Retirement

Here’s How One Couple Addressed Their Money Hang-Ups And Paid Off $200,000 Of Debt In 5 Years

Where Julien and Kiersten Saunders live in Atlanta, GA, they have multiple options for grocery shopping. There’s the high-end market down the block or the traditional grocery store around the corner.

Good choices, for sure. But when you’re looking to cut costs in order to reach financial independence, you have to find ways to save. And Julien knew he could make further inroads into his expenses by shopping at a cheaper grocery store about a mile away. It didn’t have the fake rain sprinkling the vegetables or even well lit aisles. “Going into that store gave me shame,” Julien said, because it reminded him of the grocery stores his mother shopped at when his family struggled financially as a child.

For the Saunders, the path to financial independence isn’t one of simply numbers that, over time, add up to enough that will allow the family to live comfortably without the need of a job. It’s also a deep dive and recognition of the psychological impulses or barriers that we all have when it comes to spending.

Julien, and his wife, Kiersten, had to address many of these hang-ups to completely wipe away their debt or even get married.

Julien’s apprehension about shopping at the low-cost grocery store was solved once he tried it. Turns out, the low-end grocery store “was a wonderland of produce,” he said. He wouldn’t have realized it if he hadn’t overcome his trepidation.

But other concerns – even very real ones that are steeped in society – don’t disintegrate so easily.

Discussing the spending tactics that nearly ended their relationship

Julien and Kiersten met at work in 2012; they both were employed within the marketing department of a large hotel group until last year, when Julien left to focus on the family businesses. About a year after meeting, they took one of their first large trips together, traveling to Panama City. While there, Kiersten mentioned she had funded the trip with a credit card, which then came a revelation that she had credit card debt.

Julien, who had long researched personal finance, knew how credit cards could cripple a family’s finances. In response, he reacted with anger, saying, he wouldn’t have dated her, if he knew she had the debt.

At the time, Kiersten looked at credit card debt differently than she does now. “For me, credit card debt was normal,” growing up in a comfortable, dual-income household, she said. It was a constant, like housing debt.

“It forced us to have a conversation about money, before we went further,” said Julien.

Two years later, while honeymooning in South Africa, they would have another one of those conversations, discussing what they wanted to do with their money now that they were married. Both agreed they wanted to live on far less than they earned and build passive income streams, working towards financial independence.

While Kiersten believes that Julien’s response to the debt was him, “looking for a reason not to date me,” she also says it allowed them to address their money insecurities and assumptions, head-on.

Four years after the honeymoon, and they’re 50% of the way to their goal of financial independence.

Securing mom’s future, so they could pursue their goals

At their blog, Rich and Regular, Julien and Kiersten often address money subjects that are unique to their culture and background. And they’ve written extensively on the racial wealth gap. They don’t view the FIRE (financial independence, retire early) movement as a way to solve the inherent issues in the American economic system that has prevented – and depressed – African Americans’ ability to grow wealth. But they see FIRE as a way for an individual to make strides to their own independence.

No better example is in how they helped Julien’s mother.

Julien knew he needed to make sure her finances were in order so he could feel comfortable enough to pursue his blog and real estate ventures full-time, which now account for about 20% of the family’s income. “My mom has worked hard,” he said, but “never made a lot of money. I’ve always known the day would come I would take care of her.”

It’s a reason why they hate to discuss specific numbers for their financial independence with others, since their target could fluctuate depending on how much care they provide to family members.

Hispanic and African-Americans have the highest rate of caregivers in the U.S. among racial groups, and they tend to have to take on the caregiving at a younger age and must dedicate about 33% more hours for care than someone that’s white. Kiersten and Julien knew these facts held back others in their community from pursuing entrepreneurial ventures. They didn’t want that to happen to them, so they slowly pushed his mom to open up about her financial situation.

Since she had to start tapping her retirement accounts in 2008 in order to live, her accounts were depleted and she still had debts. They convinced her the best option was to sell her house and pay off her credit card debt. She moved into a more comfortable senior community and changed up her investments into a safer allotment, with 75% in bonds. They also provided her with some income, paying her to watch their young child during the day. Along with Social Security, and she’s able to afford most of her needs.

At age 73, for the first time in her life, she became debt free.

“She said it was the happiest day of her life,” Julien said with a chuckle. “The fact I had something to do with it, it was fantastic.”

Avoiding the bigger home allowed them to address their debt

After Kiersten and Julien married, by combining expenses, coupled with promotions at work, they had more money coming in each month.

But they moved into Julien’s place, which lacked Kiersten’s personality. They had to make the decision to upgrade to a new home or continue paying off the debt (credit cards, student loans and a mortgage, among others), which they began aggressively doing so in 2013. Instead of selling, they decided to completely gut the home, updating it to both of their likes, making it possible to live in, even as the family expanded to three with the birth of their first child.

“This helped us to resist the temptation of buying up for a few more years,” Julien said. “[C]onsidering that home would then become a rental property, it also allowed us to command a higher rent than other units in the area since it was recently renovated.”

They would eventually upgrade to a newer home, but not until they became debt free. It took them five years, but they paid off all $200,000 of the debt. 

“We chose to get out of all the debt to give ourselves as many options in our lives as possible without the income limitations or location constraints that come with a job,” said Julien. “As we began to look upwards and assess the likelihood of further promotion, especially as African Americans, we felt it was a better bet to place our chips on the power of the markets than on the continued stability of our careers.”

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