Growing up, I don’t remember having to struggle for money. My parents made sure that everything I needed was taken care of, and oftentimes also everything I wanted. My friends would joke with me as a teenager that I was spoiled, that anything I wanted I got. The thing was though, I didn’t ask for outlandish things. I didn’t take advantage of it. So while I did get a lot of opportunities because of my parents’ finances, I didn’t go overboard and I was pretty frugal. This idea has carried over into my adult life as well. Even when we’ve been in the best financial situation, I have never been one to splurge on myself, whether that is for something small or large. Buying for myself makes me uncomfortable, and even when people buy things for me I have a hard time accepting it, thinking of other places that money should be going instead.
My parents taught me at a young age the value of money, the importance of saving and giving, and the feeling of being able to spend my hard-earned money on something I’d saved up for. I had a paper route for an entire year, earning about $100/month, in order to save up for our very first family computer. When I finally got that gigantic box from Dell, all those hours of folding and carrying newspapers were worth it.
So my parents gave me a great financial foundation, but as young adults often do, sometimes we do our own things and screw it up. When college happened, my parents didn’t want me to work the first couple of years so I could focus on studying. Except instead of studying I partied a lot. Which cost money. I ended up getting a couple credit cards, which I never carried a high balance on, but I got in a bad habit of just using my “magic money card” to pay for things that I wanted, then I would pay it off when I got my financial aid leftovers and repeat the cycle.
After college, I got my first full-time job and quickly paid down a few thousand dollars debt that I had leftover from spending carelessly in school. And then I met my ex. That year and a half was a huge mistake in and of itself, but it also left me with about $20,000 in credit card debt and a $25,000 car note that I foolishly was jointly responsible for. Well, solely responsible for, really, because he wasn’t going to pay a dime.. My amazing parents helped me out of the bind with the car, refinancing it and eventually paying it off for me. They didn’t have to, but I’m so thankful for them that they were able to because of the good shape of their own finances.
Eventually I met Eddie, and we started our marriage with a combined probably $50,000 in debt, counting student loans. We didn’t have a plan, other than just making the minimum payments to just slide by each month. We surprisingly were able to get a mortgage, which added about $80,000 on top of that debt, so we started marriage out in the hole financially. Through a series of unfortunate events with Eddie and a work injury, we ended up being able to pay off all that debt in less than 2 years. Without that settlement, we would have continued to be in over our heads, but thanks to the blessing of his settlement, we were able to be debt and mortgage free, with the exception of our student loans. Mine were being paid for by my generous parents, who had always planned to finance my education, but his were something we paid on monthly. We swore we would never rack up those credit card debts again! We would live within our means and save for larger expenses.
But over time, we slowly started using our credit cards again. It was foolish. We didn’t go out and spend on extravagant things, but we also didn’t delay our gratification either. Meaning, if we needed or wanted something, instead of waiting and saving up for it over time, we swiped the card and figured we’d make payments on it and get by. Eventually we were headed back on the road towards the same bad debt place we had so thankfully gotten out of a few years earlier. And then my parents both passed away in a period of about 3 years. With their passing came the task of tying up their loose financial ends (thankfully there were not many, as I said before, I had always known my parents to be very responsible with money) and there was some money left over from life insurance and the sale of our family home to be sure I could give a small nest egg to my sisters, as well as pay down the debt that Eddie and I had begun to build again. Along with that, we are giving people, so we also were able to help family and close friends out with some of their needs. At the time we didn’t think much of it, but we probably should have made sure we had an emergency fund or done some investing with the remaining money so we wouldn’t be broke again soon.
I mentioned the sale of the family home… it was during this sale that I found out some interesting truth about my parents and their wise approach to finances. While cleaning out my family’s home, I found paperwork from the mid-eighties, when I was just a baby, paperwork that indicated my family had filed for bankruptcy. My financially responsible parents were at one point bankrupt??!!! It was very eye-opening and gave me a new perspective on their financial responsibility later in life. They had to learn their financial lessons the hard way, and their good financial situation was not just dumb luck, it was a lot of hard work and a lot of climbing out of the hole of debt to get where they got. Eddie and I don’t want to have to go to the brink, to lose everything before we make changes. We are going to make changes now.
Thanks to a generous friend, we were gifted the fee to participate in Dave Ramsey’s Financial Peace University (FPU). For those unfamiliar, Dave is pretty much the top dog in financial advising. His story is similar to my parents’ story, but on a much grander scale. He has taken the path of wealthy to bankrupt, back to wealth again. He’s created financial programs to help others do the same, as long as you follow his plan. FPU is a 9-week course with baby steps broken down to help others save, get rid of their debt, and be able to build wealth and give. We are approaching our 9th class this weekend and it’s amazing the progress we have made!
That doesn’t mean we are magically out of debt and have this massive emergency fund saved, by any means. But the class has opened up a dialogue for Eddie and I to work together on our finances–not just paying the bills, but planning for the future as well. We’ve been able to formulate a plan for saving, paying off our debts, and eventually tweaking our retirement plans so that down the road we don’t have to worry about what we will do when we are old and gray together. Without the class, we definitely wouldn’t have had these conversations right now. We are going on our second month of living solely within our means–meaning NO CREDIT CARDS! We cut them all up the second or third week of the program. People look at us like we’re crazy… what if there is an emergency? Well, that’s what the emergency fund is for. And also, it certainly makes you evaluate what constitutes an emergency. In this day and age we look at things as necessities when really they aren’t. It’s amazing what you can do without or what you can make work if you’re not relying on your credit card to take care of the bill. When unexpected things have come up that we’ve wanted to do or didn’t have the money for, we’ve gotten creative. We’ve sold stuff, taken on side work, and negotiated some funds from other categories of our budget. Yes, WE HAVE A BUDGET! This has probably been the most helpful part of these last couple of months. We actually sit down and tell our money where to go instead of wondering where it went at the end of the month. It will still be a few years before we are 100% debt free, but knowing that the end is in sight, instead of just some mystery time that maybe we would get to down the road, is awesome!
Thank you to the couple that generously extended the offer of FPU to us–you have given us tools that we wouldn’t have otherwise. And one day when we are in a more secure financial situation, we will be sure to extend the same to someone else so they can experience the relief of being in control instead of out of control with their finances!