My friend Dellaina posted this as her Facebook status the other day. It was a t-shirt she saw somewhere:
Champions NEVER complain. They're too busy getting better.
After I got done reading this to Brian and the girls, Rachel replied: "What if they're the champions *of* complaining?"
Good question.
Sunday, January 24, 2010
"Dramatic Saga to Financial Freedom" ...or... A Long Story.
Today I had a friend ask me some questions, and asked for our "story" of how we got out of debt. Instead of trying to send it in a Facebook message or an email, I figured maybe I'd post this story, in case it is actually encouraging to anyone else.
Let me just say that God gets all the glory for our "success"...and we have in no way "arrived" at any form of financial nirvana. We still mess up, probably just not as bad as before. We still overspend sometimes, just not as bad as before. However, the difference is that we don't do the stupid things we used to do, and we communicate about stuff better as well.
We started out counseling with a couple from church, Larry & Marilyn McRae. We met with them for about a year (7:00 on Fridays!) and then tapered our meetings down a bit after the first year or so. They really encouraged us to journal during this time, which is a really good idea.
I suppose our "story" speaks for itself. Basically it's a compilation of my journaling throughout our little "journey to financial freedom". You'll get the idea.
----
Tami’s Financial “write-up” - our journey to (finally!) being out of debt
Ok, well, I was told that I’m supposed to write up something about our “dramatic saga to financial freedom”. So here goes:
Money, the final frontier. “The ongoing struggles of two over-spenders, their new mission: to explore the concept of money management. To budget and spend wisely; to seek out wildebeests and hunt down zero balances. To boldly go where few men dare to tread: financial freedom.”
(I’m sure Brian could come up with something better, but this is what you get.)
So, I’m not sure exactly how to start so I’ll just start at the beginning. This, as I understand, is a very good place to start.
So a little history - we had no idea how to manage money - except how to spend it. And even then, we had no idea how to (key word here) wisely spend money.
We both grew up in households where one parent “did” the money stuff and the other parent was virtually out of the loop. Also we weren’t really taught how to manage money or budget. In college (when I first got a credit card), I had no idea that credit cards charged interest, I just thought it was cool that I could buy stuff and not have to pay it until later (and look, they don’t make you pay it all back at once! Awesome!).
One thing that I did learn about money from my family, however, is stewardship. My father was (and continues to be) very adamant that we give back to God when he blesses us. Any time my dad gave us some money as a gift or when we got money from someone or from our jobs, we were taught to give back to the Lord. So that was something that was just engrained and that has always stuck with me. And I would venture to say that anyone who tithes can tell you of a specific instance of how God blessed them.
OK, back to the story.
We had several credit cards (I’ll get into numbers later), most of them with Debt Reduction Services (DRS), a credit “counseling” place; a fluctuating “vacation” savings account (and when I say fluctuating, I mean whenever money came in, it got spent); and a measly checking account that was always being watched like a hawk just to make sure that the checks were clearing right on time - not to early and not too late. That makes for one burdened bookkeeper (yeah, that’s me).
Like I said, I’ll get into numbers later. Suffice it to say that we were in debt, and spiraling uncontrollably into a pit of despair (and I’m not talking about the princess bride kind).
(OK, Larry, you said drama - I’ll give you drama.)
I’ll pause for a moment to say that everything that has happened in our finances and the rest of our lives have been completely orchestrated by God. He has been in control the entire time, through our bad decisions and through any good ones that might have been in there. Even through our journey of misdirected purchases or stupid decisions, He still blessed us. We have always tithed and I believe that is one of the reasons. Also, even through our ignorance and completely uneducated attempts at finances, budgeting, and basically trying to get though in life, He was in control. He protected us after some really bad decisions. He blessed us and got us through some tough spots. He, and only He, carried us through. I just have to make that known; where we are now is not because of anything WE did. It’s completely because we allowed HIM to work and to lead us. That is why we can rejoice and be free.
Needless to say, we needed help. I knew from past conversations with Marilyn that they had done financial counseling with couples. In fact, one of their past “students” had helped give me some budget tips and information. But information without instruction is useless. We needed specific help with specific problems that no one could do without accountability. At some point, I must have mentioned the counseling information to Brian, and he proceeded to talk to Larry one Sunday morning.
Which brings us to our counseling sessions. We started meeting with Larry and Marilyn in April of 2005. I’ll give a number now - looking at a report I made back then, including total credit cards, student loans, and car payments, we were just over $48 grand in debt.
We realized that we were in over our heads, and since neither of us had any money management experience, we needed help. We couldn’t live the way we were living, and had no resources to fix our problem ourselves. There are many emotions that struck us at different times in the process. The risk of baring your soul to someone - finances are a personal thing. The fear of facing the numbers of how much you are actually in debt, and sharing that info with people. The sick feeling you get when you see how much interest you’ve paid over the years, and the realization that you will pay exponentially more if you don’t get out of the hole you’re in! The “income factor” - Brian has a job (electrician) where his income fluctuates often. During times of work there’s a “regular” schedule, and often overtime. But then there are layoffs where you get less than ½ of a normal paycheck, and after 6 months, that unemployment runs out! So there are considerable anxieties to consider. I had a deep anxiety (and if you know me, you know I'm not an anxious person!) about taking money out of my checking account to put in envelopes for monthly expenses (besides the regular bills). I know they could see it in my eyes, even though I didn’t say anything about it when it was first suggested. But after leaving that night, I remember telling Brian that I was “mentally exhausted” and that was the best description I can give. I knew it worked for them, they still used the “envelope system”. But with my history of babysitting every check that I wrote, just to make sure it cleared right on time (not early and not late!), all I can say is WOW. God really gave me peace about it when the time came. We had our spending and saving under control enough by the time we were ready for the envelopes, and we were ready. It worked. We made our envelopes, prioritized them, and the first week we didn’t even have any money to put in them. But I was ready. God is good. And I haven’t worried about bouncing a check since. It’s been several years now, and since we started using this system, I haven't worried about bouncing a check. Praise God!
Another notable concept that I wanted to take out of this is to teach my kids about how to deal with managing money. I want them to grow up and know what a responsibility it is, and how to manage it with wisdom. We teach them to have a saving, spending, and giving envelope, and they keep some savings from chore money in those envelopes. They are starting to have an idea of what it’s like to have money saved (we have a saver and a spender), and that once it’s gone, it’s gone. No borrowing here!
Also, along with the stewardship of managing money is giving. When we were in debt up to our eyeballs, we had no room even to pay off our own bills, much less having any extra to give. We always tithed first, but now that we don’t have debt (except for our house) we are able to use some of our savings for extra “offerings” (Larry likes to call it using “margin for mercy”. You have extra (the margin) and use it to bless someone (mercy).
Notable quotes and sayings:
Larry’s “Pearls of Wisdom”
Brian: “Cautiously Excited” about getting out of debt
Tami: “Mentally Exhausted”
Brian: “I just gotta have a wildebeest”
Larry: “margin for mercy”
There is a “story” for nearly every item paid off. I may not have stories for each and every one, but I can say that after paying off the first item, and realizing that getting out of debt was actually an achievable goal and not just some “nice idea”, we were rearing to go. “What’s next?” was our mantra. This may seem unrelated, but stay with me here. We have two kids who love Disney movies, and our collection is extensive. We are also movie lovers and tend to “speak in movie lines”, ask any of our friends and they will tell you. Well, Larry saw the look of anticipation on Brian’s face when we were talking about the next thing to pay off, and made a comment about how excited he looked - and Brian just burst out with the line (for those of you who aren’t as well-versed in one-liners as we are) from The Lion King: “I just gotta have a wildebeest!” That’s actually a line we used often - it just fit perfectly into that context. So “wildebeest” henceforth became the name of anything we were just itching to pay off. You may hear us mention it if you happen to be in our FPU class at any time. In fact, we had a couple plastic toy wildebeests that sat for a long time on our office desk hutch, as a reminder of our freedom!
Through all of our sessions, we were taken through videos, studies, and the Bible to see what God thinks about how we should handle our money. God really showed us how He wants us to manage our money, spend our money, and save. I think it’s very important to look at what He says about money and how to manage it, and many times people overlook those details.
Here’s the basic overview of our “saga”. We started in April of ‘05. These amounts do not include our house. Credit cards alone totaled $22,416. We owed over $15K on our car, and over $10K on student loans. That total is the one I gave before, $48,216 and some cents. Not sense, mind you.
Keep in mind that we had been with DRS for several years before this, paying stuff off (albeit slowly). Overall we had much more debt but the total above is what we started with on this “journey”. Sometime I’ll have to figure out THAT number. (EEKS!)
During the first year-and-few-months of being on a budget, we paid off one of the small student loans, and ALL of our credit cards. Here’s how (in a reasonably small nutshell, considering all the details I could include): We figured out how much our monthly bills cost, and whatever was left over we used for envelopes. When Brian had overtime money, that all went into savings. That’s basically it. Some weeks we had enough for all our envelopes, some weeks we didn’t (our envelopes are prioritized). Some weeks we had more than we needed so our savings started accumulating. God gave him so much overtime that year that we paid off all our credit cards. We also paid down our house and loans, but only the normal payments, since we first wanted to say bye-bye to all the livestock roaming around.
In May of ’06, I went back to work (my former boss asked me to come back since they needed help). In June Brian was laid off. In July, we paid off our last credit card. Brian went back to work in October, I think, and during that layoff we not only killed the final wildebeest, but put money in savings. It was one of those “God” things. Brian's unemployment check covered the normal monthly bills (and even allowed us to save some money for taxes, since UE isn’t taxable) and some savings, and my paycheck covered the envelope money, and savings. It was nothing short of miraculous. It was really awesome to be able to see progress through the year. When we had some money saved up, and had some debt with a small amount left to be due, we would pay it off. It really helped us see some progress even though we were in over our heads. (Example: Brian’s student loan, which was small - one of the first to be paid off.)
Basically, after paying off one card, the $$ that was being used for that payment just rolled to the next card. So our payments to the debt reduction place stayed the same - and that just meant that every time something was paid off, the next card got a bigger payment each month, creating this exponential payoff. It went so much faster than we could have ever imagined.
After the credit cards were paid off, we worked toward what was left; the other student loan and the car. We paid off the car in the spring of ’07, and the student loan in the fall of ’07. Now we’re completely debt free, except for our house, which we actually have equity in now, because we stopped refinancing to get money to pay off our credit card debt. We did that a couple times, and it’s not something I would recommend. Ever.
Some credit card payoff stories:
~Returning Bowflex to pay one of the first credit cards not already with DRS. After wondering about selling it and then praying about it, God gave Brian the realization that he could return it!!) (7/3/05)
~Ending the year in ’05 we had paid off 3 credit cards and a student loan, over $8000. Actually, In 1/06, the yearly “review” showed that from April of 05 we ended up going from 22416 to 13514 on our credit card balances (8902 paid down).
~(3/21/06) I noted that with the overtime God had given Brian lately, we could have paid off the DRS balance with what we had in savings (to the tune of another $8000, I think). But we were holding off because we didn’t know about Brian’s job at the time.
~I already noted that we paid off the last credit card in July of ’06. Basically, we decided that if we paid off the chunk of the last balances, at the time was around $7000, we saved ourselves over $700 of interest if we had just paid them off over time. We figured it was worth whatever risk it was, to deplete our savings to pay off the rest. As it turned out, it was a wise decision and God honored it.
I guess I will go through and list some of the other “God” things - ways He showed us that He was working in our lives through all this. There are so many obvious things - too many to list really, but I will list some.
~House refinance (7/31/05) - lowest interest rate possible at the time, and we locked it in right before they started rising again. We also got a little bit of extra from the payout and added it to our savings account (and finally to pay some things off later).
~Extra grocery money, in the mail right before going to the store. One was from friends who we let use a high chair (7/1/05), and from my parents before a visit (12/14/05).
~Extra pizza (I think they messed up our order so we got a free one) (7/3/05)
~God took away my anxiety about taking money out of checking for envelopes (7/8/05)
~My discouragement/anxiety about layoffs caused me to claim Matthew 6:25-34, and when sharing with a friend, God encouraged her also through my struggles (7/31/05). I was given a situation and was able to encourage someone else through it (friend, you know who you are.).
~After the refinance, we also got a check from extra money in our escrow account (to the tune of around $700) so were able to put that in savings and eventually use that for payoffs.
~Christmas ’05 - My parents had given us some extra money (they do that from time to time - like I said - my generous parents, and yes, we tithed on it…) and we hadn’t really saved for Christmas so we were able to use some of that money for gifts.
We had a ‘test’ in when spending money is “necessary” and “optional”. I broke a window in the Camry by mistake (it was duct-tape-able), and where earlier in life we would have used a credit card to replace it, this time we just dealt with it and waited until our envelope had money in it. (8/14/05) Priorities shifting to the correct places!
Through all of this “journal reading” I see that this entire year we were expecting layoffs. God really allowed Brian to have a job (and lots of overtime) through all of this (we were wondering about layoffs for this whole year and even before). I kept thanking God that Brian still had a job (“it looks like he’s ok for now”). I hadn’t remembered how “impending” that layoff was, but never happened until we were in an “ok” place to handle the layoff (1/2 of our debt paid, money in savings, me with a job).
All in all, our “dramatic journey into financial freedom” has been really amazing. God blessed our efforts. We have had layoffs since, and have not worried about it at all, because we had savings and were able to hang in there. We still use our envelopes and sometimes get sloppy, we admit that, but have learned so much through the past few years and are so thankful to God and to his servants who dedicate so much of their time and effort and emotion into helping people get through some really tough times.
Update 6/9/09
No layoffs right now but again Brian’s out in the area so there is always a possibility. God has made it possible for us to move into a new house finally after 12 years in our cute little cracker box. He sold our house for us at the end of Summer '08, we had this one built and then moved into it in January '09. He has brought us so far and we are so thankful for the things He has taught us. It’s amazing to me - every day I am amazed at the things He does. I pray that by sharing our story and experiences we can in some way be an encouragement to others going through the process of getting free from the financial burden of debt.
Update 1/24/10
We have now been living in our house for a year - I should probably stop calling it my "new" house. We still have steps to go - as far as investing, saving for college, and such. We are now (in February) starting our second year of facilitating a Financial Peace University class led through video by Dave Ramsey. Interestingly enough, he teaches many of the techniques we used in getting out of debt, although we hadn't gone through his course until we were completely out of debt. When we went through our counseling we studied Larry Burkett mostly, and touched sometimes on Dave Ramsey stuff. As it turns out, though, the techniques and principles are really the same. This class has really brought it all together in a great way. It has helped so many others get out of debt, and learn to live by taking control of their money, instead of having their money control them. That was how we were living and we are here to tell you: financial freedom is a very attainable goal.
At one time right at the beginning of our counseling, we asked the McRaes why they still used the envelopes. Their answer: "Freedom". We thought they were crazy. No joke. But we kept with it, and now we say the exact same thing. We use the envelope system for spending (sometimes we get a little off course but never stray far), we always put money in savings, every paycheck (gotta love direct deposit), and we can both truthfully say that we control our money, not the other way around -- and that is financial freedom. We still have work to do with saving for college funds and other investments so that is where we need to work now. But the day to day finances are under control, and it's all because we swallowed our pride and asked for some help.
Hope that's helpful information to someone out there.
Let me just say that God gets all the glory for our "success"...and we have in no way "arrived" at any form of financial nirvana. We still mess up, probably just not as bad as before. We still overspend sometimes, just not as bad as before. However, the difference is that we don't do the stupid things we used to do, and we communicate about stuff better as well.
We started out counseling with a couple from church, Larry & Marilyn McRae. We met with them for about a year (7:00 on Fridays!) and then tapered our meetings down a bit after the first year or so. They really encouraged us to journal during this time, which is a really good idea.
I suppose our "story" speaks for itself. Basically it's a compilation of my journaling throughout our little "journey to financial freedom". You'll get the idea.
----
Tami’s Financial “write-up” - our journey to (finally!) being out of debt
Ok, well, I was told that I’m supposed to write up something about our “dramatic saga to financial freedom”. So here goes:
Money, the final frontier. “The ongoing struggles of two over-spenders, their new mission: to explore the concept of money management. To budget and spend wisely; to seek out wildebeests and hunt down zero balances. To boldly go where few men dare to tread: financial freedom.”
(I’m sure Brian could come up with something better, but this is what you get.)
So, I’m not sure exactly how to start so I’ll just start at the beginning. This, as I understand, is a very good place to start.
So a little history - we had no idea how to manage money - except how to spend it. And even then, we had no idea how to (key word here) wisely spend money.
We both grew up in households where one parent “did” the money stuff and the other parent was virtually out of the loop. Also we weren’t really taught how to manage money or budget. In college (when I first got a credit card), I had no idea that credit cards charged interest, I just thought it was cool that I could buy stuff and not have to pay it until later (and look, they don’t make you pay it all back at once! Awesome!).
One thing that I did learn about money from my family, however, is stewardship. My father was (and continues to be) very adamant that we give back to God when he blesses us. Any time my dad gave us some money as a gift or when we got money from someone or from our jobs, we were taught to give back to the Lord. So that was something that was just engrained and that has always stuck with me. And I would venture to say that anyone who tithes can tell you of a specific instance of how God blessed them.
OK, back to the story.
We had several credit cards (I’ll get into numbers later), most of them with Debt Reduction Services (DRS), a credit “counseling” place; a fluctuating “vacation” savings account (and when I say fluctuating, I mean whenever money came in, it got spent); and a measly checking account that was always being watched like a hawk just to make sure that the checks were clearing right on time - not to early and not too late. That makes for one burdened bookkeeper (yeah, that’s me).
Like I said, I’ll get into numbers later. Suffice it to say that we were in debt, and spiraling uncontrollably into a pit of despair (and I’m not talking about the princess bride kind).
(OK, Larry, you said drama - I’ll give you drama.)
I’ll pause for a moment to say that everything that has happened in our finances and the rest of our lives have been completely orchestrated by God. He has been in control the entire time, through our bad decisions and through any good ones that might have been in there. Even through our journey of misdirected purchases or stupid decisions, He still blessed us. We have always tithed and I believe that is one of the reasons. Also, even through our ignorance and completely uneducated attempts at finances, budgeting, and basically trying to get though in life, He was in control. He protected us after some really bad decisions. He blessed us and got us through some tough spots. He, and only He, carried us through. I just have to make that known; where we are now is not because of anything WE did. It’s completely because we allowed HIM to work and to lead us. That is why we can rejoice and be free.
Needless to say, we needed help. I knew from past conversations with Marilyn that they had done financial counseling with couples. In fact, one of their past “students” had helped give me some budget tips and information. But information without instruction is useless. We needed specific help with specific problems that no one could do without accountability. At some point, I must have mentioned the counseling information to Brian, and he proceeded to talk to Larry one Sunday morning.
Which brings us to our counseling sessions. We started meeting with Larry and Marilyn in April of 2005. I’ll give a number now - looking at a report I made back then, including total credit cards, student loans, and car payments, we were just over $48 grand in debt.
We realized that we were in over our heads, and since neither of us had any money management experience, we needed help. We couldn’t live the way we were living, and had no resources to fix our problem ourselves. There are many emotions that struck us at different times in the process. The risk of baring your soul to someone - finances are a personal thing. The fear of facing the numbers of how much you are actually in debt, and sharing that info with people. The sick feeling you get when you see how much interest you’ve paid over the years, and the realization that you will pay exponentially more if you don’t get out of the hole you’re in! The “income factor” - Brian has a job (electrician) where his income fluctuates often. During times of work there’s a “regular” schedule, and often overtime. But then there are layoffs where you get less than ½ of a normal paycheck, and after 6 months, that unemployment runs out! So there are considerable anxieties to consider. I had a deep anxiety (and if you know me, you know I'm not an anxious person!) about taking money out of my checking account to put in envelopes for monthly expenses (besides the regular bills). I know they could see it in my eyes, even though I didn’t say anything about it when it was first suggested. But after leaving that night, I remember telling Brian that I was “mentally exhausted” and that was the best description I can give. I knew it worked for them, they still used the “envelope system”. But with my history of babysitting every check that I wrote, just to make sure it cleared right on time (not early and not late!), all I can say is WOW. God really gave me peace about it when the time came. We had our spending and saving under control enough by the time we were ready for the envelopes, and we were ready. It worked. We made our envelopes, prioritized them, and the first week we didn’t even have any money to put in them. But I was ready. God is good. And I haven’t worried about bouncing a check since. It’s been several years now, and since we started using this system, I haven't worried about bouncing a check. Praise God!
Another notable concept that I wanted to take out of this is to teach my kids about how to deal with managing money. I want them to grow up and know what a responsibility it is, and how to manage it with wisdom. We teach them to have a saving, spending, and giving envelope, and they keep some savings from chore money in those envelopes. They are starting to have an idea of what it’s like to have money saved (we have a saver and a spender), and that once it’s gone, it’s gone. No borrowing here!
Also, along with the stewardship of managing money is giving. When we were in debt up to our eyeballs, we had no room even to pay off our own bills, much less having any extra to give. We always tithed first, but now that we don’t have debt (except for our house) we are able to use some of our savings for extra “offerings” (Larry likes to call it using “margin for mercy”. You have extra (the margin) and use it to bless someone (mercy).
Notable quotes and sayings:
Larry’s “Pearls of Wisdom”
Brian: “Cautiously Excited” about getting out of debt
Tami: “Mentally Exhausted”
Brian: “I just gotta have a wildebeest”
Larry: “margin for mercy”
There is a “story” for nearly every item paid off. I may not have stories for each and every one, but I can say that after paying off the first item, and realizing that getting out of debt was actually an achievable goal and not just some “nice idea”, we were rearing to go. “What’s next?” was our mantra. This may seem unrelated, but stay with me here. We have two kids who love Disney movies, and our collection is extensive. We are also movie lovers and tend to “speak in movie lines”, ask any of our friends and they will tell you. Well, Larry saw the look of anticipation on Brian’s face when we were talking about the next thing to pay off, and made a comment about how excited he looked - and Brian just burst out with the line (for those of you who aren’t as well-versed in one-liners as we are) from The Lion King: “I just gotta have a wildebeest!” That’s actually a line we used often - it just fit perfectly into that context. So “wildebeest” henceforth became the name of anything we were just itching to pay off. You may hear us mention it if you happen to be in our FPU class at any time. In fact, we had a couple plastic toy wildebeests that sat for a long time on our office desk hutch, as a reminder of our freedom!
Through all of our sessions, we were taken through videos, studies, and the Bible to see what God thinks about how we should handle our money. God really showed us how He wants us to manage our money, spend our money, and save. I think it’s very important to look at what He says about money and how to manage it, and many times people overlook those details.
Here’s the basic overview of our “saga”. We started in April of ‘05. These amounts do not include our house. Credit cards alone totaled $22,416. We owed over $15K on our car, and over $10K on student loans. That total is the one I gave before, $48,216 and some cents. Not sense, mind you.
Keep in mind that we had been with DRS for several years before this, paying stuff off (albeit slowly). Overall we had much more debt but the total above is what we started with on this “journey”. Sometime I’ll have to figure out THAT number. (EEKS!)
During the first year-and-few-months of being on a budget, we paid off one of the small student loans, and ALL of our credit cards. Here’s how (in a reasonably small nutshell, considering all the details I could include): We figured out how much our monthly bills cost, and whatever was left over we used for envelopes. When Brian had overtime money, that all went into savings. That’s basically it. Some weeks we had enough for all our envelopes, some weeks we didn’t (our envelopes are prioritized). Some weeks we had more than we needed so our savings started accumulating. God gave him so much overtime that year that we paid off all our credit cards. We also paid down our house and loans, but only the normal payments, since we first wanted to say bye-bye to all the livestock roaming around.
In May of ’06, I went back to work (my former boss asked me to come back since they needed help). In June Brian was laid off. In July, we paid off our last credit card. Brian went back to work in October, I think, and during that layoff we not only killed the final wildebeest, but put money in savings. It was one of those “God” things. Brian's unemployment check covered the normal monthly bills (and even allowed us to save some money for taxes, since UE isn’t taxable) and some savings, and my paycheck covered the envelope money, and savings. It was nothing short of miraculous. It was really awesome to be able to see progress through the year. When we had some money saved up, and had some debt with a small amount left to be due, we would pay it off. It really helped us see some progress even though we were in over our heads. (Example: Brian’s student loan, which was small - one of the first to be paid off.)
Basically, after paying off one card, the $$ that was being used for that payment just rolled to the next card. So our payments to the debt reduction place stayed the same - and that just meant that every time something was paid off, the next card got a bigger payment each month, creating this exponential payoff. It went so much faster than we could have ever imagined.
After the credit cards were paid off, we worked toward what was left; the other student loan and the car. We paid off the car in the spring of ’07, and the student loan in the fall of ’07. Now we’re completely debt free, except for our house, which we actually have equity in now, because we stopped refinancing to get money to pay off our credit card debt. We did that a couple times, and it’s not something I would recommend. Ever.
Some credit card payoff stories:
~Returning Bowflex to pay one of the first credit cards not already with DRS. After wondering about selling it and then praying about it, God gave Brian the realization that he could return it!!) (7/3/05)
~Ending the year in ’05 we had paid off 3 credit cards and a student loan, over $8000. Actually, In 1/06, the yearly “review” showed that from April of 05 we ended up going from 22416 to 13514 on our credit card balances (8902 paid down).
~(3/21/06) I noted that with the overtime God had given Brian lately, we could have paid off the DRS balance with what we had in savings (to the tune of another $8000, I think). But we were holding off because we didn’t know about Brian’s job at the time.
~I already noted that we paid off the last credit card in July of ’06. Basically, we decided that if we paid off the chunk of the last balances, at the time was around $7000, we saved ourselves over $700 of interest if we had just paid them off over time. We figured it was worth whatever risk it was, to deplete our savings to pay off the rest. As it turned out, it was a wise decision and God honored it.
I guess I will go through and list some of the other “God” things - ways He showed us that He was working in our lives through all this. There are so many obvious things - too many to list really, but I will list some.
~House refinance (7/31/05) - lowest interest rate possible at the time, and we locked it in right before they started rising again. We also got a little bit of extra from the payout and added it to our savings account (and finally to pay some things off later).
~Extra grocery money, in the mail right before going to the store. One was from friends who we let use a high chair (7/1/05), and from my parents before a visit (12/14/05).
~Extra pizza (I think they messed up our order so we got a free one) (7/3/05)
~God took away my anxiety about taking money out of checking for envelopes (7/8/05)
~My discouragement/anxiety about layoffs caused me to claim Matthew 6:25-34, and when sharing with a friend, God encouraged her also through my struggles (7/31/05). I was given a situation and was able to encourage someone else through it (friend, you know who you are.).
~After the refinance, we also got a check from extra money in our escrow account (to the tune of around $700) so were able to put that in savings and eventually use that for payoffs.
~Christmas ’05 - My parents had given us some extra money (they do that from time to time - like I said - my generous parents, and yes, we tithed on it…) and we hadn’t really saved for Christmas so we were able to use some of that money for gifts.
We had a ‘test’ in when spending money is “necessary” and “optional”. I broke a window in the Camry by mistake (it was duct-tape-able), and where earlier in life we would have used a credit card to replace it, this time we just dealt with it and waited until our envelope had money in it. (8/14/05) Priorities shifting to the correct places!
Through all of this “journal reading” I see that this entire year we were expecting layoffs. God really allowed Brian to have a job (and lots of overtime) through all of this (we were wondering about layoffs for this whole year and even before). I kept thanking God that Brian still had a job (“it looks like he’s ok for now”). I hadn’t remembered how “impending” that layoff was, but never happened until we were in an “ok” place to handle the layoff (1/2 of our debt paid, money in savings, me with a job).
All in all, our “dramatic journey into financial freedom” has been really amazing. God blessed our efforts. We have had layoffs since, and have not worried about it at all, because we had savings and were able to hang in there. We still use our envelopes and sometimes get sloppy, we admit that, but have learned so much through the past few years and are so thankful to God and to his servants who dedicate so much of their time and effort and emotion into helping people get through some really tough times.
Update 6/9/09
No layoffs right now but again Brian’s out in the area so there is always a possibility. God has made it possible for us to move into a new house finally after 12 years in our cute little cracker box. He sold our house for us at the end of Summer '08, we had this one built and then moved into it in January '09. He has brought us so far and we are so thankful for the things He has taught us. It’s amazing to me - every day I am amazed at the things He does. I pray that by sharing our story and experiences we can in some way be an encouragement to others going through the process of getting free from the financial burden of debt.
Update 1/24/10
We have now been living in our house for a year - I should probably stop calling it my "new" house. We still have steps to go - as far as investing, saving for college, and such. We are now (in February) starting our second year of facilitating a Financial Peace University class led through video by Dave Ramsey. Interestingly enough, he teaches many of the techniques we used in getting out of debt, although we hadn't gone through his course until we were completely out of debt. When we went through our counseling we studied Larry Burkett mostly, and touched sometimes on Dave Ramsey stuff. As it turns out, though, the techniques and principles are really the same. This class has really brought it all together in a great way. It has helped so many others get out of debt, and learn to live by taking control of their money, instead of having their money control them. That was how we were living and we are here to tell you: financial freedom is a very attainable goal.
At one time right at the beginning of our counseling, we asked the McRaes why they still used the envelopes. Their answer: "Freedom". We thought they were crazy. No joke. But we kept with it, and now we say the exact same thing. We use the envelope system for spending (sometimes we get a little off course but never stray far), we always put money in savings, every paycheck (gotta love direct deposit), and we can both truthfully say that we control our money, not the other way around -- and that is financial freedom. We still have work to do with saving for college funds and other investments so that is where we need to work now. But the day to day finances are under control, and it's all because we swallowed our pride and asked for some help.
Hope that's helpful information to someone out there.
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