Expert Interview with JoAnneh Nagler Of The Debt Free Spending Plan About Retirement Savings and Supporting In-debt Children During Retirement

Retirement savings“The principle of living debt-free is not about being good money-citizens for the sake of it. It’s not about getting a gold star. It’s about getting clarity with our money so that we can fund more of what we want, not less. I like to say, ‘It’s about creativity, not credit cards.'”

This is a quote from our interview with JoAnneh Negler

when asked about the origins behind her book, The Debt-Free Spending Plan.

Saving for retirement need not be all about deprivation, as JoAnneh reminds us below (“it’s about wants, as well as needs,”), nor does it need to be intimidating.

Preparing for retirement is about knowing where your money is going and having better control, which gives you the opportunity to fund what you really care about.

What inspired you to write The Debt-Free Spending Plan initially?

It all started about a decade ago when I was tanking terribly with my finances. I was deep in debt, and I became determined to craft something simple that would help me with my money.

All of the popular books on personal finance were death-traps for me. They were all about investing. The big names would say, “Get out of debt, it’s a bad idea. Now here’s how to invest.” As if I could get out of debt by just agreeing with myself that I should. I needed help. I was drowning! And these books didn’t help me at all. Worse yet, they made me feel that I just couldn’t get this; that somehow I should keep on ignoring the problem because I wasn’t constitutionally set up to “get” financial stuff.

But I knew I needed help.

So I went to some support groups first, just to come face to face with my need to change. Then I came up with an easy finances plan that was based on simple addition and subtraction – something that would be so clear that a 10-year old could do it.

I realized that it’s not that we debtors aren’t bright people; it’s that we panic around our money. We shut down when facing our numbers. We’re afraid if we look deeply into our finances, we’ll never have another fulfilled want for the rest of our lives. We relate to money management the way we relate to a diet: like it’s a shortage-inducing tool.

I knew I had to change all of that for myself, and to create something which allowed me some choices so that my wants were addressed as well as my needs.

I crafted this simple Spending Plan, started using it, and then shared it with my ex-husband. We were apart in large part because of our debts, and we still loved each other. A year after that, we got back together with a promise to never use credit cards again and to live by our Spending Plans. We got married again, and we’re entirely happy. So this work is obviously very powerful and meaningful to me.

Better yet, on a modest income, we’ve started to really travel – all on cash. We never fight about money. If things get intense, we just look at our Spending Plan and see what we need to adjust. It’s all very clear. We like to say that now we have money choices, but we don’t have money drama.

A few years into using my plan, my friends noticed that I had changed and that I was happier. They began asking me to show them what I was doing. One of my best friends came to me after she and her husband had been using the plan for a little while and said, “This thing saved my marriage. You have got to write this down.” And that’s how the idea for the book was sparked.

I never thought to write a book on debt-free living. But once I began to write, I saw that I had much to say. I did it as an act of service for all of the other people like me who needed something truly simple to help them make peace with their money.

Can you briefly describe the main premise behind the Debt-Free Spending Plan?

The premise is simple: have absolute clarity in your spending before you spend. Don’t wait until after you’ve spent to reconcile the damage you’ve done. That’s too late. We want to be thoughtful about what we have, what that will buy us, and how to use that money to craft the best life possible. We want to include our wants as well as our needs.

We’re building a debt-free life so we can take care of our needs, and then ask ourselves, “Okay, what do I want to build now? What would be meaningful to me to fund?” The principle of living debt-free is not about being good money-citizens for the sake of it. It’s not about getting a gold star. It’s about getting clarity with our money so that we can fund more of what we want, not less. I like to say, “It’s about creativity, not credit cards.”

Life responds very well to us when we take responsibility for our money choices. I like to look at it this way: if we’re tanking on the income we have, then we’re not building the capacity to handle any more money, are we? When we’re building the things that are important to us on our existing income, and we’re making a happy life with our resources, then it’s easy to handle more money. We’re thoughtful about it. We’re making conscious choices with it. That’s what The Debt-Free Spending Plan gives us: the ability to choose where to put our money and build on what we love. This principle alone has revolutionized my life.

You describe the Debt-Free Spending Plan as a five-minute-a-day plan. How can you get and stay out of debt in just five minutes?

You make a plan each month of what your spending needs are. Generally speaking, if your income doesn’t change much, you’ll only have to do this once and then adapt for any minor changes when expenses vary.

Then each day you simply record what you spent in a few simple categories (food, fuel, entertainment, dry cleaners, etc.) using a small notebook or your notes app on your phone. It’s simple addition, so it’s not complex. It literally takes five minutes a day.

The key here is that you are in charge of the plan. I don’t tell you what you should spend and what you shouldn’t spend.

For example, my debt downfall was never planning for clothing purchases, which I love. So I would run up debt to buy clothes – things I needed and things I wanted – and I always had guilt, shame and grief after the experience. Every credit card user knows what I’m talking about: that insane conversation in their head that goes something like:

“You didn’t need that dress. You’re never going to get anywhere if you keep running up debt.”

“Shut up! I need things.”

“Yeah, like more debt pressure! You’re a total loser with your money.”

“I have to buy myself things sometime!”

“Run up some more debt why don’t you! The pressure is killing you! You’re never going to get anywhere if you keep doing this!!”

And this kind of stress and self-loathing taints everything. It quite literally ruins our days.

My husband’s issue was dining out. Whenever things were going well – or particularly when they were going wrong, – he’d say, “Let’s just go out to dinner. I’ll put it on the card.” And momentarily we’d feel high and elated; but then we’d be stuck in the mud with whatever we were struggling with, since the debt just made the problem more entrenched.

So we knew that our plan had to include money that covered clothing for me and a reasonable amount for dining out for him, so we didn’t have the compulsion to run up credit card debt for those things. We set aside a modest amount in proportion to our income, and that’s what we spend. And it’s brought a lot of romance to our lives. We dress up, go have a cocktail or a meal, and we have fun – without guilt or stress. It’s a treat now, rather than a shame experience.

And we manage all of this – our wants and our needs – in five minutes a day by simply having a plan that we work from; one that lets us know how much we have to spend before we spend it. That’s the whole key.

In the “About” section of your website, you talk about how we don’t know how to get or stay out of debt. Can you share one or two quick, general tips on how to get and stay out of debt?

Get a tool to help you live within your means. Most of us can’t do this on our own. We need a tool – something simple, easy to master, and easy-on-the-soul. If it’s too complex, we will simply check out and go back to putting our heads in the sand around our finances.

That’s why I wrote my book. It’s not for the savvy financial person who’s made all the right choices and needs investment advice. It’s for the person who has crashed the train, or is barely making it and is getting into debt to make up the difference. My book is for people who hate numbers, never liked math or rarely balance their checkbooks. And we money-vague people need a tool more than anyone. We need a solid support to help us have clarity in our spending.

So, first, I say, we have to give up the old diatribe that chants, “Oh, I’m just no good with money.” Or, “I’m a creative type, I just can’t get numbers into my head.” Just give that bunk up. If you can add, you can learn this. Truly.

The major tip I can offer is to get a tool that helps you PLAN what you have to spend in each category of needs BEFORE you spend it. This is the problem with thinking you’re going to solve debt issues by using Quicken or Quickbooks. Listing what you’ve spent after you’ve spent it is too damn late!

Recording receipts is not enough. We have to have a strong yet flexible tool that lets us know we have $400 a month for groceries and helps us track what we spend as we spend it.

If you love tech tools, the best one I’ve found to use in conjunction with The Debt-Free Spending Plan is at If you hate tech tools, then use a little notebook to track your daily needs. In the food example, I would write $400 on the first page of a 3″ x 5″ ring binder, and when I spend, I list it.

FOOD +400.00

4/3 Trader Joe’s -75.00

+325.00 left

When we do this for each category in which we have spending needs (Fuel, Coffee Bar, Drug Store, Cleaners, Entertainment, Acupuncture, etc.) then we live within the amounts we set out for ourselves at the beginning of the month. We look in our categories first before we spend to make sure we have the money.

When we live within our allotted amounts, then we keep the money we set aside for our wants. That means if I use my plan to help me not go crazy at the market running up $55.00 on a grass-fed lamb roast and $28.00 a pound on gourmet olives, then the money I put in my travel account stays there. When I account for all my bills and have a plan to pay them, my golf-playing money stays mine. It doesn’t get stolen to pay a bill. It’s a very powerful principle. The book describes the step-by-step how-to in simple detail along with practice examples.

Can the Debt-Free Spending Plan be modified to include planning for retirement?

Absolutely. The Debt-Free Spending Plan can be adapted for any income stream: for retirement, taking time off to write a book, having a child, funding a college education, planning a wedding or funding a vacation. The plan is not like a diet. I don’t say, “This is what you must spend and not spend.” What you spend – the categories you set up – are all based on your needs and wants. It’s custom-tailored to you.

I teach the skill of “proportional spending.” What that means is, after you pay your bills, if you have $800 left to fund your daily needs (things like food, fuel, drug store, body care, entertainment, etc. – the daily stuff of life), then you’re not going to be in the market for a $300 haircut. You’re making the choices about what to spend your money on, but you’re also the adult here. So you have to make your money cover ALL of your needs, not just one or two. That’s how we stay out of debt. So if my income is modest, or I’m on a retiree income, I may choose to get a haircut in a less swanky place or grocery shop at the less expensive ethnic market (and stay out of “Whole Paycheck” boutique groceries) so that I can have a travel fund.

We’re not learning these skills so we can be good little citizens and get a pat on the head from our tenth-grade math teacher. That’s not the goal here. The goal is to live simply on the amounts we have and live as well as we can – AND fund some things that we want. Things that we love and are meaningful to us.

So if it’s the coffee bar over the yoga studio membership for you, then so be it. It’s what brings you the most pleasure. But we no longer get to crash the train by completely checking out on the fact that we’re running up $300.00 at the shi-shi coffee bar and then we don’t have enough for groceries. We learn to spend proportionally so that we can cover all our needs, and still have some left over for our wants.

It’s the most powerful thing in the world to be able to fund what we want – including the rest that retirement brings.

For people who are preparing to retire and haven’t necessarily had a stable retirement plan in place their whole working career, what advice do you have for preparing for retirement?

First, learn to live debt-free NOW. Right now. Don’t wait until next year, and don’t even wait until next month. If you read the first three chapters of my book, you’ll have a working knowledge of how to set up a plan for yourself or for your marriage. (Chapter 7 is also particularly helpful if you’re in a relationship with a partner.) You can get the book at the library if you don’t feel like buying it; but if you haven’t found simple help so far, just read it and get the gist of how to craft your own plan. You must begin to handle the lack of clarity in your spending if you’re ever going to retire in peace. That’s the honest truth.

What’s helpful about my plan for folks who are older is you don’t need a computer to make the thing work. Sometimes, learning Quicken or Quickbooks, or using a finance app can be a burden and a block for people who didn’t grow up in the computer age. The joy of writing my book was crafting it for anyone who needs help. There is no special skill you need to begin other than knowing how to add.

The whole idea of the Spending Plan is to – ta-dah! – plan before you spend! Most of the tools that are out there in our financial tech-world – including Quicken and Quickbooks – do not help the debtor or the person who has a lack of clarity in their spending. How come? Because they are after-the-fact tools. It does me no good to track what I’ve spent after I’ve spent it. That’s too late! I have to know what I have to spend before I spend it. That’s how I stay out of debt. That’s what my plan gives you, and you can do it in five minutes a day. It will not consume your life.

Okay. All that said, let’s say we’re living debt-free, we haven’t saved for retirement, and we need to figure out what to do in the next few years when our working life will hopefully end. The Spending Plan will give you the tools to figure out how much it will cost you to live and where you may need to downsize to retire with peace of mind. It gives you the clarity to come out of vagueness and take a look at what your housing is costing, what your food and fuel is costing, what you’re spending on entertainment, etc., and where you can adjust.

Though I don’t claim to be a retirement expert by any means, the obvious answer is that you must make your expenses come into alignment with your income. So what if it’s too crazy-expensive where you are living now? Your plan will help you determine where you can afford to live.

Think of it this way: if you know exactly what your living expenses are, then you can make informed choices about where to retire. More and more retired Americans are living in expat towns for just this reason. More are moving out of expensive urban areas into rural and small town locales. But you don’t want to make those decisions rashly. Have clarity and know your expenses. The plan will give you that.

If you decide you need to move to a less expensive place, get at least three contrasting quotes on any major purchase (like land, homes, or expenses in new areas) and make informed choices. Do it all based on what your Spending Plan tells you you’ll need. Don’t make quick or fear-based decisions without informing yourself.

Similarly, what advice would you have for people who are just entering their career as far as beginning to plan for retirement now?

Long before I became debt-free, I took an all-day financial planning seminar designed for women at Santa Monica College. The woman leading it said that an 18-year old woman who began putting $50 a month aside and did that consistently until she was 35 would have more money accrued (because of compound interest) than a woman of 30 who put twice as much away and stopped saving at 60 years old. That was a real wake-up call. But even given that information, I still didn’t save. I was in debt. Debt always came first. Saving, particularly for retirement, seemed like a pipe dream on my modest income.

What I know now is that if younger people can learn the simple steps of living debt-free early on, they will not feel pressed by debt’s guilt, shame, confusion and weight of its pressure on their daily lives. Without that pressure, saving for retirement doesn’t seem so arduous. The advice I now give early-career folks is simple: even if you save $20.00 a paycheck in a retirement account, it’s going to end up being truly meaningful to you later. Even when rent is high, expenses are intense, and you have wants and needs, using the Spending Plan to get clarity on all those things will free up cash for savings. That’s why I promote setting up multiple savings accounts at a free credit union (like When we set aside money in separate accounts and nickname them: Travel, Car Repairs, Retirement, Emergency Fund, New Computer Account, Road Cycle Account, or whatever is meaningful to us, we tend to feel at ease. We’re covering not only our needs, but some of our wants. That’s very, very powerful regarding retirement or anything you want to fund.

Can you speak a bit about the increasing tendency for adult children to live at home? Do you predict that this will continue, and if so, how does this factor into people’s retirement plans?

It’s funny. I was with a group of my mother-in-law’s friends the other day who are all in their 70s, 80s and 90s. One friend noted that her mid-20s grandchildren are living with her son and daughter-in-law, and said, “Well, those kids can’t make it. Rent is too expensive for them. They need to live at home.” And I disagreed.

I remember being 18 years old, working at a tech company in Silicon Valley, and paying $225 a month for rent – which seems incredibly cheap now, but it was more than half of what I was making. It wasn’t easy. I would borrow $30 from my folks and pay them back the next week to get by sometimes, but I was independent; and in those days, I had no credit cards.

So I’m well aware that, particularly in the Bay Area where we live, rent is crazy, housing prices are insane, and it’s hard. But it’s always been hard. It’s never easy to figure out how to live on what we’re making when we’re just out of high school or college. And though I know this isn’t a popular thing to say, we Americans have created an incredibly entitled generation in our children. And our personal debt has contributed to that issue. We feel entitled – which is where our debt behavior comes from in the first place – and our kids pick up on that. As a generation, they don’t truly feel they should have to struggle to be independent, and that’s a problem.

Now to be fair, health insurance is a big factor in finances for everyone now, including young people; but ultimately, it is what it is. It costs what it costs to live, and the reality check is if we want to build a life, we have to earn and adapt, and we must make solvent choices or we’ll always be dependent.

I want to say a little more about this, because it’s a huge issue for retirees. I led a seminar last year in Southern California in which more than half of the attendees were over 60. At the break, a handful of folks came up to me and told me that they would have enough to live in their Spending Plans if they didn’t have adult children – and often their families – living with them and taking chunks of money from them. These were amounts of money that the parents could not afford to give and still stay solvent, and yet still they were funding their children’s lives.

These were not situations in which the adult children couldn’t help themselves: they were able-bodied adults living in their parents’ houses rent-free – sometimes with their spouses and kids – and offering nothing toward food, utilities, house expenses, etc. These seniors were often mortgaging their houses to offer loans and housing, even though they had modest incomes and had no particular retirement savings or future security for themselves.

After the break, I asked if the group could handle some tough love. When they agreed, I told them in no uncertain terms to knock it off. It is codependent craziness to promote dependency in adult children and harm ourselves to do it. Even when we have the resources to do it, it’s still crazy. It breeds nothing but family angst and dependency, and it leaves seniors who have modest incomes in deep, deep trouble in their older years. When we did the math – particularly noting how many years they may live – the group was rather stunned. They realized that their home equity would not last with large, unpaid loans against it; and they would not be able to fund a retired life for long. It was scary to see the looks on their faces. Clarity will always bring that kind of reality check, and it’s often not pretty at first recognition.

Many shared that they couldn’t say no to their grown children. And that’s an issue for a group like Debtors Anonymous. If you need support to craft a plan for living expenses and retirement, and you’re dinging your ability to fund your life by pouring money into your adult children’s dependency, then you need help, plain and simple. You need a support system that helps you say no, turns your attention to your own real needs, and allows your children to stand on their own two feet. I can’t tell you how many stories I hear from people in their 60s, 70s and 80s who don’t have enough money to live because they’ve given huge loans to adult kids who aren’t paying them back.

So what’s the upshot? My opinion is this: promote independence in your children no matter how much it costs to live in your geographic location. Do not make excuses for adult children. Charge fair rent, food costs, utilities and a portion of the housing expenses to any adult child living at home. Don’t let adult children live in your home who have no jobs or won’t get one. Give an end-date when a 20-something adult needs to find a place to live – say, one year after college, no more than two. Give a time-limit to adult children who are divorcing and are staying in your home – say, one year.

Say no to large loans, particularly to pay off debt and credit cards, unless you’re helping them to invest in a secured loan for a house. (And even then, make sure they agree the loan is predicated on an agreement to not borrow against the equity in their new home.)

The please-help-us-pay-off-our-credit-card-debt request has become an increasingly common appeal to seniors from adult children – to the tune of $40,000, $65,000, $80,000 and more for middle-income families. But let me tell you what happens when you do that. When you pay off debt for adults who have not found a way to live within their means, you are pouring money down a black hole. They will surely – in one, two, four or five years – be in terrible debt again, and I guarantee they’ll come knocking again because they haven’t learned yet how to live within their means. Paying off debts for adults who haven’t changed is always a bad idea.

So what if you want to help them change their behavior and you feel inclined to help financially? My loving suggestion is to tell them you’ll help when they have been living debt-free for at least one year. That means no credit cards – at all – with all accounts closed. (Do not fall for the “we’re paying them off monthly now so we can get the airline miles” line. Debtors are debtors, and putting the candy in their hands and asking them to resist it is just madness.) Then ask to see their credit reports – all three – so you can confirm they haven’t been using cards for at least a year before you offer any financial help. Let them know this is a one-time offer, predicated on their changed behavior, and hold yourself to it. Then let go. They may or may not change for good. But chances are, if they’ve been living debt-free for a year, you can help them without fearing that the cycle will repeat itself.

If you have a great relationship with them, and they respect your wisdom, then you may choose to encourage them to go to a support group like Debtors Anonymous; and may want to offer them some simple instruction – say, from my book or the YouNeedaBudget website. Do not expect that you will teach them Quickbooks and all will be well. Debtors need simple. They need easy. They need something that helps them plan and get clarity with easy strategies, and helps them calm down about money.

In summary, have boundaries for adult children regarding money. Better yet, teach your adult children early on how to live debt-free or how to use a Debt-Free Spending Plan. It will empower them forever, it’s easy, and it will inform every choice they make in life. It will make them feel powerful around their money, and that’s no little gift to give.

I know I have strong opinions about this, but I’m deeply troubled by the crazy money dynamics that are happening in American families today. The adult dependency we’ve bred in our children is doing severe harm to our current group of retirees’ ability to live in peace in their older years. I get at least one email a month with a story like this, and it’s always so sad.

Think of it this way: giving your adult children the chance to struggle to find their own independence will make them stronger people. Give them debt-free tools. Train yourself; then, if they’ll let you, train them to live without debt pressure. Then let them live their lives without enabling them. I believe that these are the most powerful gifts you can give your kids – period.

Lastly, can you talk about some intangible benefits of getting and staying out of debt, like on health, personal relationships, etc. Why is it important to be debt-free?

I was on a hike with an acquaintance friend recently and she said to me, “Yeah, I know. We never should have bought this house – we’re upended in it. And we’ve got our kid at a $50,000 a year college – but that’s what kids around here expect, so we’ve got to go into debt!” The sad part is that her health is poor, she is recovering from a serious illness, her husband is stressed out, and their marriage is suffering. And I simply said, “If you’re ever ready to address it, I’m here.”

So the first thing to realize is that debt stresses relationships. Worse yet, it kills our sex life. I’m not kidding around here. When there is debt stress and money vagueness in a marriage, we subtly stop respecting each other. We tend to feel trapped with our partner and moving in a downward spiral, and our lack of willingness to address it together just makes things worse. We inch away from each other intimately, and that lack of respect grows into a muddy terrain of mistrust.

I talk about “The Aphrodisiac Quality of a Spending Plan” in just about every talk I give. In fact, I named my couples chapter in my book after this principle. When there is money clarity, there’s no reason to fight about money. When there is no accruing debt pressure, there is no added pressure. When we think about all of the things we fight about with our partners, how many have to do with money – either directly or indirectly? A lot of them do.

So when we take that stressor out of our lives, there’s not a lot to fight about. The blocks to intimacy melt away. But the Spending Plan’s power is bigger than that. It’s not just about lack of stress, it’s about what replaces it.

When my husband and I were first doing the Spending Plan together, I’d see him come home and un-wad all his receipts from the day on the dining room table, and then enter them in his little notebook. And suddenly I had more respect for him. He was making a solid effort for me and for us. And then, when a question would come up – like, can we afford to fix the hardwood floors this year? – we’d both sit down and look at our Couples Savings Account and talk about what we wanted to do with that money. Since we were saving money in a special account for these kinds of things, it was a simple decision: do we have the cash? Yes. Do we want to spend it on this? Yes. Okay, great. Let’s find a guy in our price range. And then we set out to do just that.

I’d find myself sitting in the living room, looking over at him, and smiling to myself. I was proud of him. I was proud of us. And that feeling has just intensified as we’ve taken trips on cash, bought a new bed on cash, adjusted to his retirement, and done much more.

The best thing that’s come out of all of this for me is that I got to stop doing work I hated and began to do work I love. I earn half of what I earned before; but because we have a Spending Plan, I could downsize where I needed to so I could live debt-free and chuck my old life for a much, much better one. That has freed me to do things from love and not just out of duty. I choose to live on less so I can have more freedom – freedom to do things like write my book. It’s powerful to be able to make those choices and to no longer feel trapped or boxed in.

That’s what clarity gives us. It gives us power, strength, peace, joy and – this is the kicker, the thing I could never see when I was using credit cards – it offers more of what we want in life, not less. I have more joy, more fun, and more genuine ease than I ever had when I was trying to extend my income with credit.

Living debt-free has changed absolutely everything in my life. It has restored my marriage to the person I love best in the world. It has helped me change my work to something I love. It has helped my husband and I have clarity as he retired from his school district job. It has freed us up to travel, to explore, to enhance our living space, to be generous with ourselves in ways we never thought we could be.

It’s been worth every ounce of effort.

BIO: JoAnneh Nagler is a freelance writer living in the Bay Area. She writes books, travel articles, plays, essays, scripts, and music. She is the author of the Amazon Top-100 book, The Debt-Free Spending Plan, as well as the upcoming book, How to be an Artist without Losing your Mind. She has written for The Jewish Journal, Real Talk L.A., and for Fox Television. Her travel writing credits include, Destinations Magazine,, Himalayan High Treks and The Culture Trip. Her recently completed music CD Enraptured is on-line at itunes and amazon. Follow her artistry blog at

For more updates from JoAnneh Negler and The Debt-Free Spending Plan, like her page on Facebook and follow her on Twitter.

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