’t getting you very many leads, then maybe you should reconsider how you are spending that money in your business. Basically, just do a monthly budget for your business so that you can take a look back and see how much income you generated and what your expenses were and see what income generating activities really are worth it! What is really bringing money into your business? Was that microphone really worth it? Was that course really beneficial? Are taking all these clients out for dinner really ending up in profitable business deals? You need to figure that out, and realize that it will be a little scary at first!
Quote This
Money makes people emotional.
—Justine Nelson
Highlights
How Justine Got Into Debt And How She Paid It Off In Two In A Half Years. [0:04:15.1]
Helpful Tips For Navigating Debt Conversations With Your Partner. [0:08:00.1]
Budgeting: Where Should We Be Cutting Down And How To Start Small. [0:15:50.1]
The Way You Treat Money Personally Leaks Over Into Your Business. [0:25:40.1]
#TalkStrategyToMe [0:35:50.6]
Calculate exactly how much debt you really have.
What can you do to minimize that debt number?
Save up for the “Oh Shit!” Emergency Fund.
Put together a monthly budget.
Attend a monthly budget meeting with your partner.
ON TODAY’S SHOW
Justine Nelson
Debt Free Millennials
By the age of 25, Justine Nelson had paid off $35,000 in student loan debt making an average of $37,000 per year. Grit, discipline and a motivation to kick debt's ass for good helped her achieve this goal within two and a half years. Now, she's sharing her strategies and tips with fellow millennials on how to get out of debt, budget without the bitching, and ultimately change your financial future. She believes millennials work too damn hard to be broke all the time and that credit card companies and banks are feeding lies about the way millennials should live. A Kansas City native, this Midwest millennial broke out of debt's chains and now resides in San Diego, California with her husband living the DINK life (Dual Income, No Kids).
KEY TOPICS
Debt free, Pay off debt, Savings, Student loan, Money management, Millennials, Monthly budgets
