Financial Freedom Starts Now

MBIB team member Breann Davis is serving up financial tips, tricks, and solutions.

Keeping our community at top of mind, we felt it was necessary to address the financial crisis that’s specifically impacted Black and Brown communities as a result of the pandemic. With eyes and ears open, we called on one of our very own, Breann Davis, who wanted to share the details of her debt-free journey in hopes of providing relief and advice for those seeking it.

Breann completed her five-year $120,000 debt-free journey in September 2020—amid a pandemic! Equal parts impressed and intrigued, we sat down with Breann to learn how she was able to secure financial freedom and empower others within whatever situation they’re facing now.

“If we have the ability to educate ourselves and share the wealth with the community, why not?” — Breann Davis

Q: We heard you have a debt-free story. Can you give us a rundown of how this story began, and what inspired you to become debt free?

A: I’ve always been averse to debt. All I ever heard was the stress of “How do I afford this?” I have these poignant memories of my mother having to make a tough decision between if my brother or I got a pair of new shoes for the school year because she couldn't afford two pairs. Or me figuring out, “Oh I can tutor kids one summer to make money,” but at the end of the summer—having the most money I ever had at one time—my mom needed it for a bill. I always remember that, so in the back of my mind I wanted to achieve that feeling of not living paycheck to paycheck. I knew debt was a big part of it.

I made it through a certain point in life where I was debt free. When I decided I wanted to get my MBA, that was the trigger because I knew I was going to have to take on debt—the most I've ever had. Not just a car loan, but a house-loan-worth of debt. I walked out of school with my MBA and $120,000 in debt—that was with getting half of my tuition paid. I have this responsibility—my mother is still living paycheck to paycheck—so when she does need to retire, it's not like she has this robust retirement waiting for her. That put me into crisis mode.

Q: How does self-care relate to personal finances, and how did you use financial planning to tap into your self-care practices?

A: The biggest part of it is taking the stress away. There are so many things to stress about. I didn't want to be stressed out about money if I could help it, in the way I saw it constantly growing up. The question mark is you don't know how much you're going to make, but what you can control is your debt.

The first step is your mind-set. The magic is in the mind-set and finding something you can stick with. It's no different than the mind-set of achieving a goal, whether you have a career aspiration or you want to lose weight. It's really that consistency every year to commit. Every year we make these New Year’s resolutions, but three months down the road, are you still sticking with it?

Q: How has working for a company like MBIB affected the way you view your financial path as a Black woman?

A: One of the core pieces of MBIB is “for us by us” and to me, that means the Black community is affected by a unique set of certain circumstances. If you go looking for cookie-cutter information, it's not one-size-fits-all. It's a different situation for many of us. Many of us come in and we have debt, but we also have family responsibilities, our credit is jacked up, or we don't have trust funds and reserves sitting around.

I like the fact that I can put a more realistic spin on how to become debt free, and MBIB does that too. We're taking meaningful topics but tailoring our solutions specifically to the Black community. For example, all the work we've done on mental health is even more meaningful because the Black community is disproportionately much more affected by mental health.

Q: I think most readers can agree that 2020 has had a significant impact on their life. Specifically, regarding financial impact, what are four action items MBIB readers can use to regroup, recover, and come out stronger in 2021?

A:

1. You need self-control, and it’s going to take planning. Put a plan together that works for you because you have to stick with it.

When I found out I was ready to make a plan to get debt free, I knew I was going to need self-control, and that it was going to take planning. My goal was to pay off that debt five years post-grad—so $120,000 in five years. I also knew I didn't want to be eating ramen noodles out of a bowl every day, not enjoying life. I put a plan together that worked for me because I had to stick with it for years.

2. Look at how much money you’re bringing in and all your expenses. Not just rent and the light bill, but money spent at the grocery store, when you eat out, travel, go to the gym, entertainment, etc. Just add it all up and understand where you’re at.

We're not aware of how much money we're bringing in and where that money is going. I think the latter part is the more meaningful part. I remember seeing my mom balance her checkbook, and you're very aware of what you have, and what you have left. In today’s world, it’s all electronic. I looked at how much money I'm bringing in and all my expenses—not just rent and my light bill, but how much money am I spending at the grocery store, when I eat out, travel, all those gym memberships, Netflix, Hulu… Just add it all up and understand where you’re at.

3. Maximize your disposable income. It takes some choices, it involves research, and it involves realistic discussions about what you’re willing to give up.

The logic is to put as much of your free money as possible on your debt. Now that you know how much you’re spending—you know what your income is—how do you maximize the amount of disposable income? It takes some choices, it involves research, it involves realistic discussions about what you’re willing to give up. One of the things in Cincinnati is that I didn't want to park on the street because of the snow in the winter. I wanted a heated garage, but that's going to cost more money. I had to let go of what I actually wanted vs. what I needed at the moment. I settled on a place with all the upgrades inside, but the rest was affordable. I locked myself into situations where I have a reliable amount of disposable income every month.

4. We all have our splurges. So, make splurges more efficient. It’s a compromise that requires a lot of discipline.

We all have our splurges. So, I thought about how I can make splurges more efficient. One of the things I didn't want to give up was travel. This is controversial—most of the articles you read will say, “Just cut up your credit cards”—but my credit card has a really good reward system. I could earn a dollar for every dollar I spent. I was able to connect my rent and any other bill I could to my credit card without an additional fee, so I was racking up enough points every month. It was a compromise that required a lot of discipline to pay my credit card balance off every month, but the trade-off was that I'm earning these reward points and essentially traveling for free.

Q: Were there certain steps you took during your debt-free journey that may be accidentally forgotten?

A: People tend to skip the fact that you need an emergency fund. I'm aware that every reader is going to be in a different situation, but I needed to have at least a month's worth of dollars saved up. There's two approaches you can take when looking at your debt: Either pay the highest interest rate first or pay the smallest balance first—that's called the snowball effect. I didn't have any bills with crazy interest rates, so I decided to do the snowball effect.*

The idea behind the snowball effect is twofold:

1. You pay off the smallest balance first. I have my required payments for different things, but the extra money I put to the lowest balance first.

2. Then, let's say I pay that off in six months. I take the $100 that I was putting on the bill that is now paid off, and I add it to the next thing. So, the cool thing is that you see progress. I need some reward!

Q: You became debt free during the pandemic (Sept. 2020). How did you feel, and how has this accomplishment helped take care of future Breann?

A: I got debt free in September 2020. I was proud of myself, but I was a little surprised. My plan didn't have me getting debt free until 2021. It was sort of an ah-ha! moment—I didn't necessarily realize that while I didn't get to travel, it did allow me to get debt free (in September). We were all grasping for the good things in 2020, and that was mine.

Literally nothing has changed because I have other goals. The only difference is the disposable income is going into a savings account instead of a loan. Being debt free is a benefit that a lot of our non-Black and Brown counterparts have. I'm not going to settle for that. One of the sacrifices I made in being debt free—because it was something I needed to do—was that I'm not building a retirement fund like my counterparts are on the other side. My next goal is to catch up on the retirement savings side, so that I am putting my path on the ultimate goal of creating generational wealth.

Q: What's the most impactful takeaway you received during your debt-free journey?

A: One of the things I learned through all of the mental health stuff that MBIB has done is to focus on the possibilities. I thought about posting on Facebook with the paper like, “I'm debt free!” But I decided to post the words on Facebook because I thought it might provide some hope, especially thinking about my family and the folks that were following me.

In many ways, where I'm at today—I'm definitely not supposed to be here. That was a glimmer of hope that it is possible. This is what I could make with what was on my plate, and it didn't turn out half bad.

Q: Lastly, what are three words or phrases to describe the debt-free journey?

A: Dedication, discipline, and be realistic. You can't say you want to be debt free but also be reckless with your money. We don't have that luxury.

We are so thankful for Breann’s inspiring story and happy to invite you a little further into our internal MBIB world. Whether you’re in need of some financial guidance or looking for some inspiration along your own debt-free journey, we promise to continue supporting you along the way—with insightful content, forward-thinking strategies, and conversations with speakers we love, trust, and respect. In the words of Breann, “The goal is not to be extreme. It’s not to be perfect. It’s about keeping things in perspective. Just trying to focus on the possibilities and what else I can be doing today.”

For more information in relation to this article, Breann recommends The Budgetnista, run by Tiffany Aliche, and His and Her Money, created by Talaat and Tai McNeely.

*Originally coined by Dave Ramsey.