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0:00 Mary: And for people who say I need my whole paycheck to live, you’re living way beyond your means. Because savings is part of your bills. It needs to be number one.

Julie: Welcome to Debt-Proof Living with Mary Hunt. It's all about life, money and how to live well and thrive below your means. Today on Debt-Proof Living with Mary Hunt, we continue our ongoing series: How to Take Control of Your Money. Our series is based on one of Mary’s best-selling books 7 Money Rules for Life, How to Take Control of Your Financial Future. And that book is available online or wherever fine books are sold.

Today's episode is brought to you by Mvelopes. That's M, like Mary, V E L O P E S. Mvelopes uses the tried and true envelope budget system. All in one easy app. Give every dollar a purpose. Mvelopes.com.  And now here's Mary. 

0:41 Mary: Thank you, Julie. Hello everybody! I'm so glad that you're back with me for this episode in our ongoing series based on the 7 Money Rules for Life. Now, if you didn't catch the last episode where we covered the first rule, I'd love it if you go back and listen to that. But we’re going to do a little review for all of us anyway. That first money rules for life is ready? Here we go— spend less than you earn.

1:11 It sounds so simple. Just spend less than you earn. But let me be cautious to assure you that it's not that easy. We live in a society, in a culture, that really wants us not only to spend all that we earn plus a whole lot more. Creating a lot of debt. Creating a lot of income for a lot of industries. We can get into that some other day. The rule is simple. Spend less than you earn. But Julie, let me remind you and all of our listeners. That's not the same as don't spend more than you earn.

1:50 They sound about the same, but it's not the same. If we were to say well I'm not going to spend more than I earn and that means you're going to spend every last nickel that you get as you get it. That is the problem. That is why so many Americans are living paycheck to paycheck. You know, I have to talk about myself as well because if you caught the very first episode of the series you know my story. You know the trouble I got into. It- it takes my breath away to remember and to recall that not only did I make sure we spent all that my husband earned. At the time I was not working. But I spent way beyond that because I thought the limit on my credit cards was my money to spend as well. That's just really, really crazy. So let's get the rule number one back into our minds. Spend less than you earn that indicates there is a gap. There's a gap between what you earn and what you spend. That is the beautiful gap. That is the place where financial freedom is going to be found for you. That is where you go to find solvency. That's where you are going to find joy and peace. That is the key to everything we're gonna talk about in this whole series.

2:58 Julie: I love that gap, Mary. I love that idea of having that gap and that margin, mainly because it reduces the stress in your life. (Mary: absolutely) it is so different, because you hear people say don't spend more than you earn. Live within your means or any of those things but that— like you say— that means, OK, if I get $1000 I have $1000 to spend. That creates stress in your future if you don't allow yourself that margin.

Mary:  Absolutely true. absolutely true, Julie. I have to say that all the seven, because I know what they are. I know and I will tell you the number one is the absolute most important of all for several reasons. The first reason is spending less then you earn— if you violate that rule you're stuck. You're absolutely stuck because you cannot allow the other rules to live out in your life. Because they're all based on the first rule. Spend less than you earn. Another reason is that without rule number one you're making an arrogant presumption on the future.

4:01 What you're saying is that I can spend all that I earn. I can spend all that we have. Get it down to absolutely zero in the checking account. I'm not getting into debt because I'm not going over. But, guess what? You're making an arrogant presumption that tomorrow things will be as great as they are today. You’re saying that the refrigerator is always going to run. The car will never need new tires. I will never need a brake job. The kids are never gonna have to go to the emergency room. Things are not never going to happen in my life over which I have no control— which is absolutely ridiculous.

4:35 I can see you smiling because you see how, well, ridiculous it is to think that way. Another reason that rule number one is so important is that it’s the only way that you are ever going to find freedom from debt. Debt is a horrible thief, a monster. It is horrible thing in our lives. It is steals from our future. It steals from our children. It steals our happiness. It, it takes our joy. It leaves in its wake depression, fear, greed. All of these ugly attributes. How do we get that way? We believe a lie— that we can spend money we don’t have today and pay things off later.

5:17 The last reason why rule number one is most important of all— is because living beyond your means leads to a life of misery. Total misery. Debt, depression and anxiety. OK. So we got that established. Rule number one. Spend less than you earn.

Julie: You know, Mary, did you get a chance to try out your spend-free day? 

Mary: We talked about that last week, didn’t we?

5:41 Julie: or no-spend day? I forget what we called it 

Mary: We talked about that the last episode didn't we? We called a spend-free. No spend. The whole day without spending any money and that means in any way. Can't pay the rent. Can’t shop online. Can't commit to anything. (Julie: Nope) No bills. It’s not easy. (it’s not) Do you know what? I have done that so many times. I'll tell you the first time I ever tried, I thought there was no way I could keep living. I hate to say that. We become so used just running out and getting any little thing we want.

6:16 Running through, driving through a drive-thru. Ordering something online. I had several spend-free days this week. One reason is that I don't have my own separate car. My husband and I share a car. Crazy. That's made a big difference for me. Another difference is that now where I used to go to work every day where I would commute to work. During the first years of cheesecake monthly and all of that we have done here online; we had a separate office 12 1/2 miles away which gave me a lot of opportunities to spend on the way to work. Isn’t that funny?

6:50 How we, you know, I need some new petunias. There's Home Depot! 

Julie: Right! There’s a lot of places to get a snack or a drink or some kind of fun thing for yourself in 12 miles.

Mary: Now, our our office is in our home since we relocated to Colorado. Oh, my goodness, it’s just wonderful. I have a 13-step commute to work because the offices are in the lower level. So it's 13 steps down. So I know that I got a real short commute to work. Honestly, it has taken so many things out of my mind (areas in which I can spend) but I'll tell you that the temptations for me and the things that I think about: online shopping!

7:27 But, on a spend free day— no online shopping. So that has changed for me. I had to really think, but I had two, maybe even three full spend-free days during the time between now and when we did the last episode which is only a few days ago. So I'm happy. (Julie: I know) I'm happy. I know that I have cash in my wallet. There's something about cash. Green. Dollar bills.$20 bills. I have gotten to the point…

8:00 I'm telling you folks. This is such a remarkable change for me! Money used to burn a hole in my pocket. I could think of nothing else. If I had cash, that's all I could think about. How can I spend it? I’ve done a complete 180. Where that cash in my wallet— it spells freedom. It spells options for me and I don't like to be without cash. Well, if I'm spending it, then I’m without it. I don't know. I play games for myself. I'm kind of embarrassed to tell you that but I do. I hide money from myself. I put it in the back of my wallet where I can't see it, and then I go… guess what, I know is it I know it's back there. I learned it from my husband. Im going to tell all the secrets.

8:41 My husband, as long as I've known him which has been many decades. He has kept a $100 bill hidden in the back of his wallet. He knows he has it. I know he has it. We forget he has it.  I would challenge my listeners. You think you can't save 100 bucks? Oh, yes you can if you are diligent and you really have a reason to do it. When you get it saved go to the bank and get a $100 bill. Tuck it into the most secret place. Don't tell anybody, unless you want to.

9:15 It will change everything, because no one that I know wants to break $100 bill to get a Coke and fries at McDonald’s. You just think of something else to do. It's a great thing. All right, so we have a really, really gotten off the path here we're gonna move on now to rule number two.

9:30 We’re going to move on now to rule number two. It’s so easy. It’s only four words, because remember all these rules do fit on the back of a business card. Rule number two: Save for the future. Save for the future. Four words: Save for the future. Repeat after me. Julie, repeat after me. Save for the future.

Julie: Save for the future.

Mary: Got it! Here’s what it means. Something from everything you receive— and I'm talking everything— you need to first before you do anything else. This is the rule. You save some for the future.

10:15 Wow! Let me tell you why this is absolutely critical. So important. Not more important than rule number one, but absolutely the next most important thing of all. I know. Julie, have you felt like there's some kind of an invisible force out there conspiring against you? To make sure you never get ahead? To make sure you always have more things you have to buy? Money you have to pay? That somehow, no matter how well you plan, or what a good person you are things always happen?

10:47 Like car trouble? A leak in the roof? The refrigerator stopped working? Always something that’s never gonna let you get ahead?

Julie: I do feel that way. We had a few years like that just a couple, just recently we had car after car after car break. Or was in a wreck. I mean, yeah!

Mary: it's terrible and let me tell you something you're not dreaming. It’s absolutely true. I think that we all have two enemies and these two enemies have a single purpose. They work together. They’re  like comrades. Their names or fear and greed. They’re liars and thieves. They go to extremes—amazing lengths to undermine and sabotage our efforts to take control of our money.

Julie: Let's take a quick break for just a minute. Hi, I'm Julie producer of Debt-Proof Living with Mary Hunt. You know, many of us have the experience in our lives of living paycheck to paycheck and many people. I know it well, have a difficult time following a budget. But not managing our money as a leading cause of stress in our lives.That's why Mvelopes created a simple, affordable envelope budgeting program that just works. Mvelopes helps you take control of your future by giving every dollar a purpose, every dollar, a purpose, people who use Mvelopes see monthly savings of 10% of their spending within six weeks of getting started and they report less anxiety.

Now, currently Mvelopes is extending their free trial to 60 days for all of their subscriptions. So there's never been a better time to start on a new path. Just click the link in the show notes and sign up today. Risk-free .Okay. Now let's get back to our conversation. 

11:35 Mary: The first is fear and that’s what we’re going to deal with today. Fear, and it goes like this. I'm afraid I’m going to run out of money. I’m afraid I won’t have enough money left until my paycheck. I”m afraid my paycheck won’t be big enough. I’m afraid that something will happen to my kids. I”m afraid that if I don’t have this credit card with me that I won’t have enough money to whatever it is. But it’s always I’m afraid. I’m scared and let me tell you something. When you’re spending every nickel you have? You have reason to be fearful, because we do not control our lives. We don’t!

12:08 So fear, and this sounds counterintuitive, but I really believe that it’s fear that prompts us to live way beyond our means. What happens is we’re fearful, so we have to get another credit card. Oh, I need that credit card just to have that cushion of that credit limit just in case something happens. I need this because I’m afraid of that. Guess what? We have to slay that enemy.  We have to put it to rest for certain and make sure it never comes around us again. 

12:42 The way to do that is Rule #2. Save for the future. You know that $100 bill I just talked about in the back of my husband’s wallet? Please don’t tell him you know about it. Please! He’d be so upset with me. What that does is, that alleviates fear. Not in the way it might sound, but what I mean by that is—I’m prepared. I have a contingency. I have set some space between me and the edge. If I were to run out of gas, and I don’t carry credit cards with me, what would I do? Well, it tells me I have money.

13:25 I have cash with me. I could take care of that situation. I might be able to help out somebody else. I might be able to help out my kids. Someone who is really, really….you know, I’ve seen my husband pull that $100 bill out of his wallet and give it away. There’s something wonderful about that. I’m telling you the way past fear is by preparing for the future. 

13:50 How do we implement this in our lives? How do we actually take this rule, save for the future, and put it to work? Well, I’m going to talk about a couple of things here. First of all, your next paycheck. The portion that you bring home. I’m not talking about the part of your paycheck that is withheld for taxes or that goes into your 401K. There’s an argument to say that would be savings, but that’s not money you can get your hands on. Ok? So it’s not really going to alleviate short term fear. It might take care of your retirement fears. Maybe. I don’t know. What I want to talk about is the money that you actually get into your hand. That you have control over. That you get to manage.

14:32 You are a money manager. You do know that right? Ok. You’ve got to be a good money manager. So here is the rule. We’ll talk about implementing it in a moment. The rule is that 10% of everything that comes into your life. Im talking about a rebate. I’m talking about a refund. I’m talking about birthday money.  I’m talking about any kind of money. This has to become a rule in your head.It’s the first thing you do that you take 10% of it. Put it away for the future. 

15:06 Ok, how do we define the future? Well, that could be tomorrow or it could be 10 years from now. It’s the future. It’s money you are not spending now. You are putting some distance between you and that money. It’s in that distance that you have opportunity.  You can change your mind.  You have freedom.  You can either spend it or not spend it. You have chosen not to spend it which opens up all kinds of options. 

15:35 Now we could talk. No. Let’s say that, I could talk for hours and hours about rule number two. I’m not going to do that right now. I just want to tell you that you’ve got to get this into your head. How do you do this? I know that there is someone listening to me right now that says, honestly, if I were to take 10% and not spend it from my next paycheck, we’re going to be in big trouble. Because we won’t be able to pay the rent. We won’t be able to pay the car payment. I’m already behind, so I’ve got to get caught up. I’ve got blah, blah, blah.

16:01 I understand that, but this is what I want you to do. If you cannot do 10%, (I love 10% because its so easy to figure out. If you get $942, you know that you are going to put away $94. Ten percent is pretty easy to figure out in our heads.) Let’s say you are in a really, really bad position right now, but you are learning and you are yearning to do better. I want you to take some amount. If cannot do 10%, I want you to do 5%. Can’t do five? Then let’s do 2%.

16:40 Ok, I hear you. You can’t even part with 2%? What about $1? How about just $1? I want you to take that in cash. Don’t write and IOU. Don’t say I’ll put it on my debit card or some other silly kind of plastic. Another topic for another day.  I want you to take that one dollar and I want you to make this ceremonial. I want you to get an envelope and I want you to write on the outside of it: Saving For The Future. Put that dollar, that one green dollar bill with George Washington on the face, put it in there. I want you to make a commitment. This is the start. This is my first baby step. I commit that from now on, I am going to save some part of everything I receive. 

17:43 Put it away in a safe place.  No one is going to steal it so you don’t have to put it in a bank.  Put it away in a safe place. Meditate on it. Think about it. Ask God to give you the strength, the faith that you can actually put away some of what you receive for the future. I’m telling you. It’s going to change your life. It absolutely will. Now, if you can do $2, if you can do 2%, if you can see your way clear to do 10%, you’re going to make so much greater progress so much quicker. Ok?

18:20 This is up to you! You are the money manager. I just want to challenge you during this time before our next episode that you will do this at least once. I hope you have some kind of income between now and then. If you don’t, I want you to plan for it. Start thinking about exactly how you will do this. A lot of us get paid now, not through a check or actual, actual money. Many times it is automatically deposited into your bank account. A lot of people are paid that way. I want you to take the time. I want you to go to the bank. You can probably still go inside. You might be able to see a teller. Somehow you can get cash out. I want you to do that. 

19:00 Save for the future. Honestly folks, it’s going to change your life and it will save your future. Alright, bring on the questions Julie. 

Julie: Ok. Mary, what if someone says I’m behind on my bills. I have credit card debt. Shouldn’t I be paying that off first? Or getting rid of these bills? Should I put off saving until later? What do you have to say to that?

Mary: I have just one word.

Julie: What?

Mary: NO! No, do not put off anything. There is absolutely no reason that you could give me where I would say, yes, do not save and do that first. No! Let me tell you why! 

Julie: Why?

Mary: If you don’t start saving now, you will never, ever start saving because there will always be something. You mentioned credit card debt. Why do you have credit card debt? Because at one point you thought you didn’t have enough money (Julie: Right) and so, you didn’t have savings. You didn’t have enough money to buy a new refrigerator. Why do I keep bringing up refrigerators? Because it’s happened to us several times. 

20:04 That’s kind of an emergency, ok? You will never, ever,  ever get out of that rut. That horrible deep pit of despair. Because you will always be looking to credit cards, personal loans, payday loans. Who knows how else? You know, twelve easy payments to the plumber—which are never easy. You will never get out. You must. You have to take that leap of faith. 

20:35 That means you don’t buy groceries this week. Most people have enough food in the house that you’re not going to starve. Even if that means you’re going to have to cancel that trip with the kids. Even if that means…I don’t know what you could bring up to me that would cause me to say, ok, you don’t have to start saving yet. No. There’s no reason. 

20:53 Julie: It’s true what you say about, there will always be something. It’s the habit that each person has to generate and there’s so many ways to just cultivate this habit. 

Mary: Anybody listening to us who does not have money in the bank, in a savings account, I can pretty much guarantee they’ve been putting it off. You know, its always like I’ll start with my next tax refund. Oh, I’ll start next week or as soon as we get this paid off. As soon as we get the new floors. As soon as I get…and it just goes on and on and on. 

Julie: You just have to change your thinking.  You have to completely change how you’re thinking about it. So, maybe this second question goes along with that because I’m thinking of college students. Say, you’re not making a lot of money. You may just have a campus job or whatever. Should college students pay off their college fees or should they start saving as well?

The thing about being younger is time is on your side which is so great. 

Mary: Maybe. I don’t think that incurring debt, even college debt, is anywhere near a good thing. At the very best, it’s a consolation for having not prepared. 

22:04 We’ve just got to wake up. I think the cost of college is absolutely outrageous and is probably another, another topic for another day. I cannot think of one excuse in the whole world because let me tell you this. It goes right back to children. I do have a book I wrote. I’m just going to tuck that in. It’s called Raising Financially Confident Kids and it’s the story of our two boys. 

22:26 When I went through the most horrible season of my life they were ages six and seven. My biggest fear in the whole world is that they would turn out just like me. They already had signs of that. More was never enough. Sixty gifts for Christmas, well, what else is there? They wanted everything under the sun and I had to come to the point where I realized that I trained them to be that way. Because they saw me. The very first thing my husband and I started to do was to allow them to have enough money, some money, not enough, to allow them to have money they could call their own over which they had control. They could make the decisions and they had to live with the outcome. Be it wonderful or be it terribly, terribly difficult. 

23:13 Mismanaging money needs to start early. So much easier lessons to learn when you’re age six and seven. Our boys learned from a very young age, and I would start them earlier if I had it to do over again. I’d start at age three and four. When you spend the money, you can’t have it back to spend again. You can’t change your mind. When you save money, you have options. Julie, maybe we’ll do another series on Raising Financially Confident Kids. 

23:41 I’m going to tell you a secret. It is so easy to teach kids to do this. You tell them the rules.  Our boys learned very young that they had to save 10% of everything they got. Well, guess what? They loved saving! They started saving 20%, 30%, 40%!

Julie: That’s great.

Mary: Both of them got to the point where they would save 90% of the money they got and spend 10%. The outcome is that while our boys could not be more opposite. Completely different in talent, in temperament, in personality. Everything about them is different, but they turned out the same when it comes to money, because they learned and they live by rules. Those rules dominate their lives today. Both of them, when they turned age sixteen—I’m going to start crying here, so I’m going to buck it up—both of them purchased their first cars outright with their cash they had saved. 

Julie: Wow.

Mary:  Because they got hooked on saving. They loved to get jobs. They loved to do things. They saved money. Birthday money. I thank God for that because they are financially confident men now. 

24:45 Julie: Well, I want to ask you one more question about fears. Has anyone ever shared with you any of their irrational thoughts? Someone that I know, who shared with me their irrational fears and irrational thoughts once and thought that just because of the financial stress —everything was going to fall apart. When we broke it down and talked it out together, this person realized, oh, it’s not, it was all irrational. 

25:11 Mary: I could probably put some detail to that from my own life but I’ve had people share with me over the years exactly that same thing. One thing I have learned is that fears of any nature are always worse when they are not expressed, when we just have them in our head. Ok? Once you even say the words they seem silly and we end up laughing—sometimes. I know that there are very, very real fears and I don’t want to undermine that in any way from anyone who is listening especially someone facing the fear of a medical diagnosis. We cannot equate those kind of fears here, but as we talk financial fears, oh yeah! They’re ridiculous sometimes.

25:53 I used to be so fearful that if I gave up my credit cards—that was a big one, oh my goodness! That if I gave up my credit cards, what if we couldn’t make the mortgage? We’d become homeless. I mean, it went from being late on the mortgage to being homeless like in one breath. Like they were the same thing. That we’d live on the street and what would the boys do and blah, blah, blah. You know, they’re irrational fears. They are fears that don’t find their footing in reality.

26:20 So my suggestion is to number one, write those fears down. You can do that privately. No one has to know. Put them into a journal. You can put it in pencil and erase it later. Fears that if my husband finds out, he’s going to leave me. That was my big one. If he found out what I was spending. If he found out that I was lying to him. Oh, terrible. So, fear, fear is an awful thing in our lives. There are many ways we can combat it. I think number one, prayer is the most number one thing. Give it to God. Turn it over to Him. 

27:00 Tell Him about your fears. Seek in His Word where He tells us “Fear not”. I have heard that those two words, fear not, appear in the Bible, in the Scriptures so often that we would be knocked out if we had them all at one moment. Fear not! We are not to fear. We’re not to fear. We are to be responsible. We are to trust. We are not to do awful things like spend more money than we have which I think is an awful thing. So anyway, I want to leave you with that today. The way to combat our fears, to slay that enemy, is to save for the future. It’s simple as that. Thank you everyone. Thanks for joining me today. I can’t wait ’til the next episode and I’ll see you then! 

Debt-Proof Living with Mary Hunt was created and hosted by, Mary Hunt. Produced by Julie Emerson, with Harold Hunt, Executive Producer.

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