I had an honor to present this week to a group of exceptional ladies that are part of the Powerhouse Montana women networking group. Afterwards, many of you asked me to provide the notes of my speech as you found it inspiring. I am so pleased that you found my story empowering and can’t be happier to share it with you. (Please excuse lack of fluidity as this was meant to be notes to the presentation. And of course grammar and punctuation-English is my third language :)).
I started my presentation by asking the guests to write down top two things they could use more in their life… Answers varied, and some of them already had “money” as at least one of the things. Others mentioned things like “travel”, “more time” and when asked why they can’t do those things already, the answer circled back to “money”. So, at the end of the day, money matters..
I am going to start by explaining how I ended up in front you today talking about finances…
My story began in Soviet Union, where we had no banks, no credit cards. Basically, want something-save cash.
Moving to United States in my college age years was this overwhelming learning experience. It was a never-ending ball of yarn of new things that kept rolling out and I was just thrown in into it trying to figure out where I want to fit in, how to keep my identity. Some days I felt like this play dough figure that keeps getting re-molded to new things over and over.
I had to learn to listen but come up with my own truth. Learn from my own experiences, but not too many mistakes. And so forth. At that time even thought I was only in my early twenties, I already lived through Soviet Union, then transition of Lithuania to the independent country and all the truth we knew turned out not to be true, which molded my personality to not be as trustworthy about things I see and hear and to come up with my own version of truth.
It was also exact time when I first moved out on my own and had to financially take care of myself for the first time. In the foreign country, surrounded by people who used these cute little decorated pieces of paper for money and called them “checks”. And then there were there places called “banks” that were already scary enough with their “foreign” foreign language, but the craziest part was the drive through’s. Actually, I still like to take all my foreign visitors to the ones with fancy suction bullet like contraptions like the one at Wells Fargo downtown.
And then I met this blue-eyed classmate in college. Long story short-we were talking about marriage when he non-nonchalantly mentions that he has a car loan and student loans. Like a “six years of college of Engineering degree” amount of loans. I am not going to lie, it scared the heck out of me, but he ensured me “it’s an American” way and I decided against running away and became Mrs. to my blue-eyed guy.
All along, money was a high priority on my mind. It might sound very shallow, but I was by myself in a foreign country and having money basically meant having something to eat and somewhere to sleep. The only truth my parents were to know about me moving to America from here on was that I am thriving in my new country. Worrying them was not an option.
So, this is what I learned in my long journey in “healthy finances”. First-nobody talks about money. It’s a taboo of some sorts. Especially if you are successful. Then it is just bragging. Yet, “bragging” about being “broke” is socially acceptable. Well, I didn’t wanted to learn from “broke” people, but everyone else was always tight-lipped.
Second, it is easier to talk to your friends about sex than finances. Somehow finances are more private that way.
So, with all that being said, I figured-I am on my own. I will figure it out. I am kind of that way. Not much on instructions.
I started from tackling the car loan. It is an interesting phenomenon-debt in America. We call it non-threatening names like “car payment” “mortgage”. It is so less threatening that way. It is not a debt, it is a monthly payment to live an “American dream”. Well I was having none of that. I found out that I can work overtime at my job and by golly, I worked every possible extra hour. When the car “payment” was gone, my husband started paying attention to this “no debt” business. Working as a team, credit card debt evaporated quickly after that. And, to my husband’s disbelieve, so did student loans. We were just young kids out of college with starting out wages and doing it on our own. And we did it. Strangely, I contribute it to the Soviet Union upbringing. Or maybe just Lithuanian. See, we were used to living on very little. And now that I look back, it really made us creative. We either made without or came up with the ways sparking the creativity. Funny thing is, that I never felt like we missed out on much back in my childhood days or when we were in becoming debt free. Reward was just so great and that “Lithuanian” girl in me felt ashamed to owe money to anyone. First Christmas time was interesting. We have thing old fashioned Lithuanian tradition, that you Christmas time is the new beginning and reflection of a year to come, you always take of old “debt” and start with a clean sleigh. Well carrying over that debt was stressful for me. We, people from old cultures, tend to hang on to our traditions and take them seriously.
And that whole process, the funny thing happened. I got offered position at a debt collection agency. I accepted it curiously, without really a clue that there is this whole world out there that stretches beyond what I thought the “debt” was. This was even called “debt”. Almost two decades with the company later and I realized that what you make does not matter. You can bring in many digits, but if you stretch out those payments, it doesn’t get you far at the end of the day. Maybe gets bank farther ahead. The bank ends up owning your “American dream”. Boy did that get me grounded to make sure we account every dollar. Maybe even more than before. And I am glad I had a daily reminder of what debt can do to crush your life. Money is kind of a core of our lives. Sounds awful, it seems that it should be love or something like that, but it is undeniably a big piece of life. Think of times that finances came in between your spouse and you. I have read somewhere that finances are number one cause of divorce in America. Think of the times that you hated going to your job, but that paycheck held you from quitting. Hating your job and having to be there for 8-9 hours a day, sure changes your life to mere existence. We spend a big chunk of day at work and being miserable for those hours is almost guaranteed that you are not coming home to be a cheerful wife or patient mom. And that is not the life we all deserve to live.
We happened to pay off our house by the time recession hit. It was grim news all around us and people were scared. I remember walking around in our house in disbelief that it is actually “our” house. Before that every time I had a form to fill where I would be asked if I owned my house or rented, I would always stumble for a second. Well, I only “technically” own it, the bank is really the owner of your home till it is paid. It is not a pleasant truth when you think about it that way.
How many of you have no mortgage? It is the most awesome feeling. I am stubborn that way and for me to be not indebted to anyone is very freeing feeling.
So now to the most important part- how we did it:
- We had all the “debt” written out. All. And call it what it is. Debt. Zero’s on there were motivational enough for me. If you feel that too big of a number would overwhelm you and have the opposite result, then start with one of the debt and just tackle one thing at a time.
- Account every dollar. I like to add “interest” to everything I buy. For example, a pair of shoes is only $50, but if I apply that $50 to the mortgage, it could save me some $100 in interest. (don’t actually use my numbers as math-I am horrible at math)
- “Sleep” on each larger purchase. Don’t buy anything without careful “investigation”-ask if it’s a need or a want. Can you get better price? Can this purchase wait, etc.
- Discover your soft spot and be aware. For example, while we were very frugal to start with and didn’t eat out much as newlyweds, getting bills paid off, relaxed us with the budget some and we started enjoying fine dining more. Then, we decided to buy a house. We didn’t have much of a down payment and I went to “investigate” where our money went. To my horror, the down payment was all going down the stomachs. Well, house was more important and, holly cow, did I become a better cook. And not only better, but also more creative. I would challenge myself to extend a week and use up the products in the pantry. Sometimes, it sparks creativity to some creative recipes. And a huge satisfaction.
- Google the savings on paying off loans, debt early. Paying off our house in five years rather than thirty saved enough to send two kids to college. Not one, but two. Write that number down and keep it very visible as a constant reminder.
- Get rid of distractions. Unsubscribe from all those tempting Victoria’s secret emails. Trust me, once you are all done, you will have all kinds of money for fancy things.
- Labels. Really, I will just leave it at that… Nike and Under armor is not what makes American dream. Well, to me at least.
- Car. No new car smell is as satisfying as the feeling of the paid of mortgage. Unless you can afford to pay cash for it, it is wise to start with used car and build your wealth from there.
For the time sake, I am stopping here and would be more than happy to provide more guidance and answer any more questions.
You are welcome to join my blog as I am planning to share ideas on making your finances “healthy” while still enjoying your life.