The 32nd edition of our Best of the Best Blogger series features Kevin Mulligan from No Debt Plan.
Kevin started No Debt Plan back in January of 2008 with the simple goal of being able to explain personal finance topics to his friends and family by way of his blog. Kevin earned his MBA back in 2008 but his personal financial education and experience was entirely self-taught.
He’s a “debt reduction champion” with a passion for teaching people the fundamentals of budgeting, investing for retirement, first-time home buying and saving for that rainy day.
The primary focus of No Debt Plan targets the glaring deficit in the American education system which leaves most students totally unprepared for even the most basic personal financial tasks, like balancing a checkbook.
One of Kevin’s primary personal financial tenets he talks a lot about is spending less than you earn (simple, right?) as well as being able to “live what he writes about”, effectively walking his talk. He managed to purchase his first home at a relatively young age and saved a “healthy chunk of money” for retirement. All things considered, he’s enjoyed a very successful personal financial journey and his straight forward style and no-nonsense approach are incredibly refreshing.
We sat down with Kevin recently to talk about being the “money guy”, what it feels like to take a financial bath and all the reasons that axes aren’t really evil.
Q:Tell me a little bit about what initially inspired you to start No Debt Plan.
A: I started No Debt Plan for a couple of reasons. First, I was interested in blogging and blog technology, but I didn’t want to have a personal blog where I talked about my normal, everyday, mostly boring life. I wasn’t completely comfortable sharing personal information online, and I was really interested in personal finance.
The second reason was I had always been “the money guy” with my friends. I was interested in it, and had read a couple of other personal finance blogs. I figured I would start my own blog and maybe make a little bit of money, but also be able to simply point my friends to well thought out posts answering some of the typical money questions.
Q: Describe the genesis of your No Debt Plan and how you came about formulating it.
Q: Tell me about the single most impactful personal financial experience that you’ve ever had.
It doesn’t matter if you start with nothing or start with everything. It doesn’t matter if you know how to get the best deals or get the best return on your retirement investments. It doesn’t matter if you have debt or not.
There is one absolutely simple fact about finances that you must know: to spend less than you earn. All financial concepts are built on top of this – from budgeting (“Am I spending less than I earn? Am I tracking how much I am spending and earning?”) to saving for retirement (“Okay, so I know I should have $300 left over at the end of the month. How am I saving it?”) to paying off debt (“Instead of saving for retirement, let’s apply that $300 toward our debts for the next year.”)…all of it is built on spending less than you earn.
If you have millions of dollars and spend more than you make, you will run out. If you have no savings, but don’t spend every dollar you make, you will eventually be a millionaire. It’s that simple.
Q: What are the best and worst things about buying a house and becoming a homeowner at such a young age?
A: The best part about being a homeowner for us is the ability to do whatever we want to our home. There’s no rules or restrictions on paint color or picking appliances. It’s completely yours.
The worst part about owning a home in your twenties is that you think you know where you are going to live for a long time, but life changes a lot. We are in our second “no really, we’re never moving” house now, but we thought we would never move out after buying our first house too. Of course we did after only 3 years of ownership, which meant we took a financial bath and lost a ton of money because we bought at the height of the market and sold in the middle of the recession.
Another problem of being a homeowner is all of the maintenance required. There isn’t a maintenance office to call. You own it, you maintain it, and if it is broke you fix it or pay high rates for someone else to fix it.
Q: As a self-described “debt reduction champion,” what’s your stance on using credit cards? Are they a legitimate financial tool or should they simply be avoided?
A: There are two types of people in this world. People who can use credit cards wisely, and people who simply can’t keep themselves from spending every dollar they have (and then some). The first group can be trained to use credit wisely, the second cannot.
I have always said that credit cards are a tool. One of my first posts was Credit Cards Are Not Evil. An axe can cut down a tree as part of building a cabin, and it can be used to break into a home. The axe isn’t evil. It’s a tool. Credit cards are the same way.
A credit card can help you manage your finances, earn rewards for your spending, and improve your credit score (which will save you thousands on interest when you buy a home). Likewise a credit card can finance illegitimate wants like a big screen TV or simply be mismanaged and rack up a mountain of debt. The credit card isn’t evil. It’s a tool.
Q: What are you most grateful for about your blogging experience with the No Debt Plan blog?
My thanks goes out to Kevin Mulligan of No Debt Plan for sharing his story. We need more people in the personal finance blogging community to “walk their talk”. Thanks again Kevin.