Financial Fluency Episode #17: Mastering Debt and Career Goals with Adrienne Dorison

My guest this week is Adrienne Dorison. Adrienne paid off a huge amount of student debt and managed to leave her corporate job in just SIX MONTHS!

Before you think “I could NEVER do that” take a little time to understand how Adrienne put the pieces together to enable her to be able to achieve this. We also talk triathlon training, marshmallows and taxes!

Debt Doesn’t Have To Be A Way Of Life

What I really love is that Adrienne brings up the idea of not accepting the common belief that you have to spend 24 years paying off your debt, whether that is mortgage debt or student loans.

Sure, it may not be six months but even the difference between 24 years and 10 years is HUGE! So I urge you to listen to Adrienne’s story and get inspired!

Listen in below or Tweet it out here

If you enjoyed this episode you can subscribe to Financial Fluency here on iTunes.

Links we mention:

Dave Ramsey Podcast

Adriene DorisonAdrienne Dorison is the host of The School of Self-Mastery podcast, a no-nonsense business mentor to online entrepreneurs and a passionate dog mom.
She believes success is teachable and can be inevitable for those who are willing to pursue it. It’s something you have to train for. Adrienne teaches her clients & podcast audience about full self-mastery, because making tons of money is pointless if you’re strapped for time, have neglected your relationships (with yourself & others), and haven’t paid attention to your health.
She’s passionate about teaching purposeful entrepreneurs to leverage the crap out of their strengths so they can reach more people and make more profits…while having the freedom to enjoy it all. Some of Adrienne’s personal successes are recently paying off over $45,000 in debt in just 6 months, quitting her corporate job for full-time entrepreneurship, more than doubling her income in her new business and sharing her message with the world through publications such as Business Insider, Art of Charm Podcast, Get Rich Slowly, The Huffington Post, SoMoney Podcast and Clark Howard.

Mastering Money Matters

What if managing your money and feeling wealthy was easy?

Imagine going from feeling sick to your stomach every time you have to pay a bill, to having a system that pays all of your bills on time, and shows you at a glance where all of your money is and where it is going.

Mastering Money Matters will show you a new way of looking at your finances so you can set up your systems, enjoy your money, and stop worrying about your next bill.

If you’ve been desperately avoiding looking at your finances and hoping it all just magically works out – money comes in, it doesn’t run out, and you have enough for a bit of extra spending – enroll in Mastering Money Matters today.

Financial Fluency Episode #16: Destressing Your Finances with Automation

Today we are talking about one of my favorite subjects ever, destressing your finances with the magic of automation.

You can listen in or read below and Tweet it out here

I first came across this idea in about 2010, the year that my oldest daughter was diagnosed with autism. I was kind of thrown into this whole new world of special needs finance, working on all of her stuff, figuring out Medicaid, Medicare, social security, disability, what we were eligible for and what we weren’t. It took up a lot of my time and thought, and at the same time in there somewhere I read Ramit Sethi’s book, I Will Teach You To Be Rich.

I was resistant to it at first. I didn’t really like the title, and this guy sitting on the cover with no shoes on was kind of a weird one for me, but he is a really interesting person, I’ve read the book and I loved a lot of it.

The Power of Negotiating

The first thing that I took away from the book was negotiating down your regular bills. It never occurred to me to call and negotiate with my phone company, with the internet provider and with the insurance for our car. I ended up following his advice, calling all these people and saving a lot of money.

I now do this regularly, I put it into my calendar once every six months and I call and ask if there are any promotions going on that I can take advantage of. I tell them how I’m a loyal customer and is there anything they can do to reduce my monthly bills, and most of the time they find something they can do for me.

The other thing he got me to negotiate was to go and call my credit card company and negotiate down my interest rates. I do my best not to carry a balance and I try to put all my credit cards onto autopay in full, but because of the cyclical nature of our income with the cattle ranch that we run, there are occasions in the year when we get bigger payments, and as we get close to when the cattle sale’s coming, sometimes things get a bit tight.

With the way we run our record label there are a few times where we’ve had big delays with the vinyl company or something’s gone wrong, so sometimes we front money for something and it takes a lot longer to come back in sales than we expect, so there are times when I do carry a balance on a credit card. At those times I am so happy that we do have good low interest rates.

Batching and Automating

The second thing is this idea of batching and automating your financial tasks. In the book he talks about mainly just automating your regular recurring bills which is awesome, and in 2012 I took a course with Amanda Steinberg called Money Clarity.

I combined the information from the two of those to come up with my own automation strategy, and I’m going to share the five steps I use to help people automate their finances. I started first with just the things that Ramit suggested, and then I built it out over time to include more things.

  • Gather your information

Make a list of all the bills that can be automated through your bank’s bill pay service or another bill pay service like Mint Bills. These other services usually do charge some kind of fee, whereas your own bank’s bill pay service is probably free, however. Automate all the bills you possibly can, and usually you can automate things like your utilities, your mortgage and your car payments. If you get paper bills, input the information into your bank’s auto pay and make a payee account for each one.

  • Set up a separate bill pay account

This was part of Amanda Steinberg’s Money Clarity course that I really loved, having a separate account where all the basic recurring household bills come out of. That way it’s really easy to know how much needs to be in that account to pay them, because these are regular bills. There may be some fluctuations with things like heat in the winter and air conditioning in the summer, but that’s why we build in a buffer.

The way my husband and I do it is we each have our own spend account and the pay checks that we get paid from our salary go into those different accounts. We each have separate accounts for our online businesses, the label and my own business, but the regular recurring bills come from the pay check. Every month we transfer a certain amount that covers all of those bills from each of our accounts, and then what’s left in our accounts is what we have to spend.

We know right away that all of the bills are covered for the month, because we’ve put plenty of money in to cover all the regularly occurring bills.

  • Batch your bills

If you log in online, a lot of bills allow you to choose what day the due date is going to be, or to at least move it. Even if you have a regular income, I think it’s really great to split up your bills into two sections for the month.

If you have a bimonthly pay check that comes in twice a month, if it comes in on the 1st and the 15th, I would set the transfers for the 2nd and the 16th.

I batch all my bills to go out on the 5th and the 20th, so that allows a few days for those transfers to go through to make sure there’s plenty of money in the bill pay account. It also allows that if there is an unusually high bill – say if you’ve put something on your credit card that you need to roll over to the next month – you can adjust that auto pay from being pay in full to a certain amount you want to pay off that month.

That five days gives you a little leeway, and once you’ve batched your bills into twice a month, make it roughly even. For instance our mortgage comes in on the 5th, so I put most of the rest of our bills on the 20th because the mortgage is bigger than any other single bill.

If you’re able to split your mortgage into two payments per month, a lot of people like to do that, because while there are only 12 months which means you get 12 payments a year, there are 52 weeks which means 26 biweekly payments, rather than 24 for 12 months.

You end up making a whole extra mortgage payment per year by doing it every two weeks instead of every month.

If you’re able to do that you don’t have to worry about lopsiding the bills with the mortgage on the 5th and everything else on the 20th or however it works out.

I do like making them roughly even so I feel like there’s twice in the month when I’m getting all of my bills paid off, and it doesn’t make it too overwhelming, especially if you do have irregular freelance income where you’re out there hustling for each payment. Having the two times allows you to know, okay, by this day I have to have at least this much in the account, and by this day I have to have this much in the account again. It helps you organize your accounts receivable and your accounts payable.

  • Having a savings buffer

While you can have this virtuous cycle of getting all your bills paid on time and in full every month – which will be building your credit and savings – if you accidentally get overdrawn on that bill pay account and a bill is more than expected, there’ll be this negative feedback loop.

  • The bill won’t get paid on time
  • It’ll be late
  • You’ll be charged a fee
  • And it tumbles down as each bill is affected by the negative balance in the account

So the first thing I want anybody to do before they turn on that automation is to have a full month’s worth of savings in that account, especially if you are freelance and have irregular income. It’s really important to start the month with a full month ahead, so you’re spending last month’s income each month.

That may be a hard thing to do right away, and if you already have an emergency fund that has three to six months’ worth of money in it, I would say go ahead and take one month. You’re living a month in the future by having this extra month in there, and you’re spending last month’s money.

The hope is that you would never spend into that, but it’s the buffer to make sure we never have that negative feedback loop.
There’ll be points where you have a whole month and a half worth of cash in there, and it may seem like a lot of cash, but it is so worth it to have that buffer there and never worry that you’re going to go overdrawn and that then you’ll have late fees and bounced check fees.

  • Turn on the automated system

Once you have that buffer in place you can turn on the automated system. Go into each of those payee files, pick the day that it’s being paid and turn on the system. That first month you’re going to have to watch it very carefully to make sure that all of the payments go out and that nothing is late and that there’s not any reason for it to have been delayed by something with the bank. Once that first month goes through and everything is okay, however, you just need to check on it and monitor it each month.

I really like to set up balance notifications so that if my balance drops below a certain amount I get an email ping or a text so that I know what’s going on. I also like to set up a balance notification on my credit card, so any time my credit card goes above a certain amount I get a notification. That way when it’s time for the payments to come, when I have that five days between the transfer being made and the payments going out, I can check to make sure that everything is going to be covered and that I haven’t put more on my credit card than is available in that bill pay account.

One more A few more notes about credit cards. I actually use credit cards to help batch. Your main bills like your utilities, house payment and car payment, those will need to come directly out of that bill pay account, but a lot of the other things like cellphone bills, internet, Acuity scheduler, Mailchimp upgrade, all of those things go on my credit card. It really doesn’t matter what day they’re billed because I pay off the credit card on that batched day. By putting all those little things on the credit card, I don’t have to go in and batch all of those, because they get paid on time with the credit card.

I also highly recommend that if you’re using a credit card for regular recurring purchases like that, make sure you have a really good rewards card with the type of rewards you’ll actually use. We use our Chase Sapphire Rewards card because it has a great travel plan, we very rarely pay for airline tickets anymore and it often even covers hotel and rental cars. My husband’s British and we like to go and see his family as often as we can. We’re going this year and we’ve already paid for our tickets, mostly through our rewards points. It just feels great when we actually use them after seeing them build up.

Not only are we building our credit every month by paying everything on time and in full, we’re also earning these rewards points that we then get to use a few times a year when we want to take trips.

Benefits of The System

There are quite a few benefits of using this financial system. You aren’t thinking, oh, that bill’s due on the 16th and that one’s due on the 24th, then this one’s due on the 2nd. You’re not constantly having to remember what’s coming up and making sure there’s enough money in your account. Once the batched bills have been paid for the month, that’s it for the next two weeks, if that’s the way you’ve set it up.

One step where I’ve taken it further in my life is to actually try and batch other financial tasks for those same days. The challenge with this is that the 5th and 20th fall on different days of the week each month, so I still try to make those my financial days when I go and do other financial tasks. I check in on all my payments and make sure they’ve happened, but then I also keep a physical inbox and a virtual inbox for financial tasks.

The virtual inbox is in my email, so invoices I get and anything that I need to check or think about before paying I put into there. I do use David Allen’s two minute rule; if a task comes up in my world that I can finish in faster than two minutes, I just go ahead and do it.

If someone sends me an invoice with a PayPal button, and it’s something I definitely need to pay and I can do it in that moment without having to touch that task again.

When the 5th and the 20th come around, I try to set up my schedule ahead of time so that I have at least half a day for financial tasks on both of those days. I go ahead and first check that all the auto pays have gone through and everything’s alright, then I look at other financial things that have come into my world through email and the regular mail. I sometimes get paper bills that can’t be automated, for instance writing a check for the guy who shoes the horses on our ranch, and I do those tasks on those days.

It makes me very consistent and reliable, and people know that they will get paid. If they issue an invoice before the 5th, they’ll get paid on the 5th, and if they issue it before the 20th, they get paid on the 20th. Doing those two times per month, there are very few bills that have a shorter than 15 day turnaround where the due date is closer than 15 days, so I feel I can catch everything within that.

We ALL Mess Up Sometimes

There have only been a few occasions where I’ve messed up. Sometimes it’s when I’m trying to set up an online bill pay and something goes wrong and I don’t realize it immediately, so you really have to watch to make sure everything goes right.

If something goes wrong, call immediately, talk to them, it’s very rare that if you call immediately they won’t just solve the problem without charging you any fee, particularly if it’s on the due date.

The one step further is, if possible, I try to make lists of things that need to be bought and put them off until those two times per month. Obviously there are times when we need things like groceries, but in terms of office supplies or if we know that we need to replace something in the house, I try to put it on a list. I’ll wait until all those other bills are paid and I’ve written the checks, then I make the decision whether or not to go out, take an errand in my car and buy the things we need, or go online and buy them.

If you put things off long enough, you sometimes don’t need them anymore, so that’s one thing I like about this batching our financial tasks and automating as many as possible. By putting an item on a list, it can also give you time to then look for discounts and comparison shop to get the best deal.

I am surprised sometimes at how many times I pick up the list and think,

oh yeah, I did want that, but I totally don’t need that anymore.

Often what occurs to us in the moment is interesting, but if we put it off, do we really need it right now? It just gives you more time to consider it.

So Here Are Your Steps:

  1. Gather your information
  2. Set up a separate bill pay account
  3. Batch your bills
  4. Create a savings buffer
  5. Turn the system on after your savings buffer is there

If you want to take it a couple of steps further, create that physical and virtual inbox for other financial tasks that aren’t online or automated, and start making the lists of things you decide whether to buy twice a month. If it’s something that can wait, put it on the list and see if you still need it when the time comes.

I hope that was helpful, thank you so much for reading, and if you liked it, please subscribe to my podcast here.

Financial Fluency Episode #15 Starting an Army with Bushra Azhar

Today, my guest shares why she prefers starting an army instead of a tribe, and how her approach is more about treating people with respect than the hard sale.

This episode I am bringing you one of my favorite people on the ENTIRE PLANET, Bushra Azhar!

I first met Bushra in Ramit Sethi’s Zero to Launch, which she followed much more closely than I did!

She also says some preeetttyyyy nice things about me!

We had such a fun chat about the very different approaches we have to business, outsourcing and learning – and Bushra shocked me with her views on other human beings!!!

You can listen in below and Tweet it out here

If you enjoyed this episode you can subscribe to Financial Fluency here at iTunes.

Meet Bushra

Bushra AzharBushra Azhar is a Persuasion Strategist and Founder of The Persuasion Revolution: The only place on the Internet that makes persuasion sexy, classy & fun!

Want to learn more about Bushra or possibly work with her? She’s filling her power Mass Persuasion Method now!

And find the Facebook Group here.