From Unplanned Pregnancy to Financially Free with Melissa from Traveling Wallet

Scott: Welcome to the BiggerPockets Money Podcast. Show number 90 with Melissa from travelingwallet.com.

Speaker 2: It’s time for a new American dream, one that doesn’t involve working in a cubicle for 40 years, barely scraping by. Whether you’re looking to get your financial house in order, invest the money you already have or discover new paths for wealth creation. You’re in the right place. This show is for anyone who has money or wants more. This is the BiggerPockets Money Podcast.

Scott: How’s it going everybody? I’m Scott Trench. I’m here with my co-host Mindy Jensen. How are you doing today, Mindy?

Mindy: Scott, I am doing really great. How are you doing today?

Scott: I am doing fantastic. I just got back from a lovely vacation in Mexico, [inaudible 00:00:39] of course. I use the quote, “You can’t drink all day if you don’t start in the morning several times.” It was fantastic. How are you doing?

Mindy: I’m doing great. You know, last weekend I was in Las Vegas and I also used your quote and lived by it the entire time. That was not necessarily the smartest move I’ve ever made, but I was able to go see Def Leppard, which is a band from the 90s that I have always loved. And Holy Cannoli, if you like that band, they are playing a stint in Las Vegas and they are so amazing. So stepping down off of my advertisement for Def Leppard who did not sponsor this.

Scott: Prehistoric bands that Mindy always references. Just kidding. I know.

Mindy: I’m my goodness. They are diamond certified twice on two albums. They are diamond certified. There’s only five bands that have done that. I read a lot about them after I saw their show. I’m like, wow. They were really good. Anyway.

Scott: Got it.

Mindy: Okay, so if you like Def Leppard, they’re playing in Vegas and they’re awesome. Anyway, back to today, I met today’s guest a few years ago when my husband invited her over to my house for dinner, as he used to do all the time. She has a blog called Traveling Wallet, like you said, she was traveling around our area and she’d reached out to him and we had a lovely time. And I’ve seen her on various conferences since then. And fast forward to a couple of weeks ago, I saw an article where she was quoted about her non-traditional circumstances surrounding her financial journey. And I was like, “I got to get her on the show because she had experienced something that I know other people have experienced and she didn’t let it define her.
She didn’t let it, I don’t want to say ruin her life because that’s an ugly thing to say, but she didn’t let it stop her from going out and getting what she wanted. I really wanted to have her on the show today, so I got her because I can do that. When you have your own show, you can be like, “I want Melissa.” So Melissa from the Traveling Wallet, I am so excited to have you on the show today. Welcome to the BiggerPockets Money Podcast. How’s it going?

Melissa: Good, good. Thank you Mindy and Scott for having me over. I look forward to seeing how this conversation evolves.

Mindy: Me too. I already know a lot of your stories, so I don’t want to give the whole story away, but I really like the way that your story goes. I like that you had this. I mean, I don’t love it, like you had a … spoiler alert. There’s a huge piece of adversity coming up in Melissa’s path, but I love how you overcame it and how you didn’t let that define you and you didn’t let that stop you. That is, everybody has things that they face in their life. I have things that I face. Scott has things that he faces. And the difference between what success and failure is letting it define you. I don’t know what that quote is, so I’m going to stop that. But anyway, before I tell your whole story, why don’t we let you tell your whole story? Where does your journey with money start?

Melissa: I would say that my journey with money started in my childhood and I can really think of three instances where like it defined my money mindset. And one of them was that when I was young in school, my dad really didn’t want us working during our schooling. Our job was to study. That was because he thought that money was a temptation. So he’s a salesman. And so depending on how good you sell, you can make a lot of money easily. So he didn’t want us to have that temptation and not pursue our studies. Then the next thing though was that they also took us to open our first bank accounts, our savings accounts. I believe this was somewhere either at the beginning of high school.
There wasn’t a lot of money conversation that went along with that but just doing that step and showing us the institution of banking and saving I think was a big deal. Then the last thing was that we didn’t receive allowances growing up. So we either had to ask for money for the specific things that we wanted to do or we kind of had to figure it out. So at some point in high school I went to one of those big, like Costco’s in California. It was Smart and Final and I bought bulk candy and I kind of sold it to my classmates to find a way to make some money.

Mindy: That is brilliant. That I’m always so impressed when I hear this story. I think Carol, Scott from the BiggerPockets Business Podcasts, she was on our show a few weeks ago. I think she did the same thing. I think [Oddity Shaker 00:05:17] also did the same thing. That just never occurred to me as a kid that I could go to one of these bulk stores and buy … Like first of all, you can’t buy 36 candy bars. That section is for the convenience stores that shop at Smart and Final. So why would I be able to go over there? It’s like, I don’t know.
Sometimes I just get something in my head and I can’t, like that’s how it is. You don’t question it. And it never occurred to me to actually buy a box of candy. I mean, I probably would have eaten half of them, let’s be honest. I have a sweet tooth like nobody else. But still, that’s brilliant that you figured that out in high school. Did you make a ton of money? Like where you rolling in your 5.0 with your ragtop down so your hair can blow. You’re not old enough to know that. That’s a song, Scott.

Scott: Yeah.

Mindy: So did you make a lot of money selling candy bars?

Melissa: Well, I think that I did pretty good. I realized that I had to save a certain amount to be able to buy the next batch of candies to sell, and by the end of high school I had about $1,000 in the bank.

Mindy: That’s a lot of money. Yeah, I think that’s great. I didn’t have $1,000 in my bank account when I graduated high school.

Scott: No, I love it. There’s an entrepreneurial mindset, there’s hustle, work ethic, and then there’s, I’m going to save that and not spend it, mindset as well. So I wonder if this will lead to a good money story later on.

Mindy: Foreshadowing. So what happened after high school? You went to college?

Melissa: Yes. So I decided that I wanted to go out of state. I’m originally from California and I went to a university called Kettering University in the now in famous town of Flint Michigan. The cool thing about that school was that it was actually required to work as part of the graduation requirements. So we went to school for three months, then we went to work for three months. Then we went to school for three months and then we went to work for three months. And for that it was also the school had a partnership with all the companies they worked for that these were not internships, unpaid internships, these were co-ops. So we were earning some money because that was going to help us also pay for our school. That was part of their financial plan, was like, you’re going to get to work and that’s going to help you pay for school.

Mindy: Okay. So I was going to ask were these unpaid internships, which would kind of stink that you’re forced into that. So you would study for three months and then work for three months. Did the work for three months part count at all towards your education requirements or was it just like, did you double up your school time or did you graduate in four years?

Melissa: So the school program was supposed to take four and a half years. So there was a little bit of additional time there, but not much.

Mindy: Did it go through the summer too?

Melissa: Yes. So their rotation was three months, three months, three months, three months. And you were either in the section A or B. And so every time one set of students was at work, the other set of students was at school.

Mindy: And you’re working full time?

Melissa: Yes. Full time.

Mindy: Can you imagine? I mean clearly you can but can you imagine all the work experience you’re coming out of college with? I came out of college with like, “Hey, I could wait tables.” That was my work experience, which is good experience to have, but it doesn’t look that impressive when you’re passing out resumes. Oh wow, you’re a bartender. How’s that going to help me with typing 60 words a minute. Scott’s going to say something now because I’m saying something wrong.

Scott: Oh no, you weren’t saying anything wrong. I was just curious about whether it was all the same job or if it was multiple jobs.

Mindy: Oh good question.

Melissa: So they wanted you to stay with one company every time you went back. But if you didn’t like it, you could find a different … You could throw in your resume and talk to your co-op manager and see about them finding you a different position.

Scott: Got it. Which company did you work with?

Melissa: So I worked for UPS was my first company that I worked with and then I worked with a company called Coast Composites, which was in aerospace. And both of those were in California. So I was actually moving back and forth every three months.

Mindy: Oh, it wasn’t local to Michigan. Okay. But you graduated with the equivalent of what, two years of work experience? That’s so huge. Didn’t Craig do that, Scott? [Craig Carlapp 00:09:55].

Scott: Yeah. Craig Carlapp had a similar path where I think it was six months. I can’t remember.

Mindy: Yeah. And maybe even-

Scott: Something [crosstalk 00:10:05].

Mindy: … Codie Berman did something like that.

Melissa: That’s awesome.

Scott: That translate to a job after college?

Melissa: Yes. So the second company I worked for, they offered me a full time job when I graduated.

Scott: That was easy, I bet, relatively. Most college students are probably much wondering about like, can I get a job? But you’re [inaudible 00:10:26].

Mindy: When did you graduate?

Melissa: Well, that’s a gray area. I finished all my schooling at the end of 2012. So I started working full time in 2011 but I hadn’t finished my thesis. So my official graduation is 2012 because that’s when I finished my thesis paper.

Mindy: But 2011, 2012 that wasn’t like the best time to be looking for a job, was it?

Melissa: Yeah. I mean, I was lucky I was already working with the company I was working with.

Mindy: Exactly. Yeah. That’s even better to get this work study thing. So college was just smooth sailing?

Melissa: No, it wasn’t.

Mindy: Wow. Did anything happen in college? I don’t know how to ask this.

Melissa: So I ended up getting pregnant while I was in college and it was not planned. It was very unexpected.

Mindy: So, yeah. So let’s talk about that because I don’t know if you know this. You’re not the only person that this has ever happened to. But I know a lot of people who have found themselves pregnant and then they’re like, “Oh, well, I guess I have to drop out of college.” Why didn’t you drop out of college? Why didn’t you take the easy way? Or it’s not the easy way.

Melissa: It’s not the easy way and I think I already understood that. From being pregnant, I knew that if I wanted to have a good life, then the best thing I could do was finish college and get that career job. But it wasn’t easy. It wasn’t an easy thing to do.

Mindy: At what point in your college career did you get pregnant?

Melissa: So I had my son in 2018 so I was around my junior year. So I got pregnant before that. But you know he wasn’t born until …

Scott: Sorry, what year was that?

Melissa: 2008. I’m sorry, did I say 2018?

Scott: This was early in your college career, right? This is the first or second year?

Melissa: I got pregnant in my second year. My son was born in my junior year, my third year.

Scott: Got it. And you start work full time work in 2011 but you graduate in 2012.

Melissa: Yeah. That’s when I get my degree.

Scott: Got it. So what did that look like in terms of, how did you kind of handle the situation and having a son in college when he was born?

Melissa: So I have to back up a little here and say that my first year in college was actually kind of a struggle because my family back home kind of imploded and they were being foreclosed on. And so my first year working I actually had to write two, $2,000 checks for my mom to try to kind of prevent them from being foreclosed on. So I was already kind of in this mindset of like being really lean and not having anyone else to fall back on financially. So when my son was born, I had no expectations that my parents were going to come to the rescue or something like that. So I knew I had to figure it out and ask for help from where I could.
So the things that I did for like financially, I applied for WIC, Women, Infant and Children, which is to help with food. And I applied for food stamps while I was in college and I applied for like medical assistance. I’m not sure if it’s Medicaid or Medicare which one it is, but I applied for all those. All that help because I knew that it wasn’t just me now. I was going to have my son and I wanted to make sure that I had what I needed to be able to take him to the doctors and feed him and all that stuff.

Scott: So in terms of those types of resources, did you take on a big pile of debt with those things in spite of, not in spite of but just even with all those resources that still forced you to take on some debt? Or were you able to break even or save a little bit or how did that look?

Melissa: So pretty much I was already taking on debt in school for my studies. I was already having to take student loans for school and I got a scholarship at one point, which I’m not sure if I mentioned or not, which helped a lot with the cost. But I was already taking out loans, so I was at this point, I don’t know if there was a transition there or if I was already kind of maxing them out. But I was maxing out the Stafford loans and the subsidized loans that I could get. I hadn’t taken out any like personal loans, but just like the school loans that were offered, I was taking out the max in them. And all those assistance was more for like the food, the more every day to today stuff because my school loans were covering like my housing and stuff like that.

Scott: Got it.

Mindy: What were you doing for childcare after he was born?

Melissa: So when he was born, the dad and I were still together and so we talked about it and he was unsure what he wanted to do with his path and I was pretty sure about what I was doing. And so he decided to step back from school to be able to take care of our son and do like night classes. So while I was in school, he took care of our son and whenever we went to my work term, because I still had to keep working, I worked during the day and he would do stuff in the evening so he would take care of our son, in the beginning.

Mindy: Okay. Then in the beginning, that’s a little foreshadowing.

Melissa: Yes. At some point the relationship it just wasn’t working out anymore. So one of those terms where I was at work in California, which is where my family’s from. My mom also had a change in situation with her work. So she was able to take on the role of taking care of my son when I was at work. Then she even moved to Michigan with me to take care of my son while I finished my last six months of schooling.

Mindy: Okay. So you were able to rely on family at least a little bit. I mean childcare is huge. So let’s fast forward to the end of college. Did you graduate on time?

Melissa: No, I took a little bit longer.

Mindy: I’m not judging, I’m just asking.

Melissa: No, but you know what? I think that’s less my son and more just me. Actually, it’s ironic or I don’t know what word you would use, but my best schooling was when I was pregnant and just had my son. So my first years in college I think I was just like regular college students decompressing, maybe not being 100% focus. And those years kind of cost me I think in down the line, because once I had my son I was like, “This is what I need to do.” And so I was more making up for the mistakes of pre-child.

Scott: What was your kind of position at graduation then? It sound like you did a good job of managing situations. So you kind of just came out with the student loans and not any personal debt. Were you able to begin attacking the student loans and paying them down or saving or did that take a little bit of time to get together after graduating college? Also what was your major in college?

Melissa: Oh, okay. I majored in mechanical engineering and I ended up working for an aerospace company and I was …

Scott: So she’s a rocket scientist.

Mindy: Wow. Don’t take the easy way out of anything.

Melissa: Not a rocket scientist. That would be cool though. So I had the goal that I was going to pay my student loans off as soon as possible because I’m an engineer. Like math is something that we do. And I understood that the longer I took to pay off my loans, the more money it was going to cost me. And I was like, I don’t really want to give them any free money or any more money than what the actual schooling is worth. So I made a goal to pay off my student loans in five years. Then I was like, but just in case I’ll make the scenario for six years. But that was my goal. It was just not an option for me to even consider taking 10 years to pay off my student loans.
But I did find out that in either in that first year, at some point the timeline’s a little blurry that I did have some personal debt on top of that. Because even though I had applied for medical assistance and this loved the government, but sometimes they make the mistakes. They had assigned me to like the childcare, which runs out when you turn 21. And I turned 21 and then eight days later had my son. So I was actually getting tons of bills for like the birth and everything.

Mindy: Oh my goodness. Wow. Did they switch you eventually? Were you able to work that out?

Melissa: While I was in school after my son was born, I knew I needed to add him to the program so that he would be covered when I needed to take him for his wellness visits and everything. So I went there to add him and that’s when I found out that I hadn’t been covered. And they’ll back rate you like three months, but that timeline had already passed. So I was kind of on the hook for all the bills. And I’m not sure how I found out about this. You can apply to the actual hospitals to have the loans forgiven. So I was doing a lot of work with like finding all of the bills and figuring out what they were for and submitting letters to like say, “Hey, I was supposed to be under this coverage and these people were supposed to cover that and please forgive my debt.”

Scott: No. This is awesome. So this is like a key takeaway that like honestly, a lot of people I think have a similar experience to this with medical debt, which can feel crippling, But it’s imperative if you’re listening to this and you have or know someone with medical debt that you, one go down and do exactly what Melissa just said, understand each bill, where it’s coming from, what it is. Then call the owner of that debt, whether it’s the hospital or a debt collection agency in some cases. It sounds like it was a hospital in your case. And asked and try to negotiate, “Hey, what is a practical payment here?” Because a lot of these debts are not paid ever by the person who takes them out. So there’s often a great way to get a deal for someone that’s in a situation like you found yourself in, so great tip. And how much did that save you?

Melissa: I’d have to look, but I would say it’s like in the tens of $10,000 or something like that. I’d have to look it up. I don’t have that number, but yes …

Mindy: That’s okay. It saved you a lot of money.

Melissa: Yeah. And actually Scott, you mentioning debt collectors that now I know that was actually the trigger. At one point I got a debt collector’s letter and I’m like, “What’s going on? Why am I getting this bill?” We had to call and they were willing to have us pay 50% of the value or something. And that’s, I think what opened the door for me to realize like, “Oh, you know what, maybe there’s something I can do about this.”

Mindy: Yeah. I’m going to add on to when I had my second daughter, I had like my first daughter costs, I don’t know $1 out of pocket or something. I had great insurance. My second daughter was like $1,100 was my portion of the bill, which is still nothing because she was a C-section. But she was born at the beginning of November, the bill started coming at the end of November, which is when Thanksgiving is and Christmas and you know all this stuff. So my husband and I were talking and I’m like, “It’s just going to be really tight this month to pay this whole thing.”
He’s like, call them up and see if you can pay half now and half next month. And I said, “Oh, okay. So I called them up and I said, yeah, I wanted to talk about making payments on my bill.” And they said, “Well, we can split it up into 11 payments, but if you need more than that then we’ll have to put you through to the credit department. I’m like, “No, I’ll take 11 payments.” I was looking for two, but 11 is even better. So every month for 11 months, I wrote $100 check to buy my baby. That’s not the right way to phrase that. You know what I mean? But yeah, I mean just ask if you have like a giant bill, just ask for, “Can I get a payment plan? Can I get a reduction?” I didn’t ask for a reduction because I felt $1,100 is pretty fair. Well, you know, whatever.

Scott: I think the point is, especially with medical debt, because I’ve just heard now so many anecdotal cases. I’m sorry I don’t have statistics to back up that, but it seems that perhaps a significant majority of the time when you are in either a low income situation, maybe your situation would have qualified as a college student for some of this. Or if you have bad credits or if the bills are in collection, that there just seems to be a very high probability of getting a significant reduction. And this could be thousands of dollars an hour phone call or set of phone calls exercise to go out and attack. And I just think that the hustle here is amazing.

Mindy: Yeah, absolutely agree.

Scott: Okay. So you’re graduate college and you find out after a period of time goes by, you find out you’ve got some loans, some personal debt that accumulated with these medical bills. You’ve got your student loan position. What is kind of your ability to save in terms of your income minus your expenses at this point? How do you begin to implementing that plan to pay off your loans in five years?

Melissa: Because I was living so lean in college, I never really upgraded from that. So I went from earning money six months out of the year to earning full time, a full time salary at increase as an engineer. And I just didn’t update things. I was really fortunate. I still needed my mom to help me with my son and she had all her stuff. So we just kind of live together and I was able to save myself on any costs of like furniture and things like that because we just used what she had. So I was really focusing on paying off my debt and also like opening up my 401k, like that was also a priority. So for me, I mean just the increase in money, I was able to say like this is how much I’m spending on my expenses, the rent, the food. And this is how much space there is now for other things. And I just made it a priority to pay off my debt. Like I was spending about 75% of my rent, like on debt. So it was almost taking up as much money as my rent was to pay off my debt.

Mindy: Okay. I just want to back up a minute and pat you on the back for wanting to open up your 401k. Even though you had student loan debt, you had this unexpected hospital debt, you have a brand new baby and you decide to open up a 401k too. I know people who have none of that other stuff and still don’t open up their 401k. If you’re listening to this, open up a 401k because Melissa did it, so you can do it too. I don’t care what your circumstances are, you can open up your 401k. Now, I’m going to get 300 emails, “I can’t open up my 401k because of this specific circumstance.”

Scott: What was the reason for the 401k?

Melissa: So at one point while I was in college, my brother told me about that scenario that everyone tells you about where if you start saving now in your 20s, you’re going to have more money than if you start saving in your 30s and you save for a longer time. Like he just kind of explained that rationale to me. So it was, again, I was like, that’s just the best deal. You have to do that. That needs to be a priority. And also there was a 401k match and I understood that I wasn’t going to get that if I didn’t contribute. So it’s like a raise you give yourself, at least that’s what I would tell people at work. It’s like you’re complaining about not getting more than a 3% raise, but you’re not opening your 401k up. Like you’re leaving all this money on the table. You can give yourself a 3% raise by opening up this 401k. It was illogical not to, in my mind.

Scott: Absolutely love it. And what you’re saying is it was a priority, so I did it. This concept is so hard for people. They’re like, how do I do? No, if it’s a priority, you will find a way to do it. Let me ask you this. Were you living in a penthouse suite downtown, driving a Ford luxury vehicle and getting a lot to every morning and having expansive nightlife during this period while you contribute to your 401k, paid off your debt, raise your child and were getting started in your career?

Melissa: No, I did not.

Mindy: What a leading question Scott?

Scott: Yeah. What a shock. Can you tell us about what your lifestyle look like and the sacrifices you maybe made on that front in order to make this possible?

Melissa: Well, so because my mom was helping me out, she wasn’t working, so I was essentially supporting her as well. So we had a two bedroom apartment. My son was with me, we had furniture and everything we needed. We weren’t eating ramen noodles, I can tell you that much. Like that was not a thing but it was a thing in college. So I will say that when I was in college I was eating that. But I spiced it up, I threw some like frozen vegetables and eggs in it, made it fancier.

Mindy: It’s a right of passage.

Melissa: Yeah, once I had my career job, we were not eating that kind of food. But I had an old car and actually people made fun of me for my car at work, like they did. Mindy, I wish I would have done that. I wish I would’ve just done my shoulders up. But no, I did not. And so in May I ended up buying a new car.

Scott: [crosstalk 00:30:15].

Melissa: No. So I started January 2011 working full time and then in May I bought a car.

Scott: Got it.

Melissa: Bad, bad idea.

Mindy: It’s okay. There’s worse things you can do. Like I don’t know invest in Bitcoin.

Melissa: Not making your 401k and taking the match of priority.

Mindy: Exactly. That’s a much worse idea because I bet that you have a lot in your 401k balance right now.

Melissa: I do have a good amount. I don’t know. Should I be sharing numbers?

Mindy: Only if you’re comfortable with it, but yeah …

Scott: We don’t need to know the amount in your 401k but it would be great to know about your savings. Like how much you are able to put away every month and those types of things.

Melissa: Like when I just started, I was putting 10% in to my 401k-

Mindy: That’s huge.

Melissa: … on top of … So that was like a 5,000 a year. So I don’t care about sharing my earnings back then, who cares? $50,000.

Mindy: But that’s huge. 10% of your earnings when you have all this college debt and a baby and you’re a single mom and you’re living with your mom and you’re supporting your mom. 10% is enormous.

Scott: What about with debt? How much are you able to pay off with your debt?

Melissa: So let’s see if I have any good numbers here. I don’t have exactly how much I was able to pay off each year. I was more focusing on how much I was putting in I guess. I was putting in like about $800 a month. Because it’s hard to track like the balances because … Oh that’s my second. That’s another tip I would say that kind of goes with like getting your medical bills forgiven is being aggressive when it comes to your student loans and having to call. I was calling, I feel like the people who helped my student loans like once a month, because whenever I was making these extra payments, I wasn’t paying the minimum.
I was paying extra and when I was making these payments, what they were doing was they were just pushing off the due date for my next payment. So they were not deducting the principal. And so I have to be on top of them over and over again to make sure the money was going where I wanted it to go. And I that that was an issue with a lot of people I talked to. It was like, “Why can’t I just make it go and pay this off? Why are you just pushing off the date and continuing to accrue all this interest?” Like I’m making the extra payment, this is where I wanted to go. And so definitely having to be aggressive.

Mindy: That is huge. That happens on mortgages. That happens. I don’t know about car loans because I’ve never had a car loan. Well, that’s not true, I had one at 0% so why would I pay that off early? But like my parents were very generous and paid for my college, but I have noticed on mortgages when you send in extra payments, they’re like, “Oh, where do you want this to go to the principal, the interest.” Why would I want to pay interest upfront? Why would I want to pay more interest early? That’s the dumbest question ever. Throw it at the principal. What else am I going to do with it? So that was always a little frustrating to me too. But that’s a huge tip. Be aggressive.
Read your bank statements, read your student loan statements, read your mortgage statements, like whatever bill that’s coming in, read it. First of all, make sure that that’s actually what you were charged. Did you go through and make sure that all of those charges on your credit card bill are actually something that you charged your card. My husband checks our bank balance, our credit card statements every single day. But he was able to find out that somebody had stolen … You know he does that, Scott.

Scott: I know, but the way you just said it was so defeated.

Mindy: Like every, I just can’t imagine looking at it every day. But anyway, it gives him joy. But he was able to discover that our card was stolen and he was to put an ad on Autotrader, like really $7. You sold my credit card for $7. I almost want to just pay that for you because clearly you need to sell that card. But yeah, like when your mortgage comes in, keep the statements. Do they still have mortgages, like mortgage statements? We still get a statement.

Scott: Yeah, I guess [inaudible 00:34:36].

Mindy: Okay. So look and make sure that your balance is correct and make sure that you’re paying, it was applied towards your principal. It just takes a second if you do it over and over and over again, but you want to make sure that you are doing this every single month because yeah, banks make mistakes. I don’t want to accuse banks of acting nefariously but we all know that happens, allegedly. So that’s a great tip.

Scott: Yeah. I had never heard of that before. That there is a difficulty in sending your student loan providers extra money and having that paid to where you want it to go. So it’s a fantastic tip for everyone who’s listening to make sure that they can [inaudible 00:35:14]. One question I would have is are you aware of any ways to refinance any companies that you can refinance your student loan with that make that an easier or more automatic process or is that not something that any of us know here?

Melissa: No, I don’t know because it’s not something that I chose. It’s not a path I chose to go down. I’m like, I can deal with all these people and it was a quite a few people. It was I think four different companies that I had to be on top of regularly to make sure that the money was going in the right place.

Mindy: Okay. I know that so far you started off as a student loan refinancer, however you say that, because there was a bunch of these guys that got together, I think it was all guys, I’m not being sexist. They got together and they’re like, “Why is my student loan interest rate 8%? Let’s buy this down.” So they will help you refinance your student loans. But I don’t know anything else about that. So that’s ofi.com.

Scott: I think doing some research too, if you have student loans to think about, “Who can help me refinance to a smaller rate, who can simplify this process to me?” Even if you don’t get a better rate, if you’re able to just simplify the process without incurring too much in the form of like origination cost or anything like that. It might be make life a little easier. And for those of you listening that are trying to attack the same problem Melissa had.

Mindy: Yeah, maybe consolidate them so you’re making one payment instead of like four payments or 12 payments or whatever. We should get Travis Hornsby from student loan planner.

Scott: I’m looking it up right now.

Mindy: Yeah. Oh my goodness. I’m sorry Travis. He was on our show 22, I think.

Scott: Yeah. Student loan planner. Travis Hornsby, student loan planner.

Mindy: Yeah. Okay. So we should get him back on for some tips too. That would make a really good little pullout episode. Anyway, this isn’t his show, this is your show, back to you. So you’re paying off your debt. You were paying $800 a month towards your debt. How long did you take to pay off your student loans?

Melissa: It’s so hard to segment things because you know, more life happens in there. So not only was I paying 800, every time I would get a tax return, like that’s where my money went. Like I would throw all that, any extra tax return money I got into my student loans. So it fluctuated, you know how much it was every year. In the process I got married and my husband had student loans and he sold his old car and he wanted to buy a new car. And so I can only really speak about this as a whole picture, because it’s hard to do the math separately. But after three and a half years in 2014, we had paid over $110,000 in three and a half years with all our student loans and both our cars. So we paid off our cars early because we didn’t see the point in extending the process.

Mindy: Wow. So your nuclear option, you never needed to go that extra year. You did it in half of that extra year. That’s amazing. Now, you said that you took extra money and you threw it at your student loans. I think that that’s really, really smart. I think a lot of people, I’ve heard this so many times like, “Oh, I’ve got my tax return. I’m going to go on a vacation because I deserve it.” No, pay off your loans first. Pay off your debt first and that’s just great. I love that.

Melissa: Yeah. It was a huge priority and that was what I was doing with our tax return money.

Scott: With this, it sounds like, I mean $100,000 is an incredible amount of money to pay off in three years. Would you say that that is, were you able to kind of keep your expenses low after you got married? And then were your incomes generally increasing over the years as well? Those kind of the two main drivers basically not too many changes in lifestyle front, big incomes or is there any other color there?

Melissa: Once we got married, we started to slowly join our finances and he and I would get raises, but they were like the standard 2%, 3% per year. Nothing too crazy, I don’t think. Then yeah, once we got married, he moved in and so it lowered our costs because now he wasn’t paying for his own rent and I was paying for mine. We could start separating, dividing those costs among the two of us.

Scott: Got it.

Mindy: Okay. So it’s safe to assume that you do not have a cashflow negative spouse. Is that correct? You and your husband are on the same page financially?

Melissa: Yes. He is also a saver. He was paying off his debt too. But anything extra, he had a big savings account on the side because we weren’t really sure what to do with it.

Mindy: Yeah. Hey, two savers is good. I don’t want to like bash people who aren’t savers, but it’s just better when you don’t have to spend every dime you touch. So you said that you got married and he moved in with you. Was your mom still living with you? And if not, what was going on with childcare then?

Melissa: Yeah. So when I got married, my mom was still living with us and she continued to provide childcare for some time after that. But then we did have a change in situation. She ended up going back to work and it was a really crazy two weeks to try to figure out what was going on. It was kind of abrupt. My husband and I were taking vacation days. I ended up taking my kid to work a couple of days, I think for a couple of hours to get some things through. But I went into boss’s office and I was like, “I need to talk to you.” And I remember him saying something like, “Please don’t tell me you’re leaving.” And I was like, “I don’t want to, but I need to change my schedule.” So the only thing we could figure out to solve the problem quickly was going on opposing shifts.
So I knew my company had a night shift like in the manufacturing plant, there was a night shift and they had been talking for a while that they wanted to have some engineering coverage during the night shift, but it didn’t exist. So I was essentially asking to make my own little thing. So I was able to pose the hours that I wanted and I ended up working from 4:00 in the afternoon to 1:00 in the morning to do a full shift. But it was much more preferable than starting at 6:00 PM and getting out at God knows when. But that’s what we ended up doing to deal with the change in our childcare situation.

Mindy: Okay. This is another amazing kudos to Melissa because if you don’t ask for it … to Scott, what am I thinking right now? Can you read my mind?

Scott: Yes. I know exactly what you’re thinking. You’re thinking, you need to ask for what you want and maybe they say yes.

Mindy: Okay. So I have the one boss on earth that actually can read minds, but for everybody else listening who doesn’t work for Scott, your boss can’t read your mind. And Melissa’s went into her boss’s office and said, “Hey, I need to talk to you.” And your boss is like, “Oh my God, don’t quit.” You never know what your boss is going to say until you ask and you know, “Oh, I’m just going to quit.” Well, maybe they would have worked with you. Ask for what you want.

Scott: I see what you’re going for there, Mindy. I’m sorry.

Mindy: That’s okay. You are one of a kind, Scott.

Scott: There you go.

Mindy: I love that you went in and asked, “Hey, what’s going on can’t continue. It doesn’t work for me. Can we switch it around?” Is way better for a boss than I got to quit. Because maybe you’re mad and they are like, “Oh, okay, bye.” But they don’t know that you’re happy and want to stay. You just can’t work with it in your current situation. And if you’ve already made up your mind that you have to change something, ask for what you want. If they say no, at least you asked.

Melissa: Yes. And I do think that when you go into it, you have to have, like you have to be ready for it to be a no though. And so that happened in 2015 so thankfully we were already done with all our debt repayment. And actually when I had my son, because of the situation I was in, I hadn’t been able to even take like my full six weeks to recuperate before getting back to work because I didn’t have that luxury. And I had made the decision back then that, when I have my next child I am going to take a full year off because I want to be with my kid that first year. So when I was asking, I was like, “Well, if they say no, then it’s okay because I’ll be able to accomplish that other goal of spending a year with my daughter who was born in 2013.” So I had the option of having different opportunities I guess of kind of being a win win for me.

Scott: Yeah. Fantastic. But, but like you put yourself in a position like, and they like there is a direct, in my opinion, correlation between your financial position and the amount of luxury you have coming into these things. Someone with $50,000 in student loan debt, who’s living paycheck to paycheck is not going to have the ability, maybe the confidence to ask for what you asked for I think. And the fact that you had such a strong career savings rate had paid off all your debt. I think that, look, probably the answer would just be no, and you keep your job anyways. But perhaps enabled you to feel a little bit more confident about that decision or at least made it … allow many other people to feel more confident about that decision. No, I love it. So how did you think about investing once you paid off all your debt?

Melissa: So in the process of, so around 2014 I discovered the fire movement through Mr Money Mustache. So that’s actually when, that was I feel like a big motivator of why we were able to pay off our debts so fast because we were being aggressive, but it was kind of this five year plan. Once we realized that, you know, “Oh, having this money, we had money in savings accounts too and being like, Oh, this money is earning 0.0001%. And it’s not doing the most that it can do. Why don’t we take a big chunk of that money and put it into our debt. And that really accelerated our payment, paying off our debt quicker. And so because we were living, I don’t use the word frugal leave very much, but I guess that’s what it is.
So when we paid off all our debt, we had all that money that we were putting toward towards our debt and now we could start funneling it into our 401ks and IRAs. I think that’s also when I discovered the Mad Fientist and I found out about like, “Hey, if you put your money here, then you actually pay less in taxes and so you technically get to keep more of your money. And so we decided that we were going to start maxing out our 401ks and maxing out our IRAs. So that was kind of the transition there was as soon as we finish paying off our debt and we just funneled all that money into the other vehicles.

Scott: This is so great. Everything you’re saying here, I think it’s outstanding. What are you going to do next now? Like, what’s kind of your next big goal with this? It sounds like your goal was, “Hey, we’re going to start giving away less and less money to the government, tax optimize.” What is it now?

Melissa: So in 2014 we decided like, “Hey, this fire thing sounds pretty cool. We want to also retire early and we’re going to do it when we’re 40.” So that’s why we’re going to maximize all of these accounts. But in 2015, after working night shift for nine months, and it being a really difficult situation. I was barely seeing my husband for like 15 minutes when we were trading off the kids. I was laid off and so I got to kind of start my year of not working and it turned into more than that. So we’re still saving aggressively, but I was able to take three years off of work and in that time we did a little mini retirement. We relocated to Michigan and now we’re still on track to retire by 40.

Mindy: Wait, wait, wait. You’re on track to retire by 40, after having an unplanned pregnancy in college and getting laid off and not working for three years. And what else? Scrambling for … Like that’s not right. You can’t do that. Sorry.

Scott: We still have half the show left.

Mindy: So what field does your husband work in? You work in mechanical engineering for an aerospace firm. I’m guessing that pays more than minimum wage.

Melissa: Yeah.

Scott: You’re off for three years. So this is before or after the three year that you asked this question, Mindy?

Mindy: This is, well, so you have a job now? Correct?

Melissa: I did start working this past year, but I actually started working at my kid’s school just like as a helper, making the least amount of money I’ve ever made in my life. But the reason I did that was because I wanted the flexibility. And like you said Scott before, like we were able to put ourselves in a position where my husband’s income, we can still save with that and I don’t need to work, but I wanted to work. And so I did something where I’m technically getting paid to see my kids. How awesome is that?

Mindy: Wait, I don’t get paid to see my kids. So you have a job now, what industry does your husband work in?

Melissa: So he also graduated as a mechanical engineer and currently he’s working in the aerospace industry but Michigan is more automotive industry. He’s in the aerospace industry right now.

Mindy: Okay. So, and how old are you now?

Melissa: I am 32.

Mindy: So in eight years you’re going to retire with having spent time with your kids and still be retired at 40 and living the life you want to live. You said you don’t like to say I’m living frugally. I don’t call it living frugally. I call it just living normally because I’m not a spendy kind of person. It makes me uncomfortable to just spend, spend, spend. I would rather have that money in my bank account to cover me. I don’t have a lot of really nice things. Then when I get something nice I’m like, “Ooh, this feels uncomfortable.” But that’s just me, I’m not saying you can’t have nice things. That’s maybe me going off on a tangent that I should stop.

Melissa: No, no, I agree because that’s one of the reasons I don’t like to say I’m living frugally because I feel like I’m still spending good amounts of money on the things that are important to us. Like while we lived in California, we used to travel to Michigan to see my husband’s family because he’s originally from Michigan. We would do that about twice a year, a family of four. We still got to go to the beach and hang out and do fun things. And so it’s like, I don’t feel like I’m being frugal because I’m still like doing all these fun things.

Mindy: I love it. I love it. Scott, do you want to add anything else?

Scott: No. I think this has been an incredible story, it seems like.

Mindy: This is awesome.

Scott: Yeah. I mean it seems like a great journey and that you kind of overcame a lot of really cool things. Is there any other kind of areas of your journey that you think you want to mention? Any other new big shifts or anything like that?

Melissa: Well, I do want to say, because this is always something that bothers me when I read other people’s stories, is that we did make good incomes and I don’t mind sharing it now because I’m not working in that industry, so I don’t mind sharing old information. But at our most, we were able to make $130,000 together. But before that, that wasn’t the case. I don’t want that money to kind of overshadow what happened before that. Before that, before I was married, before starting my full time job, I was not earning that money. I was only working six months out of the year and I had to kind of find a way to support myself with that and student loans and just asking for that help through government programs. So I think that’s important. I think it’s important to realize that just because we were able to make good amount of money that only was for one year before I got laid off. That there was a process, there was steps and it didn’t start at that level. It started somewhere else.

Scott: You went to college, got pregnant. You went to a college with three month shifts where you worked for three months. You got scholarships. You took on some student loan debt. You graduated as a single mom. And you got nothing to disclaim or anything like that about your income and the situation that you were able to create for yourself and your family in the years that followed that as an engineer. That is very impressive. And I don’t think, I’m defensive of the fact that you feel the need to qualify the fact that you’ve made a lot of income. All of the decisions you made in your life around and as it pertains to this financial story that you told today, those are all intertwined. And the fact that you managed to earn a high income after the path that you took is no surprise.
Many people I think, there’s a lot of situation, “Hey, I’m going to go into debt and that’s going to be accompanied by a low paying work or a career field that doesn’t have the potential to scale like that, those types of things. I mean, no, these are all seem like a set of decisions that lead to that outcome. When you save and invest, and those are a priority, as you mentioned, the income tends to follow in the years following, five, seven, 10 years on those career tracks. So I think it’s great and it’s certainly no surprise to me that there was a high household annual income after a certain number of years.

Mindy: Yeah. And I’m going to jump in here and say that anybody who has a problem with your story and all the things that were handed to you can email me at [email protected] and I will set you straight because how much of this was handed to you? Nothing. You worked for it all, you earned it all. And I think there is nothing wrong with making a high income that you deserve to make. You’re in mechanical engineering doing like NASA stuff or aerospace stuff, you didn’t work for NASA. But like still, you know who doesn’t do that? This girl, I don’t do any of that.

Scott: Well, many people can’t graduate college and get the degree that you got without kids. Look, sorry my rant is coming to a conclusion here, but I think everyone gets to the point.

Mindy: Yes. You don’t need to worry about, oh, it wasn’t always $130,000 a year. But there are also people who make $130,000 a year who spend at least $130,000 a year. Being frugal is nothing to be ashamed of and nothing to apologize for. And that’s just how you win.

Scott: All right. Should we do the famous four here?
Mindy: We should do the famous four. Melissa, are you ready for the famous four? These are the same four questions and one command that we ask of all of our guests. First up, what is your favorite finance book?

Melissa: I just finished reading, How to Quit Like a Millionaire by Kristy. I forget her last name. But I really enjoyed that book because it was an easy read. It kind of read like a story and she kind of drew me in because of her like minority/immigrant status, which I can relate to a lot in that sense. And so yeah, I think that’s a really good book and she does throw a lot of hard numbers out there and have a lot of graphs that can kind of help you figure out your own situation. So I think that’s a great read.

Mindy: That’s by Kristy Chen and Bryce Leung. And if I pronounced your name wrong Bryce, I’m sorry. And that is, they were on our show episode 55 and 55 and a half. And she’s an amazing speaker and her book is fantastic.

Scott: They were very methodical about their approach and I recommend you check out [inaudible 00:57:41] podcast and consider their book. Okay. What was your biggest money mistake?

Melissa: Well, I would say that kind of falling into that trap of like the normal life path and buying the car was one of the big mistakes I made. I mean I guess we can just focus on that one. There’s a few other ones, but …

Scott: I think it’s awesome that you said that was your the biggest money mistake. Because I think that that’s a very classic one and I think you had so many other things that were adversities. Like for example, I want to know, what do you think, looking back there was anything he could have done to solve that problem of the insurance cutting off at 21 and then not having the baby eight days later. Was there like a bridge program or something along those lines?

Melissa: I think that, yeah, I guess that’s a much more bigger financial maybe weight. I think, like I said, they do back rate it for three months as my understanding is when you get government help like that. So I guess the biggest mistake was not finding out sooner because then it would have covered that time. If I would’ve found out sooner, it would’ve back rated and covered all those bills. But because of the time when I found out, I had kind of missed the window. Then I was hustling, trying to figure out how to get them resolved a different way.

Scott: It was a very specific thing that kind of stood out to me is a huge consequence that like, how would you ever know that and be on top of that?

Mindy: Did they send you letters? I mean, I’ve been a new mom and there’s not a lot of sleeping. There’s not a lot of coherency and that just seems weird that you would apply for this. They put you in the kid program and then right after you turn 21 and fall out of the kid program, then you have … It’s just bad timing.

Melissa: Yeah, it is bad timing. And I think part of, I’m sure they, they did send letters, but again, the problem with me was I was moving so frequently and usually to different places that I’m sure that contributed to it too, that I just was hard to get to. Which I guess hit me in the butt at some point.

Scott: Got it.

Mindy: Yeah. But then you learned your good tip to always negotiate with the hospitals. Yeah. They would much rather have some money than no money at all. What is your best piece of advice for people who are just starting out?

Melissa: So I would say that when you say just starting out, I’m thinking of someone who’s just graduating college and everything like that. And so I kind of mentioned it earlier and it was just like being on top of all the loans. Because if you’re going to be making payments, you really want to make sure that the money is going to the right place. It’s going to make a big difference once it starts compounding, if the money’s going in the wrong place. So like being really attentive and persistent around that debt repayment. And just keep living the frugal lifestyle or the college student lifestyle for a couple of years. Like there’s really no need I think to like suddenly inflate your lifestyle in those first years, especially if you have student debt. So I would say that would be my tip.

Mindy: Yeah. I’m going to go one further and say if you have a crappy car that runs, just like people were teasing you. And I’ve been on the end of that teasing because I have always had crappy cars. I just don’t care. But if people are teasing you about your car, they’re not going to remember in a year what kind of car you had even, I mean, unless you’re still driving it. And even then like who cares? Coco Chanel has one of my favorite quotes. She’s like, “I don’t care what you think about me. I don’t think about you at all.” Like don’t worry about what people think and they’re teasing you about your car. Yes, it’s nice to have a great car, but it’s even nicer to have money in your bank account. Okay. Public service announcement over.

Scott: I just want to chime in that I agree and I think I’ll phrase it this way. I think the stakes are incredibly high or getting it right right out the gate from college. I think it makes, I’ve had relatively speaking, I think a very easy journey with money over my career because I just continued living the college lifestyle out of college. Never driving a nice car, never spending outlandishly, always living with a roommate. All those kinds of things the entire time. And it’s just enabled me to have a high savings rate and made things relatively easy in a lot of ways. I think that it’s much harder so I gather after in your 30s and 40s to continue to have that college lifestyle going and save a lot of money. We’ll see. All right. What is your favorite joke to tell at parties?

Melissa: Oh, dear. Okay, let’s see if I remembered this one. Patient goes to his doctor and says, “Doctor, can you give me something for my leg?” The doctor says, “I don’t really need it, but I can offer you a dollar if you’re really desperate.”

Scott: I’m so confused. It’s not working for me.

Melissa: Give me something for your leg. For my leg. Did I say my leg or your leg? Anyways, I’m not a joke teller.

Scott: All right. I’m going to go home and decipher this one because this one has alluded me for the moment.

Melissa: Did you get it Mindy? Did I say it wrong?

Mindy: Scott, can you give me something for my car? I’m trying to sell it to you. Doc, can you give me something for my leg? Oh, I don’t really need it, but I can give you a dollar.

Scott: All right. I’m slow today. It’s hot in here.

Mindy: It’s hot in here too. I’m [crosstalk 01:03:46]. Okay, so Melissa, tell me where people can find out more about you.

Melissa: People can find me at travelingwallet.com and I also have a Twitter @TravelingWallet.

Scott: Awesome.

Mindy: Okay. We will link to these in the show notes, which can be found at biggerpockets.com/moneyshow90. Melissa, thank you so much for telling your story today. I think it’s really important to tell like every story to show it’s not just people who are great with money, who got great jobs after they went to college that was paid for and lived happily ever after. Sometimes life jumps out and it’s like, oh, you think you’re doing well, here’s a curve ball. So I think it’s a great story and I’m so happy that you were able to share with us today.

Scott: Yes. Thank you.

Melissa: Thank you both so much.

Mindy: Okay. And we will talk to you later.

Scott: All right. That was Melissa from travelingwallet.com and @TravelingWallet on Twitter. Go check her out. Incredible story. Love everything about it. And again, I think I could just boil down all the things we heard today to a simple phrase. She made this a priority. I think it really is as simple as that. When you compound it over time. You can memorize all these details and have every tactic in the world investing tip, try to whatever. But if you just make it a priority, financial freedom, the accumulation of wealth, saving, whatever you want to call it, you’re going to be successful over time. No matter really what you started. And you know that that might be too bold or too broad of a statement. But I honestly believe that we’ve heard so many stories from people coming from all these different types of situations, finding success with this.

Mindy: Yeah. I really can’t top that, but I’m going to try. I’m not going to try and top it. I’m going to try and comment on it. That is a perfect summation of this. She made it a priority. You know what? When you have a nice car, you want to buy a nice car, you make that a priority. If you want to have fancy clothes, you make that a priority. If you want to have amazing hair all the time, you make that a priority. If you want to have financial independence, if you want to live the life that you want to live, then you have to make it a priority. That is as simple as that. So what I should have said, but I wanted to say all that. What I should have said is to quote Charlie Monger from the Berkshire Hathaway annual meeting. I have nothing to add.

Scott: Oh, [inaudible 01:06:08].

Mindy: He says that. So people ask questions and Warren Buffet, will talk for like an hour. And Charlie’s like, “I have nothing to add.” Which means I agree with what Warren said. I love him so much. Oh my goodness. If you know Charlie and he would be on our show, I would love to have him.

Scott: There’s a book called Poor Charlie’s Almanack, which Carl actually introduced me to. And it’s a great read. It’s really, really long. It was kind of expensive, but really got a lot of value out of that book, which is kind of the wit and his humor from that.

Mindy: Yeah. The wit and wisdom of Charlie Monger who is 96 I think. And he’s smarter than any 1200 other people that you know.

Scott: And a billionaire.

Mindy: Okay. A what?

Scott: And a billionaire.

Mindy: And like whatever. Is he still a billionaire? I think he’s not technically a billionaire anymore because he gives it all away to nice people or deserving people.

Scott: Scratch that.

Mindy: Yeah. And barely a billionaire to quote Gary Goldman. Anyway, from episode 90 of the BiggerPockets Money Podcast, I am Mindy and this is Scott and we are going to go be productive. Wait, this was productive too. What are we going to do? Over now, goodbye.

Scott: Something else. Bye bye.

Mindy: Yeah. Bye.