It was 2017, the year before they got married, when Ali and Josh Lupo took a serious look at their finance — and realized they owed over $100,000 in student loans.
Courtesy of the couple FI
Despite working long and hard hours in social services, the couple still lived paycheck to paychecknot knowing how they would afford a wedding or repay their colossal debt.
“So we started having this conversation of, ‘Is this what we want to do for the next 30 to 40 years, or do we want to start learning to live differently? And this is where our money mindset really started to evolve,” says Josh Entrepreneur.
The Lupos began tracking their expenses and found that they spent most of their income on rent and car payments, followed by food and restaurants. Their first plan of attack? Setting up a strict budget: No dating, no netflix subscription, etc.
But the extreme approach burned the couple quickly, so they went back to the drawing board. They had to find a creative way to reduce their biggest expense: housing.
Self-education led them to a solution (Ali points out how many online financial freedom resources, podcasts and books there are). If the Lupos bought a multifamily home with a small down payment, they could significantly reduce their monthly payments by renting out the other unit.
So that’s exactly what they did.
In the years that followed, the Lupos continued on their way to financial independence. They manage many asset flows and passive incomeincluding their work as personal finance content creators managing the education platform”The FI couple.”
If you’re ready to get your finances back on track in 2023, read Lupos’ step-by-step strategy.
Define what success looks like to you
The first step is the basis for everything else: determine your definition of success.
The couple suggests considering what your ideal day and life looks like. In other words, be clear about how financial freedom will allow you to do more things than make you happy.
“Our life was ‘easier’ when we had our heads in the sand, ignoring everything about our finances,” Ali says. “Our lives are more complicated and more difficult now because we are more in tune with all the responsibilities that come with it. But having power and autonomy over our time is worth it, so [you have to be] clear with your why.”
Related: How to train your brain and reach the highest levels of success
Build a community that can help you stay on track
The road to financial freedom can be difficult, but it is even more difficult for those who go alone.
Find a community geared towards financial well-being can make all the difference, according to the Lupos.
“Unfortunately, being financially savvy isn’t the norm,” says Josh, “and the pursuit of financial independence can get lonely because so many people don’t necessarily live the same lifestyle. So whether it’s in person or online, having this community of people like People in mind can be really inspiring.”
Related: The main benefits of creating an online community
Know your numbers: income, expenses, assets and debts
Another critical hit? Familiarize yourself with the reality of your financial situation.
In September 2022, consumer debt in the United States stood at $16.5 trillion, according to The bank rate. But many Americans don’t know how much they really owe: A 2019 survey from US News revealed that one in five Americans do not know if they have credit card debt.
The Lupos emphasize the importance of becoming familiar with everything of your numbers.
“So to literally describe and understand your Incomeyour expenses, your assets and your debts,” says Ali, “and have a clear understanding of your financial situation.
Related: 5 strategies for entrepreneurs to avoid the debt trap
Find out how to reduce your expenses and increase your income
Then think about how you could save and earn more money — “the two biggest levers a person can pull,” notes Josh.
The couple acknowledge that significantly increasing your income may seem difficult at first, but the key is to get creative.
“We decided to focus on how we could drastically reduce our expenses to increase our savings,” says Josh, “and that helped us pay off all the debt and buy some real estate.”
“If you are able to increase your income and reduce your expenses, you will have more of a gap between the two,” adds Ali, “and what you do with that gap is the key to becoming financially independent.”
Never underestimate your earning potential either.
“Coming from a background of social work and human services that are historically low-income opportunities, we have long identified ourselves as people [whose] the value was a bit lower and [thought] winning more just wasn’t in the cards,” says Josh. “In hindsight, however, [the key is] move good people and understand the different vehicles of opportunity. »
Related: 10 ways to make money while you sleep
Think about which strategy best suits your lifestyle
It’s not enough to think of a solution and go all out – part of the secret is choosing an approach that fits your values and priorities.
As basic as property investment has been to the success of the Lupos, the couple acknowledges that it’s not for everyone.
“The goal of financial independence is to have enough assets to pay your overall cost of living,” Ali says. “So you have to [ask], Which strategy makes sense to me? Do I want to invest in stocks? Do I want to invest in real estate? Do I want to own a business?“
“We talk to people all the time,” she continues. “They say, ‘I want to buy immovable.’ But then we talk to them, and I’m like, ‘This doesn’t really sound like you want real estate. Because real estate is not so passive – and it’s a bit more convenient. You really need to think about which investment strategy is best for [your] life.”
Real estate is not always “passive”
Then again, the 40-50 hour weeks on the job aren’t either.
At least with real estate, the “hard” weeks are still only 2-3 hours of work
— LeFIcouple (@leficouple) December 11, 2022
Perhaps the most important thing to keep in mind, though? do not forget to enjoy the trip to financial freedom.
“When we started it was like a chore,” Ali says. “Throughout the process, we’ve learned that the journey to financial independence is more important than the destination and that it’s really important that everything you do to get there is sustainable and that you don’t sacrifice quality. of your life to achieve this. [your] purpose. Because once you’ve reached the goal, what life do you have?”