“With the proper financial principles, you too can escape the Financial Matrix and live the life you’ve always wanted.” -Orrin Woodward
Financial literacy is important for every person to learn and understand. It doesn’t matter what your profession is, how you were raised, how much money you make or how much money you have – the principles of Financial Fitness can be applied to any person’s life and to all financial situations.
Matt and Michelle Mielke bring a unique perspective to their financial journey. Like most people, they did what they were taught to do and even obtained degrees in the medical profession as a pediatrician and pharmacist; they were living the American dream, but with none of the time. They, too, were trapped in the Financial Matrix. Admittedly they say, money was not the problem, it was how they thought about money that was the problem.
Here’s the “rest of the story”: (Written by Michelle Mielke)
….despite a good defensive foundation to our financial thinking, high-income professions, and a path of following mainstream financial planning, the Financial Matrix eroded our thinking and pulled us under …
Diagnosis: Poor financial thinking
Prescription: The Financial Fitness Program
Matt and I both grew up in middle class families. My dad was a traveling sales rep for various companies and my mom was an elementary school teacher. Matt’s dad worked a corporate job with international travel and his mom was a real estate agent and stay-at-home mom. I received a mix of financial messages during my childhood, some “taught” and others “caught.” Cash flow was tight after my dad experienced the “death of a salesman” as many of his sales territories and accounts dried up. During that time, my mom modeled to me how a woman can be the primary breadwinner in a family. I recall hearing tense financial discussions between my parents (and I even recall seeing my mom in tears when she came home from the dentist to tell my dad I needed braces). Credit card financing was the norm. Despite my parents living in debt, my dad taught me some solid principles including the importance of delayed gratification, want versus need, and the “Rule of 72”. One of his favorite mantras was “You’ve got to have a plan!”
Tainted with his industrial-age mindset, the central financial strategy that was passed to me was “work hard” and “save.”
Starting in middle school through college, I worked part-time and recorded every penny I spent in a small notebook (which I have to this day). Oh, how I wish I hadn’t bought as many stickers, arcade games at the mall and pizza slices at the food court! I recall sitting for hours sorting and cutting coupons stored in shoe boxes. (When I met Matt, I taught him what a coupon was!) Even though I wasn’t the kid who had everything (which has later turned out to be such a blessing), I wanted everything! I was a huge dreamer and would sit for hours with the JC Penney catalogue, designing my future house and circling items in the catalogue that would furnish my dream home.
Matt grew up with a similar financial message of “work hard” and “save.” Though he recalls taking great family vacations, his father was frugal when it came to day-to-day living. For both of us, eating out at a restaurant was a rarity growing up.
I was encouraged to live at home during college; my room and board at home was my parent’s contribution to my undergraduate educational expenses. During all those years since middle school, I was a great worker and saver and, eventually, I paid for my first car in cash: a brand new Pontiac GrandAm for $18k, complete with a spoiler.
I worked my way through undergrad at the University of Wisconsin-Madison with no debt accumulation. But then everything started to change when I finished college and moved out on my own.
I started medical school and immediately became 100% dependent on student loans. I was encouraged to take out the full loan amount that was offered, even if it was more than what my tuition and living expenses required!
If they’re offering it, take it! Matt acted on the same financial messaging of taking student loans if they were available; he contributed $40K of student loan debt to our new marriage! My dowry was approx $120K, solely from medical school loans. We definitely married for love, not for money! We pooled our poverty and started our marriage in a small 700 sq ft 1-bedroom apartment with hand-me-down furniture and a total of $160K in student loan debt. Who cared about the debt? At least we had a cool car with a spoiler! And I was going to be a doctor with a secure, high-income job. We never really gave it much thought that after all the grace periods and forbearance periods ended, we would have to start to repay those loans.
We had no concrete long-term vision for our finances and started to buy into the messaging of the American dream: house, happiness, kids, vacations, retirement. We moved to North Carolina to complete my pediatric residency at UNC-Chapel Hill in Chapel Hill, NC. When we moved back to WI, we felt like we had “arrived.” Matt had been working for 4 years as a pharmacist in an independent pharmacy in Raleigh, NC, and now I had landed my first real job as a pediatrician.
We were two hardworking adults with high-income careers and the future looked bright!
Moving into an upscale community, we soon realized we had moved into a “bubble” of wealth. A trip to the grocery store was daily dream building! Lake homes, new subdivisions, pools, boats, cars…I struggled with being content with what we had. I recall our neighbors introducing themselves when we moved in, asking, “Do you have a boat?” No, but I soon felt like I needed one (even though we didn’t even consider ourselves “lake people”)! My pediatric practice grew and I doubled my income in just a few years. In the midst of this explosive growth in my pediatric practice, Matt’s hours in the pharmacy department were reduced and he didn’t pick up any extra hours in order to be home with our children to hold our family together. It made financial sense that I would continue to work outside the home since my income was significantly higher.
Unfortunately, our decision created more stress and role confusion for us–bitterness in me and frustration in Matt. It didn’t feel right that Matt was home raising our kids and I was working outside the home.
We were struggling to support a lifestyle that wasn’t fulfilling for either of us. We didn’t know anything different though we knew things didn’t feel right. As we followed the mainstream financial messaging, we maxed out our 401Ks & started other IRAs, contributed to EdVest accounts, built a platform of stable insurance protection (health, disability, home, umbrella, and car insurance) and were even looking at other investments like real estate to add to our portfolio. We seemed to be following all of the appropriate financial steps that would hopefully lead us to a comfortable financial result. Ironically, we didn’t have a clear picture of what that end result should be!
The debt that we had from student loans was methodically being paid off yet the Financial Matrix was ensnaring us! It was like we were in quicksand moving ahead with high-income jobs and retirement savings yet going backward with a mortgage, student loan interest and new debt.
Yes, we finally accumulated our first consumer debt & now found ourselves owing on new carpet and new furniture for our home. And we accumulated 2 car loans as well. I’m embarrassed to say I still remember the day we drove to the car dealer just to “check out” a new model and drove home with a new minivan and a new loan! What were we thinking?! The Financial Matrix was sucking us in and we didn’t even realize it! We soon found ourselves spending up to our income. We could legitimately afford luxuries like a cleaning person, multiple vacations each year, lawn care, and YMCA memberships, yet we never thought of these things as “creeping essentials;” they were just a normal part of our lifestyle. Our financial pattern was best described as “accumulate to spend”….we would work, save, and then remodel our kitchen; work, save, then take a family vacation. We were never in debt with our expenditures but we were never getting ahead either!
We felt the frustration yet didn’t recognize the problem. The Financial Matrix had disguised itself in a veil of working hard, keeping up with the Joneses, and the normalization of consumerism.
Tithing: One of the financial decisions we made in 2002 was to prayerfully decide to start tithing. It was definitely a leap of faith as, at this same time, Matt’s pharmacy hours were reduced. It was also a heart challenge for me at first because I felt entitled to keep the money we were making. After all, I was working 12-15 hour days and spending so much time away from our family – wasn’t that enough of a sacrifice? Matt soon took over writing our tithing checks because I was too stingy! Later he took over the checkbook entirely (much to my distress because I was used to “controlling” the finances)! Even then, I would still look over his math to make sure the calculations were accurate! After growing up with the “save” mentality and in a family that didn’t have a lot of discretionary spending, my heart was primed to idolize money. I didn’t realize this for a long time until God showed me the joy in “losing” material things versus the pain of living with the stronghold of materialism and debt.
God has faithfully continued to bless our decision to give sacrificially.
We were then introduced to the Financial Fitness Program: Debt is cancer! Matt and I were feeling the symptoms of debt (stress, irritability, anxiety, futility, strained marriage relationship) yet we didn’t know how to label what we were experiencing. Just a few years before we were introduced to the Financial Fitness Program we felt the burden of the Financial Matrix and wanted to get rid of our loans. We sensed that this would lead us closer to the financial freedom we were beginning to desire. When we told our financial advisor we were interested in paying off our student loans instead of his suggestion to take out a home equity loan to install an in-ground pool, he scoffed at us. Today, I’m glad we paid off the loans (which freed up the equivalent of a second mortgage payment each month)…and we never put in the pool!
In 2006, we were introduced to the principles of the Financial Fitness Program, but prior to that we didn’t have a concrete understanding of true financial literacy or an intentional financial plan. The realization that debt was weighing us down from living the life we were meant to live was affirmed as we learned, studied, and applied principles of the program.
In 2008, because of applying the principles of the Financial Fitness Program (and associating with other families following the same principles) we rid ourselves of all debt outside of our mortgage (student loans, car loans, consumer loans) forever!
If we had followed the recommended payment schedule, our student loans would not have been paid off until 2017!
In addition to tithing, the most important defensive financial principles we have applied from the program are the principles of delayed gratification, understanding “need” vs “want” and “pay yourself first.”
Delayed gratification: Matt applied delayed gratification faster than I; unfortunately, I justified our spending because we had “earned” it by working hard. We still laugh at the experiences we had as we learned to deny ourselves a family vacation, or new shoes, or trips to our favorite ice cream stores, or a newer car. I remember Matt advising me, “Don’t tell our relatives that we want a new DVD player because they’ll give it to us for Christmas and I want to set a goal to buy it!” He wanted us to delay our gratification even though we had the money to buy it and to learn the discipline of waiting to purchase nonessential items.
Today, we love setting goals to reward ourselves with things that many American families do just out of routine: go out to eat, take family vacations, buy new clothes.
One of my favorite memories was the year that (as a family), we decided to pool all of our birthday gift money and then decide how to spend it together. We took an awesome trip to Six Flags and splurged on food and fun together! Another year, we did the same and surprised our kids with a new gaming system and lots of new video games on their 1st day of school! Due to our practice of delayed gratification, instead of taking multiple smaller trips that may not have been as memorable, we were able to celebrate our 20th wedding anniversary (and Matt’s parents’ 50th wedding anniversary) with an amazing extended-family vacation in St. Martin in a Caribbean villa with a private pool overlooking the ocean! Now that was worth the delay! Memories that our kids, brother and sister-in-law, and parents will cherish forever—just because we waited!
“Need vs Want”: Understanding “need” versus “want” helped us to shore up our monthly budget. We shaved literally thousands of dollars off of our expenses as we cut our cable TV, stopped the housecleaning service, and stopped the lawn care (we actually learned to enjoy doing our own yard work). I became a “shopping Nazi!” I am not your typical female who shops to entertain herself or to socialize; I am a very utilitarian shopper!
Matt and I have learned that it definitely takes both spouses to be on board to control spending.
For me, I realized it was the little expenditures that add up, $5 here, $5 there. Matt made decisions to stop buying new hunting gear every year. Today, we both appreciate how the other is fighting for our family’s financial future by curbing our spending in categories that are “wants.” More recently, it has been fun to allow ourselves to spend on more big-ticket items rather than hundreds of smaller items we didn’t need over the years….like Matt’s recent “new” used Lexus –and it has a spoiler (and Matt set and met a goal to buy the spoiler)!
Pay yourself first: The principle of “pay yourself first” has made a huge impact on our monthly budget as well. We adopted an envelope system to put money aside in different “pots” that we choose to fund (high school tuition, Caribbean vacation, health savings account, “new” used cars, house repair, etc.). It’s amazing that once the money goes into an envelope and we don’t see it, we don’t need it! We’ve taught this same principle to our children and it’s amazing to see our 17-year-old son adopt the envelope system too. He has money saved for a full year of car insurance, a full year of a monthly gas/entertainment allowance, and anticipated car repairs. What other 17 year olds have that kind of financial thinking?!
The Financial Fitness Program also introduced us to the concept and importance of an offensive strategy. In addition to our medical careers, it inspired us to pursue an entrepreneurial opportunity to build our business ownership and leadership skills and to pursue true wealth creation. It has also helped us understand the economy and how a more accurate knowledge of history can help to explain our current financial situation and how it impacts our family.
Because we continue to make choices to tithe, delay our gratification, save not spend, and build an offensive strategy to increase our income, both Matt and I were able to transition away from our healthcare professions over 6 years ago and be stay-at-home parents. The Financial Fitness Program has allowed us the privilege of living a cash lifestyle, home school our children and afford private high school tuition for our 2 boys.
We are convicted that the principles of the Financial Fitness Program work and we are passionate about introducing it to other families like ours who were being pulled under by the Financial Matrix. There is a financial medicine that works….it’s called the Financial Fitness Program!