Life rebuilt with Julia
Episode 252
Episode Guide
Episode Summary:
Episode Timestamps
Show Notes for ChooseFI Episode with Julia Harder
Episode Title: Julia Harder's Journey to Financial Independence
Episode Summary:
Julia Harder's personal journey to financial independence is a powerful testament to the transformations life events can inspire. Following a tumultuous divorce, Julia gained clarity about her finances and newfound purpose. This episode explores her history as a natural saver, her experiences with irresponsible spending in marriage, and her rediscovery of responsible financial habits. Julia discusses the significance of aligning financial practices with personal values and shares practical steps like utilizing travel rewards to enhance her financial trajectory.
Key Topics Discussed:
-
Introduction to Julia Harder's Story
- Julia's background as a natural saver and her experiences with financial chaos during marriage.
-
The Impact of Divorce on Finances
- Julia reveals the financial challenges she faced during and after her divorce.
-
Finding Purpose and Clarity Post-Divorce
- How Julia’s divorce helped her clarify her financial goals and personal values.
-
Reevaluating Spending Habits
- Julia’s journey back to responsible financial practices and her use of travel rewards.
-
Dave Ramsey's Teachings
- Insights from Julia's experience with the Dave Ramsey class and its influence on her financial management.
-
Conclusion and Accountability
- Julia's commitment to building a website for her audiobook narration services.
Actionable Takeaways:
-
Recognize Red Flags
- Pay attention to warning signs in relationships and finances.
-
Take Financial Classes
- Consider enrolling in financial education programs to gain clarity and knowledge.
-
Maximize Retirement Contributions
- Focus on maximizing contributions to retirement accounts for long-term benefits.
Key Quotes:
- "Trust your gut. Don't ignore the red flags." -
- "Letting go often leads to new beginnings." -
- "Question societal paths to happiness; find your own." -
Timestamps for Key Moments:
- Introduction -
- Julia’s Personal Financial Journey -
- The Divorce's Financial Impact -
- Gaining Clarity Post-Divorce -
- Spending Habit Reevaluation -
- Using Travel Rewards -
- Ending Accountability Discussion -
Discussion Questions:
- What life events have led to significant changes in your financial habits?
- How can recognizing red flags in your spending help you in the future?
Related Resources:
Conclusion:
Julia’s story highlights the importance of resilience in the face of financial adversity and the power of community and education in achieving financial independence. Tune in to explore her transformative journey further and discover how to apply similar principles in your own life.
Embracing Financial Independence: Lessons from Julia Harder
In the quest for financial independence, personal experiences can shape our paths in profound ways. Julia Harder's journey, marked by a tumultuous divorce, led to a significant transformation in her financial habits and mindset. This article distills actionable insights from Julia's story that can guide you toward achieving financial clarity and independence.
Understanding Your Financial Foundation
The Impact of Life Events on Financial Habits
Significant life events often serve as catalysts for reassessment. Julia's divorce made her confront her financial behaviors and the reality of her situation. As you navigate your financial journey, ask yourself:
- What life events have shaped your financial habits?
- Are you using these experiences to reassess your spending and saving strategies?
Recognizing how your personal history affects your financial choices is critical to moving forward with purpose.
Assessing Your Financial Standing
Following Julia's example, evaluate your financial status regularly. Here are steps to consider:
- List Your Assets and Liabilities: Understand what you own versus what you owe.
- Create a Budget: Track your income and expenses to identify spending patterns.
- Set Clear Financial Goals: Having measurable objectives provides direction and motivation.
These foundational steps can empower you to make informed decisions as you work toward financial independence.
Redefining Your Relationship with Money
Trust Your Gut: Recognizing Red Flags
Julia emphasizes the importance of trusting your instincts when it comes to financial decisions and relationships. Throughout her marriage, she initially ignored the financial red flags arising from her partner’s spending habits. This oversight ultimately led to financial chaos.
To improve your financial health, make a habit of:
- Listening to Your Intuition: When something doesn’t feel right, take a step back and evaluate the situation.
- Paying Attention to Patterns: Look for recurring issues, whether in your spending or other financial commitments.
This approach safeguards you from making decisions that conflict with your financial goals.
The Importance of Education
Education played a pivotal role in Julia's transformation. After her divorce, she enrolled in a Dave Ramsey class, which provided her with the tools to manage her finances effectively. To emulate this step:
- Consider Financial Education: Take courses that resonate with your specific needs, whether through local workshops or online resources.
- Engage with Financial Communities: Join forums or networks focused on financial independence, like ChooseFI, to learn from others’ experiences.
Educating yourself about personal finance is a proactive strategy that empowers you to regain control over your financial life.
Practical Steps for Financial Independence
Reevaluating Spending Habits
Julia's journey back to financial health involved reassessing her spending habits. After her divorce, she shifted her perspective on money, understanding that responsible spending could enhance her quality of life when aligned with her values.
To reevaluate your own habits:
- Distinguish Needs vs. Wants: Reflect on your purchases to ensure they truly serve your well-being.
- Set a Budget: Allocate funds for necessary expenses while allowing a margin for leisure without guilt.
By consciously managing your spending, you can create a more balanced approach to financial independence.
Embracing Travel Rewards
Julia discovered the benefits of leveraging travel rewards as part of her financial strategy. This approach allowed her to enjoy experiences without excessive spending. To incorporate travel rewards into your finances:
- Research Reward Programs: Identify which travel reward credit cards or programs align with your spending habits.
- Strategically Use Points: Plan your travel around maximizing these rewards, ensuring that your trips add value without increasing your financial burden.
Using travel rewards wisely can be a powerful strategy to bolster your finances while enjoying life to the fullest.
Achieving Financial Independence
Building a Path to Financial Independence
Julia mapped out her financial future by accounting for her pension and actively investing in her financial growth. Here are action items to help you build your own financial independence:
- Maximize Retirement Accounts: Contribute as much as possible to investment accounts like 401(k)s or IRAs.
- Diversify Investments: Explore both retirement and non-retirement investment accounts to enhance income potential in the long term.
By carefully strategizing your investments, you lay the groundwork for achieving financial independence.
Accountability and Community Support
Julia emphasized the importance of accountability in her journey. By sharing her goals with her community, she secured support that propelled her forward. To leverage the power of community:
- Share Your Goals: Engage with partners, friends, or financial communities to outline your financial objectives.
- Seek Support: Encourage others to hold you accountable for your financial decisions, whether through regular check-ins or shared financial challenges.
A supportive community can enhance motivation and keep you focused on your financial journey.
Conclusion
Julia Harder's story underscores that financial independence is within reach, despite life's challenges. By understanding your financial foundation, trusting your intuition, prioritizing education, and actively managing spending, you can create a future marked by clarity and purpose.
Reflect on Julia's journey and consider how you can implement these lessons in your own life. Whether you face obstacles or are on the path to independence, remember that every step taken brings you closer to a fulfilling financial future.
Julia Harder
What You'll Get Out Of Today's Show
- Everyone's path to FI is going to look a little bit different and there is so much we can learn from each other. Hoping to inspire and share lessons learned through conversations with community members, Brad and Jonathan speak with Julia Harder, an active duty member of the Coast Guard, who is already well on her path to FI.
- Always a natural saver, Julia was influenced by her dad, who stressed the importance of investing, and Dave Ramsey's teachings that debt is bad. She was on a good financial path, yet she still felt something was missing.
- Though it sounds counterintuitive, Julia's path to financial independence began with divorce. Prioritization to her marriage, she rarely spent money on anything she didn't absolutely need. During her marriage, her husband helped her learn that some spending can be a good thing. Unfortunately, he was an irresponsible spender and there were months Julia found she couldn't pay all of the bills.
- Although she knew something was wrong, she failed to listen to her instincts and all of the red flags that kept popping up. she just assumed everything would be okay rather than taking a step back and thinking about it critically.
- Following her divorce, she was left with a $300,000 mortgage, a $20,000 car loan, no savings, and was feeling like she had hit rock bottom financially. Following Dave Ramsey's advice, Julia began to follow his steps to get back on her feet and find herself and her financial objectives again.
- Julia was all in on Dave Ramsey's strategies. She cut up her credit cards, began using cash for everything, and made a budget every month. It gave her discipline and solidified her habits.
- She found ChooseFI in May 2019 after she began teaching personal finance to other members of her Coast Guard unit. The thought of optimizing investments and taxes really caught her attention. It was exciting to begin taking action to optimize her money in these areas as well.
- It was more difficult to come around with respect to travel rewards credit cards, but because she had learned to be disciplined with her budget, she could spend money on a rewards credit card and begin optimizing her travel spending too.
- Before ChooseFI, Julia thought she was killing it with her 15% savings rate. She assumed 59 and a half was the earliest she could retire because that's the age her finical advisors had given her. She was blown away when a ChooseFI guest discussed their 70% savings rate. It was then that she realized she could control so much more than current her zone of awareness concerning savings and retirement.
- Julia plans on remaining in the Coast Guard until eligible for a pension at 20 years of service. While others often ask if she'll be bored, she has a list of passion projects she can't wait to pursue without having to worry about how to pay the bills.
- As someone who always enjoyed public speaking, last Fall, she took up book narration after reaching out to a friend with audio experience for help getting started. She's also joined Jonathon's Talent Stacker class and looking to start a podcast.
- Julia keeps a list of all the things she wants to accomplish and FI will give her the freedom to pursue them without being obligated to a job or other people's expectations.
- Between Julia's pension, TSP, Roth IRA, and a taxable brokerage account, she plans to hit Fat FI in 2027 when she becomes eligible for her pension.
- Calculating a FI number with a pension is a bit different than multiplying annual expenses by 25. Julia estimated her pension using the military's pension calculator. She multiplied the difference between her pension and her expenses to calculate her FI number.
- While she still follows the tenants of Dave Ramsey's Baby Steps and has met the minimum standards, she believes she has moved on from the standard path of working for 40 years and is more in line with ChooseFI.
- Jonathon stressed that like Julia, members of the military with a pension, the Roth Conversion Ladder is not going to be a good option since it requires a few years with little to no income.
- When exploring the idea of a talent stack, some people may have a difficult time identifying what they are really good at. It might start with identifying a pattern in what others tell you you are good at.
Resources Mentioned In Today's Conversation
- Get "unstuck" with Jillian Johnsrud and the Everyday Courage podcast
- Build a better portfolio today with Fund Rise and get your first 90 days of advisory fees waived
- Never Split the Difference: Negotiating As If Your Life Depended On It by Chris Voss and Tahl Raz
- The Untethered Soul: The Journey Beyond by Michael A. Singer