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Reach Financial Independence on Your Terms

be financially independent pauline

As a member of the personal finance community, I’m amazed at how many people are a part of it. Unfortunately that often means that I can’t always keep up with everyone. It’s a shame because there are some wonderful bloggers with their stories and advice on handling finances responsibly and with fun.

To counteract that and get the word out on other sites, I’m interviewing bloggers in the community. Pauline from Reach Financial Independence is the star this week. 

What inspired you to start Reach Financial Independence?

I had been writing for several travel blogs for years, and after over 5,000 posts, I was burned out and wanted to get out of the travel niche. I was reading PF blogs and felt like I could add my voice, especially when it came to living abroad, early retirement and deliberate life choices. I started RFI two years ago, then another blog called Make Money Your Way where I talk about ways to make extra money by investing, improving your career, freelancing and online endeavors. Then I bought a third site, The Savvy Scot 9 months ago, which has a focus on saving money and self improvement.

There are a lot of financial independence blogs that are covered by people who have amassed quite a bit of investments. You’re tackling it from another perspective – becoming financially independent even more the fortune rolls in.

How did you decide that this was the FI path for you?

pauline reach financial independence

Ever since I graduated college, I knew the traditional route was not for me. I always chose time over money and wanted to find ways to become independent and work wherever I wanted, whenever I wanted. So I lived in four countries while working decent jobs and saving money, and finally left my day job in the UK almost five years ago, to live life on my own terms. I could live off investments, but it gets boring to do nothing, so I relocated to Guatemala, bought a small house that I turned into a guest house, a 90 acre piece of land that I am developing into a residential complex, and I am blogging in the side.

I also ventured into trading, invested in cattle and other alternative investments as a way to diversify. I believe that with a high rate of savings, you can become independent in just a few years, even if for some it means you still need to hold a part time or freelancing job, you still get more free time than the average employee. I could have waited more until I had a big nest egg, but I guess I was impatient, and I also believe that if everything goes wrong and I need to go back to work someday, I can find any minimum wage job quickly and start again from there.

Fear is often your biggest barrier, without fear, you can open many doors. For example I took some risks by investing big sums and depleting my savings, which worked well and gave me a higher return than a safe 0.5% savings account, but I realize that it is not for everyone.

RFI had a post about how mind-set can trump strategies when it comes to financial independence. Could you get into that more?

There is no get rich quick strategy that works without huge risks. The secret is sticking to a high savings rate and smart moderately risky investments for a long period of time. Like a diet, it can get really boring after a while, unless you have the right mindset. It can seem like a daunting goal, but if you take a small action every day to reach it, you will.

You own property, including a place you rent on AirBnb. For those interested in having rental property, what’s been your experience? How hands off/on is the rental?

My little house in Guatemala is open to travelers who wish to rent it short term. Compared to traditional rental property, this is pretty hands on. You have to prepare the place every time a guest comes, clean it, change the soaps, we even cook them meals if they wish, meaning I have to be on site or pay a staff to attend guests. Generally they won’t tell you at what time they’ll arrive so you wait until they do, wait until they are ready to eat, then clean and wait until they go to bed. It is time consuming.

I still own a rental in the UK which is very hands off. I bought the property new so maintenance is minimal, I find new tenants online, the old tenants show them around, they pay via online transfers. It is as close as it gets to passive income. But I wish I was closer sometimes, just in case.

What’s the biggest financial mistake you’ve ever made? What have you learned from it?

I would say tying my money for long periods of time when I didn’t know what my life would be for the next few years. For example I bought a rental property in Paris before leaving for a year to travel, then settling abroad. Managing it from the distance was complicated as it was not a good tenant, and several times I had opportunities to invest elsewhere that were much better and for which I wish I had had the cash. I try to think things through now before committing big sums to long periods of time. There will always be another opportunity so no need to rush to grab the first one.

Finally, what are your goals for the next year on RFI?

At the moment, my blogs are a hobby, not a business, so I don’t have any big business plans, although I do have a goal to make $60,000 blogging this year which is on target!

On RFI, I want to keep bringing a different approach to money and life. I live an unconventional life and that is what my readers like to hear about. I will keep talking about more general money topics on my other two sites. RFI has recurring posts about life in Guatemala, how my projects are going, how 10% of my income goes to education and computer literacy projects in my village, and so on.

I want to keep showing people that you can live any life you choose if you are determined to make it work. It can be staying in your hometown and having more time for your kids or for a side project, making enough money to travel the world for a year, whatever suits you. As long as you work for it you can reach anything.

Thank you Pauline for doing the interview! 

The Couple Money Guide to Starting Your Emergency Fund

couple money

There are plenty of Americans who don’t have any savings (one estimate puts it around 26%). That’s a scary situation to be in, even with dual income couples and families. What if you get laid off from your job (or if they reduce your pay/hours)? What if someone gets injured? A car repair can sometimes be a big wallop too.

If you two don’t have an emergency fund and you want to get started, I am going to show you step by step how to build an emergency fund that fits your family.  Two heads are better than one and couples have the ability to pool their resources to achieve goals quicker.

To illustrate the process, I’ll be using a fictional couple, Hal and Maddy throughout this post. While they may not mirror you exactly, I hope their example can get you motivated to save.

How Big Should Your Emergency Fund Be?

Before getting into whether you need three to six months stashed away in savings, let’s talk about the purpose of emergency fund and getting a starter one off the ground.

First off, there is virtually no way to predict every bump in the road of life, but the two of you can brainstorm some possible scenarios over a cup of coffee. An emergency fund is about covering for an unexpected event that could happen given your circumstances.

It doesn’t have to be an epic discussion, you two are looking for one or things you think will ruin your budget.

Our couple, Hal and Maddy, are tired of having hiccups set them back on their debt payment plans. Based on some car problems they’ve been having, the two decide that they want to have $1,500 in the bank. Right now they are paying an extra $100/month on their credit cards, but that will be used for the starter emergency fund instead.

Starting Point: $100/month -> 15 months to getting starter fund up

Looking at the timeline, the two want to get savings ready much quicker than that so they decide to look at their budget and trim some expenses.

Running The Numbers Together

You have to go beyond just sharing information when trying to change behavior, especially when it comes to money.

If you prefer, you can use a free tool such as Mint to pull that data so you can have an objective look at how much money is currently coming in and where it’s going.  While it can be tempting to harp on bad spending habits, most couples find it counterproductive. The goal is to identify where you two can cut back, not put each other on the defensive.

Starting and Building Your Emergency Fundemergency fund

With a goal in mind and some money ready to be deposited, the next issue is finding the best spot to keep your emergency fund. Keepin in mind the purpose of it, you two will need to focus on 3 things:

  • Easy access to it in case of emergency – It does you no good to have a high interest rate if you can’t get to it quickly when it’s most needed. When your car breaks down or your washer breaks, you need the money NOW.
  • Safe place to store your money – Whatever you choose, make sure it’s either covered by the FDIC (banks) or NCUA (credit unions).
  • A place where it can grow – If you can earn a decent interest rate for your savings while meeting the two previous criteria, then go for it.

For us, we chose Capital One 360 as it offer us the security and access we need along with a competitive interest rate. (If you want to open a savings account with Capital One 360, simply click here to get started.)

If you prefer a brick and mortar option, try your local or regional credit unions and banks. They may offer the service you deserve and some offer great rates for your savings.

Gathering Money for Your Emergency Fund

It basically comes down to either cutting your expenses or earning some income. If you’re looking for a detailed list of ideas for both, I highly recommend you go through my 50/50 Challenge, where we spent a month sharing tips on building a buffer in your budget for your goals.

Spend Less

Some of  these changes are one time, some of these may be done for a limited time (perhaps one month), or you two may discover than you like the change so much you keep it. It doesn’t matter, the goal is to find different ways to trim back your spending so you can have a start fund ready as soon as possible. Where you go from there is up to you.

  • Skip eating out. Pack your lunches and prepare home cooked meals for a month.
  • Raise your deductibles. Call your insurance account and see if raising your deductibles will significantly save you money.
  • Cut the cable. If you’ve noticed your cable bill has been creeping up, but you’re not getting much enjoyment from it, go ahead cancel your service. You can also always turn it back on later if you miss it.
  • Adjust your thermostat. With summer wrapping up, you may want to go ahead and start weaning off the air-conditioning by raising your thermostats a few degrees. If you’re not keen on the change in temps, program your thermostat to adjust while you’re at work or sound asleep. You won’t notice, but your wallet will.
  • Save on your contacts and eyeglasses. Depending on your prescription, you may be able to save hundreds of dollars on your eyeglasses by using online retailers like Zenni Optical.
  • Shop generic. Next time you hit the grocery store , go ahead and buy the generic brands. Even if you only focus on things that don’t matter much to you, you’ll still be shaving off some cash.
  • Utilize your credit card perks. You may be able to get some great discounts using your credit cards. Check with your current one to see if they have price protection, which can refund you the difference if you find a better price within a certain time frame (30 or 60 days).

Earn More

While some couples find cutting expenses a breeze, other couples may already be living tight and need a boost in income. Here are a couple of ways you can add some money into your emergency fund.

  • Sell your stuff. Get rid of all of your junk online or locally. My favorites for both are eBay and Craigslist.
  • Babysit. You don’t have to open up a home daycare, but you may want to watch a little one or two for an evening or some time on weekends.
  • Get a second job. Find a temporary job and use those paychecks to feed your savings.

Each couple will come up with a list that works for their situation. If you’re stumped on where to begin, go back to your expense review and pick one or two expenses that you know you can cut back on. For our couple Hal and Maddy,  we’ll pick:

  • Eating Out: Maddy would want both of them  to go straight to brown bagging lunch and skip eating out, but Hal enjoys his lunches outside the office. As a compromise, he’ll limit where he goes for lunch, cutting back from $15/lunch to about $7 each. This will save about $160/month.  Maddy is going to brown bag lunch Monday through Thursday, saving about $28/week or about $112/month.
  • Cable TV: Our couple bites the bullet and decides to cancel their cable service, but keep their internet service. This move will save them $50/month.

These two changes will bring their starter fund contributions to $422/month which means they will have their starter fun up and ready in just over three months. Any additional changes they make will only speed it up further.

Keep Plowing Into Savings or Pay Down Debt?

Once you have a start fund up,  the two of you can then decide which would be a better course of action – using your monthly contributions to pay down all your high interest debt before you fully stock your emergency fund or set aside a bit of money to slowly grow your stash. If you’re think of tackling both goals, yo may want to check out the 75/25 method.

Basically 75% of your contributions go toward debt reduction and 25% is used to beef up your emergency funds. This method can be a good fit for your family if you’re concerned that a starter fund won’t be enough to keep you feeling secure as you pay down your debts.

Speaking of a stocked emergency fund, when coming up with that amount, you two should consider a few things to make it fit your family’s particular needs:

  • Family Size - If you’re a dual income couple with no kids or other family obligations, then you’ll probably won’t need as a big of en emergency fund as a family of 5.
  • Family Expenses – Your family’s lifestyle has a big effect on the size of your emergency fund. If you have high monthly expenses, then logically, you’ll need more money to save. If your expenses are due to unnecessary spending, then you may want to discuss ways you can lower it. If it’s due to circumstances (i.e. medical bills), you’ll have less room to work with. It’s still possible though to explore options to lower your bills.
  • Income Streams – If you have two or more income streams coming in, that can decrease the size of your emergency fund. You should still have one though, as unexpected events can happen.

As you can see, couples in similar circumstances can have completely different numbers, so don’t get too stressed over what is the ‘right’ amount.

Thoughts on Building Your Emergency Fund

I hope you enjoyed this post and have some new ideas on how to get an emergency fund started for your family. For those who have made this milestone already, I’d love to get your take on how much savings works for the both of you and how you got that stashed away.

Paying Off Almost $100k Off Debt as a Family

debt discipline brian

As a member of the personal finance community, I’m amazed at how many people are a part of it. Unfortunately that often means that I can’t always keep up with everyone. It’s a shame because there are some wonderful bloggers with their stories and advice on handling finances responsibly and with fun.

To counteract that and get the word out on other bloggers, I’m interviewing bloggers in the community. This week Brian from Debt Discipline is answering my questions. I hope you check him and his site out. 

What inspired you to start Debt Discipline?

After hitting rock bottom in 2010 we decided we need to make a change in our finances. I took the lead as I managed our money at that time. I balanced the check book, paid the bills etc. I began to educate myself about personal finance. I figured there had to be some secret to it all that I was overlooking for all these years. What I found was that it was pretty much common sense, spend less then you make, have a plan, prioritize needs over wants, etc. I began to share this information with my wife. We talked about the end goal of being debt free and have a surplus to build wealth. After seeing how doable getting out of debt can be I wanted to share our success with others. I’m sure there are other families in the same situation as us. I figured a blog would be a good way to share our journey, and as well as keep us focused on our plan. I decided on Debt Discipline as a name because I believe you need to have discipline to change you bad habits, to stop over spending to achieve your goal of being debt free. To date we have paid off over $100k of debt and are on track to be debt free in the next 3 months.

How did you get everyone on board?

I realized early on that my wife and I had to get on the same page for us to be successful. I focused on the end goal. Painting the picture of what our financial life will be like when we are debt free. Having a surplus of over $2k per month to save, invest, and increase areas of our budget for entertainment, travel, etc. This remains our motivation today, once my wife and I looked at it in these terms we were sold on making the sacrifices today for a better future for ourselves and children. Our three children were 11,11 and 8 years old at the time we started so they didn’t have much say in the mater,  they came along for the ride. Along the way we have included them in our budget discussions and let them understand why we were making changes, we want them to understand money and budgets from an early age so they will not repeat the mistakes we have made.

You share your numbers openly on Debt Discipline. Is that to help you to stay focused on the plan or is that more for readers?

I share my budget with numbers because I think it’s important for others to see real examples. When I was first starting to get my budget in order I needed that type of help. I also do it for myself and family on a monthly basis for my own internal tracking and review, so why not share.

With your personal experience with going overboard with credits, how do you feel about them now? Do you completely avoid them? Do you have a place for them?

We cut up our credit cards in 2010. We have a single card today with a $1k limit. We used credit cards as an extension to our cash. If we wanted something and didn’t have the cash we used credit. We judged our spending limits by our minimum monthly payments. We have now learned that was a big mistake. We are not ready to jump back in to the credit card game just yet. We want to become debt free, build our sizable emergency fund first and then may consider using credit cards responsible in the future.

What are your plans for Debt Discipline for this year?

I just want to continue to share our story as we become debt free, build wealth and invest. I hope with becoming debt free I can redesign the site, offer move giveaways, etc. in hopes to grow the audiences to reach more people. The goals remains to help a person out there that might be in the same situation we were in 4 years ago and to help keep our family focused on our goals.

Thank you Brian for doing the interview! If you want to know more about his family’s story as they tackle their debt, please check out posts like Rock Bottom and My Parents’ Financial Story


Simple Loan Tips When You’re Having a Budget Gap

There are plenty of companies offering loans and credit but it’s important for anyone looking to cover a shortfall to make sure they chose a lender carefully. According to a new infographic from MYJAR, a million Brits are turning to payday loans to cover basic monthly household bills. my jar british lender


MYJAR is a responsible lender who will only lend you money if you have a predictable and regular source of income, and of course they will never encourage you to borrow more than you can afford to repay.

 Advice on Finding a Lender

Although some people find it easy to deal with budgets and deal with their money well, others need advice on how best to manage things. According to the infographic, 52% of Brits said that they would benefit from taking some financial advice.

Sometimes this can be as simple as deciding to set out a monthly budget and stick to it rigidly, whereas other people might need to look at ways to make cutbacks by spending less on gadgets, holidays or eating out.

Emergency Loans

Today many people keep in control and avoid overdraft charges by borrowing small amounts responsibly and therefore ease the pressure at the end of the month or in the face of an unexpected expense. A word of caution, though, late repayment can cause you serious money problems. For help, go to

Save $100 This Week (and Beyond)

$100 savings challenge

Like I promised last week,  I’m tackling your most pressing money goals here on Couple Money. Since saving for emergencies is a priority for many readers, I want go ahead and give you some practical ways you can get $100 this week. Even if you don’t have a ton of time, most of these suggestions can be done fairly quickly.

Please pick and choose which ones you think will give you the biggest bang for your buck and let me know by next Monday how much you saved.

Ways to Save $100 Today (and Beyond)

If you’re stuck on ways you can save $100, I found some quick and easy ways you can use starting today to get some money pumped into your saving account.

Monthly Family Expenses

  • Review your cellphone service. Many families are not getting the best deal when it comes to their smartphone plans. The good news is that there are more and more options beyond the big four. One of my favorite providers is Republic Wireless. They have unlimited cellphone plans ranging from $5-$40/month and the Moto G they offer is an affordable $149.
  • Buy comparable store brands. One of the biggest expenses for couples and families are groceries. Without trimming down your list, you can save money by getting comparable store brands. Consumer Reports had found private labels to be just as good or even better than the national brand. This doesn’t apply to all store brands, but it is something to consider next time you’re at the super market.
  • Clip coupons for one week. I’m not asking you to become an extreme couponer or clip every single one – what I’m suggesting is to only clip coupons for the items you already buy. It might not save you huge amounts, but it will cut your total.
  • Call your home/car insurance for better rates. If it’s been awhile since you’ve shopped around, go ahead and go online and get some quotes from competitors. To make sure you’re getting a comparable quote, have a copy of your current policy. You can then call your insurance company and see if they can match or beat those quotes.
  • Switch your credit cards. Looking to either cut back on your interest rate or getting a cash back bonus? Getting a credit card that is better suited for how you spend your money can be a boost. You may be able to transfer your current balance or maybe you can receive cash for signing up.
  • Consolidate your student loans. Depending on your situation, you may be able to save some significant money by consolidating your student loans.

Entertainment and Fun

  • Review your cable bill. Even if you keep your same service, you may be surprised to be offered a promo rate. That happened to us with our internet service – we saved $20/month just by comparing plans.
  • Get fit for free. Skip the gym membership and fancy equipment by using the power of the web. There are some great resources online like Nerd Fitness and Fitness Blender that can whip you into shape.
  • Stay in for movie night. For just this month, go ahead and use your Netflix, Hulu+, or Redbox account and watch movies at home. You can still have your favorite movie treats, without spending a ton.

Found Money

  • Use a coin jar. You may be able to save $20 this month or more just by keeping your loose change in a jar. Place it by your front door, so you can empty your pockets quickly and easily.
  • Adjust your w-4.  If you tend to have a big tax refund year to year, you may want to talk to Human Resources about updating your w-4. It can help bump up your take home pay which you can then regularly transfer into your savings account and earn some interest.
  • Have a yard sale. Most of us have some clutter that we’d like to get out of the house. Take care of that and make a little bit of cash by hosting a yard sale or selling your stuff on Craigslist.
  • Tutor a student. If you have subject that you’re good at, you may want to offer your skills as a tutor. Besides getting some cash, you’ll be helping a someone.

Automate Your Savings

I hope this list inspired you on where you can save $100..  Don’t forget, once you save that cash  go ahead and transferred that money into a high interest savings account. I want you and your family to build your financial cushion as fast as you can.

I’d love to hear from any readers who have built their emergency fund. Do you have any other ideas on how you can trim $100 from your budget?

Photo Credit: Ash