[00:00:00] How do we sort through our money goals? When we have big deadlines, like a baby due date, a car that won't fit the whole family. And then just a general desire to be investing more today. Jenny and I talked through a game plan for financially preparing for a new baby. And then which goal is to focus on after baby arrives? Do we do the goals that just feel good or should we run the numbers first?
Let's dive in.
Carly Hill: I have on the Debt Free Mom podcast today, Jenny. Jenny is a physical therapist with a side gig pressing flowers from weddings. She is married to a police officer who is the epitome of a spender, and she is a saver. They have a one and a half year old daughter and another baby on the way. They've tried lots of different forms of budgeting and found the Debt Free Mom budget template about six months ago, and have started saving and working towards their goals. So thank you, Jenny, for taking time right before you have a baby to come and chat with us about money. [00:01:00]
Oh, yes. I'm so excited to be here.
Awesome. So you are a very busy person. You are working full-time and doing a side gig, pressing flowers, also having a toddler and about to have another baby. So how much time would you say you spend on your side gig doing things on the side in addition to your full job?
Jenny Adamson: Oh, it definitely depends on like the season. So with wedding season coming up it'll be like maybe like an hour or two a night, depending on how many wedding bouquets I have that week, so if I get like four in a weekend, it's pretty much every night once my toddler goes to sleep that I'm doing that. So like maybe like seven to 10 hours a week, I'd say on average.
Carly Hill: Okay. So did you, did you kind of just stumble into that? Or were you specifically looking for an extra form of income? Like how did that come about? Because those two things, physical therapy and pressing flowers are two very different things. So I'm curious about that. [00:02:00]
Jenny Adamson: Yes, they're very different realms. But my grandmother actually taught me to press flowers when I was really little. And you know, the world of TikTok now, I had seen that this was becoming quite a thing. People want to press their bouquets and big frames and I was like, well, that's definitely something I can do. I know how to do it. And I was looking for an additional, like, stream of income, just so we could pay down our student loans a little bit quicker, pay off car payments a little bit quicker. We had a toddler and daycare was more of an expense than we had really anticipated originally. So I started doing this about a year ago, and it's given us a lot more wiggle room in our budget as far as like, oh, I have $200 coming in extra this pay period, cuz I still treat it like a pay period. Or I actually have a thousand dollars coming in this pay period. So it was just really nice to get that little bit of a buffer where we weren't like, oh, okay, well we have $25 left after paying [00:03:00] daycare this month..
Carly Hill: For sure. That is a huge, huge expense. It's awesome that you were able to turn something that you already knew how to do. Like you said you saw it on TikTok, like, Hey, I already have that skill, and turn it into a little extra income. And I'm sure because you, especially things that we learn as a kid, it's not when we do it like in the evening after our kids go to bed, for example, it almost doesn't feel like work a lot of times cuz it just kind of comes second nature. So it's amazing that you found something like that, that you then can also get paid for.
Jenny Adamson: Yeah, it's, it's been great that I didn't actually have to learn a new skill. I already had, it didn't have to do a whole lot other than kind of, troubleshoot a couple things here, and they're like, this glass doesn't really fit. How do I change this? How do I market myself was a big one originally. But that's all kind of come together in this first year, so it's much more streamlined now.
Carly Hill: That's amazing. How do people find you? Like how do you market yourself?
Jenny Adamson: So I have a Facebook page and an Instagram page, and then I actually like teamed up with [00:04:00] a local florist in my town. And they have like a big example of my work. I actually have a little booth there of like items that I make, like jewelry, necklaces earrings, key chains, bookmarks. And then I had participated in my local farmer's market and a couple of pop-up markets they called it in my first summer being in business just to get the word out and hand out business cards and made like examples of the large framed pieces that I could make out of wedding bouquets or memorial flowers or anything like that. And that's how I started. And I'm kind of doing the same thing now, but with two kids, I don't think I'll be able to do as many farmers markets or other outings.
Carly Hill: Well hopefully now you've, like you said, you've done it a year, so you have built a little bit of a base of people know who you are and know where to find you so you don't have to sit out there on a sweltering Saturday with a newborn. So that's a great transition into talking about the next couple months of [00:05:00] your budget as you're facing a big life transition.
So you said that you have about 12 weeks of maternity leave, so through middle to end of August, and then daycare starts while you're paying daycare right now, but daycare doubles or probably over doubles. Does it over double it? It just doubles. Okay. Okay. I know sometimes a newborn is like a lot more than a toddler.
Jenny Adamson: Yes. We lucked out that we go to an in-home daycare.
Carly Hill: Oh, perfect. Awesome.
Jenny Adamson: Yeah, so she's got a standard fee no matter how old the child is, this is what you pay per week.
Carly Hill: Perfect doubles. Yes. Okay. So double. Yeah, just doubles. Just double. Just doubles. So let's talk through what to do in the next couple months just anticipating that. Because you know, even when you know how much that daycare doubling is gonna be, we don't know all the variables around your maternity leave and the expenses and you know, if you have medical bills or whatever it might be. So in the [00:06:00] next couple months, between now and August what in your mind were a few, maybe financial or just budget wise goals that you might have had for yourself and the money that you have, the buffer you have between your expenses and your income.
Jenny Adamson: So I knew that the time period in which I would be having the baby was also the time period I would start getting busy in my side business. So that gave me just a little bit of, I don't wanna say like encouragement or just like, I don't know what word I'm looking for. A little bit of comfort,
Carly Hill: confidence?
Jenny Adamson: Being that, yeah, that I'm not gonna be bringing home a pretty large chunk of change with having a 40 hour a week job. So I knew I'd be going into my busier season. And we had also been, we kind of stopped paying down as much debt in the last couple months and putting anything extra we had at the end of each pay period, just kind of straight into savings and putting it along with our emergency fund and saying, you know, if something does come up that's huge, [00:07:00] we can potentially cover it a lot easier than having to go into some kind of credit card debt. So that was kind of our, our hope. Cause my, my maternity leave will pretty much be unpaid. My employer does not offer like paid leave. What they do is they have short-term disability that I have to pay for, like, out of my own check. But they only cover like, you know, the six or eight weeks depending on what kind of birth you have. And then it, it's only like 60% of my salary. it's still a big, it's a good chunk of money still but it's not what we are used to.
Carly Hill: So you are doing exactly what I recommend and what I personally did in those situations when we were coming, approaching a large life transition like adding a kid to the family and rocking the income and all those things. I always, no matter where anybody is at in debt payoff in investing, I always say like, give yourself just a little bit of time to pause all the other goals and just sock away [00:08:00] as much cash as you can. And then, you know, like I, I think what happens is a lot of times we think best case scenario. And so we're like, oh, well for sure my side gig will bring this much in and for sure I'll be able to pay this off. So all this extra money while we're getting ready for a baby to come should go to this debt or should go to this investment. But those goals are things that we can't later pull back out. Like we can't call Visa and be like, Hey, that extra $500 that I paid, I actually want it back. They're gonna be like no dice. So I do really recommend putting cash aside as we come up to that transition. Get yourself through, you know, first four to six weeks of baby, you know, at even, even small things like you eat out more than you plan to do or something like, I just like to be like, this is not the time of life where you're gonna have some goal setting or goal busting amount that you're sending to any goal. This is just ride out the transition, like you said, without going into [00:09:00] credit card debt or without having to drain savings. So socking that extra money away into a savings account and saying, Hey, if we actually do end up on best case scenario where we get to I don't know, end of June and everything's good to go. We know what our expenses were for medical. There were no complications. You know, we got through those first initial weeks where there's like, for some reason, no matter how many babies you have, like once the baby's actually born, it's like, oh, I actually need to buy all of these supplies and all of this clothes and you know, all those things. And it doesn't matter how many how many you've had. That happens every time. So just letting yourself have permission to buy those things and get through that. Then you can be like, Hey, we set aside an extra $4,000 as we were getting close to the maternity leave. Now that we're halfway through it and we're kind of on the other side of that, let's go ahead and put that 4,000 towards the goals that we were hoping we could do.
So it's not like when we pause the goals, it doesn't mean that all that [00:10:00] money is gonna go to waste or is gonna not end up seeing progress. We can use it for a goal. We just wanna be on the other side of that big transition first. So just know that I, I agree with and totally encourage the idea of pausing big goals and just putting money in savings where you are at with three weeks to go for a baby.
Jenny Adamson: And then we've been trying to, like, with our discretionary end of budget of that pay period like we formula fed my daughter, we plan to do that with our son too. So I've been trying to buy like one or two things a formula. Or like a pack of diapers or something. Just cause I'm like, we're going to use it. We might as well buy it, and then if anything left over after that, we've been putting that amount back into the savings.
Carly Hill: Perfect. And that just helps too with not seeing your expenses like skyrocket right after the baby's born. Cuz you can be like, Hey, I actually have four containers of formula, I have two packs of size, one diapers or whatever.
Cuz yeah, they are, [00:11:00] they're expensive, tiny little things. Especially at the beginning. Yes, yes they are. Yes. It's like, how are you so small and costing me so much money? Yes, a hundred percent.
Okay, so then on the other side of that, let's fast forward ourselves to like July and say we've gotten into a groove with what the decreased income is for the maternity leave. You have five or six weeks left in maternity leave. Then as you kind of see yourself rolling back into work and into the full-time paychecks and, and on the other side of having the baby and all those newborn expenses that come along with it. Then now let's talk about some of the long-term things that we would then settle into.
So where are you at in the process of like emergency fund and debt payoff? What debts have you already paid off versus what categories of debts do you still have?
Jenny Adamson: So, we've saved a, a big chunk of an emergency fund and then a little bit on top of that [00:12:00] as the like, maternity
Carly Hill: baby fund?
Jenny Adamson: Yeah. Yes. The "Let's see what will happen" idea.. And so prior to that, we had paid off my student loans from graduate school. We actually bought a different car to lower our car payment. So we went from having like a Toyota Highlander and then we bought a Dodge Grand Caravan instead, which also I love the minivan life. It's, yes, it's great. It's great. Totally way more practical for little kids and dogs. We have three large dogs, so Okay. Very practical for that. That lowered our payment substantially. And then I also have you and the podcast to thank because our interest rate was like 9% on the van because you know, interest rates are ridiculous right now.
Carly Hill: Now they're crazy.
Jenny Adamson: And then we went to our local credit union and now we have a three and a half percent.
Carly Hill: Oh, that's amazing.
Jenny Adamson: So we re, we bought a new vehicle, refinanced it. That's like our big debt right now. My husband does still have student loans, but because he's a police officer, he qualifies for the public service loan forgiveness program. So he has four more years to work for [00:13:00] the police department before the remainder of his loans are forgiven. So we're not really like trying to pay extra.
Carly Hill: Extra. Yep. Yep. Just stay on the plan.
Jenny Adamson: Yes, stay on the plan. So really the, the only true debt we have is the car. We don't have any credit card debt. We're very fortunate to not have any credit card. And then, down the road we do have to buy my husband a different truck. He has like a two seat truck that he picks my daughter up from daycare. He can turn, you know, like the airbag off in the front seat and she has her car seat up there. And I'm like, well, when we have two kids, I don't think that you'll be able to pick up from daycare anymore.
Carly Hill: Three has three across.
Jenny Adamson: I'm like, I don't even think another car seat would fit in there. So that's another expected debt that I would guess that we're gonna have pretty soon to when I would go back from maternity leave.
Carly Hill: Okay, so like in the fall?
Jenny Adamson: Yes. So in the fall we're planning on getting a different vehicle so that he has the capability to take both kids or pick up both kids from daycare as opposed to just being me, like if I'm running late at work or [00:14:00] something like that. But truly, those are our only real debts are car payments and then student loan payments still.
Carly Hill: Okay. Do you currently have two car payments or one?
We only have one.
Currently one. Okay. Yes. Currently one. Okay. Okay. And it's that three and a half, like you said. Three and a half percent? Yes. Okay, perfect. 9%. Awesome. That is, that is so drastically different than 9%.
Jenny Adamson: Oh my gosh. So our term for our loan with the 9%, with 72 months. And it, I can't remember what the exact cost of it was, but when we refinanced, it dropped our loan term down to 60 months and our payment actually decreased like $15 a month too. Okay. So I was like, well, and it cost us $50 to refinance.
Carly Hill: To refinance. I know. Isn't that insane?
Jenny Adamson: It's like, okay, well, This is, this is great.
It's a no-brainer. Yeah. I was like, okay, sure. I'll pay you $50.
Carly Hill: Yeah. Yeah. Do you want it in coins or bills? That's amazing because that, that I don't know what to call it. That like [00:15:00] benchmark of high interest versus low interest debt to me is around 10. And so anything around 10 and definitely above 10, I would consider a high interest debt. And then anything under 10 is a low interest debt, single digit debt. And the reason for that is that we can typically expect, people have different calculators and things that they use, but eight to 12% return on investment when we invest in the stock market with index funds that are very low fee that we can buy and have them grow over time, those are the rates of return. The historical rates of return are between eight and 12%, so the. The calculus basically flips where when the interest we owe on debts, the interest rate that we owe on debts is smaller than the interest rate we could earn. That's when it becomes more advantageous to start investing additional money over, you know, what you might currently have in a pension or a 401k or something like that.
So you're totally right that at the [00:16:00] point that your only debt is like 3.5% interest, it's definitely in your best interest to start using some of that extra to increase your retirement investments, do things that are more focused on the long term while hoping to also pay down the debt.
So right now, I'm, I'm assuming he has a pension plan through being a police officer, right?
Yes, they do. They have a pension plan.
Okay. Do you have any like retirement or a match that's offered or anything through your employer?
Jenny Adamson: Yes, I do and I actually participate in two different retirement accounts. So I participate in our 401k and they'll match up to 8%. I put in 8% there. And then I have a Roth IRA too. Through them that I put 2% into. That they don't match at all, but they, they match the 401k.
Carly Hill: So ideally then what you would do, the order of operations we kind of wanna move through in investments is just exactly what you said, that we wanna invest [00:17:00] anything up to a match anytime it's available to us, no matter really where we're at. The only time I would ever tell someone to pause investing and lose a match is if like they're bleeding money and they're like chronically spending more than they make. But if it's at all possible, never give up investing to the match because basically that money is just part of your salary package. You know, what you agreed to get paid.
And so denying yourselves that is, is just silly. And then after that, we wanna look at if we're, do you have an hsa? Like do you have a high deductible plan that gives you a, a health savings account?
Jenny Adamson: No, my employer doesn't offer that. I don't, I don't believe, yeah.
Carly Hill: Okay, that's fine. Yep. It's just if somebody has it, then we invest in that. And then after that based on. As long as our income is not above, I think, I believe it's $245,000 in a family. Then Roth IRA becomes the good. Yeah, I know. That's what, anytime I say it, people are like, who do you think I am? Like, what do you think I do? Then Roth IRA becomes the most advantageous [00:18:00] after that.
So ideally what you would wanna do in the fall, you know, again, we're fast forwarding to getting through baby and all the things then start to bump. Investments into that Roth IRA because you're gonna long term earn more in that over the long term as you're buying index funds inside of that than you would by trying to accelerate the payoff of a debt that has 3.5% basically.
And that can be, I don't know, sometimes depending on who the Roth IRA is through or how easy it is to access and manage the Roth IRA, sometimes when they're through employers, it's like extremely challenging to figure out like, how do I log in? How do I make, do I have to talk to HR in order to deposit money?
So are you able to manage it at all or do you have to kind of go through them?
Jenny Adamson: So, I have logged into it a couple times, and I find it very confusing because they take the money and they invest it for you. Like you don't even [00:19:00] pick anything. And there's like different portals for it. And I actually have a, I have a different Roth IRA too through etrade that I have not contributed to probably since graduate school, just because I was contributing to the other two. But I put money in it at one point and he looked at it and he goes, do you know there's money in here that's not invested?
I was like, no. He's like, you know, you have to invest it. I was like, I was never told this day you, you set it up for me. So I just put money in it. I didn't know what to do with it. So I have that too and I feel like that would probably be easier for me to get into and access, cuz the, what I have through work very confusing for me to access.
Carly Hill: So, I would definitely go the route then of having one that is easy to access for you to manage. And then also really look at the fees that you're charged depending on, so like, Fidelity, Vanguard are both really good ones for having very low fees because they own index funds, or they have, like, there are Fidelity index funds inside of a Fidelity Roth [00:20:00] IRA have extremely low fees or a Vanguard Index fund inside of a Vanguard Roth IRA has extremely low fees. And so those have the biggest advantage of not having fees associated with it that kind of make you work backwards where you're investing money, but then you're getting charged for the fact that you invested money, which is just the opposite of what we wanna be doing.
So I don't know a lot about E-trade, but I, I don't believe that they have some of their own managed funds in the same way that a Fidelity or a Vanguard do. So mine through Fidelity, and I love being able to have an app on my phone that basically feels the same as a banking app. You know, chase or PNC or whatever and I can log in, I can initiate a transfer from my checking account into the investment account, and then I can do that second step, like you said, that you were missing of then choosing index funds inside of the Roth IRA and using the money I deposited to purchase an, an investment inside of it.
So [00:21:00] extremely, extremely low fees with very high consistent returns over the long term. So that would be something to look into. I you could even roll over your e-trade, whatever money is in the e-trade one into a Fidelity or a Vanguard, just like what you've done, you know, before, and then be able to manage it yourself as opposed to needing to go through something with your employer.
So as you think about in the fall, at a certain point, the gap between our income and expenses is quite limited, especially when doubling daycare. So we have all these good things we wanna do, like pay down the debt and save up for a truck and, and invest. Which of those and there's really no, there's no wrong answer. Which of those for you and your husband feel like the most pressing or the highest priority in terms of paying them off the fastest or, or investing the fastest?
Jenny Adamson: So our first priority would probably to get a vehicle that, that we [00:22:00] could use for him to pick both kids up if some, and even if something were to happen to like my car.
That we'd have another vehicle that would function. And then after that it's probably like the dual payoff debt and invest together and like try to find the happy medium where we're like making a little bit of progress on both. Like with our, with our debt paying journey, I like wanna say like, I just really wanna pay off the debt, but again, it's low interest. So is it, is it in my best interest to do that? Probably not. When we could also be investing in like maybe retire a few years earlier than what we were currently planning to. So those are I mean, they're like equal. In my mind, it's like playing the game of, okay, you don't really need to pay off the debt. It's low. Invest a little bit more.
Carly Hill: So like I said, there really is, I, I'm not like quizzing you. I feel like sometimes when I ask that question, people are like, did I get it right? I'm like, there is no right answer. We just wanna think through what is best for [00:23:00] you. And the answer is different depending on everybody's situation and priorities.
So one of the things to think through is, sometimes a low interest debt has a high enough payment that it then becomes advantageous to pay it off quickly because of how much monthly income it would free up. As long as the person, which I feel like you are, some people are not, but you would be committed to then when it's paid off, investing the money that had been going into the car payment, if that makes sense.
It just depends. It, some of it is a timing issue more than an amount issue because it's like if the car could be paid off in a relatively short amount of time and then that frees up a couple hundred dollars a month, that could then be invested, then sometimes people decide to flip that order and instead of investing more and doing a little bit on the car, then they pay more down on the car and invest just a little bit.
So maybe you could find a happy medium just so that you feel like you're making progress [00:24:00] of, you know, getting into the fall, identifying how much the new car payment is gonna be so that you know what your new budget looks like, and then set like an auto transfer of like a hundred dollars a month to that Roth IRA and then say, okay, anything else above that is gonna go to paying down the smallest car loan. Sometimes it's gonna be $25, sometimes it might be a couple hundred. And so you know, that could especially fluctuate with your side gig income as that fluctuates if you know that your two regular salary jobs are covering all necessary bills and expenses, then you have the freedom to use that side gig income to accelerate the goals that you have. So that might be a way to be like, okay, I don't wanna take up brain power every month being like every single month I have to look at this extra amount and make a decision about how much goes to this and how much goes to this. Maybe you could just say, once we get the new truck or car and know what our payments [00:25:00] are, I'll set up an auto transfer of, of this exact amount on whatever date of the month works best for your budget, and then say anything above that is gonna go to the car or vice versa. You could say, okay, a hundred dollars extra on the car every month, everything else goes into investments.
Does that sound like something that would be like, okay, I would feel like I am, I'm doing the things that I wanna do.
Jenny Adamson: Yeah, definitely. I think that would give me like, oh, I'm working towards both and I don't have to think too hard about it. Like one is a set amount, one is like whatever the fluctuation is in the budget and that takes a lot of the brain work out of it cause if we have $500 one pay period or $50 one pay period, and I'm sitting there going, what do I do with it? I think it's way easier for me to just be like, well, I know where that's going. That amount's going there. That means that amount can go there.
Carly Hill: And I think that's why, that's why it's so important to have a list of what goals we're working through in order, because not only does it help us obviously know where our money is going, but it is, like you [00:26:00] said, really important to actually relieve ourselves of having to make new decisions every time new money comes our way. Like one of the most common kinds of dms I'll get is, oh, we got our tax return, what should we do with it? And I'm like, okay, well, I would have to ask like 30 questions before I could reliably say what to do with it. But to me, what most, what that most often indicates it's not a person who can't decide where to put money. It's a person who doesn't necessarily have a list of goals that they're working on in order because we should pretty quickly be able to say, oh, I have extra money coming towards me, so I'm putting it on the car. I already know I made that decision. The, the author and podcaster Kendra Adachi has a book called The Lazy Genius. And she said that's one of the principles in her book is decide once. And so she's like, once you make a decision on something and you say, this is the way I do this. So one of her decide once is examples is like, Taco Tuesday is the perfect ex [00:27:00] example of decide once it's like, I don't need to get to Tuesday and be like, Hmm, what should we have for dinner tonight?
It's like, Tuesday. So we're having tacos and it's the same kind of like, it's the same approach to our money that we should have such a level of confidence in that decide once mentality where, like I said, if you decide a hundred dollars a month is going into the Roth, IRA, anything above that is going to the car, then give yourself the reminder like, you know, I decided that I don't need to have every extra amount of money be this new question of where should this money go?
And it helps us to actually stick to our goals cuz I think I am. I am a spender. I'm not a saver. So although I talk money and goals and you know, all these good things all the time, I am actually a spender. And the longer I give myself to make that decision, the higher the chance that I'm just gonna blow it on something that isn't a goal at all. Right? Because it's like, If we don't have clear direction, it's really easy to convince [00:28:00] ourselves like, well, we really wanted to do this, or this would really be fun, and all those little ideas start popping in. But if we decide once and we know where our extra money is going, then we can send it there before we have time to second guess ourselves. So I would say that in the fall especially, you're, you're gonna be so tired and so busy, like you don't need to add a new decision that comes every single month to your plate.
Like knowing this is what I do with a hundred dollars a month. This is what I do with anything else. Just gives you permission to be like, I don't know, I got paid for that side gig. Send it to this goal.
Jenny Adamson: Yeah, I think that'll be much needed come a fall. Yeah, for sure.
Carly Hill: And, and to feel like you are, cuz like you said, you are now at a point where you don't have high interest debt, so you're not like strapped down with giant interest payments or something.
So you are at a point where you are ready to see growth in investments and see some of those long-term things that can add to your future. I do [00:29:00] caution people against doing too many goals at one time. That's kind of a common theme that I talk about is if we try to send our money in seven different directions every month, if we only have $200 extra dollars a month, then each of those little goals is getting like $28. And that is not only mathematically takes a long time, but just mentally it feels. It feels so like boring to, to send that small amount of money to goals and be like, I'm working so hard and my money's not going anywhere. I'm not seeing anything get paid off. I'm not seeing anything grow. So I do caution against having a long list of goals. But paying down high or paying down low interest debt while investing a little bit is two very big buckets of good high priority goals. And splitting yourself up that way I think will be helpful to your long-term financial future. And then also helpful to your mindset of where's my [00:30:00] money even going? Am I seeing any progress with goals?
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Carly Hill: You've been using the pay period budget template for six months and you saved a bunch of money in those six months. As we're, as we're thinking to the future of these goals and sending money to them. In the past, before you started using the Debt Free Mom template, what tools were you using to budget number one and number two, were you seeing any progress on goals or on payoff or on savings? Like how was that work operating before you started pay period budgeting?
Jenny Adamson: So I tried a couple different apps. I tried the Every Dollar app. And then I tried just like putting our expenses down in like a Google Sheets or a Google Doc, like this was January, this is what all of our, our [00:32:00] bills were in January and this was like what our credit card statement was in January. And like trying to go off that. And it like never w it, it worked, but it never really worked well. Because I never, we would like a credit card could be due on the 13th, but we didn't get paid. So we don't get paid till the 17th. So I'm like, okay, well what, what money do I need to pull out of our savings to put into our checking for when that credit card statement gets paid? Cuz we just have the auto pay every month whenever the it comes up, it just pays itself. So that was really difficult. And so I never knew. I'm like, well we, we have the money. I just, I don't know at what point in time we're gonna have it in our account. And when it's gonna come out.
So the great thing about the Debt Free Mom template is I could see exactly when every single bill was gonna come out, were we getting paid before it, were we getting paid after it? Did we need to save some from our last paycheck to cover the credit card bill that was gonna come out in five days, you know, three days before [00:33:00] we get our next paycheck? So that was great because before that I was like, I, I don't know. I know we're not gonna have enough money to cover that credit card, so I just need to transfer some more in there. And then it wasn't as helpful with like the little spending things too, because although the ev like the every dollar at it was on my phone. The Google sheets is so much like more user-friendly to just scroll through and be like, okay, I went to the grocery store, I'm gonna put it at the bottom of, in those little I don't even know what you call them, but they're very useful
Carly Hill: trackers? The spending trackers?
Jenny Adamson: Little spending trackers, or we went to Menards and we bought stuff for, we bought mulch and I can just go in and add that to the home maintenance. Literally when I get in the car and we're driving outta the parking lot it was so much more user friendly. And then I just saw my numbers change like immediately right there, based on what I had told the spreadsheet that we had in our account from those pay periods.
But before that, I was all, it was a guessing game. It was like, I don't know.
Carly Hill: Yeah, so it was like [00:34:00] you had enough, it wasn't a problem of not having enough money. It was a timing issue basically.
Jenny Adamson: It was a timing issue for sure. And then it was, okay, well how much do I have left over now? And how much can I either transfer back into savings .
Or can I put towards the debts we wanna pay off? Yeah. So that was always up in the air too. I'm like, well, I know I transferred it over, but I don't know how much I can transfer back and I'm not sure what percentage of that we wanna put towards debts or not. Whereas I can see it very clearly using the spreadsheet format.
Carly Hill: Yeah, because it's like, I think that's such a common frustration is when it's almost more frustrating when you do have enough money because it's like, I know that I have enough money. But it feels like I don't because of when the credit, like you said, when the credit card is due versus when the paycheck comes in, versus when the savings needs to be there.
And so it's like, that is one of the most frustrating things [00:35:00] is when you're like, it feels like I don't make enough, even though I do. And so then it's like mind boggling cuz it's like, what's the problem? Where, where am I going wrong? And so I love that you, once you had that timing mapped out correctly and can see the dates. Then it's like, oh, like all the right numbers were the right numbers in those old budgets. It was just a matter of the calendar basically. When, when were the dates going to line up? And if they aren't, if they aren't going to line up, what's my plan B? What, how am I gonna address it? How am I gonna have money there?
What's your pay schedule? Like? Are you every two weeks? Are you once a month?
Jenny Adamson: We get paid and we're lucky we both get paid every two weeks. We get paid on the same day every other Friday. It works beautifully. Yeah, that's great.
Carly Hill: That, that's amazing. That doesn't, that actually does not happen that often. I, I build a lot of budgets and that those usually do not line up that nicely. So yeah, that I love, I miss, I miss every other Friday. I used to, I had it for [00:36:00] so long and then we switched to twice a month when, when we did the self-employment, which it makes the most sense for the budget overall with business-wise.
But still, I like loved having every other Friday, it just felt like, we got to payday and it was always payday and the weekend every other week. Yes. And so it was just like, yes. Like things are just lining up. So yeah, that is a great schedule and that's also tends to be the schedule that people have the highest frustration with when they're trying to do those monthly budgets, because that is the one schedule, biweekly and weekly are the one category of schedule that completely ignores a monthly calendar. Like it doesn't matter that it's the first of the month, you might not be getting paid the first of the month. And then it also doesn't matter, like where they fall in the month. You could have one at the beginning and one in the middle, or sometimes your very first paycheck is on the 14th of the month, and so then it's, it's just like all over the place.
You know, I built the template itself when we were getting paid biweekly because of the [00:37:00] same reason of being like, I, my monthly budgets are just a mess, time after time again. And I think like you, I was like, I know numbers. Like I can look at a spreadsheet, I understand what I'm looking at, and, and yet it's still falling apart.
So I do think I tend to see the largest transformation when people move from a monthly budget to a pay period budget if they are a biweekly or weekly, because they are the ones that really need to focus on the timing of it. So, and then you said you were, your bio says you saved over $7,000 in six months, which is amazing.
Jenny Adamson: Yeah, we did. It was it and it was awesome cause I was like, oh this is great. And not only were we able to save that and like know, like I could be like, this is exactly what we need in our checking. I can transfer the best to savings it can, you know, go like top off our emergency fund and then it can start being that maternity fund. But we were also able to pay like some of our debts down too. Like we were able to pay my student loan off. . From graduate school in the same span of time, which I don't think we [00:38:00] would've ever been able to do had we not know, like been able to look at the budget and be like, these are our real numbers. This is, this is, I know exactly what I have left over. I know exactly what I can put into savings. I know exactly what I can put towards my debt. And we were able to like finally pay off my graduate school loans and, and still save it the same time. Which I really never thought was gonna be possible. I was like, well, we're gonna have to do one or the other. We're gonna have to pause it and figure it out at some point because I never know how much money we have left over at the end of the month and it's just a guessing game.
So using that was incredible cuz I could see our savings, I could see the debt and I could like, you know, track our debt too. And, oh, I can put $200 more towards here, this pay period in the next pay period or excess will go into the savings fund. So, it was cool because I could do it every two weeks. I didn't have to wait till the end of the month and then be like, okay, well I think I have this much left. What do I do with it now before the next month? Or do I need to keep it because my mortgage is due on the third? . And we don't get paid till the 14th, so, yeah. [00:39:00]
Carly Hill: Yeah. And what you, what you just described is so true that it's like even if you had the extra there in the bank account, we have so many times where we had been hurt by trying to do that, that we then just start to get really apprehensive about doing it cuz we're like, well I think that that $500 is extra, but I've had month after month after month that I thought it was extra and so I either used it or I sent it into savings and I ended up needing it two days later. And so then we just get burned out where we're like, well, I think it's extra, but I'm not even gonna do anything with it because I've been wrong every time I thought it was extra. And then when we translate that into a pay period budget, then we, like you said, we can run through the actual real numbers and be like, everything is there, everything is covered. This $500 actually is extra and when I send it to savings or when I send it into a debt, I'm not gonna be regretting it a [00:40:00] couple days later cuz we have that more wide angle view of not just our current month or our current pay period, but a few pay periods from now to know that I'm not gonna be kicking myself for having sent it to that goal. We, we know that it actually is extra.
Jenny Adamson: Yeah, for sure. And I even on the template, I can put in like the approximate dates, I think my car insurance is gonna come out. And so I know that ahead of time. It's not like a, oh, you have a $400 expense surprise.
Was it planted for that? But I know I could see it. I, and I know like approximately I, we pay every six months. And I can put that in, even if it's not in like the exact correct period. I can't see it. And I'm like, why does that pay period look like it's gonna be so like sparse or it's negative. And then I'm like, there's the big bill in there. Yeah.
So I even that even being able to look forward and being like, okay, well I don't wanna put that $400 this pay, you know, two pay periods ahead. Towards this day, I'm just gonna keep that [00:41:00] and pay my, my car insurance off with that. And that way I, I know it's covered and I don't have to like get to that pay period and be like, ah, crap, what do I gotta move around now to try to figure out where I'm gonna put this $400 expense?
Carly Hill: One of the things I like to do since like I have multiple, months built out in advance is when we have those big bills sometimes we get pigeonholed into thinking like, oh, well if it's due on October 1st, I have to budget for it in the pay period of October 1st. And it's like, Hey, you could actually find an earlier pay period that it just works better to put that money aside in that pay period. Set it aside early and not have to stress about fitting it exactly into the pay period that it might fall.
I love being able to, be flexible like that and actually know ahead of time, can the pay period that that budget is or that that bill is due, actually handle the bill? Or do I need to give myself a little bit of earlier planning in order to make it possible.
And we can actually transition. One of the things that you had said, like a [00:42:00] frustration or question to work through was large expenses like auto insurance registrations, occasionally vet bills. In those situations with large expenses that some of them are known like an auto insurance, but then some of them are unknown where they just pop up. What has been your approach or game plan? In the last six months since you've been using the template, how have you handled those things that pop up? Cuz everybody has things that pop up, even the best budgeters.
Jenny Adamson: Oh yeah, definitely. So first I'll look at whatever our, our buffer is from that pay period and see if it's enough to cover it. And if it's not, I'll go through our different spending categories that we have. And like, if I budget $400 for food for two weeks and I've used, you know, like $130. And we, you know, have like seven days left. I can be like, well, I'll probably double that, but I probably won't use the, the full $400. I pull some from that. And then I always overestimate our, like [00:43:00] gas. Cause you know, if we need like an oil change in the same something I just put extra there. So I know I can usually pull a little bit from there. And then if those two aren't cutting it. I'll look at kind of our other discretionary spending categories and if we're still lacking pull a little bit from the emergency fund if we absolutely have to. Then the following pay period, I just try to like put whatever I pulled, like right back into savings initially before I do anything else. In that pay period where I'm like, oh, well Josie needs new shoes or something. I'm like, well, I'm gonna that expense back where it was. And then whatever our buffer is for that current pay period or the next one after that, unexpected expense and then I'll kind of go from there.
Carly Hill: Yeah I mean that is, that's what I do as well. I think it's, a lot of times people are so hesitant to pull money from savings, [00:44:00] but one of the indicators to me of someone who has figured out budgeting is a willingness to use the money that they've set aside. Like so many people will have like $30,000 in savings and like a $2,000 credit card balance and be unwilling to use two out of the $30,000 to pay this 30% interest card off because, I think especially even growing up, like we're always told like, put 20% into savings and never touch it. Like we're told that, you know? And so then when we go to use it, we in, in our head, we're like, this is so bad. This is so wrong. We shouldn't be using our savings. But it's like, that's what it's there for. And so if we, what's the point of it? If we're absolutely never gonna use it, or if we say, I'm only gonna use it if we lose our jobs or something, it's like, well, that's very unlikely. But what is likely is, like you said, a small vet bill or the electric bill comes back and it's [00:45:00] $70 higher than you budgeted. Like those are all the things that are actually likely to happen. So I love that you said I pull it out to use the cash and then the next pay period, I put it back in because basically what you have done is you've broken the cycle of borrowing money from someone else when you can't pay for something inside of your budget and you've instead gotten the confidence to borrow money from you and pay you back in your next pay period.
And that's like, that is the goal. Like that is awesome that you are willing to use the savings and disciplined about putting the money back. Like that is essential to long-term budget success, so five stars from me.
Jenny Adamson: it's definitely my husband. My husband is the one that's like, well, we have the savings, use the savings. And he's the spender. But then it's me in the next period being like, okay, well we used it and I'm putting it back now. Like it's going back to where it belongs.
Okay. Like, I know we needed it. But now, now we don't need it. So it's going back.
Carly Hill: Yep. You [00:46:00] need both, right? Yes. You need to be able to, or be willing to use it and be committed to refilling it once we've used it, right? Yes. Yes. So you need his willingness to use it and your commitment to putting it back. It works well. It does, it does. You balance each other nicely.
So then for, things that we can anticipate, like auto insurance or car registrations, have a specific due date or Christmas or you know, a trip or something Something I like to do is there's, there's kind of two options. There's the sinking funds option that's like, people have basically tiny little buckets for everything where they're like a pet fund and a house fund and you know, all of the things. And they put small amounts of money over time. I, I like the idea more than I like the practicality of it depending on the person. So I am the kind of person, again, as a spender who, as I see money in savings that says, clothing or fun, or [00:47:00] house I'll, I'll be like, well, since it's there, I'm just gonna spend it because it's there. And it's not like it's, it, it's totally different to me than an emergency fund. So I, so often every time I tried doing that, I found the, that money disappearing rather quickly. So I learned about myself that I actually needed to not do that, and instead, rely on the pay period budget with the specific dates in mind to actually be like, okay, I'm totally fine with identifying a pay period that has some extra and budgeting a bunch of money to buy all the kids' spring clothes. And then once I do that, then going back to not having anything budgeted for clothing because I just spent a bunch all at once. So I've actually learned that that actually results in me spending less overall than if I just put a small amount every month, then I would just go out and spend it simply because it was there. So that's one thing that I do for some of those expenses that kind of pop up and they're known expenses and they're, I would say like they're [00:48:00] medium sized expenses. You know, they're, it's not $10, but it's not $2000.
And then the other thing I do for Christmas and trips especially, is I do what I call a savings sprint, where I just take like a backwards plan from Christmas and I look at like the four or five pay periods leading up to Christmas, and I just put like, $ 200, $200, $200, $200 or something like that, as I call it, my savings sprint, where I'll have enough by the time I need to shop. But I don't spend all year putting $40 aside or, or something like that. Because again, if Christmas is 11 months away and a a little savings account says Christmas $200, and I know that it's almost a year away, I'm probably gonna spend the $200. So that's something I do. Anything that has a specific date in mind. So like Christmas is a date, and then a vacation has a, a date. And so I'll just say like, okay, if we're going, you know, with my family to Florida at the end of July, then starting in June, if I [00:49:00] do $200 a pay period leading up to that, I'll have the amount that I want.
And that's really one of, that's a distinct advantage of pay period budgeting that you really can't do in any other method of budgeting because you don't know that the money will actually be there. In any other format of budgeting, if you're not specifically planning with specific dates in mind, but because we have budgets that we can actually look at July long before July comes, we can actually say, no, I know that it will work for me to spread it out in four or five pay periods as opposed to the whole year. So that's just kind of my 2 cents on a couple different ways, like syncing funds, the wait until you actually need it and just drop it into the budget, and then the saving sprints to just space it out a little bit, but not through an entire year to then feel like I'm, I'm still covering everything, but I'm not spreading myself so thin.
Jenny Adamson: Yeah. And I feel like it gets hard, at least for me, cuz we use our local credit union, we need to look into like some other banking options that [00:50:00] are like higher yield savings accounts and things like that. But to keep all of that straight, so it's like we have our, you know, we have our emergency fund and then we have what we're gonna need for taxes and home owner's insurance and you know, x, Y, z things that are safe, like, and, and little amounts and to keep track of all of that in one account and being able to be like, okay, well this is in there, this is in there, this isn't in there. And then add 'em up periodically to make sure that, that,
Carly Hill: make sure it matches
Jenny Adamson: That it's actually in there. Yeah. It's, it's hard to do, especially if I'm saving for Christmas, which is Yeah. Like, Way far away. So yeah, that sounds like a, like a great idea to plan like little increments in advance.
Carly Hill: Closer to the due date than spreading yourself across an entire year. Yeah. The episode that aired right before you episode, I think 17 we, that was one of the main things we focused on was organizing bank accounts so that she didn't have to remember what her savings was for. So she did exactly what you described where she had [00:51:00] one giant savings that she had money for emergency fund, but then also money for like a, a big fee that was coming up or, you know, taxes or whatever was all in one bucket. And she was trying to track what it was. And number one, not remembering what all of it was for, but then number two, also being easy to convince yourself that you can use some of it because it doesn't really have a name on it.
So that would be a good listen to listen back to both for you and anyone listening where we talk through how to find a bank and a bank account organization for yourself that just like we said earlier, removes the decisions and removes the amount of information you have to mentally keep track of. Because if the bank account itself can be subdivided into different categories so that when you log in, you see I have $500 in the Christmas category and I have a thousand dollars in the home insurance category, then it's just information that you don't have to remember, or keep track of and it tells you. So that would be a good thing to look at. [00:52:00] Ally Bank is the one I use and that's what I just recorded with her last week, talking through that exact same thing of, I know I have the money, but it's hard to track or remember what it's for. And that can just add to something else tracking those numbers for you. You don't have to be the one to make a spreadsheet for it or anything like that. And that might help with some of that organization of those large expenses that come your way.
So do you have any other questions for me? Anything you wanna ask?
Jenny Adamson: My only other question would be as far as like my side business goes, because people, when they book with me, they do like a booking fee of like $50. And then after that, they pay me when I get their flowers to actually press them.
And then it takes, it's like a long process to press flowers. Like they gotta stay in the process for like, numerous weeks. So then it'll be like four or five weeks before I'm like, oh, okay. I, I'm gonna purchase their frame. And so working on like, the expense of I have this income in, in this pay period cause I [00:53:00] pay out of my Venmo account to our account. The same dates I get paid by my employer just to make it easy in the budget. So I have this allotment in, in this pay period, but I'm not gonna buy their frame for like three months. And like trying to keep that straight. And be like, okay, well the revenue is coming in here, but the expenses are coming out like further down the road and trying to find something and how that would work.
Carly Hill: So what I would do is either leave the amount that you need for the frame in Venmo, or ideally have a checking account that you use. So something I would do is once they pay you that big amount for the project if you can either know or estimate how much the frame and the expenses that you'll have to cover for them will be, I would put that amount aside in that checking account that you could say, okay, seven weeks from now when their flowers are done, I need to buy a $90 frame or [00:54:00] whatever it is. Put the $90 aside or round up to a hundred or whatever, and then pay yourself the difference. And then what that will do is that will actually alleviate your personal budget and personal expenses from needing to be responsible for those business kind of expenses. Because what happens is when you're small, it's easy to be like, well, I'll just put it in here and it'll all go in my personal checking and I'll pay for it. Cause I buy a frame like once a month or something. But it ends up probably inhibiting you from growing more than you really could, like you could grow your business to very legitimate, large size. And so we wanna kind of act like we're already that size before we are. And one of the good things to do is to have a very clear division between your personal finances and your business finances.
So the ideal business finances structure is to take all of the income into an account that is for the business, decide how much you're setting [00:55:00] aside for taxes if you need to, and then expenses. And then pay yourself what's left after that, which would be considered the profit. And what that does for you is not only help with organizing the business finances, but then it makes it so that money never flows from personal to business.
It only goes the other way. So then, then basically, you know, I, and you can still do the exact thing, same thing you can, you can pay yourself every Friday or every other Friday to match. Like you can do all of that. It's just, we do one pre-step. I have like a little. And again, even when Debt Free Mom was tiny and I was making like a couple hundred dollars a month, I still tracked like a pay period budget where I would put like the income at the top. I would list the expenses that I think that I would need to cover in that pay period. And then basically the bottom, the amount left was what I knew I could then pay myself into my personal checking account. So that two things: money never had to flow from [00:56:00] personal to business, and I could then, I had a checking account for those things that I had a debit card with and anything, any expenses I would use that debit card for. And so none of my purchases were coming through my personal account.
Jenny Adamson: Okay. Yeah, that makes sense. Because I use a, I just have like, for all my expenses, I just use one credit card. Everything that I need for the business just goes on that credit card. So, at the end of the year when they're like, what are your expenses? I can just give 'em the credit cards,
Carly Hill: Give 'em the credit card statement. Yep.
Jenny Adamson: These are the expenses. Yeah. But that makes a lot more sense just to like leave that little bit of money or whatever. I need to cover the costs. At what, whenever they pay me and then just use it later down the road as opposed trying to go back and forth.
Carly Hill: To, and you can do the exact same thing. Yeah, you can do the exact same thing. Still having a, a credit card. You would just then pay the credit card off out of that other account instead of out of your personal account. I love talking about that cuz that's, that's been a, a process for me to learn how personal finances are [00:57:00] actually really different from business finances. And it was like a whole set of different things that I had to learn. You know, I jumped into it just thinking like, oh, budget, I talk budgets all the time, I can do this. And then pretty quickly it was like, this is nothing like personal finance.
Jenny Adamson: No. It's way different. And so I of the personal, like down a little bit better. And the business ones, I'm like, I don't know. I'll figure it out at some point.
Carly Hill: Yep, yep. I'll just pay for it and hand it over to an accountant and be like, please don't kill me. Yep. Yeah, pretty much. Yep. All right. Well awesome. Well thanks so much, Jenny, for taking an hour of your evening when you are expecting a baby.
I know that that is, you're probably very tired. I remember how tired I was. So I really, really appreciate you being willing to come and just share what your process has been as you've been learning these things, but then also what you're looking forward to.
Jenny Adamson: Yeah, thanks for having me. And I'm gonna continue to watch all your Instagram stories, cuz that's where I learn all the things about budgets.
Let's [00:58:00] review today's big highlights. Number one, when you're facing a major life transition like a new job or moving or adding someone to the family or going through something really hard, like a divorce or a loss now is not the time to make massive commitments to debt, payoff or investing. Save your extra money, ride out this change, this new season of life. And then once you feel like you've settled in to a new normal, you can then start to focus on your goals.
And second, once you get to a point like Jenny is where you have an emergency fund and your high interest debt is paid off. If all you have left is very low interest debt, start to explore your investing options. Learn strategies for investing in a way that matches your goals and your income level. The one resource I recommend more than any other for learning how to invest is personal finance club. He has an amazing Instagram account with tons of free content and then a [00:59:00] paid course that I personally have taken and learned how to manage my Roth IRA and my overall investment strategy.
You can go to www dot debt-free mom.co/links. L I N K S to find a link to the investing using index funds course from personal finance club. Use the discount code. Debt-free mom, all one word to get $20 off making it only a $59 course to learn how to manage your retirement.
(*Credits) Thanks for listening to the Debt Free Mom Podcast. If you want to join me as a guest on the show, go to dfmpodcast.com. The Debt Free Mom Podcast is hosted by me, Carly Hill, and is produced, edited, and mixed by Kyle Hill. Music for this episode was written by Kyle Hill. Hit subscribe wherever you're listening to join in with every new episode as we grow our confidence and contentment in our personal finances.
