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January 26, 2021

Becoming Debt Free and What’s Next – Episode 36

Thriving Financially with Hilary Hendershott Money Made Easy

When Hilary was in her 20’s, she was definitely not thriving financially. She was advising multi million dollar clients by day and coming home to a stack of bills she wouldn’t open because she couldn’t pay them. She was a massive overspender. Hilary was earning 6 figures and spending 6 and a half. She realized she had to repair her relationship with money and wealth. This was a very emotional time for Hilary. Looking at the numbers and realizing how in debt she was made her feel like a piece of crap. She was lucky enough to go to a great school and smart enough to graduate with honors. Hilary was determined to figure out how she got so deep in debt. She started reading everything she could on the psychology of money. Her mother was a budgeter and saver and Hilary was ashamed with the amount of money she could spend on birthday presents for friends. Hilary wanted a pair of Nikes like the other girls on her basketball team but had to get her shoes from Payless. Hilary felt like there was never enough money for the things she wanted in life. That became her money operating system. It’s a very common money operating system. And there are many others also. Through the divorce of her parents and her father not wanting to pay her mother, Hilary came to realize that money  is power. So operating with the thoughts ‘there’s never enough money’ and ‘money is power’, Hilary would spend and buy to try to show she was successful, even though she had no money in her bank account. Luckily, she was able to unravel those behaviors and make a change in her own life. This made Hilary want to teach her framework to others, especially women. Also by doing this, her business took off. So many entrepreneurs limit money in their life with their thoughts. Even though Hilary has a very traditional background as far as her training, until she changed her mindset, she would spend money as soon as it was in her back account. For Hilary to make a change, she started doing the opposite of what she had been doing. Where she had hidden her money troubles before, she became super transparent about them. And she also, just wouldn’t do things where she would be spending money. It was super tight and painful for several years. After Hilary had her condo foreclosed, she turned in her leased BMW and paid off her negotiated credit card debt, she then began rebuilding. She didn’t buy a coffee for 2 years. After she fixed the problem, she has now built up enough wealth to be financially independent. And that’s definitely thriving financially.  In addition to the traditional financial advising, Hilary has Ignite Investing for people who are just getting started in investing. This program makes financial advice accessible. She also has a coaching program, that teaches exactly what she did to get out of debt and build wealth. Hilary shares her 7 Steps To Wealth with us.  1 – Decide. Involve your mindset and how you see your future. 2 – Speak. Look at all your scripts about money. Journal. Write down all the things you think and say about money. 3 – Plan. Most people don’t have a plan. She teaches a multiple account system, not budgeting. 4 – Earn. Raise the ceiling. 5 – Ask. She has a No Challenge. Make so many big requests, your goal is 100 no’s. If you get to 100 no’s, you’ll have so many yeses, you’ll have a different life. People are afraid to ask. 6 – Invest. Compound your wealth. 7 – Protect. Protect your wealth with wise decisions and your identity from theft. A lot of people, especially women, have this idea that money is a zero sum game, Hilary tells us. Just enough is enough. She wants us to know there is an abundance of money, you can be rich and everyone else can too. Hilary works with a lot of people in their 60s, 70s and 80s and doesn’t know many that work past 70. You need a stash of money to support your life. The Profit Boss Radio is the podcast Hilary hosts. She has so many things she wants to say especially to…
  1. Thriving Financially with Hilary Hendershott
  2. Money Practices and Money Maps with Bari Tessler
  3. The Art Of Money with Bari Tessler
  4. Get Good With Money with Tiffany 'The Budgetnista' Aliche
  5. Think Like A Breadwinner with Jennifer Barrett

We’re welcoming back to the show today one of our favorites – Kate who is @thatdebtfreelife on instagram to talk all about becoming debt free and what’s next. 

Of course, we wanted to hear about how if felt to be free of debt. Kate shared that it felt free and made her feel invincible. 

First, Kate and her family went on a dream trip to New York City at Christmastime. After their trip, they then got back into their financial goals pretty quickly.

Saving up a bigger emergency fund was their biggest goal. Kate really hasn’t changed much in the way she manages her finances.

She still creates a zero based budget for every paycheck and she budgets it down to the penny. Kate can’t live without it because she knows exactly where her money is going when she has it done.

Kate is still working overtime to reach her financial goals. Catching up on retirement contributions and funding the 529 for her son are both important and they also made a 6 year plan to pay off the mortgage.

When you have a plan for your money, whether you have more money or need more money, you know what to do and how to do it. Without a plan, it’s a struggle to know what to do and how.

Kate feels the most important things that helped her payoff her debt were the zero based budget and 15 no spend days every month. With 15 no spend days per month that translates into 6 months of not spending, but in bite sized chunks. She uses the HabitShare app to track her no spend days. Tetia loves it too!

She also uses her 30 day buy list. Whatever Kate wants that she hasn’t budgeted for or she’s not sure about it, she adds it to the list with the date. Then after 30 days she goes back to the list and most of the time she doesn’t care about it anymore.

Luckily, both her and her husband were able to stay employed during the pandemic. In addition, with working from home she saved so much in gasoline and 3 hours a day spent driving. 

This year, they were able to pay cash for their fence. Kate also opened a Roth IRA for the first time in her life and funded that. They also purchased kitchen appliances and redid their laundry room. Kate also paid cash for Invisalign.  

Spending more time at home becomes more enjoyable. Angelica share how another one of our former guests, Lupe Prado, talks about tolerations. Little things that crowd our mind and how getting those small things taken care of make our life more enjoyable.

When first starting to pay off her debt, Kate realized if she spent her money with intention and allocated it properly she would be able to do it. She could meet all the goals she thought were out of reach before.

Starting @thatdebtfreelife on Instagram and making the promise to herself to post something once daily about something finance related made her think about it and focus on it. The accountability of that also helped keep her on track.

Even just checking your bank balance every day can make you more aware and intentional. Starting with the small things and giving yourself grace can really help you not get overwhelmed and make forward progress.

Let yourself be a beginner, resist those impulse purchases, make mistakes and give yourself some grace – you’re not going to be perfect ever. Kate has never written a perfect budget, even after becoming debt free.

To budget on an irregular income, list your expenses from most important to least important and then as your money comes in you pay your bills in that order. Then after paying the things you have to take care of you can make your debt payments and other things.

If you have irregular income, Kate also recommends creating a buffer or a cushion fund. in addition to your emergency fund, set aside some money so if things fall short or you’re hit with an unexpected expense, you have a bit of a buffer or cushion to carry you through.

Another strategy she recommends is living on last months income. It might take a while to save a full months worth of income but then you can live on last months income. This takes away the guesswork and can eliminate the stress.

If you have trouble with impulse shopping, then going through your house and looking for things to sell can help you buy more intentionally. One of Kate’s favorite quotes is, “Look around you, all of that stuff used to be money.”

They have a 9 year old son who is aware of all they’re doing. Kate says he shows such an interest and asks questions about a 401K and other things. She loves sharing with him and helping that interest grow.

Kate wants to be the kind of person she needed when she was in her 20s. She wants to give people the kind of information that will help them with becoming debt free and their finances. 

When we asked for Kate’s definition of success, she shares about how much it’s changed. She used to think it was a law degree, a high paying 9 to 5, a luxury vehicle, a big nice home and all the status items she could want. Now it’s having the freedom to do whatever she wants, to spend her time how she wants, to have options in life, to have options to leave that law job and more importantly to become work optional.

Kate jokingly shared that her 3 words when she thinks about money are “I want more” or “There’s never enough”! On a more serious note, she says freedom, security and budgeting.

Kate thinks that if you have money, you need a budget. You need to know what can you do with your money. Where some people might feel living with a budget is stressful, she feels it’s freeing and so much less stress.

As we said before you can find Kate on Instagram at @thatdebtfreelife – 

www.instagram.com/thatdebtfreelife

Kate’s blog –

www.livingthatdebtfreelife.com

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