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Bob Lotich shares key habits that helped him break the paycheck to paycheck and debt cycle. We also get into how to encourage your spouse to get on board and tackle finances together!

Better Habits, Better Money

Bob Lotich from SeedTime Money shares key habits that helped him break the paycheck to paycheck and debt cycle. We also get into how to encourage your spouse to get on board and tackle finances together!

As we continue dealing with coronavirus and its effects, many of us are taking another look at our finances.

Perhaps you see that there’s an opportunity to change things now so you can set yourself for a some wins down the line.

To make lasting changes, with anything takes both planning and execution

No plan can mean we’re spinning our wheels getting nowhere.

Not executing means all those color coded and fancy budgets are a waste of our time. 

We’re not immune to it. When we were first married, we had several budgets, but weren’t making progress on any of our goals. 

The game-changer for us was changing habits.

Instead of manually paying bills or savings, we automated it. 

Instead talking about money once in awhile, we made it a part of our routine. 

With each change came an improvement. We were able to pay down debts like the car and student loans. 

For Bob Lotich, changing habits meant changing his money and more. 

Years ago he found himself in a situation where his car broke down, practically maxed on his credit card and had no savings.

Pretty much life was knocking him down.

Fast forward to now – where he’s debt free and a Certified Educator in Personal Finance (CEPF®).

Together with his wife Linda, they help others build their finances over at Seed Time Money.

I chatted with Bob and he shared the key habits that helped him break the paycheck to paycheck and debt cycle. (We also discussed how he won his wife Linda over. )

It was a blast, so if you want, you can watch the video right here or scroll down to get an edited transcript!

Elle Martinez: Bob, thank you so much for joining me. I’m really excited to talk to you about not just fixing your finances, are improving your finances, but really diving deep about changing habits and really transforming your life and in the finances that follow. So thank you for joining me.

Bob Lotich: Yeah. Well, thank you for having me. And I love chatting about this stuff. This should be fun.

Elle Martinez: It should be. And guys, if you haven’t met Bob, he is the creator of Seed Time Personal Finance. You also have your YouTube channel.

I was noticing you take Bible principles and you break it down and show how practical they can be with tackling a lot of big money problems that families and couples have to deal with, like paying down debt, saving and investing wisely.

So I kind of want to pick your brain on this because you have not always been the financial expert that I know initially.

Bob Lotich: Definitely. Yeah.

Elle Martinez: We’ve all been in a journey and we’re all, you know, as we’re going through the financial fallout of this virus.

Many families have found themselves at very different points, depending on where they are financially. So I kind of wanted to talk to you about it at the point in your life. I remember reading on your site there was a time in your 20s when things weren’t looking so good. No savings checking account. Kind of reminded me back in my 20s. Just wasn’t that it wasn’t going well. But you were picking up some friends and your car broke down. Can you just kind of tell me what was going on then?

Stuck with Debt and No Savings

Bob Lotich: Yeah. Yeah. So this is kind of my financial turning point because prior to this. Like, you know, I don’t remember the exact stat, but it’s something like 80, 85 percent of Americans. If you ask them, are you good with money? Eighty eighty five percent of them say, yes, I’m good with money, you know. But if you look at the evidence, it’s definitely not the case.

So a lot of us tend to think and believe that we are better with our money than we actually are. And we don’t know what we don’t know.

And so as a young 20 something, a little bit too cocky, arrogant, whatever, conceited like, I thought I was good at managing money. I had already worked at a bank. Like, of course, I know how to handle money.

I don’t know what I’m doing. But the evidence began to arise as I wasn’t able to pay bills on time and getting calls from bills collectors or whatever it’s like. All right. Maybe I don’t know exactly what I need.

And for me, this kind of turning point I was in kind of, I guess, sabbatical period, living in a town that I didn’t know down in Florida, just kind of taking a year off college to kind of clear my head and kind of get refocused and life and where I want to go and all that.

So I’m down in Florida, in this little town. And like you said, yeah, I’m getting to this situation where the money is getting tighter and tighter and tighter.

I only have one credit card, which is kind of my saving grace because I thought you could only have one credit card at that time. And that was really, really good because otherwise I would credit 10. But anyway, so my credit card is nearly maxed out.

And yes, I need to go pick up some friends from the airport. We were going to hang out and all-staff my rent was due that day, so I’m taking my paycheck. I just got from my job.

I needed to get us at the bank so I can get it to pay rent because it’s they’d charge fifty dollars extra if you’re one day late. All this stuff.

So all this stuff is running through my head and then my car breaks down and it’s, it’s like, oh, the worst possible time, you know. And to add insult to injury, it was like right in front of this minor league ballpark.

And so like an hour before game time. So all these cars are driving by. And I’m thinking this is going to be great. Like all these people here, somebody’s going to see me and somebody help me.

But it’s like that thing where there’s when there are too many people, no one helps because everybody’s waiting for somebody else to do it. And so I’m literally standing there. Everybody driving by staring at me.

There was a police officer directing traffic in and I’m like stuck in the middle of the road. And I asked him if he could help me, like push off to the side of the road. He’s like, ‘No, I’m busy’. And so is one of those days where it’s like everything starts piling up.

So anyway, I end up like trying to push the car by myself, you know, doing the holding the steering wheel and pushing it all the way to the side of the road. Get it over the side of the road. I get in, close the door, put my hands in my head. And I’m just like I have no idea what to do, you know? And I started praying and, like, got what do I do? How do I get out of this situation?

Because I didn’t know. I get no more money left in my checking. I didn’t know how I’m going to fix this car, let alone go pick up my friends, whatever, you know, not even thinking about the next couple of months.

That was the moment where I realized, all right, God, I don’t know everything I thought. Can you teach me something? You know, and like you mention, the Bible actually is a whole lot of practical wisdom for today about money.

So that’s been my fascination. Like how do we pull some of that out, some of these timeless truths that we can use to impact our financial life? You know? So anyway, that was kind of how I got to that. When everything changed for me.

Finding Your Pivot Point

Elle Martinez: Yeah. And I think you bring up several good points. You know, we’ve kind of all been there where it seems like everything crashes down at once and you get so many things happening.

You said you started making this commitment, of course, making a commitment. Deciding that you want to change is a huge first step. But do you remember after you decided, like, enough is enough?

What was the first thing you had to pivot or adapt or change in your routine?

Bob Lotich: Yeah. Yeah. I think for me. Yeah. I don’t know the exact practical thing, but I know what I immediately did was set out to learn, you know. And so I began reading at the time.

It was a whole bunch of magazines that I get Kiplinger’s and Smart Money magazine to start with. You know, that I found as many books as I could about money just as I began to read. It’s like, wow, I really didn’t know what I didn’t know.

And in that and immediately began bringing up some more practical things that I needed to do.

So, you know, one of them just being all right, that isn’t helping my cause. Like having this credit card for, you know, thankfully, again, I was only one having that balance, you know, basically maxed out is not helping my cause. Like, I am paying all these interest charges and all that’s going on so I can get rid of that. That’s going gonna be a big step forward.

And then, you know, this car loan. What if I could get this car paid off and have an extra whatever, junior fifty dollars a month to spend on whatever I want.

So just beginning to understand how much being out of debt would help was kind of my first thing that I needed to do.

Elle Martinez: I totally get that because I was there and my husband and I our first conversation, we we thought we’re being smart and we were.

But [we] weren’t prepared with talking about money and where we were at. And since we were both broke college kids, we thought this would be simple, you know, completely night and day how we viewed money. And it’s fascinating.

You mentioned like the credit card saying here I had the car loan and thankfully it wasn’t a lot of student loan, but still assistant loans. I had like these three debts on me. And I mean, it really does feel like a weight. But you got to a point and I kind of found this completely relatable where you said an early win you have was like being able to pay your monthly expenses without having to rely on that credit card.

For some people, you know, they’re like, that’s not a big deal. But for others, they’re totally nodding their heads like, yes, can you take me back? Like, how did you feel being able to do that to take care of your bills without having to rely on debt?

Bob Lotich: Yeah, one of the things I talk about a lot is, you know, this whole idea that expenses rise to meet our income. And so you get that big raise before you know it’s gone.

And the expenses, it’s always naturally just percolate up to wherever your income is. And so the thing that I’m always trying to help our people do is try to widen that gap as much as you can, try to keep your expenses locked down while keeping your income going up and just creating a wider gap. And then you have what you can do with that. And so for me, that was one of the things that. I had this revelation that, you know, as I am paying things, paying bills, and we’re upside down, like we’re going backwards. So not only are we just staying the same would not make advance or progress, but we’re literally going backwards. And that was a huge motivator for me to want to break out of that cycle. And how do we get to the point where we actually have a little bit of a gap there where we are earning spending just a little bit less than more earning? Because just being that just a tiny little thread of a gap there, at least we’re moving forward. Something is building. But that feeling of going backwards because I don’t have enough to actually pay my bills.

It’s yeah, it’s really, really rough. And it’s it’s just no fun at all. And that was something that for me when I was in that phase, was a big motivator to get out of there as soon as possible.

Elle Martinez: Yeah. And I think for couples and families that are having debt as a regular part of their budget, they can appreciate. Like, can you imagine if you take away the car payment, if you didn’t have a credit card, minimum payment and you know, the student loan, if you took that money and instead redirected it towards your big family goals, what progress you could make on that? But I know this wasn’t an overnight transformation. You know that it took steps and you said learning. That’s absolutely key. But then there’s a point when you have to apply, you know, you can’t just take in stuff, but you’ve got to, you know, actually do it. So what was the hardest change you had to make? What was the easiest?

Bob Lotich: Well, I think I think one of the interesting things, because this was this was a couple years before I got married, but bringing a spouse onboard, you know, makes things interesting, you know? And so, Linda, my awesome, wonderful better half. She is she I was a couple years ahead of her on this whole journey. And she was, you know, had a good amount of debt when we got married. And I had already paid off a good amount. I still had a little bit left, but I was working towards it. And so she brought some in and she you know, she’d been living at home up until that point. And so she had an income, but really did many expenses, but still was spending like crazy. And so we’re spending more than our incomes as she was going backwards while living at home. So once we got married and we were kind of determined to pay off our debt, she had to make a massive lifestyle change. I mean, she went from spending about one hundred and twenty percent were income to down to probably 10 percent of our income over a paycheck anyway. And so this is a massive change for her and for me as a husband who, you know, desired to give her the lifestyle that I wanted her to have. It was painful for me, honestly.

I was like one of the hardest things I think was say, hey, let’s get married. And I know we want to go on vacation and we wanna do all this fun stuff. But instead, like, let’s just not spend any money. And like, every other meal and, you know, go to the gas station with like a four four dollars and that in the tank and Austell stuff because we want to get out of debt. You know, I was really the one driving it, but she was interested. But but that was like hard for me because I am still I haven’t fully experienced the break through of being out of debt and what this whole thing means. And I’m trusting that all the people like you and I who were talking about this then who were saying it’s worth it, it’s where they go for it. Like, I’m trusting that they’re not lying to me and that it actually is worth it and that it is a goal that we can actually achieve. And and I’m hoping that if we just stick with this long enough that the tides are going to turn and that it is going to make life a lot better and a lot easier. And so it was just hard. It was hard to hang on to that because I’d never experienced this.

And meanwhile, like, I wanted to bless the socks off my new wife at the time, but instead, like, I’m doing the opposite, you know. And that was really challenging for me personally in terms of the easier part paying off the debt. I wouldn’t I don’t want to say it was easy, but for me, I’m somebody who really gets motivated by the trend and the direction with which things are going. And so, like, we were just talking about being upside down. You’re going backwards. If you have a little bit of a spread there, you’re going forwards in your building. And for me, just seeing that first debt get paid off. And when we first paid off our first car loan, I just I felt like I was I could I was so light, I could just walk around the building like I was walking out of that bank. I was just. Thrilled. The feeling of having that title in my hand and being like, this is mine. I cannot take it for me. It just it felt amazing. It was addictive. And so that momentum and that fire that was kind of lit in me made it easier to fight through the challenges of that make sense. So still wasn’t easy. But I think I made it considerably easier for me anyway.

Elle Martinez: Yeah. And I have a question because you brought up a couple of good points. And I’ve seen this, you know, every couple kind of handles their finances differently. I want to kind of go back to how you’ve won Linda over with this new lifestyle, because I’ve seen some extremes. I’ve seen where you know, that the debt free person, the person trying to get out of debt, they’re almost like bulldozing their spouse over this. And then I’ve seen others where they kind of just address. I mean, they feel the same fear, like, oh, I don’t want to, you know, take them down this lifestyle. I want to provide for them. Note on this relationship. So how did you have that discussion? Was it like a series of discussions or how did you keep her motivated and then become really become a team, not just like she joined you, but you felt like both of you were on the same page?

Bob Lotich: Yeah. No, and that’s great. That’s a great question. Yeah. I mean, it was it started with a pretty thorough sales pitch, man. Where where, you know, really, I’m painting a picture of where we can be. But in order to get there, we got to go through this. We got to go through this valley in order to get there. And she understood. She got that. But. I think for us, the thing that really lit a fire in her was we had always, even when we were dating for some reason, you know, it’s just something that was it always been our heart. Like we wanted to be really generous. It was just stuff. Yeah. It is a burning desire in our hearts. And we didn’t have two nickels to rub together at the time. And so it was really painful. Whenever something would come up that we want to give to an organization or this charity or whatever that we want to support. I think we can pull together like five bucks or something. And we just wanted to be doing a hundred thousand times more than that, you know. And that was challenging for us. And once she began to see that by having this debt paid off, that’s going to free up a lot more money to allow us to do that. And that really it began to click for her a little bit more. Yeah. At that point, because, you know, we both desired to be a little more comfortable with our lifestyle, to be able to travel once in a while and whatever, to be able to go out to dinner and go to the movies and stuff like that. But that was a thing that really got her kind of lit on fire for it. And so my suggestion would be, and we talk about this a lot, is that if you’re trying to talk to that spouse and convince them, it’s find out what they want. Find out what their real motivators are in life. What are the things that they’re really excited about, paying off our debt, building a solid budget.

Like this is the way that we’re gonna get there. We’re gonna reach those goals.

Elle Martinez: Yeah, I love it. You just painting a picture and really, it’s not forcing you’re not tricking them or you’re not being a parent. It’s a partnership. It’s genuinely how can we work together to create this life, you know, that we both want. So I love that. But I know coming up with a plan is one thing, but keeping going forward, you know, your goals change and you evolve as a couple. You grow as a couple. How do you handle your finances now? I know we do kind of Lee’s monthly many dates now that we’re home. They’re a little more home. But how do you check in with each other with finances?

Bob Lotich: Well, yeah. I mean, to your point, I’ll add this, too, as well. Like, one of the things that has been helpful over the years is just continuing to continuing to talk. And like, I’ve had to make some sacrifices. So in terms of because this was initially my idea and I was the one originally pushing for it, like for a good amount of sacrifices that I felt like I needed to make, where it’s like this is not exactly how I would do it, but I need your buy in. And so I’m going to sacrifice on this. So it’s like there’s too much or more money than I would put in the budget for whatever hair and makeup or whatever the thing may be. But I need you to be excited about this and interested in it. And so those are some of the sacrifices that need to be made there. Now, as far as how we’re continuing and just kind of having those check ins, yeah, we it’s not on a calendar, but I feel like it’s probably about two times a month. We are just talking about where we are with the budget. And honestly, we’re talking about this on a smaller scale, probably every few days, just talking about because the way we’re doing transactions and modifying things, you know, so we’re just kind of keeping like tabs and what is going on in the budget and then try once or twice a month.

We’re having a little bit more of a discussion about. All right. What are kind of some of the bigger things we’re trying to do this month and where does that go from there? And then those sometimes will lead to bigger conversations of what do we need to make an adjustment to our budget? Or again, like what are the bigger goals that we’re trying to achieve? And one other thing that we do where this is a much bigger conversation for us. We take a month long sabbatical every year in which this has been really, really good for so many reasons for our business, for our marriage, for our spiritual life, for our finances, all this stuff. And during that time, that’s when we do kind of do our year long planning. And so we’ll talk about what our big goals financially are for the year, you know, and and that’s where we have a lot of those kind of deeper ten thousand foot view discussions.

Elle Martinez: That’s fantastic. I know so many families would love to have that option to get away. I know stay at home is not the same, but actually to get away and kind of not have to worry about work in some of those other day to day distraction. You know, and to really sit down and dig deep above, I know we could go into this like for hours and hours, but we only have a little bit for the podcast. If anyone is listening or watching right now and they want to learn more about you, I know you have several books. You got the videos podcast, correct? Yep. Yep. How can they find out? Where can they find you?

Yeah. So SeedTime.com. So yeah. So we have podcasts. The time money and normally it’s it’s Linda and I. So she’s my. She’s been really involved, so oftentimes we’re having discussions while we’re talking, you know, kind of like this where it’s like I’m the money nerd and she’s a little more of the spender. And what does it look like in real life when we’re kind of talking about all that but or an Instagram at the time? So I just come hang out and say hi.

Elle Martinez: That’s fantastic. Well, thank you so much, Bob, for joining us, guys. I’ll have all the links in the show notes so you can find out more about Bob and Linda and what they’re doing.

About Elle Martinez

Elle Martinez helps families at Couple Money achieve financial freedom by sharing tips for reducing debt, increase income, and building net worth. Learn how to live on one income and have fun with the second..