BABL 073: The Debt Free Guys on Money Conciousness

John Schneider and David Auten, collectively known as “The Debt Free Guys” are two 30-something professionals who found themselves in a deep dark debt hole just a few years ago living life the way that they “assumed” life was supposed to be: Dinners out, expensive clothes, living at full speed, and at times keeping up with the Joneses.  At this point in their lives, they were living in a basement apartment, dreaming about buying vacation homes in faraway cities, and facing the reality of being $51,000 in credit card debt, essentially living day-to-day on borrowed money.

The overwhelming debt load, coupled with their low light basement apartment, made it feel like their world was getting darker, not lighter. So, they began to shed light on their finances in a major way. They way they got more in touch with their money consciousness, realizing that if they were going to achieve everything they wanted to, they’d have to get serious about blasting away their debt.

As a starting point, David put every expense in a spreadsheet including every Einstein bagel and coffee, every lunch out, every $30 quick trip to the grocery store. And after looking at these numbers critically, they realized that David was the nickel and dime guy and John was the big spender, often buying $3-500 pairs of jeans, and more shoes to add to his growing collection. What became apparent was both partners in this couple were guilty of sabotaging their collective financial future – just in different ways.

Fast forward just a couple of years and David and John are living a debt free life and encouraging others to do the same. Having blasted away $51,000 in high interest debt in just under two years, the dynamic debt-free duo put their financial planning into overdrive. They followed a very simple process to knock out the debts, and have written about their experience in the book The Four Principles Of A Debt Free Life. Their book on living debt free features four principles to help others blaze the path that the two of them traveled just a short while ago. The four principles are:

  1. Be Money Conscious. Understanding where you’re spending, how you’re spending, and WHY you’re spending is critical to getting a handle on your finances in a major way. Once David and John understood their own money consciousness, they tamed the debt tiger and began building real wealth.
  2. Cash Is King. Both of the debt free guys said that when using credit cards to fund their lifestyle, it was way too easy to splurge and think nothing of it. By using cash instead, they have pulled back on some of the spendier purchases that used to be done on a whim. (Like the $500 John dropped at Diesel in 10 minutes because he had ‘nothing to wear’ one Wednesday night on the town. Hear this story around the 30:00 mark!)
  3. Have A Financial Plan. More than anything, the DFGs say this is key to staying on track. Much like taking a vacation but having no plan in place for where you’re going or when, NOT having a financial plan makes it too easy to stray from your goals when temptation arises.
  4. Live Below Your Means. In Build A Bigger Life speak, we’d say build a bigger life not a bigger lifestyle. Keeping up with the Joneses is what got David and John in the mess they were in from the beginning. But living below their means is the key to a life well lived for them.

According to David, being money conscious and having a financial plan are the two anchors because when you realize how much money you’re making and how much you’re spending, you can really begin to dial in to what are the most important things to spend money on. Travel is a focus for David and John, opting for great trips instead of $50,000 cars.

John commented on the show that people will often question how they can afford to take these incredible trips when they’re debt free. “People think debt free is synonymous with being broke”. It’s more about knowing where you’re going to focus your financial efforts to live the best life possible.

One of the ‘tricks’ that David and John use is very simply — Excel. They track what they spend and where they spend on a regular basis, as well as tracking their net worth on sometimes a weekly basis. David says seeing progress keeps them on the path of making great financial decisions. I often recommend the budgeting and net worth templates found at www.Vertex42.com.

When I asked John and David how many money arguments they have on a regular basis, they offered up that today there aren’t arguments so much as money discussions. For them, the key is both of them are very passionate about what they want life to be, but it always goes back to the financial plan.

Books recommended by the Debt Free Guys:

7 Habits of Highly Effective People by Stephen Covey

Think And Grow Rich by Napoleon Hill

The Alchemist by Paulo Coelho

The Richest Man in Babylon by George S. Clason

A Random Walk Down Wall Street by Burton Malkiel

The Buddhist Bootcamp by Timber Hawkeye

My favorite quote from David and John is “credit card debt anchors your future to your past.”
To find more about David and John check out their website: www.debtfreeguys.com

  • Thank you for having us on your podcast! We had such a blast meeting you at FINCON and then being invited to do it all over again on your show is pure awesomeness! We are honored to be included in such an amazing list of guests.