There are two kinds of people in this world: Those who open their bank app on their phone without a single worry or anxiety, and those two squirm and cringe just thinking about it, or maybe even pretend the app isn’t there. Nearly 1 in 3 women in our country are discouraged about their finances with over 68% feeling overwhelmed by debt. But it doesn’t have to be that way.
I am thrilled to welcome Tiffany Aliche, AKA The Budgetnista to Goal Digger to talk about how to get out of debt. This girl knows personal finance. She’s a highly sought after speaker and cited expert with features on the Today Show, Forbes, MSNBC and more. This woman even helped write LAW on financial literacy, now called The Budgetnista Law, that requires middle school students to learn financial literacy in her home state of New Jersey. Tiffany is real about her financial journey — She talks about how the recession claimed her home, how she went through foreclosure that left her credit score dwindling, and with her strategies brought it back up to 800. If you don’t know, 800 is near perfect. Tiffany knows what she’s doing and she’s here to share it with you.
I want to talk about debt. Eliminating debt was a personal goal of mine, and Drew and I now live debt-free, but I want to talk to Tiffany about the types of debt, how to get out of it from ANY starting point, and simple strategies to contribute to your savings that won’t leave you feeling cash strapped at the end of the month. Plus, I couldn’t resist digging into some entrepreneurial money topics, too. It’s all in this episode — press play right now!
The Debt Myth
Tiffany found herself in $300,000 of debt. Her student loans were a bulk of that, and the number made it seem like her debt was a forever thing. It can feel that way, like your debt will be there forever. But really, debt is a slow go. There are some parts of your finances you can tackle more quickly, but debt is typically not one of them. “Debt is almost set it and forget it.”
When you’re looking at your debt, and it’s giving you those heart palpitations and totally overwhelming your brain, your first instinct might be to throw all of your money at it and pay it off as quickly as possible. Tiffany has a different view on debt: “Your priority should not be on [paying off] debt, it should be growing wealth, because being debt-free does not equal wealth.”
Tiffany is all about the clever money tricks. In her book she talks about “unexpected money” so I had to ask her what this meant. Basically, unexpected money is any money you receive outside of your normal pay (like that lovely birthday check from Aunt Sally) or any money you were planning to spend, but did have to.
“Say you’re at Target and you want a buy a dress that’s $50, but when you get up to the cashier and she tells you it’s half off,” Tiffany says don’t run back and grab a second dress — Put that extra $25 you were planning to spend but didn’t have to towards your debt or towards savings, you’ll see a significant impact on those numbers, fast. “Just because money is not spent doesn’t mean it’s saved. You have to purposefully put it somewhere.”
When To Invest in Your Business
I asked Tiffany when is the right time to start spending money on your business and when it makes sense to spend a little money (that would otherwise be going towards debt or savings) and invest, hoping someday it will pay off. Tiffany said: “You can be a business, or you can look like a business!”
What this means is you can buy yourself the fancy website, a box of business cards, maybe even a brick and mortar storefront and LOOK like a business. But at the beginning, do those things yield a direct return that you can track? Probably now. But, if you’re a photographer and you buy a lens that allows you to shoot better portraits, that will yield a direct return. That’s how you should evaluate potential investments in your business — Can you track the money from your pocket and watch it come back to you as a bigger number? It’s probably a smart spend.
Things like a website might still be super important at the start of your business, but the return just might be a longer wait. That doesn’t mean don’t have a website… Only you can evaluate if the investment is important at the start of your business. What’s important is giving yourself a buffer, a long enough runway, for your business to really take off. Give yourself time to succeed.
More from This Episode
Tiffany built her business around educating and helping others with their finances and budgeting. If you want to hear how she landed her first contract and scaled from a $500 teaching gig to a widely-recognized expert on personal finance with a multi-seven figure business, tune in right now! Tiffany also shares advice for paying yourself as an entrepreneur (it can be messy in the beginning… but she has advice to make it simple). Press play and hear the entire interview about how to get out of debt for good.