30 June 2011

Independence Day

I keep hearing Martina McBride singing in my head...

...it's done.  We're free.  (Mostly--but I'll tell you about that in a minute.)

James just made the final payment on our debt.  Not a big deal for some, but this has been HUGE for us, and an issue since before we were married.  I am not proud to admit that I started using credit cards in college and just got...hooked, even though it's a cliche.  My mindset?  Credit was the same as having money.  I could spend and spend, and only pay what I wanted to pay.  I shared some of my bad habits with my Boy, although he's always been better than me when it comes to spending.  Fast forward a decade, and add a decade's worth of overspending, spending what we didn't have, financing things we didn't need to finance, and a whole lot of sticking my head in the sand when it came to money.

We hired a financial advisor at one point, and just loved him.  Great guy.  Great ideas.  Didn't even phase us when he sat us down, looked us in the eye, and said, "your net worth...is negative."  He gave us a plan to get out of debt and build wealth.

That binder made a pretty addition to the bookshelves I charged at Target several months later.

Even when we sat down and looked--really looked--at our finances to make the decision to move to Brenham and for me to leave the classroom, we weren't looking with eyes that saw the truth.  We thought we were in pretty good shape.

We had a "budget" that left no room for new tires, or medical bills, or any unexpected expenses, much less daily life.  I was STILL charging stuff when we moved to Brenham and started our "new life."  With the same old bad habits.  Thank God--literally--that He did not answer our prayers about buying another house when we moved here.  Honestly, we were lucky to get out of the one we sold...that we'd financed with a 100% loan.  100% loan - 3 years = lucky to break even.  I have no doubt that if we had bought a house at the prices we considered (keep in mind, we thought we were in good shape, even with my smaller salary!) it would have ruined us financially.  The little green house was a blessing 5 years ago, and it still is today.  Dave Ramsey's plan includes living under your means...I wouldn't say we've done that well, but we have learned to live WITHIN our means.  And though we laugh about it sometimes, our means right now to finance the lifestyle we have (rich in family time, not so much in stuff anymore) are this very small rented home and two 6-year old vehicles.

But going back...Life came at us pretty hard and fast after we moved.  We quickly learned that our "budget" (not that we had one, we just thought James made enough money to cover everything) wasn't cutting it.  Quite frankly, we didn't have two nickels to rub together that first summer we were here...it hadn't occurred to us that since I didn't get paid year-round anymore, we ought to save money for the summer months.  We lived through that summer by eating a lot of sandwiches and just hanging out, not spending anything more than we had to.  Things picked up that fall when work started and I got an awesome online teaching gig...then I got sick and it took 4 months of testing and waiting to find out it was simply my gall bladder.  A quick surgery later, I was good as new.  So good, it kick-started my system and Kayci's birthday wish for a baby brother came true.

Then you know what happened a few months later...Dad got sick, our world came into focus, and we decided it was time to quit waiting and start LIVING.  So we cleaned up our acts, took a good, long look at our finances and decided to take control.  If you've gone through this, you know how defeating this can be, and it got us down.  But once we started Financial Peace University at church, it felt like a lightbulb went off, and then another, then another.  We had tools and a plan and support and we learned that people we respected in our community were in the same boat--we may have been the only people dumb enough to talk about it, but we were not alone on the sinking ship of debt.  For some reason, that made a difference...we were stupid, yeah, but others had made our same mistakes.

Our first step?  Budgeting.  This was HUGE for us.  The idea of actually knowing what we were going to bring in each month and naming each dollar before we got it was life-changing.  Our M.O. before was:  get paid, go shopping, live it up...then pay the bills with what's left over and eat cheaply for the last week of the pay period.  I had used gas cards (my parents', of course, until I was married) since I started driving, as had James, so giving those up was painful--that's a lot of money to come RIGHT OUT OF THE BANK each week.  We had to make a lot of changes like that, and it was painful at times.  But what made it easier was seeing our debts fall away.  We made a lot of progress fast, and from October until April when my Dad died, we had paid off all of our small debts AND our student loans.  What was left was a big ol' pile of credit card debt that we'd used a bank loan to "pay off."  That sucker has lingered and lingered.  Of course, we quit being as intense about eating out and stuff as time went on, and if we had followed Dave Ramsey's advice about "rice and beans, beans and rice" we could have posted this last year.  But we got to the point where we set a goal and just set about working quietly toward it.

And here we are, June 30th, with the last payment made.

Do you want to know how stupid we were?  $50,000+ debt...paid off in two years and nine months.

Now, we still have to pay off our cars, so we're not ready to go screaming on Dave Ramsey's radio show just yet.  But still, today is a good day.  We are finally free from our stupidity, and can use the money we've been putting toward debt to build our future.  In a lot of ways, the exciting part is over once this day ends.  In a few months when our cars are paid off, that will be exciting.  But really, now we just quietly keep saving...the hard part isn't over.  In some ways it's just beginning, because now we have to be disciplined enough to save toward our new goals:  savings, home, retirement, college...good stuff.  But stuff we would still be a million miles away from if we hadn't taken the reins of the runaway horse that was our finances for the first decade of our marriage.  I could focus on the bad things, how stupid we were, the things we charged we didn't need, the wastefulness of our early married years...but that's not my style.  Instead, I'm looking ahead at how our choices now will, hopefully, have such an impact on Kayci that she'll say no to the credit card company on the college campus that offers free t-shirts just for signing up.  That's where it all started--they handed a lit match to a pyromaniac, friends.  The rest is history, but we've changed our future.  I'd like to think that's what matters.

Let freedom ring...


A Journey For Life said...

Awesome and inspiring!!!!

Tracye said...

You're "almost" DEBT FREE! Can't wait to hear you on the radio in a few months. What's also so amazing & inspiring to me is that if I wasn't reading your blog and knew you guys were working towards this, I would never know. Your generousity in giving love (& things) & time are all awesome. Thanks for sharing!

Jana said...

I so had to laugh at the "free t-shirt"!!! That's how I got hooked too. We are currently cleaning up our stupidity as well. Thanks for being so honest!

MommyGirl said...

I love you guys (girls!)! This is why this blog will always be a place of honesty, even when it's unflattering. Thanks for the love! (Today and EVERY day!)