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Your Guide to Managing your Personal Finances: Q&A with Derek Sall

Managing your Personal Finances

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Managing your finances and personal life together can be a head scratching task. People often have this concern that the two might clash and cause problems. Today, we share the journey of Derek Sall, who found his way to balance between the two. We had the opportunity to have a great conversation with him on how to maintain a good financial position while handling your personal life. 

Q1) Before we start, could you please give us a little background about yourself and let people know who you are and what you do?

My name is Derek Sall. I have a pretty humble background of parents that worked their butts off in life and provided me with a low-middle class life. I did well in college but had no idea how to build real wealth. I graduated and got an okay job as a merchandising analyst (I later became a financial analyst) that paid $33k a year.

Like almost everyone else, I had student loan debt. Between my wife and I, we had $18,000. Not a ton, but when I was sitting at our at-home desk one day and discovered that we were going backward financially, it felt like a massive 1960’s style refrigerator on my chest. It was a debt that just had to go.

Q2) What drove you to chronicle your financial journey through your blog, Life and My Finances? What are the challenges you face in your personal financial journey, especially when you started out?

Even though my degree was in Finance, I couldn’t get into a Finance job right away (graduating during the 2008 recession didn’t help…). So first and foremost, I started a financial blog so I could talk about money! Secondly, I enjoy helping people, and it seemed like an awesome way to help people all over the world.

And finally, my wife and I wanted to move back home to Michigan from Florida. We didn’t feel comfortable just quitting our jobs and making the move and then hopefully finding some jobs in Michigan. I thought maybe I could earn some money with the site, which would enable us to make the move a bit quicker and perhaps a bit smoother (financially) as well. (And you know what? It worked! 😊)

Q3)  Where did you learn about finances and money matters? Was it through your own personal experience or was it from books or people around you?

I mentioned earlier that my parents worked their butts off. They knew that if they put in the work, they could earn money and get my siblings and myself through school. They constantly watched their dollars, saved wherever possible, and invested a fair amount as well.

We rarely ate out, our “big vacation” each year was a trip to a local hotel, and if anything broke around the house, they fixed it (instead of buying new).

I was also a kid with big business ideas, and they encouraged me to give them a go! I bought in bulk and sold items individually for a mark-up. I mowed lawns. I even built and sold shoe cabinets from scrap wood that my dad brought home from work.

Needless to say, I learned a lot from my parents. But, I also had a natural bend toward finance and business at a young age. By the age of 16, I already had pretend stock accounts and had “investing” competitions with my friends. I honed my skills with books from the library and actually got pretty good!

The interest and further learning just snowballed from there.

Q4)  Even before you turned 30, you managed to pay off $100,000 debt, which is a rare feat these days. What inspired you to pay off your debt? Did you have a specific moment where you decided to make it a goal to pay off your debt?

I mentioned earlier that I had $18,000 in debt. So where did $100,000 come from?

This is where the “Life” from LifeAndMyFinances.com comes in…

I got married at 24. We bought a house. And then I was divorced at 27.

The student loans were $18k, the house was $75k (I know, super cheap! I wish those prices still existed!!), and $21k to my wife in our divorce settlement…

I essentially had 3 stages of debt:

·        $18k of student loans. My ex-wife and I tackled this out of fear. We were afraid of not being able to pay the bills. Clearing out the debt would enable us to survive the regular payments of life.

·        $21k for the divorce settlement. I paid this one out of anger. She left me and gave me no chance to win her back. I was pissed off and wanted a clean tie from a situation that I never wanted. I paid her off in just 6 months while making only $60k a year.

·        $75k for the mortgage. I paid this off quickly because I wanted a fresh start. My ex-wife was still on the mortgage (I don’t think she knew this) and I dreaded the idea of her calling me or showing up on my doorstep, telling me that she and her new hubby wanted to buy a house and they needed me to sign something to release her from her old mortgage. That hurt my heart just thinking about it. So, I hunkered down again, worked off my tail, and got the remainder of the mortgage paid off in less than 12 months.

As for having goals. Of course! I had a goal for each one of these payoffs. And, I actually beat every one of those goals. Isn’t it funny how that works?

Q5)  How did you stay disciplined throughout the process to pay down your debt?

When I make financial goals, it’s to improve my future life. Likely 5 years, 10 years, or 20 years down the road. I think about the future me and how awesome it will be to have a paid off house, to have millions of dollars, and to hang out with my kids without worry of the future.

When you can think ahead in your life by a few decades, making a 6 month sacrifice is absolutely nothing.

Q6)  What advice would you provide to other young couples who are getting separated? How can they manage their finances so that both can overcome the stress of debt?

It sucks. It’s going to hurt. More than you know. If you want to come out of it financially strong, don’t medicate yourself for the short term (ie. bar crawls, new cars, exotic trips), medicate yourself for the long term (no payments, passive income, a well-thought out partner with the same dreams and goals, etc.)

Q7)  What are your top tips or any advice you have for people who feel excluded from the world of finance?

There are many financial experts out there that like to make finance seem really hard. It’s not. It’s actually really easy:

·        Earn money via a job

·        Live on far less than you make

·        Avoid debt

·        Have a beefy savings account for emergencies

·        Invest in your retirement (and if you have no idea what you’re doing here, invest in an S&P 500 index fund)

Q8)  Before we wind up, are there any final pearls of wisdom you want to share about financial journeys and financial health?

Life isn’t all about money. When you make decisions, consider money, but don’t decide everything based on the dollars. It took me a while to learn this.

Here’s the case and point. Wrapping up with a story here from 2016.

My fairly new wife and I had a paid-for house and a paid-for rental house. She badly wanted to live on acreage (she sold her 23 acres to move onto my 0.15 acre city parcel).

I put together a master plan:

·        We had two paid-for houses.

·        We’d buy another paid-for house with cash and rent it out.

·        We’d then save up enough money to buy a house on acreage.

·        After purchasing our new acreage home, we’d rent out our old primary home, giving us 3 rental properties.

·        This would net us over $30,000 a year, a pretty solid passive income!

I figured we could do all this in about 5 years if we lived on basically nothing that whole time. This seemed fine to me. Not to her…but I was sure she’d endure the pain just fine and thank me later.

So, we bought a fixer upper as the second rental. We demo’d it in 3 weeks. It was fun. Life seemed great…Until it took me 8 months to fix up that entire mess of a house.

Did I mention that we had a 1.5-year-old daughter? And another child on the way?

By the end of that project, my wife couldn’t even stand looking at that house. In fact, she was so furious about the whole thing, she demanded we sell it. The whole thing nearly ended our marriage.

Over the course of the next year, we sold that house, we sold our primary house, and we bought a house on 6 acres. It wasn’t the most financially wise move of our lives, but we both agree that it was the best thing we could have done. We still love our house, we’re happily married again, and we’re fully together in everything we do in the future.

Financially wise or not, we make decisions together.

Don’t get caught up in the numbers. If you and your spouse can’t come together on something, don’t do it. Even if you are right, it’s likely not worth it. 

Check out more information on Derek Sall here. You can reach out to her through mail: [email protected]

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"A budget is telling your money where to go instead of wondering where it went."

John C. Maxwell

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