After racking up more than $10,000 in credit card debt and accumulating more than $100 in interest monthly on a single card, Rich Jones knew he had to make a change. In his quest for financial freedom, the former human resources recruiter created the personal finance podcast and blog Paychecks & Balances. He spoke with Easy Money about becoming debt-free in 2018 and his No. 1 advice for people tackling debt.
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This interview has been lightly edited for style and clarity.
You’re debt free. How did you do it?
Becoming debt-free in 2018 is one of the highlights of my adult life. I moved a chunk of debt to a zero-interest card and started funneling extra money toward the remaining balance. Once that was paid off, I moved to the zero interest card and made the final payment using part of my performance bonus from work.
The biggest shift for me through the process was intentionality. Once I committed to getting out of debt, my money had purpose. It was about the freedom on the other side of that finish line.
What’s your advice for someone who’s tackling debt?
Have an emotional end goal in mind. Imagine how you’ll feel once you pay off that debt. What will you be able to do? What will it mean for your life? How would it help you live in better alignment with your values? That vision will come in handy during the tough times. From there, create a realistic plan. It’s OK to start small instead of making grandiose payment goals and being disappointed when you don’t achieve them. The key is to build momentum.
How should people prioritize their money?
Pay yourself first — even if it’s just a little bit. Many of us are learning the importance of an emergency fund the hard way. If you’ve got nothing there, start with a small goal like $500 and work your way up. Take care of the essentials like food, shelter, family care and transportation. Reduce non-essential subscriptions. If your favorite show on that premium channel doesn’t come back for six months, cancel it until then. Every bit helps. We’re seeing the rubber meet the road when it comes to wants versus needs.
What’s your No. 1 financial advice for unemployed people?
Think beyond traditional employment. Are there things you can do today to bring in money while continuing the job hunt? Can you sell things you don’t use or make money with a skill people keep saying you’re good at? How about taking on contract work through a staffing agency or on your own? You’re in the season of exploration so take advantage of it.
What’s a common misconception about financial stress & mental health?
They’re intertwined more than people think. I can review old bank statements and tell you my mental state at various points in time based on my spending. I’ve also been stuck in a vicious cycle of [feeling financially overwhelmed], leading to bad decisions. Stress can make us default to old and sometimes destructive behaviors that impact our overall wellbeing.
How does achieving financial freedom improve someone’s mental health?
Financial freedom enhances personal freedom. You move differently when all your needs are met, and you have one less burden hanging over your head. You can invest in yourself and take chances with less worry. It’s also easier to live your values when you don’t have restrictions or constant money-related tension. And if you are struggling mentally or emotionally, there’s less hesitation about what securing the help you need means for your financial bottom line.
Do you have any financial regrets?
I wish I started contributing to my 401(K) plan sooner and taking advantage of the company match. It took me a few years to understand the power of compounding, so it feels like I’m catching up on contributions. I’m definitely waving my fist at my 20-something self.
What’s the best money you’ve ever saved?
I still have the money I earned a couple years ago from a podcast consulting client in a separate savings account. It was one of the most rewarding projects I’ve taken on and serves as a reminder that I have options.
What’s your current money goal & how are you working toward it?
I set a goal to increase my net worth by at least $100,000 in 2020. I initially planned for 30% to 40% of this to come from speaking engagements, consulting and digital products, but the pandemic threw a wrench in things.
I’ve been finding ways to save additional money like negotiating my rent down and cutting back on dining out, while still taking on virtual and digital projects to keep the side hustle income flowing. I’m a little behind pace, but optimistic overall. The years of consistent effort is starting to pay off and the tipping point is approaching. I’m excited about the coming months.
Image: Nastia Kobzarenko